Darden and MOOCs, Not Exactly a Love Affair

Robert F. Bruner

Regarding my recent post on UVa partnering with Coursera (“Yes, Hybrid Online Learning Delivers“), I came across this blog post by the dean of the Darden School of Business, Robert F. Bruner. The dean, who was instrumental in forging the technology partnership, sounds less than convinced that MOOCs (massively open online courses) represents the future of business school pedagogy. But he can’t let Darden miss a chance to stay at the leading edge of business education.

Writes Bruner: “This partnership is a relatively little bet that can help Darden understand whether and how purely online instruction can serve the interests of our students.” He doesn’t see online learning as a big money maker. Indeed, his question is, “Is this sustainable?”

“I don’t know,” he answers. “An important aim is to get some experience and then decide. In my previous blog post, I argued, ‘online is more likely to spawn losses for the traditional not-for-profit colleges and universities — this stems from the cost of creating digital content and reinventing programs.’ … I’ve been mugged by reality enough times on projects involving educational technology that I want to take a hard look at the resource requirements.”

Production of online courses is expensive, and the job is never done. Courses and materials need to be continually updated. A lot of trial-and-error will be required, and much of that effort will have to be written off. MOOCs are a winning proposition for Coursera, which doesn’t bear the expense and risk of creating content. The logic is very different for uUniversities, which will end up competing with one another and bearing the risk of failure. Writes Bruner:

Venture capitalists and other “smart money” are pouring into the online aggregators because higher ed looks like a replay of what happened in the music and filmed entertainment industries: disintermediate the incumbent distributors and gain rights to distribute the content that someone else paid to develop. … you don’t see venture capitalists or other ‘”smart money” pouring into colleges and universities mainly because they see only big outlays ahead to develop content. The “smart money” is voting with its feet: the flow of funds toward the online aggregators, to the neglect of universities is consistent with my argument that online ed will be costly to colleges and universities.

Bacon’s bottom line:

Higher ed is conflicted. Prestigious institutions like Darden are more focused on the downside than the upside. They are getting involved for strategically defensive reasons: because they have to.

Bruner sees Darden’s rivals being other top-rated universities. But the competition won’t stop there. I disagree that venture capitalists will steer clear of content creation. At some point — whether a year from now or a decade — entrepreneurs will figure out how to get into the business, and some will succeed because they won’t lug around all the overhead that universities do. Content entrepreneurs will raid universities for their star teachers (not necessarily the biggest names, but the most popular teachers), leverage their teaching power a hundred-fold through MOOCs and pay them more than they could ever make in a university.

These interlopers will offer a threefold value proposition: (1) access to the best teachers, (2) at a lower price than traditional institutions can offer, and (3) certification that students have mastered the subject matter.

If I were running an institution trying to maintain $20,000- to $50,000-a-year tuition-and-fee cost structures, I would be very worried. With its brand name, endowment and roster of star faculty, of course, Darden should fare better than generic state universities. At least it will be producing the courses most in demand — until their faculty are spirited away, at least. And its highly interactive, case-study pedagogy will be far more difficult to replicate online than standard introductory courses are. Even so, the pressure will be relentless.


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  1. larryg Avatar

    It’s not clear exactly how online is going to change education but there is no doubt in my mind that online is going to revolutionize the way people learn and it offers tremendous opportunity to those who do not have the financial means to attend college.

    Now, any child, anywhere, no matter their financial circumstances can learn as much as they want to learn and achieve great things in life if that is their goal.

    We forget the great thinkers and inventors often did not have the benefit of “school”.. they were self-taught but they did have access to books that many others did not.

    Online will change UVA but not in ways we can easily predict. It may well be like the “dot.com” revolution which is widely regarded as a huge failure – if you ignore what happened after the “re-set”.

    There will be no excuse for any parent or any child to say that their school “fails” them. The obvious answer is to abandon schools that cannot or will not change and I’m convinced it’s going to revolutionize K-12 and higher Ed.

    UVA is smart to get their fingers in the pot but now I’m really curious about why Sullivan was fired if the move to online was already underway anyhow.

  2. reed fawell Avatar
    reed fawell

    More than six and a half years ago I made a New Year’s resolutions. The first, and perhaps the last, that I have kept. Namely: “Spent one hour a day in the best class rooms in the World.”

    That is the Sale’s Pitch of The Teaching Company. Theirs is also the first, and probably last Corporate sales pitch, I’ll ever take to heart.

