Imagine a future where you have 24-7 worldwide access to an unlimited team of personal tutors, each an expert in their field. These “experts” explain their subjects in simple, practical language; they are incredibly patient, willing to repeat lessons without complaint; and their advice is free or comes at a minimal cost. That future is here – in the guise of a new instructional platform pioneered by Internet firms like Udemy.
Their efforts, and those of other education entrepreneurs, are revolutionizing traditional learning paradigms by replacing classroom instruction and fixed curricula with self-paced, online instruction from subject experts around the world. They are also “democratizing” sources of knowledge by recognizing expertise wherever it may be found. In other words, anyone can be an expert.
Udemy Background Information
Amazon turned the book publishing world topsy-turvy with its Kindle eReader and its direct publishing subsidiary (KDP). Udemy, a California-based company with $48 million in funding to date, intends to do the same to the traditional instructional industry. Udemy has created a technological platform that allows novice instructors to plan, design, and produce video how-to instructions for almost any subject.
Its mission is to “help anybody learn anything online.” Its vision of the world is one in which everyone can teach and share what they know. As a publisher and promoter of video how-to instruction courses, Udemy targets to several different, though related, markets: The instructor who creates the course, the student who takes the course, and organizations that might utilize Udemy technology to create specialized courses as a branded product or for internal employee use.
Udemy may be the largest educational “how-to” video producer out there. It currently offers 20,000 publicly available video instruction courses in categories ranging from “Lifestyle” to “Test Preparation.” With more than 10,000 instructors globally, over 1,000 new courses are added each month. The rapidly growing student base – currently four million – views more than 80,000 lectures daily, available in 10 different languages and 190 countries.
Many of the courses are free, and the majority are priced at less than $200. However, prices ranges all the way up to $999 for courses like “The $400k Crowdfunding Launch Formula” and “How to Trade Stock Options: Profiting in Up and Down Markets.” While many courses offer a certificate of completion (and a very select number provide continuing education credits), these have little academic or professional value since there is no independent verification of course subject matter. The real value of a Udemy course is securing the practical knowledge of a subject and applying that knowledge to one’s life and work.
The company aggressively seeks potential course creators by sharing with them any tuition fees received from students. This is similar to the strategy used by Amazon, which distributes a royalty ranging from 35% to 70% of the sales price for e-books published by its KDL subsidiary and retailed on the Amazon website.
Udemy does not require specialized expertise or credentials to create and sell a course. It relies upon the marketplace to separate the wheat from the chaff. Course creators are primarily responsible for publicizing and marketing their courses, just as self-published authors must promote their books on Amazon if they want to have commercial success.
Key Features of Udemy Courses
Individual courses share a number of common characteristics:
- Wide Range of Course Offerings. Udemy currently offers 15 major categories of courses ranging from software development to music, with up to 15 subcategories under each main category. For example, in the “Instruments” subcategory of “Music,” there are at least 30 separate courses for piano students, a similar number for guitar players, 5 courses for beginners who want to play the harmonica, and multiple courses on how to play the drums, saxophone, flute, banjo, and autoharp.
- No Prequalification Necessary to Take Any Course. Students can take any course that might interest them.
- Viewable on All Internet-Connected Devices. Courses can be viewed on desktop and portable computers, as well as tablets and smartphones.
- Free or Low-Cost Tuition. An estimated 10% of courses offered by Udemy are free, while the remainder are generally priced under $200. There are exceptions, with some courses costing up to $1,000, but these are relatively rare.
- 30-Day Money-Back Guarantee. If students determine that they do not wish to pursue a course for any reason during the first 30 days following enrollment, Udemy returns 100% of the tuition fees.
- Immediate Access. Upon enrollment, students have instant access to the courses they have chosen, since all course materials – PDFs, financial templates, guidelines, and checklists – are prerecorded and electronically available for easy download to any electronic device.
- Lifetime Access to the Enrolled Course. Courses, or any portion of a course, can be retaken or reviewed a limitless number of times without additional cost. This access ensures that students have every opportunity to master the material regardless of their personal schedules or interruptions.
- Self-Paced. Each course consists of video lectures in lengths ranging from 5 minutes to 15 minutes. When watching the lectures, students can stop and replay all or part as many times as they want. Courses generally include a series of interim quizzes so that students can gauge their mastery of the materials.
