I’m in the midst of reworking the e-Literate web site. I do this every few years to tweak the usability and aesthetics. This time I’m working on a stripped-down, minimalist approach with a strong emphasis on reducing cognitive load. None of the discoverability features I implemented over the years to help folks find older posts seems to make much of a difference compared to site search, Google, and LinkedIn. So I’m removing all of that stuff, focusing on readability and findability.
Coincidentally, I received an outreach from my old friends at ReadSpeaker. Their product was one of the first MindApps we implemented for Cengage MindTap. It was incredibly popular with students.
Text-to-speech is a feature I’ve wanted to have on e-Literate for some time, both to increase accessibility and for convenience. (Sometimes it’s nice to be able to listen to a long article while doing other things.) Now you can.
Try it out by coming to the web version of this post.
I often find when I’m writing about the challenges or dysfunctions of a situation that I struggle to communicate about the dysfunction itself without making my words feel personal to the people who are in the middle of it. I try to write about problems and challenges clearly enough to make them easier to tackle. As a result, my prose has sharp edges. Sometimes those edges cut when I don’t intend them to.
While I haven’t yet received any negative feedback on my recent VC culture post, some of the positive comments have seemed a bit off from what I intended to communicate. The main point of that post is VCs are humans working under constraints and success conditions that they have to adapt to. If, as a founder, you’re struggling to understand the responses you’re getting from the VCs you’re talking to, then start by trying to understand their particular business and culture first. That often explains a lot. Most of the time, you’re not crazy and they’re not bad people. Structural and cultural factors are at work.
For today’s post, I’d like to write about some of the VCs who were kind to us. If you are a founder raising money in the venture world for the first time, you will need kindness. At Argos, despite our ultimate inability to raise the money we needed to keep the company going, we were lucky to receive support and guidance from multiple VCs. I’ll write about a few that were particularly kind in illustrative ways. And because it can be hard to recognize kindness for what it was in the thick of things, I’ll do my best to unpack the signs of it for first-time founders reading this.
Kindness is contextual
VCs are always short on two things they desperately need to succeed: time and information. They always have to hear as many pitches as possible because most of the companies that pitch them will not be good investments for them. They’re also making investment bets in an environment where they don’t have a lot of the information that would help them judge how likely a company is to succeed. (And the earlier the company is in its growth, the less information the VCs can gather.) These two problems—lack of time and lack of information—feed each other. Because VCs have less time, they have less time to listen to any individual entrepreneur. Because they don’t have time to explore prospective investments in more depth, their risk of missing some critical detail is higher. All of this adds up to risk. VCs live or die based on whether they make more money than they lose across their portfolio. If they fail to do so, then nobody gives them more money to invest. They go out of business.
For example, when a VC chooses to tell a founder “not yet,” that is often a move to address the lack of time and lack of information problems. The longer a start-up survives and the more concrete success it can demonstrate, the lower the risk to the investor by providing more information about the company’s prospects and more time to understand how the company works. Saying “not yet” preserves their optionality.
In that context, VCs give up something valuable to them whenever they give up time or optionality to help you out. That is kindness in their world.
A “no” is a kindness
A VC who gives you an honest “no” is giving up optionality. You are less likely to keep coming to them, giving them updates, and inviting them in. Of course, they can always change their minds later. But their chances are lower because you’re not focused on keeping them up-to-date and they don’t know if you’ll react badly to their honest answer. They have something to lose by offering a clear “no.” The founder, on the other hand, gains clarity. One of your problems as a founder is knowing whose money to chase. As painful as it is to hear, an honest “no” is far better for you than a “not yet” that really means “probably not, but I’ll keep you coming back just in case.” I will always be grateful to every single investor who told us “no” rather than choosing to slowly fade away on us.
A clear “no” with a reason you can make sense of is better. Even the guy who told us he wouldn’t invest in us because we were too old did us a favor. Once the quiet part had been said out loud, both sides agreed that there wasn’t a good fit. We didn’t waste energy trying to change his mind or wondering what went wrong.
