The founder of Google's top secret project lab has a new plan to double the world's GDP

More than seven years ago, Larry Page and Sergey Brin tapped Stanford professor Sebastian Thrun to build a hardware innovation lab inside Google.

His efforts turned into Google X, the secretive "moonshot factory" that has produced some of Google's most technically ambitious projects like self-driving cars, smart contact lenses, Google Glass and internet bearing balloons.

But after guiding Google X through its early years, Thrun relinquished the reins in 2012 to focus on a company he founded the year before, an education startup called Udacity.

Since day one, the company said its goal is democratizing education by offering free, online classes in techie topics like artificial intelligence and data visualization. But Udacity, like many other massive open online course (MOOC) startups, noticed that class completion rates only hit dismal percentages - less than 10% of people made it to the end of most classes.

So, over the last ten months Thrun and his 140-person team at Udacity have completely revamped the way the company offers its classes.

Being in demand

Enter: Nanodegrees.

Instead of only providing a bunch of singular, lecture-style classes, Udacity partnered with major tech companies like Google, Cloudera, Facebook, and Salesforce to build classes that fit neatly into six credentialed, project-focused programs.

The idea is that anyone who completes one of the nanodegrees - front-end web developer, Android developer, data analyst, iOS developer, full-stack developer, or intro to programming - will be perfectly primed to get a job, since major tech companies actually build the curriculum.

Because the average technical worker switches jobs seven times over the course of their career and the industry changes fast enough to render many university-learned skills obsolete, Udacity teaches the kind of bleeding-edge skills that can help people either get a new job or seek a promotion.

"Our new slogan is 'Be in demand,' for a reason," Thrun tells Business Insider. "You can learn for your own sake, and that's fine, but if you come to Udacity you learn because you want someone else to understand what you learned."

Although all classes are still available individually for free, nanodegree students pay about $200 a month for between six to nine months to work through a program in which they'll get one-on-one project feedback (if they complete the program fully, they can get half of that tuition back).

For example, someone who takes the Android developer nanodegree will actually build products that integrate with Google code and fulfill criteria that Google has told Udacity it's looking for. Each completed project gets reviewed by one of Udacity's 400 global code reviewers.

Creating a network of reviewers

Thrun considers the global code reviewers program a major part of the company's secret sauce.

At first, it took Udacity weeks to review each student project, which made feedback less valuable since it was so delayed. But once it launched the network of virtual reviewers in May, Udacity could deliver detailed feedback in only a few hours. Udacity pays reviewers $20 an hour for their work, and to make sure they keep only the best people on board, students can rate them based on the helpfulness of their feedback (the average is 4.8 out of 5).

On average, reviewers make $3,000 a month, but the top reviewer last month took home $17,000. Udacity recently heard from one successful reviewer who just turned 70.

"You can be any age, anywhere in the world, and you can make substantial money grading Udacity students," Thrun says. "We have a huge waitlist of people trying to get in."

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Kelly Marchisio worked in the customer service department at Google. After taking a Udacity nanodegree, she landed an engineering job at the company (click source link for more info)

Scaling forward

The change seems to be working. Thrun says that Udacity's new nanodegrees have twice the student engagement and retention as the former course-centric approach, and sign-ups are increasing 34% month-over-month. The company, which has raised $55 million, hit profitability for the first time in August.

Udacity has six nanodegree programs now, but hopes to offer 11 nanodegrees by the end of this year and 35 by the end of 2016. (It's launching an Entrepreneurship degree later this year, and has plans for other classes programming-heavy degrees.)

Getting tech companies to participate in the course building program has had a snowball effect: "The first company pitch was hard, and now we're getting 10 inbound inquiries per week," Thrun says. "We're at the point where these companies think of us as kind of the new university of Silicon Valley."

Soon, Udacity will launch an easy-to-search database of all its students with a dashboard to make it easier for tech companies to cherry-pick the resumes of people who have completed degrees that fit with their job openings.

"So you get this beautiful formula that's starting to work where you can go to students and say, 'Look, our value proposition to you is a job that you love because you'll be in demand," he says. "For companies, we say, 'Look, we have this amazing student and you don't need to pay a dime to try to recruit them.'"

The concept of polishing students for technical careers outside of a university setting isn't exclusive to Udacity - there's been a huge surge of coding "bootcamps" that promise six-figure salaries after three months of intense classes - Thrun considers his company the cheapest, best option, because you can do it online, with individual feedback, and with the assurance that real companies will be looking for the skills you learned.

Stephen Lam/REUTERS

Thrun donning Google Glass

Education, anywhere

Udacity plans to use its new nanodegree momentum to start tailoring its classes for international students: First in India, and then in China. As usual, Thrun is playing the long-game, and pushing himself to be as ambitious as possible.

Although some of its nanodegrees - like the Android one - are built for people who already have significant programming skills who just want to make themselves a more attractive candidate for a better job, others will be able to engage students who are just dipping their toes into technical learning.

Thrun laughs recalling one student who had recently reached out. He had been a professional golfer, but his career wasn't going as well as he had hoped. Through Udacity, he's now nabbed a job as a software engineer.

"It's not a technology moonshot in the same way that putting balloons into the stratosphere is - it's a really important societal moonshot," he says. "We want to double the world's GDP - that's our ambitious goal."