The MOOC--and the Coming Unbundling of Higher Ed

Going out of Business Everything must go!

The MOOC–the massive open online course–is stirring up a lot of concern.

And rightfully so. Because “open” here means: come one, come all, no charge. And a college course for free is likely a gamechanger.

I’ve written before about one aspect of the crisis in higher education: namely, its business model. The MOOC is another leading indicator that higher ed’s business model is in serious trouble.

Networked computing–the omnipresence of computing devices, connected by wireless and wired networks, using standardized protocols and formats to share multimedia content–has revolutionized many industries.

  • Many record stores are gone, in part thanks to digital music files and the ability to buy and consume them using very tiny computers.
  • Some bookstore chains and independent bookstores have bitten the dust, since internet shopping, shipping and payment systems have made a book across the country slightly more convenient than one down the block. (‘Convenience’ is surely more perception than reality.)
  • Videostore chains and mom-and-pop shops could not stand up against streaming videos to your TV, computer and phone, or renting a DVD at the same place you buy your beer on the way home. (Ah, the glamour of it all.)
  • Paper money is looking real old-fashioned right about now: the ways people pay for things on the internet may replace the ways we currently pay on-site.

Higher ed is clearly ripe for this kind of assault.

(To those of you who say “but higher education is something much more profound and noble than a mere industry or service,” I say: those who worked in video stores, record stores and bookshops felt much the same way. Any business that takes in money for whatever purpose can be put out of business. For the present purposes, that is all that counts.)

  • You can now take a whole course on your computer, tablet, phone, etc. And the school offering it may be across the country or around the world.
  • The Open Course movement and (more recently) MOOC’s (massive free online courses) have made the basic content inside a college course basically free.

All this is pushing towards one specific kind of service innovation: disaggregation or un-bundling. (I know: it's not a new topic.) Currently, you must pay one price for all aspects of higher education–and largely from a single vendor at once. One vendor:

  • hires the experts who have the knowledge,
  • owns the rooms where the courses take place,
  • runs the servers which transfer course material around,
  • brings together the other learners (whose presence is required as a matter of efficiency),
  • houses and feeds the learners,
  • helps the learners move towards graduation, and
  • hands out that all-important credential at the end.

All these services are bundled.

  • You may pay one price for all these services at once: so much per semester or year.
  • Or you may pay per knowledge slice–i.e., per course.
  • Certainly the housing and feeding are not 100% integral: not all colleges are residential.
  • And even residential colleges will let you buy your food elsewhere, even live off-campus.

But now higher ed’s remaining services are looking more like food: learners want to buy what they want where they want. (And who can blame them?)

Higher ed is in danger of becoming the “cafeteria food” of knowledge: stale stuff that’s sitting around being kept warm, the same meat-and-two-vegetables being served to everyone, regardless of their preferences, because it’s more convenient to keep bad food on hand than it is to make the food people want when and where they want it.


In unbundling, it seems that when one a single element is available freely or very very cheaply, consumer behavior is: to look for ways to downsize the price of the whole service.

So what are the real valuable pieces of the higher ed service?

A Community of Excited and Helpful Peer Learners. This is probably the most important part of the equation.

  • If you’ve ever entered grad school with a terrific cohort of curious, hard-working, helpful people, you know what this is like.
  • If you’ve ever taken a course in which the professor excited and empowered students to pursue their own projects, both individually and in groups, then you know how powerful this can be.
  • And if you’ve ever taken an online course with zero meaningful peer interaction, you know how dispiriting the absence of this element can be.

Subject-Matter Expertise. This comes in the form of professors, books, lectures, etc. You may buy the books, rent them, borrow them from a library.

This is knowledge: the heart of higher education. And it’s the most removed from the student. Many learners never interact with their professor. Many students don’t care whether they learn from a book, a lecture, a person, or a robot.

Places To Meet. Physically: classrooms, coffeeshops, libraries, labs, study rooms, etc. But also: chat rooms, web sites, discussion boards, the LMS–any place people can connect, contact each other, leave messages, chat in realtime or asynchronously.

Guides, Mentors, Advisors. These people help you find your way through the labyrinth. They can be professors, students a year or two ahead of you, teaching assistants, department advisors, counsellors, or old books which recount stories which seem to apply to your life. (The guard at the door of the Emerald City in The Wizard of Oz always makes me think of every piece of paper I ever had to file in any bureaucracy.)

Assessment. This is the moment when you prove you learned something. It used to be part of a course–papers, tests, labs, that sort of thing. The validity is guaranteed by the school, department and instructor, by the social and cultural norms of the discipline, and by the accreditation institutions that say ‘this college really meets the appropriate standards.’

So now we can see what’s happening.

The last two items are the only ones not being revolutionized. Which means it’s only a matter of time.

  • The community of learners doesn’t need to be face-to-face. They don’t need to be convened and housed by an institution–which might actually do a bad job at it. You can find your own friends: we do it throughout life. College needn’t be any different. And social media is the new place to find and interact with like-minded people.
  • The subject-matter expertise is now basically free: video lectures, ebooks, web resources. Research databases are still a sticking point: the service is expensive, and membership in a school community is basically required. But there’s lots besides.
  • The rooms are no longer necessary–although they’re a nice luxury. Students also study at Starbucks, at a friend’s place, and (in good weather) on a nice lawn. Lovely libraries and study rooms are nice, but if you hate your peers, it’s no good. Students seldom take pleasure in using the LMS. Students have their own preferred communication channels and hangout spaces. And when distance enters the equation, physical rooms no longer matter. The communication tools simply need to be plug-and-play.
  • Advising and mentoring has never been the most consistent part of higher ed. Colleges and universities try to provide it, but I believe often it doesn’t work, and students simply turn to their peers for advice. (“Just read the textbook–nothing from Jones' lectures shows up on the test.” “Don’t forget to file your yellow form by Friday–or you can’t graduate in the spring.” Etc.)

This means that only two pieces of the higher ed services have yet to be replaced (in principle if not in practice).

what what it was what it can be
a community of learners a cohort, classmates social media
subject-matter experts professors, books, articles, lectures free resources: lectures from MOOC's, free ebooks, etc.
places to meet classrooms, the LMS social media
guides & mentors advising, professors, upperclassmen ?




The guidance and mentoring part is hard. This is likely where colleges should focus: connecting every student with several experts who are really good at mentoring, not just showing up for office hours because they have to.

But in the end, if you’re a college, students really just need you for the piece of paper: assessment from an accredited institution.

As soon as employers accept badges, or colleges start giving tests to pass students out of courses (for a small fee), it’s done: the services are unbundled.

If you’re a college, people will soon be competing for every aspect of the services you provide. Some of these services are now free. How higher ed solves this problem–if they can–remains to be seen.

Chances are: the MOOC is only the beginning.

–Edward R. O'Neill


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