One VC who was particularly kind to us started our relationship with a clear “no.” He has two funds and the way he describes them is almost like hearing mutual fund prospectuses. Each fund has clear parameters that we didn’t fit. It wasn’t personal. It had nothing to do with whether our company had merit. We just fell outside the investment parameters for the funds he had. (Unsurprisingly, he’s an East Coast investor with a background in banking.) By defining an investment discipline crisply, sticking to it, and making it public and understandable, that particular VC gave up significant optionality. It wasn’t all about kindness, of course; having a crisp investment discipline often leads to better investment success and less time wasted evaluating potential investments that don’t fit. But he chooses to implement his strategy in a way that is kind to founders. Once we got “no” out of the way, we were able to have a conversation. (More on the kindness of offering time in a bit.)
A “not yet” is a type of “no” that can be delivered with more or less clarity and kindness. One of my favorite VCs (and favorite humans) told us, “We’ve learned that we’re no good at investing in companies with less than $X in revenues. We’ve made exceptions in the past and have gotten burned every time. So we just don’t do it anymore. Ever. We like you. We’d like to check in with you every couple of months. But we can’t invest in you until you hit that milestone.” As with the previous example, this VC helped us to understand her firm’s investment requirements. We knew whether we would have a chance in the future, what we’d need to achieve in order to earn that chance, and how to communicate with the firm.
The kindest “no” of all is the one that comes at a personal emotional cost to the person delivering it. As I wrote in my last post, I don’t think I could thrive at a job where I had to turn down 95% of the entrepreneurs who come seeking my help on a project they have thrown their entire selves into. You have to protect yourself emotionally to do that job well. Keep your shields up. So VCs who offer you genuine, heartfelt regret that you can see in their eyes or hear in their voices are truly offering something of themselves to you. When one party feels pained from a failed deal, it’s a transaction. When both parties feel pained, it’s a relationship. You’re sharing a moment of grief. I have all the time in the world for investors who gave us the precious gift of a regretful “no.”
Time is a kindness
I mentioned earlier that our relationship with one VC started with a “no.” (That’s not quite accurate, since we knew him before, but we weren’t close.) Once we got “no” out of the way, the rest of the first hour-long conversation was him giving us advice. Good, clear, honest advice. He ended the call by saying, “Call me whenever you need to.” We did. He never failed to answer. Promptly. There was no talk of investment in Argos for him. I suppose he hoped we’d eventually reach the point where we fit his parameters, but that wasn’t going to happen any time soon. His time and advice were pure kindness. And given that time is a scarce commodity in his world, it was no small gift. I can think of a few investors who said “no” to us for whom I would do just about anything. He’s one of them.
Likewise, an introduction is a kindness. A VC who isn’t investing in you but is introducing you to VCs who might is expending reputational capital on your behalf. Their network is essential to them. Of course, as with most things humans do, humaneness and self-interest can mix. A good introduction that leads to you getting an investment from another VC earns the person who introduced you credit with both parties.
That’s OK. Kindness is an evolutionary adaptation. You don’t have to discount the kind part because it’s mixed with self-interest. Or condescension. Or something else you don’t like. Be smart, but take the win. It’s hard. I failed at it sometimes. But it’s worth practicing gratitude in the face of difficulty.
Early investment is a tremendous kindness
If you’re a first-time founder of an early-stage company with little or no revenue, then your early investors are essentially betting on you. A great entrepreneur with a flawed plan can often figure out how to fix it. (One could argue that the ability to fix an inevitably flawed plan is the definition of a great entrepreneur.) A weak entrepreneur with a great idea has a much higher probability of failure. An early investment in a first-time entrepreneur is, as Kierkegaard put it, a leap of faith in fear and trembling. It is very nearly a pure expression of belief in you in the face of enormous unknowns and improbabilities.
