The pandemic pulled forward many technology trends such as the shift to remote work, to eCommerce, and to app-based experiences. This accelerated digital transformation, coupled with the Great Resignation, resulted in a surge in demand for online training and career development.
As a result of this tremendous growth, we saw public exits for Udemy and Coursera, as well as big acquisitions like 2U acquiring EdX. But beneath the surface, there’s a new “fourth wave” of online learning that will completely transform the landscape.
Online Learning for Career Progression
Remote learning isn’t new: even before the internet was a thing, people were looking for ways to make education accessible via snail mail and TV. But the internet did two things (see “The Long Tail”): it democratized the means of distribution (course directories were discoverable via Google search and paid ads) as well as the means of production (anyone can record videos, upload to Vimeo, and put behind a Stripe paywall).
This was an unlock for learners as well: there are thousands of great careers out there, but top universities all teach the same core liberal arts education, which prepares us poorly for these thousands of careers. It doesn’t help that vocational training is looked down upon.
The result is that higher education has widened the gap between the skills employers need and the skills new grads enter the workforce with. The solution: training providers that fill that gap, coupled with on-the-job learning in their careers: opportunities for employees to educate themselves.
Having been in the online education space for over a decade, I’ve identified four major waves of online career training. I broke them down below.
The First Wave: MOOCs
The first wave of online education providers consisted of MOOCs (massively open online courses) which essentially functioned as content libraries. These include Udemy and Skillshare, which offered short educational videos that mostly allowed students to learn by example: ”monkey see, monkey do.”
While that’s enough to learn some skills, it wasn’t the best medium for students to learn deep concepts. The proof is in the completion rates: Udemy’s reported completion rate is only 30%, and an average of 70% of students don’t even start the course they enrolled in. This could be attributed to several factors, the most noticeable being the quality (or lack thereof) of the course content. Since these platforms were basically marketplaces for hundreds of creators, the quality of education tended to be all over the place.
A step up from Udemy and Skillshare’s long-tail of UGC video content were MOOCs like Udacity, Coursera and edX, which promised to democratize higher education by giving learners from all over the world an equal opportunity to learn from top academics at institutions like Berkeley and MIT at zero to minimum cost.
These three MOOCs differentiated by leveraging the brands of top schools to get learners to watch their videos. Later on, they packaged up courses (and eventually, full-fledged online degrees) that were backed by big universities such as Duke, Stanford, and UC Boulder.
Second Wave: The Rise of Bootcamps
MOOCs promised to democratize higher education—brilliant in theory, but let’s face it, there’s a difference between recorded Ivy League lectures and a degree. (I’ve signed up for a handful of free Coursera courses. Haven’t watched a single lesson.)
The emergence of developer bootcamps in around 2013 was almost a reaction to MOOCs. These bootcamps, which included Dev Bootcamp, Hack Reactor, and later, General Assembly, offered the opposite experience: Rather than massive, self-paced, and free, they were small-scale, grueling, and expensive. A 16-week intensive program jampacked with everything needed to get a junior developer job cost, on average, $12,000. With an admissions process and a high price tag, completion rates neared 90%.
Fast forward nine years: most of the original bootcamps have been acquired, and many of those have shut down. Dev Bootcamp, acquired by Kaplan in 2014, was shut down in 2017 after failing to “reach a sustainable business model”. In 2015, Apollo Education Group bought a 62% stake in and subsequently acquired South Carolina-based coding school Iron Yard, only for the bootcamp to shut down in July 2017. Recently it was announced that Full Stack Academy, also acquired, would either be re-sold or shut down.
In 2017 WeWork acquired Flatiron School, another top bootcamp, but sold it at a loss to the founder and Carrick Capital Partners in 2020.
Trilogy Education Services took a different approach to the bootcamp concept. They partnered with universities, renting the university brand and classroom space. Trilogy ran marketing, admissions, and operations, and gave the schools a cut of the profits. They scaled this model incredibly fast to dozens of universities. And since this model closely mirrors the OPM model that 2U employs in online higher ed, it’s no surprise 2U bought Trilogy in 2019.
Then there’s Lambda School. It positioned itself as the most selective, most prestigious bootcamp, offering six-month tech bootcamps worth $30,000 with installment payment options that begin after the student gets a job that pays at least $50,000.
That was a great call: Income Share Agreements force the school to be truly accountable for the student’s future. It’s also a great way to raise awareness about the school through organic channels, and for free.
