MOOCs: A Tsunami that never came?

MOOCs started with a bang…But 6 years out, none of the Ivy Leagues have gone bankrupt

MOOCs are acronym for Massive Open Online Courses aimed at unlimited participation and open access for everyone on the internet. Although some variation of technology-assisted long distance learning existed well before their arrival, MOOCs became talk of the town in the fall of 2011 when Andrew Ng and Daphne Koller from Stanford university started, with Andrew’s famous Machine Learning course. Around the same time, Sebastian Thrun and Peter Norvig started a similar company named Udacity, with his famous course titled “Introduction to AI”. Right their launch, these companies attracted a huge user base initially, with Coursera growing “faster than facebook” to reach 1.7 Million users in first eighteen months.

The MOOCs took the world by a storm in their first two years, with aggressive growth in both user base, online content and brand-name universities. All platforms had several courses listed from star professors at prestigious universities such as Stanford, MIT, University of Pennsylvania, MIT etc. There was so much buzz and media attention around the concept that people calling it the long-awaited disruption in perhaps one of the most conservative and traditional industry in USA: higher-education. New York Times called 2012, “The Year of MOOC” and reported “Elite Universities are partnering with Coursera at a furious pace”.

However, half a decade out, the results have been far less than the forecasts. We still see student debt in USA increasing, with colleges comfortably increasing tuitions fees several times the rate of inflation. Moreover, the interest in attending conventional university campuses hasn’t shown any signs of subsiding either. The question is, why this disruptive model, that gives anyone with an internet connection to take a course from the top universities, isn’t giving universities a run for their money. Why none of these slow bureaucracies in higher education are going to join the ranks of Blockbuster or Kodak any time soon?

The answer is quite unsurprising. These platforms do provide great quality education. However, traditional college campuses still have three distinct advantages of them that are not going to go away anytime soon. First and foremost, universities provide official degrees that are perceived as pre-requisites “certificates” for jobs. These “certificates” represent several types of information to potential employers in the marketplace. For instance, they signal selectivity through the admission contests elite universities organize. For this reason, a Harvard dropout sends the same signal to marketplace as Harvard graduate: They were capable enough to pass the bar. This signal carries significant economic value with it that MOOCs, with their current structure, are not designed to provide.

Secondly, college degrees have now become a pre-requisite for graduate education. It wasn’t always the case. In fact, Charles Eliot, President of Harvard in 1869, made bachelor’s degree a pre-requisite for graduate admissions at Harvard. It led other colleges to follow suit and established this monopoly of bachelor’s degree over graduate education market. As almost all universities with graduate programs also run bachelor’s programs, they have no incentive to let go of this “captive” market to MOOCs.

Thirdly, Government regulation and private-sector HR practices have traditionally been structured around conventional degrees. For some professions, for example university teaching or medicine, it is illegal to work without a university degree, regardless of how capable you are. Similarly, the whole corporate recruitment machine has been structed around the conventional degrees and diplomas. In fact, these companies often use these degrees and diplomas for their “information” and “signaling” value of an individual, as described in the earlier paragraph. Completing 130 credits can also attest to a person’s discipline and personal effectiveness, in addition to academic ability.

So, what’s the future for MOOCs? Their main problem is to solve the “credential gap” by providing some means of attestation for their programs. Coursera has already started their “verified certificates” program. Given the vast differences in grading mechanics, esoteric course codes on transcripts, and relatively smaller class sizes (resulting in small sample sizes) in traditional colleges, these digital certificates can be encoded with much more information about how a student compare to the cohort (which happens to be very large in MOOCs). More specifically, these digital credentials can also store the actual work or assignments that a student has completed, for years. Employers can use that data to compare applicants from the final pool of selection.

But aside from these “incremental improvements”, digital credentials can be made “machine readable”, allowing algorithms to “mine” for the candidate with the right set of credentials. This can help solve the current problems companies like Google or Microsoft face, tens of thousands of applicants for one role with no objective way of selecting who to interview.

Word Count: 769 (excluding sources)



Carey, Kevin. “Here’s What Will Truly Change Higher Education: Online Degrees That Are Seen as Official.” The New York Times. The New York Times, 07 Mar. 2015. Web. 18 Nov. 2016.

Friedman, Thomas L. “Revolution Hits the Universities.” The New York Times. The New York Times, 26 Jan. 2013. Web. 18 Nov. 2016.

Bothwell, Ellie. “Moocs Can Transform Education – but Not Yet.” Times Higher Education (THE). Times Higher Education, 20 July 2016. Web. 18 Nov. 2016.

Auletta, Ken. “Get Rich U.” The New Yorker. The New Yorker, 23 Apr. 2012. Web. 18 Nov. 2016.

Pappano, Laura. “The Year of the MOOC.” The New York Times. The New York Times, 03 Nov. 2012. Web. 18 Nov. 2016.

Selingo, Jeffrey J. “Demystifying the MOOC.” The New York Times. The New York Times, 01 Nov. 2014. Web. 18 Nov. 2016.

Title Image: Till Hafenbrak



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8 thoughts on “MOOCs: A Tsunami that never came?

  1. I enjoyed this read. One implication that I think you had throughout is that the MOOCs are intended to replace a traditional university education. However, I don’t think that has been their purpose – MOOCs (in their current state) are being utilized more to augment existing skills, rather than a degree replacement. In fact, one study indicates that about 65% of all MOOC students already have a degree, either undergrad or master’s/professional. To bolster this idea, another study looked at the average age of HBX registrants, and there was a pretty even distribution from age 20 up to about age 60. As such, this reinforces my point that these aren’t being utilized as a substitute for formal education.


