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Why an online educator is venturing offline

Surprise! Studying with people in real life improves performance, says Udacity.

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Study groups might actually work after all.

© JGI/Jamie Grill/Blend Images/Corbis

Udacity calls itself an "online university." After today, that's kind of debatable.

The four-year-old site is among many startups like Khan Academy or Udemy that have bloomed in recent years promising to change education -- and even unemployment -- with thousands of online courses.

But what good is all the knowledge in the world if no one's actually soaking it up? That's probably what Udacity CEO Sebastian Thrun has been asking himself lately.

On Wednesday, Thrun's venture-backed startup said it would offer students the option of actually meeting with a tutor and fellow students in a real-life -- wait for it -- classroom.

Called Udacity Connect, the new option will be available in San Francisco, Los Angeles and New York. After that, Udacity might be coming to a city that might be nearer to you, says Thrun.

Udacity's latest move is a little like the .edu version of e-commerce industry's so-called Clicks-to-Bricks strategy. Though companies such as Amazon or Warby Parker or Birchbox or Casper all started out online, they've all opened brick-and-mortar retail outlets in a push for new revenue.

Udacity's motivations are only slightly different. The company says that 4 million people are currently enrolled in one of its free courses and another 11,000 are paid students in its Nanodegree program, which offers skills in demand by tech companies, such as data analysis, machine learning and web development.

To grow, Udacity needs to have paying students actually finish its courses. (Its in-person option would only be available to Nanodegree students, not its free users).

Earlier this year, Udacity gave some of its Nanodegree students the option of meeting and studying together in a group once a week for two to three hours with guidance from a "facilitator." (Udacity won't call them tutors but says they lead students in conversations related to the course.) And it liked what it found.

"They submitted more projects, were more motivated and graduated faster," Thrun said in a statement.

The average student takes about four and half months to finish one of Udacity's programs today. The company wouldn't answer how many of its paying students actually complete its courses.

However, when asked how he expects the change will affect his university's graduation rate, Thrun was pretty straightforward, if not optimistic.

"(It'll) go up."