Udemy Collects $1 Million to Expand Casual Learning Platform

8/31/10Follow @wroush

Great teachers prepare their students to be lifelong learners, even after they leave the classroom. And judging from the $9 billion that Americans spend each year on “casual learning” products—that is, courses, conferences, seminars, DVDs, self-help books, and other forms of instruction outside of formal educational institutions—they may be succeeding.

One small company tapping that phenomenon just got a big boost. It’s a Palo Alto, CA, startup called Udemy—the name is a mashup of “you” and “academy”—and it announced today that it has collected $1 million in seed funding from a group of angel investors. The funds will help Udemy scale up its Web-based courseware platform, which can be used by anyone with expertise they want to share. These DIY instructors can develop online courses consisting of videos, PowerPoint presentations, and text files.

“There are millions of experts who might be great at Photoshop, or Web development, or public speaking, or dog training, or playing football,” says Udemy co-founder Gagan Biyani, a former Accenture consultant. “We wanted to make a way for people to share their knowledge by providing a WYSIWYG [what you see is what you get] way for them to build online courses.”

Launched in May with support from the Founder Institute, a training program for entrepreneurs, Udemy already offers more than 2,000 courses created by 1,000 instructors. At the moment, everything on the site is free, but within a couple of months, the startup will turn on a payment system that will allow instructors to collect course fees via PayPal, with Udemy taking a 20 percent cut, according to Biyani.

That business model has attracted the attention of a high-profile group of Silicon Valley angels, including PayPal alum Keith Rabois, Adify co-founders Russ Fradin and Larry Braitman, MHS Capital managing partner Mark Sugarman, Playdom co-founder Rick Thompson, Facebook alum Benjamin Ling (currently at Google), Aggregate Knowledge founder Paul Martino, Yelp CEO and PayPal alum Jeremy Stoppelman, 500 Startups founder Dave McClure, and AngelList co-founder Naval Ravikant.

Udemy course pageBiyani credits Founder Institute creator Adeo Ressi and AngelList for helping Udemy collect its seed fund, which ended up three times larger than the amount that the company originally set out to raise. “We went out on AngelList after getting two investors [Rabois and Fradin],” Biyani says. “Within a week or two we were overcommitted, and within three weeks we had closed the round.” (I profiled AngelList on August 20.)

Biyani’s co-founders are Eren Bali and Oktay Caglar, both Turkish citizens who were among the earliest employees at SpeedDate, the venture-backed startup in San Mateo that more than 10 million people have used to go on three-minute speed dates via webcam. Bali and Caglar joined the Silicon Valley version of the Founder Institute in May 2009 in order to restart a software project they’d originally worked on for the Turkish government: a live video-based learning system that entrepreneurs in Europe could use to teach startup techniques to entrepreneurs in Turkey.

Biyani entered the Founder Institute at the same time, as part of a startup creating Internet-video-based SAT preparation courses. But after Biyani’s co-founder in that venture dropped out, he paired up with Bali and Caglar, who needed a business type.

At Udemy, Bali and Caglar have rebuilt their original live instructional platform to be primarily asynchrononous. Instructors who prefer to teach classes live can use the startup’s custom Web-based conferencing system, which has all the usual bells and whistles (video, audio, presentation sharing, chat, and a whiteboard). But the core of the Udemy system is a content management system that lets instructors upload course materials such as presentation files and recorded videos, and arrange them according to whatever pedagogical scheme they have in mind.

Existing consumer-level publishing platforms such as WordPress wouldn’t work well for courseware, since most of these restrict users to posting material in reverse chronological order, Biyani argues. “The blog world is all about recency, but when you’re learning something you want to start at square one,” he says. “We’re focused on sequencing, and letting you put the course in the order that you think is appropriate for the learner.”

If you were looking for Udemy competitors, you might point to Blackboard Learn or Moodle. But both are geared toward professional educators. And Blackboard is a high-end system that only universities and school systems can afford, while Moodle—although free and open-source—must be downloaded and installed on the instructor’s own Web server.

Udemy’s system, by contrast, is entirely Web-based, and is free to instructors. Only a system with this level of simplicity, Biyani says, will draw in the large population of people already offering informal instruction through various media.

“One thing a lot of people don’t know is that there are already hundreds of thousands of people online trying to teach, using the most basic formats, like sharing Zip files of a bunch of PDFs,” Biyani says. “Our platform is new, in the sense that it’s different from a textbook, but this is not the first time people are learning on the Internet via video and PowerPoint, so I don’t think we will have to teach people how to use the platform. But we do have to teach people how to market their courses, and that will be a little more challenging.”

I asked Biyani for a few favorite examples of courseware created by Udemy’s early users. He pointed to several, including “Multimedia for the Classroom,” by Larry Hewett, an art instructor at West Columbus High School in Cerro Gordo, NC; “Photoshop Basics,” by Deivid Colkevicius, a U.K.-based Web designer; and “Introduction to Poker” by Al Spath, a contributor to Poker Journal and the former “Dean” of PokerSchoolOnline.com.

Like much user-generated content, Udemy’s courses are a bit rough around the edges. This can perhaps be attributed to the novelty of the form, and to the fact that Udemy hasn’t yet implemented its payment system, which will presumably attract more serious casual-learning entrepreneurs. “Right now we have decent to good courses,” Biyani says. “Eventually we will have great courses.”

For an example of what the Udemy platform can do and what the site might eventually grow into, check out academic.udemy.com, where the company has backfilled its platform with more than 600 video courses from free sources such as MIT’s Online Courseware project. But don’t pay too much attention to these Ivy League-caliber lectures, which Biyani and his co-founders uploaded mainly as a demonstration. The startup’s vision is firmly mass-market, built around the three common types of files that many hobbyist instructors probably already have on hand: video, text, and PowerPoint.

And that could eventually mean big business. But over the coming months, the company will have to prove that it can attract high-quality instructors, and get users to pay for their courses. “We think we can democratize the market, similar to the way blogging democratized publishing, by providing simple authoring tools,” says Biyani. “We figured out some very simple tools that instructors can actually use today. That’s what we think is the compelling value proposition.”

Wade Roush is a contributing editor at Xconomy. Follow @wroush

By posting a comment, you agree to our terms and conditions.