Straighterline Wants To Help Professors Expand Reach, While Students Save

Burck Smith is so far making good on his vision for revamping the way people pay for and complete college courses. His startup company, Straighterline, enables students to pay $99 a month for introductory college courses — and potentially save tens of thousands of dollars in the process.

In November, Smith will embark on another disruptive tack in online higher education. His Baltimore company will allow college professors to pitch their own courses through Straighterline, and even set their own prices above a minimum threshold.

The long-term vision, Smith said, is to empower professors — from lecturers to the tenured — to customize Straighterline courses and create an online platform where thousands of students can buy their college education— much like an eBay for college learning.

"Some professors might be better than others," said Smith, whose company is based in downtown Baltimore. "The idea is the student has those choices. It's really an experiment in creating a marketplace for professors and students to meet up."

Straighterline is among a crop of early stage online education companies that have been percolating in Baltimore in recent years. The company is in the midst of a rapidly growing online education industry that straddles the world of accredited education and nonaccredited skills training and knowledge sharing.

Across the Web, numerous companies offer online education and skills training, either for free or for a fee, but few — aside from traditional colleges and universities — offer course credit. For instance, people looking to learn new skills, such as iPhone programming, can watch video courses on iTunes University, Apple Inc.'s education platform.

There also is Coursera, which offers free massive open online courses from professors at major established universities, that could attract millions of students. But most colleges on the site, including the Johns Hopkins University Bloomberg School of Public Health, don't offer credit — though Coursera is moving in that direction.

There's Udacity, which offers free online courses and allows students to take exams, for a fee, and receive a certification — but no credit. And later this fall, a joint venture between the Massachusetts Institute of Technology and Harvard University, called EdX, will offer free courses, but no college credit.

Just a few years ago, Straighterline and its peers were regarded largely as wild-eyed disrupters whose vision for a 21st century online higher education environment was radical and improbable.

Not anymore. The cost of online software services, broadband and course development and dissemination have continued to plummet. High school and college students increasingly are looking for ways to save money on their college education, in the face of mounting student debt.

Venture capitalists have followed Straighterline and its competitors into the digital education breach. Straighterline raised $10 million in April from a handful of major investors. That same month, Coursera raised $16 million from venture capital firms.

Also in April, Landover-based 2Tor Inc., which builds online education platforms for major universities, raised $26 million.

"The Internet is happening to education," said George Siemens, a professor and associate director of Athabasca University's Technology Enhanced Knowledge Research Institute, in Alberta, Canada.

In 2008, Siemens and another professor experimented with holding the first massively open online course, which attracted thousands of students. Such courses now can attract more than 100,000 students from all over the world.

"The need for knowledge has increased in a knowledge society," Siemens said. "We're doing a greater amount of learning than even the last generation did."

Siemens said the cost of creating and distributing course materials has fallen, and communication over long distances is cheaper and simpler. With costs so low now, educational technology companies are trying to figure out what students consider worth paying for. Siemens thinks students want to pay for course accreditation — something that Straighterline offers — because employers still want to see their workers hold official degrees.

"Economically the primary value point is accreditation and recognition — that's what students are willing to pay for," Siemens said.

Straighterline will use its April venture capital investment to expand its marketing and outreach to universities across the country. Smith believes his company differentiates itself from competitors by offering its students a way to receive credit toward a degree at an inexpensive price. University competitors typically charge the same price for online courses as their offline ones, while other companies aren't yet able to offer credit.
Frank Bonsal III, general partner with New Markets Venture Partners, of Fulton, Md., said his firm invested in Straighterline because of that difference.

"I'm not betting on luck or product coolness, but on student engagement and institutional course acceptance," Bonsal said. "Students should get something for their 'spend.'"

The big news for Straighterline this summer is that it recently struck its first "articulation" agreement with a Maryland higher education institution. Students will soon be able to take Straighterline courses and transfer them to the University of Maryland University College, the state's flagship online university, for credit.

Straighterline also is striking partnerships with companies that are looking to provide low-cost college courses with tuition reimbursement, as a benefit in the workplace. In July, the company announced a partnership with Aaron's, an Atlanta-based chain of stores that leases and sells household items, such as furniture and electronics.

Straighterline soon will allow its students to choose the course materials for their classes, which are offered by established textbook and curriculum publishers.

What Straighterline offers, Smith said, is a path to accreditation through its introductory course work. Students can receive credit toward a degree by transferring their course work to schools the company partners with, which are accredited. But Straighterline can't offer its own degrees to students, because it is not accredited.

With Straighterline's new model of enabling professors to customize courses and charge more for them to students means, at least theoretically, that the professors who offer the best value and services attached to the courses could attract more students as paying customers.

Under Straighterline's model, which is set for a pilot this fall, Smith estimated that a college professor who attracts a large, potentially global following of student course takers, could earn up to a million dollars from a course.

"My gut is the professor's brand won't be attached to the college, per se, and that's a different expectation than people assume right now," Smith said.

In reality, Smith sees the Internet and massive cheap or free online courses contributing to the rise of the branded, "rock star" professor. Much like the Internet has allowed popular bloggers and independent voices to gain millions of followers, Smith sees professors having that same potential to reach a wide audience based on the quality of their course content and offerings to students.

Straighterline has attracted 4,500 students — tripling its enrollment in two years — and has credit-transfer partnerships with 40 accredited colleges and universities in the United States. Its university partners like Straighterline because the company brings them a pipeline of students who've taken some courses, but still need more to finish their education at an accredited institution in order to receive a degree.

But Straighterline hasn't grown as quickly as Coursera, which has millions of students taking its free courses.

Yet Smith believes his company has a revenue model figured out. Students want cheap college courses, but they don't just want a certification of completion, Smith said, they want to receive real credit.


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