Nearly 600,000 first-year college students take calculus annually in the U.S., and 250,000 fail, according to Woodie Flowers, professor of mechanical engineering at MIT.
At $2,000 per failed course, that’s nearly $500 million in losses for students each year.
How can that failure rate be cut in half? The professor suggests investing nearly $100 million into classroom alternatives like online learning.
That’s the idea behind Outlier.org, an online education platform created and led by Aaron Rasmussen, the co-founder of MasterClass, a streaming platform where anyone can learn from the world’s authority on a variety of topics.
In light of Outlier’s $30-million Series B round led by venture capital firm GV, Benzinga spoke with CEO and founder Rasmussen on motivations, recent developments and future plans.
Rasmussen's Journey From MasterClass To Outlier: Rasmussen is a serial entrepreneur.
After procuring degrees in computer science and advertising at Boston University, he founded and sold both USMechatronics and Harcos Laboratories before the age of 30.
“Then I did MasterClass,” Rasmussen said. “My co-founder David [Rogier] and I created that. I was on the product, creative, and engineering side.”
Rasmussen recalls the early days, interviewing Christina Aguilera while trying to fix the CSS on the MasterClass home page in between questions.
See also: MasterClass Review
“It was complete madness, but it worked really well and I’m very proud of what we accomplished there.”
Eventually, MasterClass brought on new leadership and Rasmussen took some time off.
After visiting nearly 28 countries, Rasmussen said he learned his background was not unique. Instead, he realized how important education was in expanding his mindset and access to opportunity.
“I started to think about why don’t we have a great for credit online solution,” he said in a discussion on the time he looked to MIT professor Flowers' comments on failure and losses at the college level.
“We waste [nearly] a billion dollars on failed calculus courses a year. Why not spend $10 million, make the greatest calculus course ever, and reduce that failure rate?”
This realization was the genesis of Outlier, a new format of online education that taps into the drivers that made MasterClass the success it is today.
The Calculus Behind Outlier: Outlier conquers the problems typically associated with online education — prestige, content quality and relevance, as well as lack of peer-based learning and high prices.
“People look down on online education, but I think it’s a matter of the way you treat it,” he said. “We film these things very beautifully, edit them, craft them. We make it something that’s deserving of prestige.”
Outlier partnered with instructors from top institutions like Yale, Harvard, MIT and Columbia to create cinema-quality lectures for a catalog of six college courses ranging from Calculus 1 to Philosophy.
At $400, one-sixth the cost of a traditional college course, Outlier students enjoy unparalleled learning opportunities that earn them transferable college credits.
“If students do all the work and don’t pass, they get their money back,” Rasmussen said. “That’s on us.”
Outlier's Partnerships, Fundraising: Since its founding, Outlier has cracked the code for online learning, Rasmussen told Benzinga.
“When we launched, ASU Global Freshman Academy was state of the art in getting for-credit à la carte classes. They had a 2% completion rate and 0.5% getting credit.”
After partnering with the University of Pittsburgh in a pilot semester, Outlier was able to dramatically increase traditional online learning success rates while lowering costs through a partnership with Klarna on zero-interest financing.
"Within a semester, we moved those numbers up to in-person courses," Rasmussen said. "Some of our cohorts actually do better than the national average."
To make introductory online courses available across the globe, the firm grew its executive team and secured $30 million in Series B funding led by GV, with participation from Unusual Ventures and existing investors GSV, Harrison Metal and Gaingels.
The company has raised $46 million so far.
The funds will be used to release 14 more courses by the end of 2022, a process that’s rather expensive, Rasmussen said.
“The pandemic was an awful thing across the board and, for us, there was a difficult adaptation we needed to make because we film beautiful cinematic videos which look like filming a feature film set.”
After pivoting to enable professors to set up equipment in their homes during the pandemic, Outlier found it efficient to incorporate robots on film sets, Rasmussen said.
“We spent a lot of time last year figuring out how to scale this in many ways, a litter quicker than we expected.”
Outlier, apart from automating with the use of robots, built its own learning management system and student support toolkit.
The Innovation Outlook: Outlier plans to add mission-driven talent, go global, develop synergies with government institutions on education issues and add partnerships.
One example of a partnership is the work Outlier is doing with the University of Pittsburgh and the University of Pittsburgh at Johnstown.
“We are giving $3.8 million worth of Pittsburgh credits to frontline workers,” Rasmussen said. “[Participants] shoot a little video and send it in. Usually, within a couple of days, we can approve them and they get a free course, at any time, over the next two years because they might not want to take it right now.”
Outlier is not in the business of replacing the college system, he said.
“We’re looking to be an option when people don’t have options,” Rasmussen said. “Having a market solution is good.”
Photo courtesy of Outlier.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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