Complete your course or lose your deposit. Exceed your goals and you get paid extra.
That’s pretty much what a startup in Canada is hoping to do to turn ridiculously low passing and completion rates of online courses. In the first of it’s kind in the MOOC industry (Massive Open Online Courses), the concept by a team called Wisely is banking on the idea of loss aversion where people have a tendency to strongly prefer avoiding losses to acquiring gains.
Loss aversion studies suggest that losses are twice as powerful, psychologically, as gains. This implies that one who loses $100 will lose more satisfaction than another person will gain satisfaction from a $100 windfall.
We’ve all heard of Udemy, CodeAcademy, Coursera and the likes. Content previously exclusive to students at colleges such as MIT are now accessible to anyone willing to learn. Open source education is notably fast growing. EdX and Udemy have over 2 million users. The largest of them all, Coursera has 7 million users. Conservative estimates predict over 15 million users will be on Coursera by the end of 2015.
With all these staggering numbers, the world is set to be home to its most educated generation in its history.
There is, however, one huge problem with these statistics. Of the millions now enrolled in online classes, only a tiny fraction actually do complete and pass the courses. Completion rates hover around 3-8% with an average of 5%.
Is this a sign of an inherent failure of the MOOC industry?
The Wisely team is confident that their formula will drastically increase passing rates. According to the team, there is a general problem with sustained motivation for users as a result of two missing ingredients in the MOOC ecosystem: lack of interaction and lack of incentive.
This is how Wisely works. Users place a self-declared deposit that they may or may not get back depending on whether they pass the course. Here’s the best part: If and when they do pass and exceed their goals, they get awarded with cash money from those who failed or dropped out, along with their initial deposit. It is actually a formula that has been proven to work with GymPact, the controversial app that pays people to live healthy and lose weight.
The good news is that the higher you set your goal, the higher your reward. The bad news, of course, is that if you fail, you lose your entire deposit to the winners. Assuming loss aversion studies to be true, you would then be more motivated not to lose your money than to gain. The incentive, as co-founder Cynthia Liao says, isn’t so much the bonus that’s driving you to succeed. It’s the fact that you do not want to lose your deposit.
Besides punishing students who drop out and rewarding performing students, other key features include an aggregate dashboard to track deadlines and announcements across courses on all MOOC platforms and the ability to meet and engage with online classmates through study and chat rooms.
Presently, the startup, which is under beta phase, has 200 users and 2 class pilots currently underway. The success of this concept will definitely serve to ensure thousands if not millions more would possibly pass their online courses and make the world a possibly more intelligent place.
So, would you use it?