- Access to Prior Student Reviews and Ratings. Potential purchasers of any course can easily read past student reviews and ratings for a hopefully unbiased opinion of its value. In addition, many courses feature previews of their lessons so you can evaluate the style and quality of each instructor.
- Instructors Have Practical, Professional Knowledge. Instructors are generally business people with actual experience in the subjects they teach, rather than academics. They have “been there and done that,” and are able to impart lessons from their time in the field. For the most part, lessons are presented in simple English with easily understood examples and applications in actual business environments.
- Certificate of Completion. Many courses award certificates of completion. Since there is no independent verification of subject mastery, it’s important to note that the value of a certificate may be questioned by people unfamiliar with you or Udemy. While some courses have been approved for professional continuing education credits, interested students should verify the status of such credits before purchasing a course.
For Instructors and Course Creators
The advantages for potential Udemy course creators include the following:
- Aggressive Revenue Sharing of Tuition Fees. Instructors set the retail price of each course and typically receive revenues from two sources: sales to new Udemy customers made by the instructor earn 100% of the tuition fee, and sales to the existing Udemy customer base earn 50% of the tuition fee.
- Creator Pricing Control. Course creators set the market price for the courses they offer. Udemy recommends $10 to $30 per hour of content. For example, a four-hour course would sell between $40 and $120 under this formula.
- Proprietary Technology for Publishing. Udemy offers a one-stop shop for potential instructors to plan, create, publish, and promote their course offerings. A series of videos provides step-by-step instruction to create a course for any subject. Support is provided 24-7 with a full library of informational articles and examples. All Udemy services are provided free to potential instructors.
- Opt-In Participation in Special Udemy Marketing Promotions. From time to time, Udemy runs special promotional programs designed to attract new customers. The option to participate is decided solely by the instructor.
- Access to an Established Customer Base. All of Udemy’s four million users are potential purchasers of any course. However, course creators must be prepared to pursue an aggressive marketing strategy with their own contacts to ensure sales success, not unlike self-published authors who must create “buzz” for their literary works.
- Brand Building and Tie-Ins. Experts can use their Udemy courses to promote the sale of other services or products, thus building the value of their brand. For example, Angela R. Loeb, a “self-development consultant,” offers a free course titled “Your Job Search Is a Spiritual Journey.” It is likely that some of the course’s 3,471 enrollees have sought to engage Ms. Loeb for additional services. Every student of a course is a potential customer of the instructor’s.
A potential Udemy student can benefit from the following features:
- Discounts and Low-Cost Courses. Udemy estimates that a significant number of its courses are free, though the majority are priced between $29 and $99. The company aggressively seeks to build its customer base with widely distributed discount coupons and promotional periods where students can try courses for free or for 50% or more off the listed price.
- Extensive Course Offerings Dwarf Competition. There are more than 100 categories and subcategories of courses on Udemy, ranging from web development to photography to foreign languages. Udemy’s library of courses dwarfs any of its video learning competitors.
- Instructor and Student Feedback. Courses generally have an accompanying discussion board that allows students to post comments, questions, or problems where the instructor and other students can see and respond to them directly online.
- Tie-Ins With Instructors’ External Services. Many course creators use their instructional videos to promote proprietary products like books or consulting services. In many cases, enrollment in a course may entitle students to special promotions and price discounts.
- Ability to Test-Drive. Not only do many courses offer a free preview of one lesson, but if students wish to “return” purchased courses for any reason within 30 days, they may do so, no questions asked. This makes it easier to try one or more courses risk-free if you’re not entirely sure they will suit you.
For Instructors and Course Creators
In selecting Udemy as their publisher, course creators should consider the following disadvantages:
- Competitive Instructional Video Publishers. A number of startups, such as lynda.com, SchoolKeep, Fedora, and Skilljar, have entered the video how-to market. Competitors may develop dominant positions in a particular subject category, creating a disadvantage for Udemy course creators.
- Competitive Course Offerings Within Udemy. Course creators are at the mercy of the “tombstone” – each course’s viewing position on the Udemy website. Udemy controls the placement and appearance of each tombstone through proprietary logarithms, meaning your competitors may have a leg up simply because they appear before you.
- Uncertain Quality of Udemy Classes. Udemy requires certain technical standards, such as a course outline with at least five lectures, each under 20 minutes long, as well as minimum audio and video standards. Despite this, there is limited review of the completeness, accuracy, conclusions, or recommendations of the course creator. As a consequence, course offerings vary significantly in quality. One rotten apple can spoil the barrel just as a poorly designed and presented course reflects badly on the Udemy library as a whole, potentially damaging your brand.