Don’t take that for granted. Ever.
At Argos, we were blessed to have tremendous investors who believed in us. They made time for us. They made connections. They offered advice. We had a couple of institutional investors. We’ll always be grateful for the incredible support of the good folks at WGU Labs and the Herculean efforts of our close friends inside Carnegie Mellon University. A lot of our money came from individual Angels, many of whom we know well. Friends. Colleagues. Mentors. In some cases, we went to them for advice first and they ended up offering us money. Their own money.
Every one of them lost their investment.
And still, even as that became clear, we received nothing but support and kindness from them. During the last throes as Curtiss and I played out the longest of long shots, one particularly close friend who had invested in us heavily told us, “Boys, it’s time for the test pilots to eject from the plane. I’ve already accepted that I’m going to lose my money. I don’t want to lose my two friends as well. Take care of your health and your families.”
I have no words for that.
Look for the helpers
I suppose it’s obvious that writing these posts is therapeutic for me. (I have been in therapy for about 18 years. Luckily, the cost of hosting my therapist on WordPress is fairly low.) Co-founding a start-up is one of the hardest things I’ve ever done. Having that start-up fail…well…it sucks. Having a start-up that was working as a business fail to raise the money needed to buy time to extend that success is an experience I’m going to be processing for a long time.
I could write more about the flaws of the venture capital machine. Eventually, I may do that. Eventually. Maybe. The edges would be too sharp if I were to try today. For now, I choose to make time to appreciate the humans. If you’re a first-time founder reading this, I recommend that you cultivate a habit of doing the same.
Relatedly, I offer my deepest, most heartfelt thanks to the many friends and followers of Argos who are not investors and have offered support, encouragement, and condolences. The outpouring of goodwill has been far beyond anything I could have imagined. It means a lot to every one of us on the Argos team.
I have learned, and continue to learn, many lessons from our two years of trying to get Argos Education to escape velocity. Learning from failure—especially painful failure—is a process. I expect to write a number of pieces over time as I sort through my experience and get a little distance from it.
The most immediate piece that I feel able to write about today is dealing with venture capitalists. Obviously, I can’t tell you all the secrets to success since we didn’t succeed. I can only tell you some things that I wish I knew sooner.
The core lesson of today’s post is that you’ll stay saner if you think of VC behavior in terms of culture. They have their own constraints, their own customs, and their own ways of doing things. Yes, there will be bad behavior, and yes, some of it will be maddening. I could say the same for customers, partners, and co-workers. Founding a start-up is every bit as painful and exhausting as people will tell you it is.
One of the hardest parts for me was not being able to make sense of what was happening in the moment. There’s definitely a “fog of war” element to it. But the war analogy can be overdone. In reality, each one of the groups I mentioned—VCs, customers, partners, and co-workers—is often embedded in a different culture. Bridging all those cultures is a necessary part of making your company work.
For me, the most alien culture was VC culture. So I’ll share some of what I learned about it and some tips for dealing with it.
VC culture values politeness over bluntness
Former Instructure CEO Josh Coates loved to say “All VCs lie.” I heard him say it a handful of times. Josh is a bit of a bomb thrower, but he’s also a smart guy and a successful serial entrepreneur. So I knew he meant something when made a statement like that.
It turns out he meant most VCs lie.
That’s harsh. I’m going to tone it down momentarily. But let’s stick with Josh’s formulation for a moment. Because I tested that language with a few VCs to see what they thought of it. None of them denied it. Or even protested that it was unfairly harsh. One successful serial entrepreneur, when I told him that a VC firm would be interested in funding us when we reach $X in revenues, replied, “You know how VCs say ‘no,’ right?” The answer, of course, is they give you a revenue target that is sufficiently far away that you definitely won’t hit it for a while.
