Team 8: ToW Coursera & Duolingo
For our technology of the week assignment, we studied two innovative business models, namely; Coursera and Duolingo. The reason we chose to focus on these companies, is because we were extremely interested in how the rise of the Internet has enabled the democratisation of education; a phenomenon that may revolutionise the education system entirely. The Internet has been regarded as “the world’s largest library” (Becker 1999) as it has enabled individuals to access an enormous pool of information on millions of topics. Furthermore, individuals are able to personally add to that knowledge in the forms of comments, personal blogs or vlogs. Much like we are all doing on this blog now!
The accumulation of an abundance of websites that contain educational content, and geographical, physical and demographical constraints that individuals face have been the driving forces for the creation of alternatives to traditional classroom-taught methods. In turn, these events have paved the way for online platforms and applications that are considered, effective, efficient, user-friendly and in most cases, free. The rise of these newly founded companies, has inspired the development of various business models that can create value for society. In this report, we discussed two innovative business models in online learning, represented by two companies that operate in slightly different areas; Coursera, in higher-education, and Duolingo in language learning. Based on our research, we created two business model canvases to describe the firms.
Coursera Business Model
*Adapted from businessmodelcanvas.com
Duolingo Business Model
*Based on information from duolingo.com
There were a few points that stood out the most to us while researching these firms.
Sustaining a Free Offering
The fact that both Duolingo and Coursera provide a free offering makes them quite unique, yet it also complicates the financial sustainability of the firms. Both firms still rely heavily on investor funds. Investors are generous with their investment due to the nature of the industry and the social benefit of the service these firms offer, however, the firms will not be able to rely on these funds forever, and investors will want to see a return on their investments in the near future.
A second interesting point that can be made is the use of business networks. Coursera relies on them, as their partnerships with universities are a main driver for their success and reputation. The risk that can be identified here is that if Coursera continues to grow, universities may no longer be interested in subsidising the platform, especially if MOOCs threaten to replace university offerings. Duolingo also recently started making use of business networks, as it partnered up with Uber. This promises to be a great source of new business and revenues for Duolingo.
MOOCs: A Hype?
Whether MOOCs are over-hyped remains unclear. For instance, one of Coursera’s founders, Koller (205) states that MOOCs are currently emerging from the trough of disillusionment in Gartner’s hype cycle. The New York Times (2012) referred to 2012 as the ‘year of the MOOC’. It was said that MOOCs had the capacity to entirely overtake educational institutions. However, this did not happen and the success of MOOCs has not diminished either. Coursera has seen steady increases in both user numbers as well as active user numbers (Koller 2015). Furthermore, Google Trends contradict the hype as well. MOOCS have proven to be a complement to university classes as opposed to a threat, many lecturers use a combination of online videos and class discussions and presentations to maximise student learning (Ulrich 2014).
MOOCs cannot be considered to be a disruptive innovation, as they are not revolutionary and work as complements to traditional university offerings. Furthermore, MOOCs are not able to replace the true essentials of universities, such as being part of a community, building a network and the true university experience (Terweich 2014). On the contrary, Duolingo can erupt the market and become a strong language learning provider as well as being a complement to schools and universities. This is the case because Duolingo is not a MOOC, it has entered the online educational market as well as the (educational) gaming market. The latter is still a blue ocean, and as a first-mover Duolingo has a great competitive advantage (Shapiro 2015).