Sramana: Isn’t there a possibility that a student could convince someone else to take a course for them and essentially defraud the system?
Anant Agarwal: Absolutely. The certificates at this point are issued after signing an honor code. The certificates we issue are noted as honor code certificates. We have recently partnered with Pearson, which has testing centers all over the world. You will be able to go to their testing center and take an edX exam through them to receive a proctored certificate. That certificate will convey the message that we know the student has represented his or her own work.
Sramana: Does that certificate show up as a slightly different certificate? I am assuming that a proctored certificate will have more value than an honor code certificate.
Anant Agarwal: I would agree with you. A proctored certificate should have significantly more value than an honor code certificate.
Sramana: How does the money flow in all of this? Who is paying whom, and what are they paying for?
Anant Agarwal: We are a nonprofit, but we must be self-sustaining. At this point certificates are free, but we are exploring an option for paid certificates. Students need to pay to take exams at Pearson’s centers, and we should be able to get some of that fee to offset our costs. That is our equivalent of a B2C model.
There is also a B2B model. I gave you the example of a course getting licensed to San Jose State. That was a pilot and they are now interested in licensing a number of courses from edX. In that case we will develop a B2B model wherein universities and perhaps even companies can license courses which could be offered onsite.
Sramana: In the B2B model, if San Jose State licenses a course from MIT, does MIT get a piece of the licensing fees?
Anant Agarwal: Under either the B2C or B2B models, we are going to see edX sharing revenue with the content creators. There are other models we can explore. One possibility is that we could offer an employment service. When students do well, we could connect them to potential employers. In that model, the employers would pay edX a fee to hire that student.
Sramana: What about high schools? There seem to be a lot of high school students who are showing the initiative to complete MIT-level engineering courses. Those are the types of students that MIT is looking for.
Anant Agarwal: That is another possible business model.