The Strategy Udacity Uses to Scale Rapidly

More of the world is headed in this direction, focusing less on traditional employment arrangements and more on talent however it is best found and arranged.

Back in 2014, Udacity launched its nanodegree program, offering an array of online degrees that cost $200 a month and teach students the technical skills necessary for an entry-level position. As part of the program, students receive quality feedback on the work they submit, meaning feedback from actual humans, not bots. The nanodegrees were a massive hit. Within a few months, Udacity had around 2,500 paying students, but only 17 internal team members reviewing projects. It was taking weeks for students to receive feedback. Udacity had to figure out a way to streamline the process.

Two years later, Harvard Business Review published a book called “Agile Talent,” which details the macroeconomic trends happening in today’s labor market. Agile talent isn’t just a fancy, new word for freelancers. It’s a term that describes working with the best people in any capacity they prefer, giving Udacity — and companies that do this — a significant competitive advantage.

This article is the culmination of two interviews with Vishal Makhijani, CEO of Udacity, and Jonathan Younger, co-author of Agile Talent. In it, they share their strategies and insights into this new era of work.


What is agile talent anyway?

It’s likely that you’ve thought about agile talent before. Most business owners have, even without realizing it. “Freelancers” and the “gig economy” seem to be this season’s buzzwords, but what exactly do they mean and how can they benefit you?

The majority of information around this topic reports that there’s a massive shift happening around the way people work and how companies get things done in today’s labor market. You’ve probably read that most freelancers are remote. And how outside experts can pose useful when you need a specific skill set in a particular niche at the drop of a hat. It’s just as likely that you’ve heard about businesses outsourcing mindless tasks to indifferent, overseas labor pools in order to save money and cut costs. This is the buzz you probably read about anyway.

What you don’t ever read about is why you might utilize agile talent or how to set up your organization to successfully receive external resources and maximize the value and productivity of this outside work.

Data suggests contracting out focuses more on efficiency and less on strategic capabilities, which Younger thinks is a massive missed opportunity.

He proposes thinking more strategically about agile talent and offers a completely different approach to the future of work.

“Agile talent is powered by what we call, cloud resourcing. The allusion to cloud computing is intentional; cloud is a synonym for distributed computing over a network and reflects the greater ability of organizations to increase speed and efficiency by running applications on many connected computers at the same time,” Younger says. “Cloud resourcing reflects the ability of organizations to access a global talent network that offers a greater range of skills, on a more cost-efficient basis, than is available from traditional models of employment and that enjoys a far broader variety of resourcing arrangements.”

Agile talent is sort-of like a utility supply. The goal is to temporarily use the best of something in order to take your idea or business to the next level. Temporary could mean anything from a week to a few months or even years.

Consumers have high expectations in today’s on-demand, always-on economy. The need for speed has never been greater, forcing leaders to assess whether traditional, full-time, onsite employees are still the optimal — or only — route to injecting creativity and speed into their organizations.


The 4 Trends Driving the Shift to Agile Talent

According to Younger, there are four trends driving the big shift known as agile talent. He details each one below.

1. As competition accelerates and as innovators disrupt industries and markets, the need for “expertise on tap” continues to expand.

Not only are organizations likely to need new or increased capabilities, they need them sooner, the required speed of change has vastly accelerated. According to Deloitte, just over half the companies it surveyed say their need for “contingent workers” will continue to increase over the next three to five years.

2. Much of the external talent available is composed of highly trained expertise.

3. Because of greater educational and economic opportunity, expertise is more globally accessible than ever before.

4. Finally, both organizations and individual professionals are rethinking the idea of “careers.”

A growing number of companies, such as Zappos and LinkedIn, have eschewed traditional employment relationships for new, flexible and temporary arrangements that offer engaging work rather than full-time, permanent employment. Facebook has gone on the record saying that it’s as interested in temporary employees as it is individuals with longer-term career interests. These types of workers, who sojourn in organizations, now represent as much as 20 to 40 percent of the workforce.


There is no “Aha” Moment

At least there wasn’t for Udacity. The decision to employ agile talent birthed out of complete necessity. As its aspirations grew to rapidly expand to different parts of the globe, Makhijani says they were forced to find alternative ways to do so.