One former VC who I count as a friend told me he never says “no” directly because it needlessly breaks off the relationship when you might find another way to work together in the future. That seems to be the common, if unspoken, value. They will rarely tell you that your idea is bad. In fact, it’s easy to walk away with the impression that they are impressed with your pitch because they tell you that it’s “interesting.” VCs live in a world where network connections are everything and they’re making a lot of guesses about their investments. If they say, “Let’s talk again when you hit $X in revenue,” they don’t make an enemy of you. And if you surprise them by succeeding they might be able to invest later, when their risk is lower.
Also, saying “no” is hard. I personally couldn’t thrive in a job where I’d have to say “no” to 95% of the entrepreneurs who come to me, passionately and often desperately asking for my help. It must be painful. Instead of saying “no,” the VC community has developed a culture of avoiding saying “yes.”
So if you get an encouraging-sounding answer that amounts to “not yet,” ask a lot of questions and listen to the answers very carefully. Sometimes “not yet” really does mean “not yet.” Sometimes it means “no.” And sometimes it means, “I don’t know what to think of you, so I’m kicking the can down the road.” If you probe and pay attention, you can get better at figuring out what the answer really means.
Sometimes you will feel like you are being lied to. Sometimes you will be lied to. A lot of the time, it’s both more accurate and better for your mental health to think about the obfuscation as a cultural norm. Try not to waste time feeling offended. Instead, focus on trying not to waste time. The best way to tell how serious a VC is about your company is how quickly they follow up. If they don’t, then make a judgment about why. If they’re just not that into you, then think seriously about how much time you’re going to invest in chasing them.
Relatedly, it’s common within VC culture to ghost founders that they don’t want to talk to anymore. I wouldn’t say it’s pervasive; more often than not, it turns out they’ve gone dark because they’ve been overwhelmed with work, some of which they can’t or won’t tell you about. (More on that in a bit.) But genuine intentional ghosting is much more common with VCs than with any other business culture I’ve interacted with. And because it’s common for them to drop out of touch for a while, you often can’t know in the moment whether you’re being ghosted.
As with “not yet,” you will want to pay close attention. Does the VC respond to a follow-up nudge? Does she pop back up randomly from time to time? Or is the silence prolonged and consistent? Don’t give up easily, but try not to spend too much time obsessing. It’s hard to resist. But that way lies madness.
Learn their context
As a first-time founder, there’s a lot I didn’t understand about the VC business (and a lot more I probably still don’t, two years later). For example, I didn’t know how much of their time they spend fundraising. Just as we were out knocking on doors looking for money, they were doing the same. They won’t always tell you that they’re fundraising. But one reason why they might go quiet on you is that they’re off doing exactly what you’re doing. Fundraising for their lives.
It’s not like you’ll never get feedback. You’ll get plenty if you’re persistent and look for it. Much of it will be contradictory. You may well be warned of this in advance. But it is less likely that anybody will tell you why it is happening or how to sort through the mess of conflicting feedback.
Here’s the deal: Different funds have wildly different investment disciplines and therefore are looking for wildly different kinds of pitches from founders. Their public theses don’t tell you enough for you to judge if you’re a likely fit for them or how to pitch them. They have all kinds of constraints about how they need to invest. They have an entire machine that converts a pitch and a spreadsheet into an investment analysis. A lot of that is specific to the circumstances, investment methodology, and leadership personalities at the firm. VCs usually won’t volunteer information about any of that but some will tell you more if you ask. Before you take their advice on how to improve your pitch or change your company’s focus, do everything you can to understand how their own decision-making process works. Some of their advice will be specific to them. If you interpret it as general advice, you may put yourself in worse shape for the next VC that has an entirely different way of working.
Also, be prepared for the process to work differently than advertised. The press loves to cover big deals. Most first-time entrepreneurs are fooled by what they read. I was, and I have more exposure to the business than many. Nobody says, “Look, the last three seed deals you read about were for startups that all had famous founders with previous experience making their investors money. Don’t expect to get that kind of a deal.” Or “You’re going struggle raising in EdTech because many of the investors at this level, including us, are primarily looking to make their money by getting you to the next round. While everybody wants a home run, most of the time we’re swinging for singles and doubles. The payoff for your company is too risky for us in the time frame we care about.” Or “The rules we gave you about why we can’t invest in you right now apply until we get excited or afraid of missing out and decide to throw the rules away.”