    My hour a day “in the best classrooms in the World” is most always on a bike with an I Pod plugged in both ears. If it is not raining and my schedule allows, its outdoors on a bike Trail to Georgetown waterfront and back. Otherwise its indoors on stationary bike.

    The lectures (most 30 minutes each) range from 12 to 72, depending on course. I’ve never failed to be delighted and educated on on by now surely exceeds many many dozens if not hundreds of courses. I’d completed everyone, and listened to some several times. Each course comes with a usually fine outline, complete with reference to written works for further study. For additional cost, one can buy a transcript of many courses. Most all my courses are digital, some streaming video, the vast majority audio.

    I read a great deal, and always have. Over the past six years, these digital courses have enlivened my reading menu, and been invaluable guides to finding well targeted, rich and varied high quality reading, whatever the subject of interests, which I my case is quite varied.

    If my experience is in anyway typical, this “long distance” learning can be a game changer for a lot of people. One needs the time, interest, and determination, but relatively little money. Rarely does each Teaching Co. lecture cost more than a buck and half, as offered on frequent sales. The time for me is free. Because, I am going to exercise an hour a day on a bike, health permitting, no matter what.

    What I miss is the person to person exchanges in small group seminars, the Socratic type experience, to deepen and sharpen and fill out understanding. That’s often critical to the best learning, for me anyway. And I enjoy it. Obviously there are the “Reading Groups” around. There, I’ve found, one needs to choose carefully. To some degree, I have also been able to supplement my “Hour a Day”, with Aspen Institute type Gatherings.

    I’ve often wondered why UVA does not launch such Aspen Institute type programs. They could be built in part around their Alumni, thus serving collateral interests. After all, I assume some UVA Alums have advanced beyond their freshman year in terms of interests and entertainments.

    Regarding UVA’s chance for further success with this stuff. I suspect it will need to be bold, entrepreneurial, and market savvy to truly succeed. (Aspen has a highly refined and targeted model, for example.) In any case, a dose of out of the box thinking, willingness to make mistakes, a bit a nimbleness, and spirit of adventure, will probably go a long way.

    But if UVA is able to develop the necessary culture in a way that builds and melts with its existing one, wild success (ie exponential learning built on a sound financial model) will likely be the reward for UVa, its faculty, and students, and Alums too. If UVA does, others undoubtedly will.

  3. larryg Avatar

    It might well be that the best way to do online education in Va is not through the Universities but through the community college system.

    What I fear here is an uncoordinated approach by different state Universities and each one comes to the State asking for money for their stovepipe operation.

    Online has the potential to become a huge money-pit with taxpayers picking up the tab.

  4. Peter Galuszka Avatar
    Peter Galuszka

    This perspective is very different form what you have posted before, an interesting development.
    One big flaw: you assume that the “best” and/or “most popular” teachers will flock to MOOCS or whatever. If they do that, they will just become commoditized content providers with zero future. One reason that they are stable and able to keep up is the tenure system at universities despite all the criticism. You buy up these “best” teachers, they very well could be out on the street in very short order.
    The Web-based model has created great wealth for a few while completely abusing the people who provide the “there” that is there.

  5. larryg Avatar

    but the web is inevitable even if the concerns are real. this is “creative destruction”, right? But who could be against kids have much better opportunities at success? I think we are forgetting who is really benefiting from this – and yes – at the expense of those who are part of the status quo.

    it also opens up opportunities for instructors – who are willing to change and adapt …

  6. The basic body of knowledge does not chhange much, hence the validity of SOLs. Once you achieve an excellent online program to demonstrate some content, how much refinement does it need?

    Writing the first Windows program is expensive, but once completed it costs pennies to reproduce. Ask bill gates. Or Steve jobs if that model is sustainable.

  7. Peter Galuszka Avatar
    Peter Galuszka

    Windows is a horrible example.
    You create a crappy software system, grab market share through ruthless marketing tactics and then keep it crappy, version after version.

  8. DJRippert Avatar

    I think you guys have the wrong sequence of events. New technology often first invades from the bottom. Free, online e-mail is an example. Most people had a client-based e-mail system like Microsoft Outlook when they first saw Yahoo! Mail or GMail. They didn’t throw out their employer-based e-mail system in favor of a free, online system. They used the free (or, better said, advertising supported) system for personal e-mail. The systems were temperamental, prone to variable response time experience, low functionality, etc. However, they were “free” and they worked “good enough”.

    Over time, the “free” online e-mail improved. In fact, it can be easily argued that the online e-mail improved faster than the client-based e-mail. Today, many companies use a cheap but “paid for” version of GMail instead of Outlook.