“We’re taking on a big thing here at Udacity. We’re building the entire education experience. We’re not just building an LMS or one piece of the solution. We’re trying to build the content and the services and the way to acquire students and career services and a whole host of things,” Makhijani says. “We were frankly just practically constrained about what we could execute with our internal team, so we were looking for any way to go get talent to help us do this.”

Project Reviewers

The first challenge came in 2014, when Udacity had to quickly scale its project reviews while fulfilling two objectives. First and foremost, the reviews had to provide quality feedback from a real human expert. Second, this feedback had to be quick since fast feedback loops are essential for effective learning.

To relieve constraints, Udacity took a play from the Uber and Lyft playbook.

“It was just an idea coming out of what we saw all around us. We said: ‘What if we can find folks who we could train to provide this grading service?’ So one of our best engineers and product people said ‘Give me a month.’ He took six weeks, and he built a system to have students submit their projects in a way that folks, who we trained, were able to take those projects, grade them, submit them back, and get paid,” Makhijani says.

These services, provided on a just-in-time basis for its students, reduced code review wait times from a few weeks down to just two hours.

“Whenever a student submitted their project, we’d send an alert to an on-demand workforce of amazing programmers, ready to code review at a moment’s notice,” Oliver Cameron, VP of Engineering and Product at Udacity, said. “Our theory was that there was a wealth of programming talent, all around the world, who would jump at the chance to help our students succeed. We hoped that this Udacity Project Reviewer role was something you could do during your spare time, but given the volume of project submissions, it was clear there was an opportunity for this to be a full-time gig too.”

Where do you find this type of talent?

The first question Udacity set out to answer was: What types of programmers would be the best project reviewers for its students? According to Cameron, they narrowed it down to four types of people:

  • Freelance programmers (typically charging $70–140 an hour)
  • Employed programmers at companies (full-time salary)
  • Unemployed programmers (wanting full-time employment with flexibility)
  • Udacity graduates (some in jobs, some not)

Then they went on a mission to recruit as many of the four groups as possible.

“Our pitch was simple: You can earn $50 an hour and work as many or as few hours as you’d like. The best part: You can directly influence a learner’s life. You will be empowered to help a student advance their skill set.”

A few weeks of recruiting later, Udacity wound up with more than 110 project reviewers — each with different motivations — from around the world.

“Some were in it for the extra money. Some wanted to polish their code reviewing skills, but the main theme we heard was that they wanted to give back, and support the community.”

In retrospect, the best project reviewers were Udacity graduates. Not only did they have the highest rated reviews but they also had the fastest turnaround times; and so, they doubled down on recruiting Udacity graduates as its main source of project reviewers.


How do you pay this type of talent?

When Udacity first launched its code reviewer position, they paid $50 an hour, but they quickly realized this just wasn’t going to work.

“ Fifty dollars an hour was still a benchmark we wanted to hit, but the pain and logistical challenges of time tracking were overwhelming,” Cameron says. “We quickly decided to make the switch to per-project pricing. For example: A complex Android project review might take about an hour, so we’ll pay $50. A JavaScript project review might take 30 minutes, so we’ll pay $25. Keeping our pricing simple would help us launch just that little bit sooner.”


How do you train this type of talent?

Makhijani says it just comes down to figuring out how to do it — the processes and systems. Udacity exposes its project reviewers to a modicum of training materials for each specific activity it’s asking them to do for our students.

“For example, for project graders, we have a playbook on how to give great feedback. Not everybody is used to giving feedback in this context. So we train them on the basics of interacting with the customer, and then we give them a rubric, just like a teacher would have a rubric in a class for grading something,” Makhijani says. “Graders familiarize themselves with the rubric. We go through a couple of training exercises with them. Then we double-grade some things, so they essentially grade something that’s already been graded, and we see how they do.”

If you go to the right communities, that onboarding is actually really short, Makhijani says.

“They already know the background basics so it’s just familiarizing themselves with how to work with people, frankly, and give people feedback. All they have to do for each specific project is familiarize themselves with the grading rubric so they can do a good job for that specific project. Then they’re up and live. It’s worked out really, really well for us.”

Forum Responders

Udacity has different forums for each of its nano degrees, where students can ask technical questions — whether they’re having difficulty with their projects or a concept that may be covered in the course material that they just don’t understand that well.

