At Udemy, Online Education Meets the Marketplace

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broader potential. Since then, the company has raised $16 million from Insight Venture Partners, Lightbank, MHS Capital, 500 Startups, and a variety of Bay Area angel investors such as Keith Rabois and Naval Ravikant.

At its core, the Udemy platform isn’t terribly high-tech—it’s a content management system that lets instructors upload and arrange course videos and supporting materials. On top of that, there’s an iTunes-like store where students can browse, preview, rate, and sign up for courses, along with tools that let registered students communicate with instructors. Students can also access the courses through native iPhone and iPad apps. Last year the company introduced “Udemy for Organizations,” a service that lets companies buy bulk access to the courseware for their employees.

Yang, a former executive at mobile advertising company 4Info, was brought in last summer to help jumpstart Udemy’s growth. Udemy’s advantage, Yang believes, is that it draws on a large community of instructors, who have their ears to the ground in their subject areas. Competing sites like Lynda.com and Skillsoft also offer career-oriented, video-based training with an emphasis on software skills, but both companies create their content in-house, which can be more costly and time-consuming. (Lynda.com courses, especially, are known for their high production values.)

“We will always have a much larger catalog, and we will tend to pick up newer content faster,” Yang says, pointing to recently added courses on the Raspberry Pi computing platform and Bitcoin, the virtual currency. “If a new database language came up and got really hot, I can assure you we would have a course on our platform before anyone else. Going to a movie studio to create a course is a great way to do it, but folks in the market are thinking about it and will create it themselves faster.”

Udemy offers a 60-point checklist to help instructors create decent courses, and every course is reviewed to make sure it meets minimum standards. Instructors learn from each other, and “over time the bar gets higher and higher,” Yang says.

For students, the costs of taking a Udemy course average out to about $10 per hour. That’s much more expensive than Lynda.com, which charges $25 per month for unlimited access to its 2,000 courses, but it’s a lot cheaper than enrolling in an extension or community-college course. And for the most part, students’ money goes directly to the teacher. When students sign up as a result of an instructor’s own promotional efforts on e-mail, Facebook, Twitter, and the like, the instructor gets to keep 85 percent of the fee. For students who sign up via Udemy’s site, instructors keep 70 percent.

As in any true marketplace, most Udemy customers clump around a few top offerings, and the most popular courses, including the huge Excel course, are prepared by outside e-learning companies like Oakland, Ontario-based Infinite Skills or Mumbai, India-based Corporate Bridge Group. That means successful individual instructors like Hernandez are outliers; three out of four Udemy courses never break the $10,000 revenue barrier.

But over time, the changing demands of work will drive more and more people to seek continuing education. And because of their busy schedules, they’ll want this content in digestible, on-demand chunks. All of this means Udemy will need more instructors in more fields, from HTML5 and JavaScript to photography and acupuncture. Says Yang, “Our number one goal is to continue to drive liquidity—to scale both the supply and the demand and, as much as possible, keep them in lockstep.”

That’s something traditional universities, with their crowded first-year lecture courses, have a notoriously hard time doing. A world where more and more people get their education à la carte won’t resemble the ivy-covered halls of old, but it might make economic sense for a much larger number of learners.

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The Author

Wade Roush is a contributing editor at Xconomy.

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  • Gurjinder Singh

    http://www.wiziq.com/courses/ is also there. Educators can set up paid courses and launch their MOOCS too.

  • http://www.parallelbranch.com/ Parallel Branch

    I think it is a very great post containing valuable information about the online education.Due to high technology-based platform,online learning enable the students to comfortable to catch the vital information about anything from different media.These positive interaction bring more confidence level to students to perform their skills very well.

  • http://right-course-online.com/ Right Course Online

    Good points Wade. Agreed that online courses are a great way for students to supplement their learning with modules of particular interest to them. Udemy does have a lot of Excel courses! It’s very helpful to first think about the niche that is appropriate to you: That makes it a lot easier to find the course that’s right for you. Here’s our advice:
    http://right-course-online.com/blog/udemy-excel-reviews/

  • Ben

    From poking around on these courses, it appears that there are no assignments and no assessments. The courses are solely video lectures with maybe a forum. I have never taken a college course where there was no work. I don’t feel like I’d learn much without assignments.

  • J Guilherme Vidotto

    Learn C# from the beginning, 69% off for the first 20 students https://www.udemy.com/c-beginner-course/?promote=1

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