- Lenient Return Policies. If, for any reason, purchasers request their money back within 30 days of purchase, refunds are guaranteed. As a consequence, course creators bear the risk that a student would complete and use the course within 30 days, yet still ask for a refund. At a minimum, royalty payments for the courses to the instructor are deferred until the guarantee period is over.
- Reliance on Personal Marketing Efforts. With the disintermediation of traditional marketing relationships, the burden of product promotion falls heavily upon the shoulders of the course creator, whether publishing with Udemy or one of its competitors. While Udemy provides limited marketing assistance, the bulk of promotion is dependent upon the creator. Promotional activities can be very expensive, even when limited solely to social media. Course creators must be prepared to undertake marketing and promotional roles for their courses.
- Lack of Academic Credit. Unlike accredited MOOC courses offered by universities and colleges, the majority of Udemy courses do not include any certificate of proficiency that would be recognized by an employer or other educational institution. Udemy courses are generally not intended for academic credit, but the transfer of practical knowledge from instructor to student. Students should be aware that mastery of a subject is up to them.
- Variability of Production Values. Courses generally consist of talking heads, slide show presentations, computer screen shots, and limited pupil-to-pupil or pupil-to-lecturer interaction. Even though the information presented is basic, easily understood, and generally complete, the videos tend to be unexciting, even boring, so that maintaining attention over an extended period can be difficult. In addition, the production values between different courses can vary enormously. Some courses are plain and simple; others are technological aggregations of professional presenters, computer graphics, and stunning design. While each course has to meet minimum video and audio standards, the quality of presentation can affect attention and retention. For example, the heavy accent of a nonnative English speaker may jar students in the U.S., just as a Texan’s tongue-lazy pronunciation of Español is likely to detract from a course’s value to native Spanish speakers.
- Lack of Course Mastery Validation. With few exceptions, Udemy courses are targeted to beginners with little or no experience in a particular field of study. Students should recognize that completing a course may be the first step in mastering the subject, not the end point.
- Overlapping Course Content. A recent search for Udemy courses about “business plans” provided more than 800 entries in the English language. While 115 courses were free, the remaining had fees, starting at $15 (“The Business Plan”) and ranging to $749 (“Grow Your Own Tarot Business”). The plethora of courses covers similar materials in different degrees. Students looking for specific information or instruction might have difficulty finding the course that fits their requirements.
- Questionable Expertise and Experience of Some Course Creators. Expertise is often in the eye of the beholder. Udemy’s business plan presumes that every person can be an expert in some subject or field and that others wish to benefit from that knowledge. Rather than censor or evaluate the credentials of course creators or the value of their instruction, Udemy relies upon the open market to identify winners and losers. This open-door, nondiscriminatory strategy ensures a vibrant flow of course offerings and, currently being pursued by ebook publishers, has changed the publishing industry. Udemy hopes to do the same in the packaged video instruction space.
A Sample of Beginner Finance Courses
Each of the following courses consists of approximately 30 to 34 video lectures averaging about eight minutes in length. They generally include self-administered exams, allowing students to test their understanding of the subject matter as they progress, and downloadable PDFs, slide shows, and financial models (Microsoft Excel) to simplify and explain course concepts. The majority provide a certificate of completion, but there is no independent verification of subject mastery. A few courses have more rigorous requirements and may qualify for professional continuing education credits, such as the financial modeling course by edu CBA.
Project Finance Modeling for Beginners
“Project Finance Modeling for Beginners” is a $99 course that teaches the details of project finance modeling, as differentiated from the broader corporate finance modeling at an enterprise level. It includes simple explanations for estimating costs, verifying feasibility, mitigating risk, and project modeling with samples of appropriate financial statements and management reports. The course was developed by edu CBA, a global online investment banking training firm that offers 41 different finance courses through Udemy. While more than 1,900 students have enrolled in the course, only 11 student reviews have been posted to date, the majority of which have rated the curricula four or five stars.
While designated a beginner course, the instructors presume that students have experience with Excel spreadsheets and a working knowledge of financial terms, accounting statements, and their relationship to one another, as well as financial ratios. The video lectures generally average five to eight minutes in length with the longest about 15 minutes. While a certificate of completion is provided to those who watch the entire course, there is no independent verification that the information has been assimilated by the student or can be applied in a work environment.
