Major waves hit the edtech space last November, after Sebastian Thrun, who some call the godfather of the MOOC, disavowed his baby. “We were on the front pages of newspapers and magazines, and at the same time, I was realizing, we don't educate people as others wished, or as I wished. We have a lousy product," Thrun told Fast Company.

Since Udacity was one of the first Massive Open Online Course companies, and Thrun its founder, his admission came as a shock. It signaled the decline of the MOOC empire: from 2012 when The New York Times declared it “The Year of the MOOC” to now, when its very champions, who had built their reputation and companies around the theory that free, huge, online college classes were the way to fix education, were conceding failure.

Thrun said that MOOCs were a bad product because less than ten percent of the MOOC students managed to complete each class. How can said classes revolutionize education if no one is finishing them?

Udacity and Thrun have kept a relatively low profile since then, aside from the usual product launch announcements. But Thrun recently spoke with Pando about the aftermath of his remarks to Fast Company, how Udacity has changed its focus since then, and what he sees as the future of the “lousy” MOOC product.

The following Q&A is edited for length and clarity.

I saw that Udacity is now calling itself a former MOOC? What does that mean?

It’s very simple. The MOOC that we created at Udacity was our first attempt to democratize education and we learned from it. Like everyone, we made mistakes. We learned we can drastically boost learning outcomes by adding a service layer around MOOCs. It has a huge impact on completion rates and learning outcomes. Many people in the industry would say, ‘We told you so.’

It’s not a MOOC [anymore] because we end up charging for it. But when people really want to learn something, they can learn from the best in the industry. I feel confident asking people for money because their money is better spent on this than doing a free course and dropping out after a week.

What comes with that extra service layer?

At the very beginning you do a Google Hangout and someone from Udacity talks to you. It’s our internal fleet of mentors [who provide coaching through the class]. When we make a class, we have a very different model from a classic MOOC. The team trains mentors specifically for the one class.

I was so troubled by our [former] completion rates. When I called a MOOC a lousy product I wasn’t kidding. [With this new model] we have literally gotten a [course] completion rate of 60 percent. Generally a free product has less of a commitment than a paid product. Saying “We’re going to help you with the course” is a massive completion rate booster.

But how can that “pay-to-play” mentorship format democratize education for those who can’t afford it?

All our material is still available for free. If you’re a student who can’t afford the service layer you can take the MOOC, on demand, at your own pace. If you’re affluent, we can do a much better job with you, we can make magic happen. Mentors give code feedback if students get stuck, you click a box and have your answer. It’s trying to build a modern version of education.

That doesn’t sound like democratizing education, if only the affluent can afford the version that works.

I would be careful to say this is not democratizing it. Any alternative path is actually much more expensive. We managed to lower the cost by a factor of ten. Going to the extreme and saying it has to be absolutely free might be a bit premature. I care about making education work. Everything else being equal, I would love to do this at the lowest possible price point. Where we’ve converged is right. You don’t need a college degree anymore. I would be careful with the conclusion that this is the end of democratization. We still have the free model for students. It just doesn’t work as well — it’s just a fact.

What is the future of MOOCs? Will any succeed?

It’s hard for me to comment on other companies because I’m not sitting on the board and understanding their strategies. I really care about making this learning environment really amazing and making learning fun. I think there’s a bunch of companies going in that direction.

We saw that with The Walking Dead MOOC, the course that was modeled after The Walking Dead TV show. It seemed like MOOCs were finally starting to experiment with their native technology, instead of just sticking full lectures online.

Every first generation technology is a copy of the old medium. In television, people read a script in front of them like they were on the radio. From the beginning, [Udacity] distinguished ourselves by making student interaction the number one priority. The lectures are one minute long. We believe you can’t learn as well when you watch someone else lecture. You should spend most of your time writing your own code.

It’s very much like playing a video game. This kind of learning is a much better way. The mastery of learning.

What was that like for you as “the godfather of MOOCs” to realize it wasn’t a good product?

I am a total friend of honesty. I really care about getting it right. The MOOC space was very hyped in the beginning. What better service than to go back to the people and say, ‘Here’s where we are, and here’s what we’re not. So if someone says we’re the panacea of all education, we’re not.’ We’re improving. We’re much better than we were a year ago. This isn’t about sweet talking numbers. It’s about advancing education, filling the skills gap, and reinventing education for the 21st century. I stand behind what I said.

[Image via Sebastian Thrun]