Time is money
On multiple occasions, we spoke with VCs who religiously read every word of every long, long, loooooong post I write but were unwilling to give us more than 15 minutes to explain our company. And really, if we didn’t have them in 60 seconds, the next 14 minutes were basically about them being polite. I could rage about this. I have raged about it. I still do on occasion.
But fundamentally, their business is all about deal flow. If they pass on 95% of the pitches they hear, then they need to hear a lot of pitches to find their investments. They don’t have a lot of time, even if they think highly of you as a person. That’s not just about the “hook,” either. Remember that evaluation machine behind the scenes that I mentioned? They’re listening for the bits of information they need to get your start-up through the machine without it getting barfed out. They are listening for particular numbers that matter to them. (Which numbers matter in which ways varies from VC to VC.) They’re thinking about how the individuals on their investment committee will react. Will they understand the pitch? Does it resonate with their own perspectives? Does it bring back bad memories of a failed prior investment?
The better you understand their process, the better off you will be. But you won’t understand much of it most of the time because most VCs don’t have the time or the cultural predisposition to explain it to you. Try to avoid filling the information vacuum with your own narrative. That won’t help. It will just mess with your head.
It’s about your sanity
By this point, regular e-Literate readers may be thinking, “Why is Michael being so charitable and understanding toward VCs? He’s not that nice to anyone!”
(Which is fair.)
The reason is that it’s not about them. VCs are humans, which means that some of them are wonderful, some of them are shits, and a whole lot are in the middle of humanity’s bell curve, just trying to do their job the way the people they work for taught them to do it. The net effect of VC culture can seem like pervasive, horrific gaslighting to a founder. It’s easy to feel angry, resentful, offended, confused, hurt, worthless, and stupid. I felt all of those things at times.
I’m saying, if you’re a founder, you can choose to think about it differently. You might be more successful than we were if you do. You’ll probably be mentally healthier. Try to frame it in your head as culture, process, and business. And try to separate the question of whether they like you from whether they are going to fund you. VCs are not in a position to judge you as a person. They are only in a position to judge the business opportunity that your company represents to their firm. And even within that narrow frame, most of them succeed a relatively small percentage of the time. Their job is to make big decisions about investments based on a small amount of information regarding companies whose critical success factors may well be outside their areas of expertise. This is why they have to hear so many pitches, and why the percentage of their successful investments is typically low. Your company’s survival may depend on their investment decisions. But don’t confuse their decision process with one that can accurately judge your personal value or even the value of your idea. That’s not even its purpose, never mind its actual effect.
You can like the VCs you meet. You can even be friends with some of them. Later. In retrospect, my warm relationships with some VCs probably hurt both my ability to pitch them successfully and my ability to maintain those warm relationships. Remember, VC business culture values politeness and depends on network connections. I didn’t sense the switch flipping from “friendly colleague mode” to “business mode” because the surface behaviors were very similar. But under the hood, they were entirely different. The person across the table from you may be nice, but when they’re doing their job as a VC, at least some of their niceness is performative.
Founders have to crawl across the proverbial broken glass to succeed. Our culture tends to valorize that suffering, which sucks. There’s nothing glorious about pain. But it is real. If you decide to make a go at founding a company you will almost certainly experience prolonged and excruciating pain. That’s part of the deal. Unfortunately, you can easily make it infinitely worse for yourself by buying into the start-up mythology and getting spun around by VC culture. Try to replace any impulse you feel to like and be liked by VCs with a discipline to understand and be understood by them. You’re attempting to broker a transaction with counterparts who operate under particular business constraints and likely inhabit a very different business culture than the one you’re used to. Eyes on the prize and all that.