Lean Finance for Startups
“Lean Finance for Startups” is a $197 course developed by Lili Balfour, founder of Silicon Valley consulting firm Atelier Advisors, which works to raise capital for entrepreneurial ventures. As such, the course is part of the firm’s marketing outreach, since completion includes a 50-minute personal telephone session with Balfour on strategy, finding capital, or modeling. The course includes 34 video lectures, self-administered quizzes, downloadable PDFs, slides, and models, as well as a list of potential investors and a “Popexpert Session” valued by Atelier Advisers at $300.
It is an excellent introduction to the intricacies of raising capital for a new company as well as the potential pitfalls for inexperienced entrepreneurs. Especially interesting sections include methods of evaluation from a potential investor’s perspective and a step-by-step process to build and exploit a personal network for capital.
The $139 course, “Financial Modeling,” also by edu CBA, has almost 9,000 enrolled students and 47 student reviews, the majority of which are five-star. While the 159 lectures are aimed at beginners, there is a presumption of basic accounting and finance, and familiarity with Microsoft Excel. Course-provided templates do, however, help facilitate understanding. This course is also approved by the CFA Institute and qualifies for 20 hours of continuing education.
Since the course includes forecasting, scenario analysis, data tables, goal-seeking, and advanced charting and is relatively sophisticated with case studies and valuation models, it is probably beyond the capability of an untrained pupil without basic business knowledge and experience.
Basics of Business Finance
With more than 4,200 enrollees in the $29 “Basics of Business Finance” course, Binny Matthews – course designer and instructor and former investment banker with an M.S. in computer science – teaches a basic introductory finance course consisting of 24 video lectures and 23 self-administered quizzes. The course is built around the three basic financial statements – income statement, cash flow statement, and balance sheet – and utilizes real company examples to explain the basics and interconnected relationships of each. It should be suitable for anyone with at least a high school diploma who seeks a basic literacy in finance and accounting.
Finance Boot Camp for Entrepreneurs
Lili Balfour, creator and instructor of “Lean Finance for Startups,” mentioned above, is the sponsor for “Finance Boot Camp for Entrepreneurs,” which is directed more to entrepreneurs who are ready for, or in the process of seeking investment funding. Like her other course, those who complete this one are entitled to a “Popexpert Session” with Ms. Balfour.
Her subject ranges from formulating a realistic valuation and a model to justify that value to developing a “pitchbook” to identify potential investors. Ms. Balfour provides real life examples and practical advice to prepare entrepreneurs for the difficult, often unsuccessful task of raising capital. A particularly useful lesson is the explanation of capital dilution, a consequence of taking in outside investors.
More than 1,300 students have enrolled in the course, but only 7 have completed a formal review. Potential purchasers should be aware that the 30-day period outlined by Ms. Balfour to accomplish funding is most likely optimistic. With that exception, the course paints a realistic picture of the venture capital process including likely obstacles to success. Nevertheless, awareness of this information is critical to every aspiring entrepreneur.
Finance and Accounting for Startups
“Finance and Accounting for Startups” is a well-developed, logical progression through corporate accounting and finance. The instructor, Chris Benjamin, an MBA and contract CFO for over 100 startup companies, combines 75 video lectures in seven hours of content. Mr. Benjamin uses slides as well as actual examples of public companies’ financial statements to make his points. The course has fewer than 400 students enrolled with only six student reviews (three to five stars).
The last three lessons are dedicated to raising capital, understanding investor exit strategies, and the mechanics of an initial public offering. This is a down-to-earth, basic course with critical knowledge for anyone starting or growing a company.
While lifetime learning is critical to maintaining an employee’s position in the workplace, formal classes are often unavailable, too expensive, or too theoretical to deliver knowledge that actually benefits students in their professions. Udemy is an interesting and evolving entry into the field of education providers. It turns the traditional view of the educational process on its head, focusing on the transfer of knowledge, rather than the attainment of a diploma.
It is likely that, as self-paced, online instruction becomes more common, validation of mastery will appear through independent testing agencies in many subjects. At the same time, developing and implementing new and enhanced skills in the workplace is certain to benefit both employee and employer. Udemy is a company with a concept whose time has come. While competitors are sure to appear, the company is likely to maintain its lead in the online video instruction industry.