But then, things got messy: First, Lambda went through two sets of layoffs in one year and drastically changed its teaching model, doing away with paid team leads and leaving the students to mentor and assess themselves. Then in 2021, three students sued Lambda school. The lawsuit claimed that the school inflated job placement rates, questioned how it handled its ISA contracts, and concealed a regulatory dispute in California that required the school to cease its operations. These controversies probably prompted Lambda School’s rebrand to Bloom Institute of Technology in November 2021.
The Third Wave: MicroCredentials
At some point, Udemy, Udacity, and Coursera realized that watching an MIT professor’s astrophysics lecture was more of a “vitamin”—nice to do, but not a need to do. To monetize they’d need to sell “painkillers”—products that can help customers make money or save money. That’s why they transitioned from lectures to micro-credentials: They repackaged their free content into career-focused skill paths, with some platforms, such as Udacity, eventually placing almost their entire content library behind a paywall.
They also pivoted away from academia, opting instead to partner with big employers. Coursera co-branded with Google, IBM, and Meta. Udacity started co-branding its nanodegrees with big employers such as AWS, NVIDIA, and Mercedes-Benz.
Microcredentials also moved beyond video libraries and experimented with graded assignments and mentorship. There was still virtually zero live instruction, but they were able to increase the perceived value by offering some forms of limited human contact like self-serve message boards moderated by instructors.
Udacity has raised 6 rounds of funding totaling $235M, and it has a post-money valuation of $1B. Coursera had its IPO on March 31, 2021 and as of press time, it has a market cap of $1.70B. And in 2021, the non-profit MOOC edX was acquired by SaaS platform 2U for $800M in cash.
Why MicroCredentials Will Fail, And What Will Replace Them
MicroCredentials are bound to fail for several reasons. Content is delivered via passive videos, with only the occasional quiz, assignment, and perhaps a message-board. It’s easy to drop out—there’s no structure or accountability. And completion rates are downright terrible: an MIT study in 2018 found that MOOC completion rates dropped to an average of just 3%, indicating their failure to expand high-quality education globally. It might be better for MicroCredentials than MOOCs overall, but it was bad enough that Udacity was offering a 50% refund to anyone who actually graduated with a NanoDegree.
Increased competition from talented course creators is another reason why I expect to see Udacity, Coursera, and others struggle. The best talent isn’t building courses on Udacity: they’re building a brand on YouTube and then going direct to consumer using platforms like Teachable and Thinkific.
And since there are way too many courses online, learners refuse to waste their time on subpar lessons even if they’re dirt-cheap or even free. Posts about online course recommendations and reviews abound on Reddit and Quora. Review sites like CourseReport and SkillUpgrade also provide much-needed objectivity and transparency.
The Fourth Wave: Cohort-Based NanoCamps
Bootcamps are characterized by their fixed start and end dates, their high-intensity, and high-touch experience, designed for career switchers. MicroCredentials on the other hand are characterized by being short, low-touch courses for career upskillers. We’re now at the beginning of a fourth-wave that attempts to combine these two trends: intensive, high-touch courses, but a breadth of topics, and shorter, catering to upskillers.
I’m calling these short cohort-based courses NanoCamps.
Back in 2015 at Bloc (an online bootcamp). it was an uphill battle to persuade learners that they could get a rigorous, intensive, life-changing experience remotely. But COVID accelerated the shift to remote work, showing us that we can do our demanding jobs online— the same logic applies to learning. The market is finally ready for courses that are expensive and intensive and fully-remote.
Cohort learning encourages collaboration, offers more structure, promotes discussion, and introduces fresh perspectives. It also gives learners a chance to expand their network and connect with their peers and faculty—all from the comfort of their homes. And since cohort learning programs have fixed start and end dates, the content tends to be more intensive and outcomes-based yet the completion rate is noticeably higher.
On September 28, 2022, VC firm Greylock announced its investment in CoRise, an AI-powered cohort-based education platform that helps learners get the most in-demand tech skills from top academics and industry leaders. The program is designed for working professionals, with live courses that revolve around projects to ensure hands-on learning and support.
In contrast to bootcamps, which usually only deliver basic tech skills that enable a delivery guy to become an entry-level developer in a few months, CoRise promotes upskilling and further specialization. It’s not for someone who wants to break into tech—it’s for people who want to take their careers from good to great.
“Working with learners from 500+ leading companies over the past year, CoRise has proven their approach is 10X better than online content-first learning options. To date, 78% of CoRise learners have completed their courses,” reads their announcement. “[CoRisers] are becoming more confident, delivering real projects, switching jobs, earning raises, and getting promoted.”
if this is the future of the learning economy—affordable and engaging, with a focus on not just giving learners a better job, but the best career—then it’s sure looking bright.