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Leadership

Coursera teams up with Instagram, Google: The search for a business model continues

Claire Zillman
By
Claire Zillman
Claire Zillman
Editor, Leadership
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Claire Zillman
By
Claire Zillman
Claire Zillman
Editor, Leadership
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February 11, 2015, 12:01 PM ET
Courtesy of Coursera
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Coursera’s model of offering free college courses to the masses has always presented the online company education with a sizable business challenge: how to make any money.

Coursera, which has attracted some 11 million students since it launched in 2012, took another stab at fixing that problem on Wednesday when it announced that it is teaming up with tech companies like Google and Instagram to launch projects that will serve as capstones to its multi-course “specialization” series.

Specializations—made up of between two and six academic courses—are geared toward students with an interest in advancing their careers, CEO Rick Levin told Fortune. Students who enroll in specializatios have a higher completion rate and are more likely to pay for Coursera’s verified completion certificates than their counterparts enrolled in standalone classes, Levin says. (Coursera would not disclose specific completion rates, but a study released in 2013 points to about 4%.) The branded capstones will provide further incentive for students—and more revenue for Coursera—since they’re only available to students who complete the lead-up requirements for the specializations and purchase certificates of completion.

“We have a good share of revenue coming from specializations,” Levin says, “It’s the fastest growing area of revenue.”

Completion certificates cost about $49 per class. In some instances, students will be able to pay for all of a specialization’s certificates at once. For instance, the Wharton School is offering a Business Foundations specialization for $595—a package that includes certificates for the four lead-up courses and a capstone that was created with input from Shazam, a music identifying app, and Snapdeal, India’s biggest online shopping site. (It should be noted that Harvard Business School recently launched its own set of online programs that cost more than $1,000 a pop.)

With Wednesday’s announcement, Coursera students can now choose from 19 specializations. The company plans to roll out more as part of what Levin says is a “viable strategy for reaching profitability.”

Coursera’s partnership with Instagram will consist of a capstone that will culminate a six-course specialization called Interaction Design offered by the University of California San Diego. The final assignment will ask students to design a new social experience, the requirements for which were created, in part, by Mike Krieger, co-founder of Instagram. Krieger and a professor will judge the projects and provide feedback on the best designs.

The capstone of another specialization series, Mobile Cloud Computing, will be offered by the University of Maryland and Vanderbilt University and will ask students to design mobile cloud computing applications from the ground up. Google will participate in reviewing the top Android apps. The ones Google deems best could land in the Google Play Store.

At the end of the University of Maryland’s Entrepreneurship multi-course series, 500 Startups, a seed fund and accelerator, will participate in a pitch session and offer interviews to select students. SwiftKey, a keyboard app developer, collaborated with Johns Hopkins University professors to create a capstone project for the Data Science specialization that will require students to develop original predictive language models by analyzing a large textual data set. And executives from iHeartMedia, a multimedia and entertainment company, will meet with top performers in Berklee College of Music’s Modern Musician specialization to discuss how independent artists can enter the music market.

Levin said Coursera’s new partnership with brands has no “financial considerations.” The companies that helped design the capstone projects participated because they “increasingly [understand] that there’s a new, growing market in credentials [and] they’re thinking about how they can participate,” he says. “They want to build a field of qualified people,” he says, and some are interested in recruiting directly from course rosters.

Instagram’s Krieger said in a statement that it’s essential to “create a generation of designers and builders” who can help people harness the power of increasingly advanced technological devices.

Levin said the brand-sponsored capstones will benefit students by offering them a chance to apply the knowledge they’ve gained in the specialization’s academic courses. The projects will “enhance the experience and practical skills for learners,” he says.

About the Author
Claire Zillman
By Claire ZillmanEditor, Leadership
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Claire Zillman is a senior editor at Fortune, overseeing leadership stories. 

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