Don’t add more broken glass to the pile that’s already in the way.
“A man in in a suit crawling over broken glass” as interpreted by DALL-E 2
Phil Hill recently tweeted out two slides from Coursera’s quarterly conference call. They made me sit up straight. Then they made me read the transcript from the call.
I haven’t been paying enough attention. Having watched the rise of the MOOCs closely and having watched 2U/EdX chase EdX’s inspiration and rival, I assumed I understood Coursera as well.
I was wrong. Coursera is evolving into a different and much more interesting company that is well-positioned to take advantage of the tectonic shifts I’m tracking.
Coursera as a marketplace
One of the two slides Phil shared out was further confirmation of a trend that everyone in higher education has already been struggling with:
Coursera, like US higher education institutions, has seen a decline in degree program enrollments. This seems like a significant drop relative to the drop across degree programs as a whole, particularly against primarily degree-granting institutions, which have fared better than their on-campus counterparts. So it’s curious.
But this is the slide that attracted my full attention:
The point of this slide is to show the diversification of Coursera’s business. Degree programs may be down, but enterprise licenses and direct-to-consumer certificates are up. But it also indicates Coursera’s ability to diversify revenue streams for its university content providers. The enterprise business provides a distribution channel between universities and employers. From what I can tell, it’s a Guild competitor, even though the two companies look very different on the surface. The consumer segment started as the MOOC business and has expanded into the “tweener” space between courses and degrees: certificates, microdegrees, whatever.
On the surface, it may appear that Coursera and 2U/EdX are evolving toward each other, with Coursera having grown out its degree programs and 2U acquiring EdX to get into Coursera’s MOOC space. In reality, 2U/EdX is moving much more toward Coursera than the converse. And it’s easy to see why if we look at the economics of their original models.
2U historically made its money by helping premium-brand universities bring expensive graduate degree programs online. And they famously succeeded in attracting multiple premium university brands to offer the same degree through them by showing that, historically speaking, geographic brand reach is smaller than you might think. Students in the Northeast United States have been much more likely to apply for degrees from Harvard, Yale, or Princeton than from Stanford or even Duke, even if the degree programs are all online. The same is even more true, a notch or two down the reputation scale, where institutions may have strong regional brands but are not even broadly recognized nationally.
Roughly about the same time that it became apparent that the growth of expensive online graduate degree programs would inevitably slow—there’s only so much demand in the world for $40,000 MSW degrees—2U got into the short course business. And then the BootCamp business. And then they bought EdX. But, as I have written about in the past, 2U has tended to publicly imply that its “free to degree” product range is a sales funnel. Of course they’re interested in diversifying their revenue. But outwardly, at least, the mindset has appeared to be that of a diversifying OPM.
In contrast, Coursera has always thought of itself as a two-sided market. For those unfamiliar with the term, a two-sided market is one where the company’s primary business is to connect buyers with sellers. Amazon, Etsy, Airbnb, and Uber are all examples of this sort of business. Yes, they were attached in the early days to selling a particular form of MOOC as an individual product, much as Amazon only sold books in the early days. Much of the attention during the early years of MOOCs was on the pedagogical model of the MOOC itself, which is not very effective, and on the MOOC course delivery platforms, which directly translated lecture-model courses into an infinite lecture hall, with some relatively modest technological improvements. The innovation that got the least attention at the time was Coursera’s nature as a two-sided market. I remember talking to Daphne Koller about this circa 2014 (in front of one of those ridiculous fountains in the Swan and Dolphin Hotel at a Sloan-C conference).
I’m not sure that EdX ever fully grasped the implications of the two-sided market model. 2U might; it’s hard to tell right now. The company’s in-process rebranding is confusing and their clearest marketing point so far has been that MOOCs lower the advertising costs for degree programs. Coursera, on the other hand, understood the business model implications early on, one of which is that two-sided markets tend to produce one big winner in any given space. Who is the second-largest competitor to Amazon? Walmart? Wayfair? The distributed network of stores that Shopify powers? I don’t know. The answer isn’t obvious. It’s not like Coke and Pepsi.
