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Udacity’s, A Freelancing Platform for Nanodegree Alumni, Shuts Down

Last month BestCerts mentioned that Udacity Blitz was not staffing any new projects. Now Udacity has made this official and announced that Blitz will be “winding down,” and will not take any new projects. Any projects that are actively in progress will continue until completion.

Message on Udacity’s Blitz homepage.

A year ago Udacity announced, a freelancing platform for Nanodegree alumni, with great fanfare. Companies could hire a team of Udacity-trained engineers via Blitz, and then said companies had the option of hiring the freelancers full-time afterwards at no extra cost. Udacity would only take a cut of 5–10% of the project fee. Projects could range from $5,000 to upwards of $50,000.

According to Udacity, their graduates have earned around $1.5M through Blitz. Some Udacity Blitz contributors (we don’t know how many) have been hired by their client companies, as well as Udacity’s own engineering team.

Victim of Scale?

So why is Udacity is shutting down a “successful program” (in their own words)? This is how Udacity communicated the shutdown in an email to those who were signed up as contributors to Blitz.

“Udacity’s mission is to democratize education on a global scale, and it has been working. We have a large number of Nanodegree students around the world and more joining every day. To support this large group, we have decided to focus all of our efforts on our top-notch career services (including the Udacity Freelance Toolkit and Roadmap in the Career Resource Center and — if your program qualifies — the Career Portal), as well as hiring partnerships with world-leading companies.”

Here is my attempt to decode this corporate jargon.

Udacity Blitz was officially launched six months after Udacity announced their Nanodegree Plus program. For an extra $100/month, the Nanodegree Plus would provide a job guarantee[1], or you’d get your money back. Only a few Nanodegrees were eligible. As we speculated, Udacity Blitz was one way that Udacity could fulfill this job guarantee.

But as BestCerts reported last month, Udacity is no longer offering its job guarantee on new Nanodegrees, and is slowly removing it from older Nanodegrees. And the reason behind this might be Udacity’s success.

Nanodegree stats from Udacity

Udacity has found success in launching futuristic-sounding Nanodegrees like the Self-Driving Car Nanodegree. This particular Nanodegree did not come with a job guarantee, but instead came with a bunch of hiring partners attached to it — partners like Mercedes Benz, Nvidia, Otto, and Didi Chuxing. These seem to have worked: Udacity received 42,000 applications and enrolled 10,000 students. More than 100 students have already been hired by companies like BMW, NVIDIA, Lockheed, and Bosch. Based on the success of this, Udacity announced a Flying Car Nanodegree.

Overall, 53,000 students are currently enrolled in Nanodegrees, which is a 4x increase from last year. This number does not include students who received scholarships, or students from Udacity’s enterprise efforts. There are now over 18,000 Nanodegree graduates. Udacity is also on track to double its revenues.

So it seems Udacity doesn’t really need the job guarantee program anymore to attract new Nanodegree students, and that may be one of the reasons why Udacity has decided not to pursue Blitz further.

But another reason may be that Blitz might be too expensive for Udacity to run. According to Udacity, it paid out $1.5 million, of which it takes a 5–10% cut. So in the best case scenario Udacity made $150,000. Udacity would need marketers, engineers, designers, project managers, and other staff to run Blitz. It would take a lot more investment to keep it going. To break even, Udacity might have to generate a pipeline of freelancing projects (probably greater than 10x the current volume), and have a strong pipeline of Nanodegree grads that can fulfill these projects. I suspect that Udacity might have had trouble scaling both these pipelines.

But since Udacity has figured out how to scale enrollments for Nanodegrees, it probably decided not to take up the challenge of scaling Blitz.

[1] Udacity guaranteed that the graduate’s gross income would be more than the cost of tuition within three months of getting a job. “Job” didn’t necessarily mean a full-time job, however.