I took the MIT Fintech Certificate Course: Future Commerce. The Massachusetts Institute of Technology created the content. GetSmarter, a South African company, ran the course and provided the web technology. Take this class if you want good feedback on writing a fintech business plan, would like to add “MIT” to your LinkedIn profile, and if you, or your employer, have $2,600 to spare. Because it’s completely online, you can take this 12-week class from anywhere while working a full-time job. You should expect a workload that’s a little more than a typical college course. But since most of the assignments are group projects, you may end up putting in a lot more or a little less time, depending on the how much your teammates are willing and able to contribute.
I learned something completely separate from the course’s subject matter: Online learning can and will play an indispensable role in education. Learning institutions need to find the right mix of technology, content, and personalized instruction that will enable them to scale online education and keep costs down while maintaining quality.
“Online learning can and will play an indispensable role in education.”
There’s Always a But
GetSmarter is a for-profit enterprise. Creating a course like this one requires significant investment. To maximize returns, an online education vendor needs to replicate courses as many times as possible. Because fintech is changing so rapidly, a course purely devoted to fintech would have a very short “shelf life,” meaning less time to earn a return and more costs to make frequent updates. Conversely, the concepts involved in writing a business plan don’t change much. So MIT and GetSmarter created a course mostly about business plan writing, but with an emphasis on fintech. They had it both ways: they recruited many people who wanted to learn about fintech, which is a hot area, but they delivered something less costly than a course purely about fintech.
The people I interacted with at GetSmarter were intelligent, polite, smart, and responsive. The course’s content was current and of good quality. GetSmarter also provided detailed information about the course content before I enrolled. So I knew that writing a business plan was a significant part of the class. But if you’re thinking about taking this class, you should understand that it’s not going to turn you into a fintech expert. Most of the folks who successfully complete this course could not, for example, explain how the bitcoin protocol employs proof of work. And if you can’t do that, then you’re not an expert on the latest financial technology.
I had 810 classmates, or cohorts, who were scattered throughout the world. The $2,600 list cost of this class is about half what MIT currently charges full-time students for an on-campus course (TIP: Do some Google searches. You may find discount coupons).
GetSmarter has an excellent web-based system for delivering an online course. I noticed some bugs and user interface issues, but the bugs were minor. They also leveraged third-party technology. We used GetSocial as a group message board and Google Hangouts for virtual team meetings. I found the video conferencing feature of Google Hangouts to be surprisingly helpful. It made me realize how much we human beings, social animals that we are, depend on non-verbal cues for communication, building relationships, and creating trust. For example, a caustic remark in an email could easily leave a much different impression than the same statement delivered with a smile during a video conference.
I estimate that the course organizers allocated about six full-time equivalents (FTEs) to run the class. If you budget those employees at $10K/month, then payroll costs would be $60K x 3 months = $180K. They heavily promoted the course. So to account for other expenses, I’ll double the payroll costs to reach an expense of $360K. In case I missed something, let’s round up to $400K. Estimating that out of 811 cohorts, 750 paid an average of $2,500 each, then the total revenue for the course would be $2,500 x 750 = $1.875M. Given that, their gross margin was $1.875M – $400K = $1.475M. Not bad!
I have no idea how MIT and GetSmarter split revenue. It’s important to note that creating the course content wasn’t cheap, and GetSmarter apparently made significant investments in developing its website. But my back-of-the-envelope estimates suggest that online learning can be lucrative.
MIT is Spending Its Brand Capital
Nobody would have paid $2,600 for this class if the end result was a “GetSmarter Fintech Certificate.” The MIT brand is what people wanted. I didn’t see any evidence that the organizers screened students. I met cohorts who were very smart and talented. But one or two students I met were less than impressive. Hundreds of those not-so-impressive folks now have MIT Fintech credentials. That could diminish the value of MIT’s brand.
Other Kvetchitas (Little Complaints)
If you’ve worked for a few decades, and have already started companies, then there’s a good chance that you’ll have more experience and expertise than the person assigned to critique your business plan. So you may get comments that you know are wrong. For example, our business plan involved taking on SAP and Oracle, but our mentor suggested that our $1.6M funding ask was far too high. Huh? Anyone who’s ever hired the staff required to develop a sophisticated software product, like what you’d have to do to take on Oracle, knows how fast you can chew through a few $100K.
No business plan is a plan without financial projections. Every investor that I’ve given a business plan to flipped right the pro forma financial statements. A good spreadsheet will enable you to perform an instant “what if” analysis by changing assumptions, which should flow through to all future statements (cash flow, balance sheet, etc.). Because it would have been too difficult to teach hundreds of cohorts accounting 101, the course organizers not only didn’t require projected financial statements in a spreadsheet, they wouldn’t even look at ours. That’s silly. They should at least give you the option to submit a spreadsheet as part of your financial plan.
VolksEd of the Future
I started out somewhat skeptical of online learning. But now I’m convinced that it can work. It’s possible to use technology (e.g., Google Hangouts with video) as a reasonable substitute for in-person interaction. Meanwhile, the cost of education is skyrocketing just as our need for it, both as individuals and as a society, is increasing exponentially. I have a great deal of admiration for both MIT and GetSmarter for being pioneers in this area. They must keep it up.
Just for Fun
This has nothing to do with the course, but it’s one of my favorite scenes from Back to School.