More than 70 percent of these questions are answered by paid forum mentors — just like their graders.

“Because of our success with grading, we decided to hire folks who have subject matter expertise and who we engage on an on-demand basis. The on-demand is when a question is posed by one of our students, and then they’re compensated once we kind of bless the answer.”

Subject-Matter Experts

Last but certainly not least, Udacity works with people they believe are the best in their respective fields.

“Our HR leader said she didn’t feel comfortable signing up for full-time, but we loved her so we’re going to engage her,” Makhijani says. “When my own folks tell me they can’t get someone full-time, I tell them to get them however they can get them.”

While Udacity does not have a formal program around nanodegree development yet, they’ve already started engaging folks on a specific, assignment-like basis.

“We’ve started to engage people to develop content for our course material, mostly because that’s the way we want to get to the best content. It’s not about anything other than that. We want people who are amazing at a certain topic, but we can’t expect that they’re all going to want to be Udacity employees. So we figure why not give them an opportunity to “publish” about it and then use it in our materials for the benefit of our students? That’s the next stage of what we’re doing,” Makhijani says.

3 Roles of Agile Talent

While Udacity provides three creative example use cases for agile talent, Younger offers three general roles of agile talent that may help you see where you could interject agile talent into your company’s strategy. Here they are.

Advisory

Advisers have ongoing, topically specific relationships with senior leaders and technical staff.

A successful advisory relationship depends on the following:

  • The topic is important enough for advice to be sought and followed.
  • The adviser has the credibility and experience to be recognized as an expert with something important to say about the topic.
  • The advice is seen as relevant and informative.
  • The adviser must have a sponsor or person of importance, who is knowledgeable about the topic, and can influence a decision.

Consulting

Unlike advisers, consultants work on projects with a beginning, an end, a schedule, deliverables and a finite budget. They need structure and support from the organization to complete their task.

Consultants are project-based. Their expertise is applied against identified projects that have a beginning, an end, a typically tight schedule, well-defined deliverables and a clear budget.

There are a few important things to consider when hiring consultants:

  • The goal, purpose and deliverables of the work must be clearly defined in a clear and measurable way.
  • There must be clear ownership of the work and the consulting relationship. The executive team that has engaged the consultant must have the formal power or informal influence to sponsor the initiative and be able to provide the essential resources and political support needed to implement agreed-upon recommendations.

Gigs

Younger thinks of gigs as temporary employment, but it is really much more, he says, mentioning how Tina Brown of the Daily Beast described it, “the gig economy reflects the assembly of a career based on interesting projects.”

Gigsters are all about cool work, Younger says. He offers the example of a talented young consultant, who left a promising career with his firm for an 18-month project requiring a move from Portland to Hong Kong.

“The new company project is just too interesting to pass up,” he told Younger during his exit interview. “It’s not about the company, it’s about a great project.”

Eighteen months later, he returned the U.S. and to another employer offering — again, another project that was too interesting to pass up.

Why would companies offer a gig as opposed to other forms of employment?

“One purpose is talent attraction: A gig is a way many organizations have attracted top talent, offering them interesting work that sometimes lead to a full-time employment offer. It’s also a way to attract highly talented individuals, who don’t want full-time employment but who are attracted by interesting or challenging work,” Younger says.

So now the question becomes: If you decide to rent, how do you attract the best external talent available, and set them up for success?


Recruiting Agile Talent

It’s very likely the external expert you decide to engage will be a millennial since there’s an estimated 53.5 million millennials in the workforce today. Younger says that’s an important thing to consider.

“If the external expert is a millennial, they’re likely to be focused primarily on the opportunity and its potential to be interesting work that makes a difference. Money is important, but the scarce resource for millennial experts is the work and work environment,” Younger says. “These individuals have high expectations for their supervisors and colleagues and want a challenge that is worthwhile. They expect a lot from the work they do, how they are managed and the organization for which they are working. And they are unafraid to leave an organization that doesn’t keep its promises.”

Money isn’t everything

Younger points to a recent Fast Company article to make his point.

“As important as money is to tech people, it’s not the most important thing. Fundamentally, geeks are interested in having an impact. They believe in their ideas, and they like to win. They care about getting credit for their accomplishments. In that sense, they’re no different from a scientist who wants credit for work that leads to a Nobel Prize. They may not be operating at that exalted level, but the same principle applies.”

