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Sebastian Thrun’s Big Business Model Shift

Over the past few years, investors have dumped hundreds of millions of dollars into online education, and now companies like Coursera, Udemy and edX are searching for profitable long-term business models. That’s led Udacity founder Sebastian Thrun to abandon his initial approach of charging for videos and to instead charge for degrees in subjects like Android and data analysis.

Mr. Thrun, a Stanford robotics professor who started Google’s self-driving car efforts, is the godfather of the massive open online course, or MooC for short. Delivering college lectures via online video was supposed to revolutionize education by making it much more cost efficient.

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“What we commonly refer to as education, 98 percent of it stops at age 25,” Mr. Thrun said. “The system as a whole is really tuned to a 19th century experience. The group of people past college degrees, all the way to the highest ages, have been an extremely willing customer for us because many of them need a way forward to build their careers.”

Steve Nellis and Chris O'Brien commented on this article.
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Mr. Thrun wasn’t willing to talk lifetime customer value but said that four figures isn’t uncommon.