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Dawid Bilski

Silicon Valley's Hottest Innovations 2016

Lessons for the Future
Udacity, the online education start-up, wants students of today to learn the technology of tomorrow

V Keshavdev

Sebastian Thrun, founder, Udacity

Keep learning till you drop dead!
Provoking as it may sound, but that’s how Sebastian Thrun envisages the future of education. “I was a professor at Stanford University for 10 years. I can say it’s much harder to change the curriculum every half a year. You become an expert in one thing and tend to teach the same thing for the rest of your life. That means colleges turn over content every 30 or 40 years,” says the 46-year-old, who was a professor of computer science at Stanford.

To understand where Thrun is coming from, it is important to know how it all began first. It was in 2011, Thrun and his friend Peter Norvig at Google, decided to throw open Stanford’s ‘Introduction to Artificial Intelligence’ course online for free. Within weeks, more than 160,000 applications from over 200 countries poured in. It was a pleasant surprise. While 200 students of Stanford completed the study on campus, so did 23,000 students across the world, online. But what followed next set Thrun thinking. When scores from the final exam were ranked, none of the top 400 students were from Stanford and the strongest campus student was ranked 415th. “That’s when we recognised that while Stanford attracted extraordinarily talented students, there is even a larger number of talented individuals who couldn’t make it to top universities, but deserved every bit of the same top-notch education,” says Thrun, sitting at Udacity’s office in Mountain View, California. He is not off the mark. In March 2016, Stanford announced that 2,063 high school students were admitted to the class of 2020 from a pool of 43,997 — the largest application pool in the institution’s history. The admitted students had come from the US and 76 other countries.

One for all
The need to democratise education using internet and, the fact that the cost of Stanford online experiment was just 16 cents per student, which is a small fraction of $52,000 a year, that a student otherwise pays for the course at Stanford, formed the cornerstone on which Udacity went online in 2011 by offering its first course titled, ‘Building Your Own Search Engine.’ 

It was rather an interesting switch in Thrun’s career, which began after he completed his PhD in computer science and statistics. During his stint at Carnegie Mellon University, he was instrumental in creating a masters program in automated learning and discovery, which also happened to be the first PhD program in machine learning in US. He went on to become a professor at Stanford and it was here that the world took notice of Thrun’s genius when his autonomous car project won Stanford a $2 million prize from the Defense Advanced Research Projects Agency (DARPA), and also landed him a prestigious assignment at Google in 2007. It was here that Thrun set up X, the semi-secret lab which is working on Google’s most ambitious projects: self-driving cars, glass, smart contact lenses and an internet network of balloons. He quit his association with Google in 2014, to focus on Udacity.

The decision to single-handedly focus on Udacity was also an outcome of a change in perspective for Thrun. “At some point, I realised that I can build how many ever self-driving cars; but if I can help every talented person in the world a chance to build their own self driving car, the progress in the world would be much faster,” remarks Thrun, who is also an avid cyclist.

While Udacity had the numbers to show in terms of sign-ups, Thrun was rankled by one piece of statistic. The number of students who actually ended up completing the entire course online was less than 10%. Also, among those who finished, not all got a passing grade, which meant, for every 100 enrollments only five actually learnt the course. That clearly showed that the free course was not necessarily a big pull for students. “All content is free of charge, but that alone does not make for a great business model,” explains Thrun. In 2013, Thrun changed the tack by planning to charge for specialised courses, customised for technology companies. It was a novel idea, but that required a bit of knocking around doors in the Valley and asking companies what skill sets they were looking for when hiring employees. The feedback resulted in ‘a checklist’ that led to the creation of Udacity’s maiden nanodegree program titled ‘Data Science and Big Data Track,’ developed in cooperation with enterprise software major Cloudera, at $105 per month. The duration of nanodegree courses vary between 3 and 9 months, though students are allowed to complete the course at their own pace.

It’s here that Udacity believes it can differentiate itself from established universities of the likes of Stanford by adding the latest tech topics to its curriculum as quickly as Silicon Valley warmed up to them. “Our life-cycle is three years as technology evolves fast. The challenge to keep content fresh is essential for any education and we are lucky we have this close collaboration with top companies that are willing to share their content with us,” says Thrun. 

Best of everything
Though Thrun has worked with Google, he believes that being an independent venture has helped Udacity to work with lot many tech companies. “If we [Udacity] were part of Google, it would have been difficult to get Facebook to give their best instructors or Mercedes, who at some level consider Google as a competitor, to come on board for the driverless car nanodegree. We would like to be an independent platform and the new university of Silicon Valley,” mentions Thrun.

