The Hope of Udacity

At this point, just about all of us want to see universities as we know them transformed into universities as we don’t know them.

Many colleges are stagnant and complacent, and by at least some measures they are wildly overpriced. No wonder that so many people have been rooting for the massive open online course, or MOOC, to bring education within reach of millions who could never otherwise hope to get it—a topic that we ourselves have explored here and here.

At the center of this effort has been Stanford professor Sebastian Thrun, pioneer of the self-driving car, who founded Udacity in order to make this dream a reality. And, for a while, he seemed to be succeeding: More than 1.5 million students have signed up for these classes. The trouble, however, is that a much smaller number has been completing them, and an even smaller number has passed. In fact, Thrun has found that, for every 100 pupils who’ve enrolled, only about five have emerged having learned the topic.

“We were on the front pages of newspapers and magazines, and at the same time, I was realizing, we don’t educate people as others wished, or as I wished,” Thrun recently told Max Chafkin of Fast Company. “We have a lousy product.” As a result, Chafkin reported, Udacity is undertaking “a pivot that involves charging money for classes and abandoning academic disciplines in favor of more vocational-focused learning.”

As an attempt to overturn education, Udacity has clearly had to scale back. What to make of the change?

“Many innovative efforts end up in near-success rather than in success or failure,” Peter Drucker wrote in Management: Tasks, Responsibilities, Practices. “There is, again and again, the product or the process that was innovated with the expectation that it would ‘revolutionize’ the industry only to become a minor addition to the product line, neither enough of a failure to be abandoned nor enough of a success to make a difference. . . There is the innovation which was meant to become a ‘household word’ that ends up as another ‘specialty’ which a few customers are willing to buy but not willing to pay for.”

Drucker would have applauded Thrun for recognizing this reality by measuring results. As Thrun put it: “I’d aspired to give people a profound education—to teach them something substantial. But the data was at odds with this idea.”

Looking at the data, as Thrun did, is really the only way for any entrepreneur to be honest with himself. “It is . . . particularly important in managing innovation to think through and to write out one’s expectations,” Drucker advised. “And then, once the innovation has become a product, a process or a business, one compares one’s expectations to reality. If reality falls significantly short of expectations, one does not pour in more resources. One rather asks, ‘Shouldn’t we get out of this, and how?’”

What do you make of Udacity’s struggles?