    You guys take online education and assume that the first move is an attack on the Darden School or other high end educational institutions. That’s unlikely. Reed Fawell’s experience is probably the path forward. Online education starts as a niche – people who want to learn rather tha watch Jerry Springer while they exercise. Then, perhaps it applies to education in industry – teach PowerPoint in the workplace. Then, adjunct education for high school and college students – you want to take a CS course that requires statistics but you don’t want to delay a semester while you take statistics. Therefore, you take statistics online over the summer and the CS course in the fall semester.

    The real question is how well the product eventually works.

    Portable, recorded music has been available since people carried boom boxes on their shoulders. Those boom boxes were big, clunky, expensive and inconvenient. Today’s iPod Nano is a far different thing. The question isn’t whether online education will displace an MBA from UVA today. The questions is how far online education will go and how fast it will improve. It may never replace an MBA at Darden. But, it might well provide enough benefit to working people that many pass on the possibility of quitting work for two years and going into hock in order to attend Darden and get an MBA.

    Peter’s point about content creation is astute. Before the phonograph the only way to hear music was to hear it performed live. There were many professional musicians who traveled from town to town playing for the people in each town. Then came records. The “best” music was recorded and the recordings were distributed. People could listen to recorded music. There were far fewer traveling musicians. Make no mistake – there was still a demand for live music, it just wasn’t as great a demand. And that demand was often filled by people traveling a long way to hear a uber – popular band play a very large venue. Fewer people gained wealth through music although the total amount of wealth may have increased. And one thing for sure – the wealth that was gained was put into just a few people’s hands.

    Welcome to the future.

    1. reed fawell Avatar
      reed fawell

      I agree that there is a potential downside, indeed a dark side, to this inevitable tech revolution in higher education.

      As every successful entrepreneur knows, the key to marketplace success is far too often not what your know or what you build, but what you control.

      Control all the Grade A build-able sites in the neighborhood, and you control the buyers and price they pay. Control the stars and you’re the Yankees. Remember, the speculators care not a wit about the product they sell (one created by someone else), only the money they can make on it. Hence they collect, bundle, gain all possible leverage on other people’s stuff, and sell. This far too often throttles the marketplace, lowers it’s grand opportunities and varieties to the lowest denominator. And when we are talking the marketplace of ideas and education, we are playing with fire .

      The universities need to be careful that they do not fall into the hands of the speculators and those who bundle. If they do, they undermine themselves, selling their legacy and engines of growth and vitality. They also undersell themselves, perhaps out of fear, or panic, or simple insecurity.

      Frankly, Dean Bruner’s comments give me reason for pause: the idea that creating a course such as that produced by the Teaching Company is very expensive. Nonsense.

      But, of course, our great universities can blunder around and, in the process of their flight, turn a first rate professor into Elvis – thus helping to create their own nightmare scenario. Do the reverse. Be smart, bold, confident, market savvy, playing the big boy’s game, like you teach at Darden. The Education of Citizens demands it. I suspect Ms. Dragas, despite early indications to the contrary, may well have this picture, given her day job.

      1. reed fawell Avatar
        reed fawell

        PS – Universities Beware: there are guys out there with whips of illusion, trying to build circles of Elephants on their hind legs, making them dance.

  9. larryg Avatar

    DJ is dead on. Online Education is not an “attack” on traditional education anymore than GMAIL or open source ANDROID is an attack against Microsoft Outlook or Apple Iphones.

    Technology moves forward no matter what – and it is embraced and institutions and status-quo lovers are caught flat-footed when their world changes.

    Online Education is not going to die if Universities reject it. The smarter run Universities know that online education is not only going to go forward but it is going to revolutionize how people learn and, most important, it will SWAMP traditional educational institutions if they ignore it.

    The Universities have no choice if they want to survive than to embrace this revolution and incorporate it into how they do business.

    Unfortunately, technologies and the advance of technologies are totally agnostic with respect to people losing their jobs. Talk to all those folks who have already lost their jobs to technology….

    I’m not unsympathetic but you’re either on this train and adapt and deal with it or you’re going to end up under that train.

    There is a problem. Intellectual property and content used to have a business model that allow the selling of it with respect to each individual that wanted it and it could not be “copied” so easily. Now days, if content is created – you have to fight to keep it from being almost immediately available to as many who want it.

    Music and Books are so far enforcing DRM. I wonder if DRM will also be part of online education ……(DRM = digital rights media)

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