For now, Udacity’s courses are not just backed by Google, but other giants such as Facebook, Amazon, GitHub, Cloudera, AT&T, Mercedes among others. “We are more focused on the idea that education shouldn’t take too long if you focus on a particular skill set,” points out Thrun. The start-up’s most popular degree is web content developer, which allows individuals to be a front-end web developer. No university or IIT teaches android courses and students of Udacity who are pursuing an android degree get to immediately work with Application Programming Interfaces (APIs) as soon as Google launches them. “Google, in partnership with Udacity, is making android development accessible and understandable to everyone, so that regardless of your background, you can learn to build apps that improve the lives of people around you,” Shanea King-Roberson, program manager at Google, mentions in a blog post. Currently, there are 1.4 billion android devices and the operating system accounts for 82% of the global smartphone market. Similarly, Udacity, in a bid to spur the driverless car momentum across the globe, has tied up with Mercedes-Benz, Nvidia, Didi, the Chinese ridesharing major, and Otto, the autonomous truck outfit that Uber recently acquired. The $2,400, 27-week course, which also has inputs from Thrun, offers students with basic coding experience and a chance to become deep learning engineer.

Following the introduction of paid courses, students are no longer dropping off and a big difference has also come about because Udacity roped in mentors as well. “Online courses are very lonely experience as we learnt that students wanted someone to talk, guide and help them grow,” reveals Thrun. Udacity provides paid services access to coaches, guidance on their projects, and career counselling. The students, who are usually of the age 26-27, receive prompt evaluations of their work by field experts, as the idea is to train students and not rate them. “Our global grader network, which is now over 400 people strong, gives people the ability to earn extra money for grading nanodegree projects. They return student projects in an average of three hours, get an average star rating of 4.8, and can make up to $28,000 a month,” mentions Shernaz Daver, the chief marketing officer at Udacity.

Udacity also offers nanodegree plus programs, costing $300 a month, like android developer, iOS developer, machine learning engineer and senior web developer. Udacity guarantees students of its nanodegree plus programs a job within six months of completion of the course and if they don’t land with a job within the time period, they get a 100% tuition reimbursement. For anyone who graduates from a regular nanodegree program within a year, Udacity offers a 50% tuition reimbursement. Since the company has begun to focus more on vocational learning, more than 400 students have received jobs at companies such as AT&T, Google, Nest, Accenture, AT&T, Amazon, Salesforce, Rakuten, Verizon, Goldman Sachs, Intuit and many others outside of Silicon Valley. More than a marketing spiel, Thrun believes the money back policy plays a critical role. “The other reason we give back money is that it forces us to work as hard as we can, to align our educational offerings with the interest of our students who predominantly come to us because they love to improve their life situation, get better education and contribute better to the society,” explains Thrun. The average salary for an android developer in the US is $82,000 a year. Udacity says base salaries for self-driving car engineers range from $66,800 to $210,000 and that its four partners are committed to hiring the best talent that it produces. 

Though the money back scheme is currently restricted to students from the US, Udacity has partnered with Indian companies such as Infosys, the Tata group and start-ups such as Flipkart. “We have no money back guarantee in India because we don’t have enough employers that give us confidence that we can place them in a job,” reveals Thrun. But Udacity has placed some of its students from India who completed the android developer nanodegree program with Flipkart for its mobile development team. Peeyush Ranjan, chief technology officer, Flipkart, was quoted as saying, “The shortlisted profiles provided by Udacity and the in-depth data we received were very helpful and allowed us to assess the candidate’s competencies in a much better way.”

Thrun says that every company that he has spoken to is desperate to find talent in machine learning and data science. “The needs are very identical…they all need the same skill sets: machine learning, estimation, control theory, AI, and robotics. If one can master all these skill sets, I will be shocked if the person can’t find a job,” says Thrun, whose latest course addition is a nanodegree in virtual reality.

Even as the five-year old start-up is sitting on half of the $58 million raised earlier, in November 2015, it mopped up an additional $105 million in a Series-D round, and in doing so, it has joined the Unicorn club of start-ups which enjoy valuation of over a billion. Besides existing investors Andreessen Horowitz, Charles River Ventures, and Drive Capital, new investors like Bertelsmann — the international media services and education company, Scotland’s Baillie Gifford, Emerson Collective and Capital G, too participated in the round. The funding raising comes close on the heels of the company celebrating the one-year anniversary of its nanodegree program. More than 3,000 students have graduated with a nanodegree since the program was launched in 2014. 

As Udacity continues to grow, so does its business model. It has recently launched a freelance software project marketplace. The new site will give nanodegree graduates a chance to work with companies that need mobile apps, websites or other software. The program, which began 10 months ago, saw 80 nanodegree engineers working on 80 projects through Blitz. While Udacity takes a 10%-20% of the project fee as commission, its ultimate aim is to ensure that the graduates get full time jobs with the companies whose projects they have worked upon.

Given that AI is going to become all pervasive in the near future, Thrun believes that highly specialised jobs in the field of diagnostics, accountancy, law and aviation will soon be replaced by machine learning. Besides, 80% of the office jobs today would be no longer the same, over the next two decades. Just like we consume food today and continue to have life-long associations with utility services today, so will be our association with education providers, feels Thrun. 

In the coming future, the Udacity founder believes cars will fly, cancer will be cured and people will live twice as longer. “For all those sceptics who think Sebastian is a dreamer, let them not forget...the technologies that we care for today was magic for civilisation 200 years ago,” smiles Thrun. If that indeed is the case, then the students of Udacity could well turn out to be the wizards of tomorrow.

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