This example makes it clear that today’s experts have different expectations of work and career.

So what must your company do to increase its attraction to outstanding external talent?

“First, leaders must ask themselves: Why would a top adviser, consultant or any other agile talent want to work for our company? What have we done to establish a relationship and provide an experience that would motivate a talented external partner to give us their best work and full engagement?”

In an increasingly competitive world, top talent goes where there is the greatest potential for both satisfaction and career opportunity, Younger says.


Craft an employer value proposition

Answering the preceding questions meaningfully and communicating the answers consistently requires crafting, and living, an employee value proposition.

Younger says to think of the proposition as the give and get for membership in the organization, essentially a contract between the individual and the organization.

More of the world is headed in this direction, focusing less on traditional employment arrangements and more on talent however it is best found and arranged.

It’s important to note that a powerful brand statement differentiates companies from competitors only if the promise is real.

First, you must understand the stuff that motivates today’s agile talent. According to Younger, while these things change over time, people are usually motivated by a mixture of the following:

Advancement: A motivation to advance in role, status and financial achievement. Individuals attracted by this employer brand are looking for organizations that will provide significant and ongoing advancement opportunity, either by rising in an organization or punching their career ticket. In other words, I want to join your organization because it offers me the opportunity to progress to greater responsibility, influence and position.

Affiliation: A commitment to an organization. Whereas advancement-oriented individuals are willing to trade off loyalty for reward or opportunity, affiliation-oriented individuals trade off reward for a sense of belonging and team. In other words, I want to join your company because it offers me security, based on my contribution, and a feeling of community and belonging.

Autonomy: A drive for independence. Autonomy-driven individuals seek an organization that offers greater self-direction in what they work on (think of Google providing 15 percent self-directed time), how they work on it and where and when they work. In other words, I want to join your organization because I have the freedom to do my job on my own schedule and in my own way.

Variety: An interest in variety and challenge in one’s work and a desire for support for portfolio development. Individuals want newness and fear the boredom of repetitive work. In other words, I want to join your organization because I will have the chance to learn and do different things and be consistently challenged by new problems and interesting projects.

Balance: The desire to balance work, family and other priorities. Perhaps a person has a new child, an elderly parent in need or a life interest that is important. People seeking balance are not less committed to performance but want a life beyond work. In other words, I want to join your organization because, as important as work is, it is not all of my life and I will have the opportunity to balance job contribution with my other life interests.

Service: A motivation to contribute to society or a community directly or indirectly through work. People with this focus want a life that combines work and service and are most interested in offering their expertise to organizations that invest in a broader social agenda. In other words, I want to work for your organization because my work enables me to make a positive contribution to society and to give back in a way that is meaningful to me.

All orientations need to be respected and cultivated or problems will arise. Agile talent will find places where it can be all it wants to be without fear of retribution or unconscious bias.


Leaders must set a good culture for agile talent

Leaders need to see, notice and address how externals are treated in order to create a positive and productive experience for agile talent.

“Like full-time employees, externals want to do meaningful work; grow in competence and opportunity; be respected, trusted and engaged; be treated as part of the team; receive ongoing communication about the issues that bear on their work and feel rewarded fairly and recognized for their contribution and effort. Too often they feel instead merely tolerated or treated as suspect by organization employees with whom they work. They feel unappreciated by management and powerless in dealing with the administrative bureaucracy of partner organizations,” Younger says.

Makhijani says that some of Udacity’s employee still struggle with the non-traditional employment, but others find it interesting when they realize the universe is their’s with such a large, diverse group of people to work with.

“We’re constantly scoping out new nanodegrees, and my rule was you couldn’t have any full-time employees,” Makhijani says. “It costs between $500,000 and $600,000 to build a nanodegree. I told my team that we’ll give more, but you can’t hire anyone full-time. If anyone comes crying to me about that they know they won’t get a sympathetic ear.”

It’s a learning experience

“We still make mistakes. Sometimes we’ll build a project, and it doesn’t do that well in this format so we’ll rework the project and rework the rubric, and it tends to get better pretty fast.” Makhijani says. “It really is about jumping in the pool once and getting comfortable with doing it, because once you start doing it you’ll figure out a way to make it work. That’s how it’s been for us.”