  2. AR – Interesting read and suggest you also read my post as I delve further into the HBX initiative launched by HBS. I agree that while fundamentally a great concept, MOOC’s never quite hit it off since the big launches in 2012. The completion rate for MOOC’s have been roughly 7% ( which is unfortunately due to mass signups by folks who don’t end up investing the time, and the lack of any personal connect with the thousands of peers enrolled in the MOOC. At the end of the day, the sad reality is that we end up putting in a lot more effort when we’re paying for something. That’s one of the key differentiators with HBX Core, which achieves a 85-90% completion rate as they charge $1800 for the course.

    So I’m torn because fundamentally I want free MOOC’s but also have a strong appreciation that I may never have the will to complete the course if I don’t personally invest in it (kind of like Pvt Equity firms requiring Management Teams to have skin in the game?)

    I look forward to seeing how the digital education industry evolves. While I don’t think it will ever replace traditional college education and achieve the status that an Ivy League degree/stamp provides, I do personally wish for them to succeed and serve the many brilliant minds that unfortunately don’t have the resources to physically attend the top universities across the globe.

  3. I see great potential in MOOC’s, and while I agree on their need to solve the “credential gap” I don’t see that as their main issue. I trust — as in many cases the top prestigious universities are the same providing MOOCs (i.e. Harvard through HBX Core) — that institutions could (and eventually will) sort out a validation mechanism that will prove to be valuable to the market (employers). What I am more hesitant (concerned?) about is how these online communities will evolve to contribute to more intrinsic value propositions of the learning experience, such as networking and community building, while preserving the institutions’s brand prestige and value and its alumni network sense of belonging and commitment to those institutions.

  4. One note – published tuition for 4-year colleges has been increasing (i.e. ‘sticker price’), but inflation-adjusted net tuition has been flat for the past 2 decades. This is because the increase in sticker price has been offset by school scholarships, federal and state scholarships, tax benefits, employer aid, and private scholarships.

    However, this has also increased the variance in cost across students. Some students are more than offset by this benefit, while others are stuck paying the fully published price.

    Check out this graph:


  5. “a Harvard dropout sends the same signal to marketplace as Harvard graduate” LOL

    Interesting post. I’ve actually taken a variety of courses through Udacity – very cool content. However, one of the problems I found with MOOC programs in general is that student engagement is not necessarily on par with the required level of engagement at universities, especially when most MOOCs allow students the flexibility to complete lessons at their leisure. Also, employers are perhaps too reluctant to hire non-university grads since they would need to trust that the candidate has all the relevant skills they would expect a comparable university grad to have. Consequently, it is a risk for employers which may not provide the required return from their lens. But I do think the MOOCs’ use of project portfolios definitely serves as proof of the candidate’s potentially and is a great way to signal credibility.

    A lot of people obtain a college degree, usually in their field of career interest, to obtain a job. So one recommendation for a way these MOOCs can increase their relevance is to build deeper relationships with hiring companies. I think until companies acknowledge that a “certificate” from Coursera or a “nanodegree” from Udacity, candidates will still need a college degree as a “stamp of approval”. Companies have the most influence in changing their hiring “eligibility” criteria to enable MOOCs grads to use their MOOC degrees.

  6. Very interesting perspective on the subject. My opinion differs a bit: the role of MOOCs will be a mayor one in the reinvention of education going forward.
    I’ve taken up some courses and they’ve been excellent tools to develop specific areas of expertise I intended to go deeper. Going forward, I see MOOCs as a way to introduce University courses to new students. The experience of learning in the classroom is difficult to replicate, so I expect the quality Universities to keep their place in the future. What I think will happen is that we’ll see less low quality Universities. Validation by intermediate degrees of low tiered Universities will compete further with MOOCs, and I think this is great. As always, competition and variety creates value. High priced Universities will need to continously improve on their content to stay competitive.

  7. MOOCs are an interesting, yet puzzling. Indeed, the lack of “street cred” among employers is a challenge and I don’t think digital credentials is going to be enough to bring firms over the mental hump as it sounds pretty time intensive to go through all that data. I could see a Coursera or Edx really benefiting from partnering or acquiring an online skill assessment platform (like Pluralsight’s Smarterer, which allows us to measure any skill set with as few as 10 questions in under two minutes based on an adaptive algorithm – see to help standardize and quantify what a potential job candidate knows, or does not know. This seems to me to be a feature that makes sense and addresses the issue of proper credentials in the right sectors, barring fields like healthcare where there is high regulatory oversight.

  8. Similar to AR, I am also highly skeptical of the proposition that MOOCs will be able to replace traditional universities for all of the reasons mentioned above. However, I see real value in MOOCs and believe that they are not actually competing with Ivy League Universities, but instead will develop increasing relevance for three different communities.

    1) Displaced workers: As automation grows more prevalent, many workers will need to re-skill in order to find new jobs. These individuals are unlikely to go back to school, but may be able to join an adjacent industry or function if they receive some targeted instruction where their work experience and MOOC courses are relevant.

    2) Community colleges: Many community colleges focus on highly technical skills targeted to increase their students employment prospects in a specific industry. Employers in these fields do not always require an associates degree, which would allow individuals to take MOOC courses to build those skills in lieu of community college.

    3) Supplemental training for job seekers: At the college and graduate school levels, a students courses will rarely prepare them for the specific nuances of a job interview (e.g., consulting case interviews or financial modeling exercises). MOOC courses could be designed specifically for these interviews to act as a supplement to the students existing education. While not formally a MOOC, this is somewhat similar to how Trainingthestreet has been successful.

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