Sramana: Are there other models that you could envision being successful?
Gary Matkin: Another option would be to start selling advertising. Somehow they should use the names they have for advertising or marketing.
Sramana: Everything you have mentioned works well for UCI. For Coursera, that is a scary thought that nothing monetizes significantly in the short term. That is a problematic situation for a venture-funded firm.
Gary Matkin: It is and I don’t think Coursera, edX, or Udacity will last very long.
Sramana: edX is a non-profit, so I’m not sure why they would not have staying power.
Gary Matkin: Non-profits need to be supported somehow. Eventually, even the most generous donor will not continue to fund them. Their burn rate is astoundingly large.
Sramana: All three of them are burning huge amounts of money.
Gary Matkin: Exactly. That can’t last very long.
Sramana: Do you think all three of them will go out of business?
Gary Matkin: They will unless they morph or change dramatically.
Sramana: Interesting. What about the other side of your three-pronged strategy. We have talked about open courseware and MOOCs which are the first two legs of your strategy. You started online education programs 14 years ago. What are the strategic decisions you have made over the past 14 years?
Gary Matkin: We started out just putting up open courses on our own website, http://ocw.uci.edu. We have about 90 courses up and 1800 learning objects. We then started publishing the same courses on other open sources such as YouTube. Our objective was a byproduct of what we were already doing. If we had a course developed, and the course author was willing, why not put it up for free? We were able to take the existing courses and put them up in an open way with very little money.
We saw other people putting $50,000 into MOOCs. We don’t do that. We already have courses and we just put them out. In some cases, we received funding from foundations to do specific things for deserving audiences such as K-12 teachers. We put that courseware up on open sources. We received some money from the Certified Financial Planning Board to put some courses up in Spanish. It became a public service initiative that really gained us positive publicity. That is why we continued to do it.
Sramana: So your continuing education program is not really a revenue generating agenda, it’s a public service agenda.
Gary Matkin: Our continuing education business is a business. Our budget next year is $49 million and we make money.