Multi-sided platforms have unusual characteristics.
A market is a platform
We often use the term “platform” in tech conversations to narrowly mean the features and architecture of a kind of software. A platform is distinguished from an application in the sense that a platform encourages people to build other things on top of it. Mapping software that can only provide directions is an application. If the same software can be integrated into search and discovery applications like Yelp is a platform. In hardware, a flip phone is a device. An iPhone is a platform.
But platforms can enable building more than just software extensions. When Phil Hill and I worked together at MindWires, the company was heavily involved with helping the 114-campus California Community College System onto one common LMS instance. ((Phil and some MindWires teammates did the lion’s share of the work, although I got to write a white paper for the state legislature, which was fun.)) The point wasn’t just to get everybody using the same LMS but rather to use that common base to build up a course exchange that would enable campuses to help each other with over- and under-subscribed courses as while enabling students to take courses that they need to graduate but that are oversubscribed on their own campuses:
(Shameless plug: The webinar I’ll be facilitating about university/workplace partnerships for OpenLMS on Thursday, November 2nd at 1 PM ET will include a similar story about how a common LMS adoption facilitated teacher support and recertification amidst a state-wide teacher shortage.)
With these examples in mind, I found the following anecdote from Coursera CEO Jeff Maggioncalda to be very interesting:
In July, I highlighted the recent partnership with Louisiana Tech University and the University of Louisiana Systems. Our initial partnership with Louisiana Tech started as a social impact initiative with the office of student financial assistance via the Louisiana Board of Regions. [sic]
It was designed to provide low-income high school students and graduates access to Coursera’s entry-level Professional Certificates from Google in order to prepare them for college or to begin a digital career. This was followed by Louisiana Tech summer programming series open to faculty and staff that is banded to include professional development opportunities for employees across all campuses within the University of Louisiana Systems.
Now the Louisiana Workforce Commission, a state agency responsible for enhancing workforce growth and well-paying jobs for Louisiana residents, is partnered with Coursera to launch Tech Ready Louisiana, a statewide workforce development initiative providing training to thousands of Louisiana.
The centerpiece of the program is Career Academy, as our entry-level professional professor certificates were specifically designed to prepare workers without a college degree or prior work experience. Using Career Academy, Louisianians can explore careers develop key skills and competencies, build a portfolio of hands-on projects using actual workplace tools and earn industry-recognized credentials.
And many of these credentials have ACE Credit Recommendations, which make it easier for learners to earn credit towards a local or online degree program when they’re ready to continue their education.
Finally, in recognition of the connectivity challenges that present a real barrier today, the Workforce Commission is making reliable Internet access at nearly 60 sites across the state for learners to complete their Coursera courses.
Traditional university degree programs and workforce development initiatives often lack a solid connection to today’s in-demand jobs and are often not equipped to adapt to the fast-changing skilled landscape and evolving employer expectations.
By leveraging Coursera, an entire system of higher education in coordination with government institutions can foster stronger collaboration with industry by unlocking new development opportunities for students, faculty and staff by diversifying and expanding talent pipelines for employers and by building a more competitive workforce.
This is the vision of Coursera’s three-sided platform at scale, connecting learners, educators and institutions in a global learning ecosystem designed to keep pace with our rapidly changing world.
Notice he calls it a three-sided platform, although I count more than three sides here. The Coursera platform, writ large, connects universities, learners, government agencies, megacorporations, and local employers. It helps open up new opportunities for universities to reach students without falling afoul of the “dialing for dollars” problem that plagued for-profit universities and create ethical and legal complexities for OPMs.
A multi-sided market also offers some benefits to the educational mission relative to other models. If, for example, you’re an OPM that has heavily subsidized the creation of a degree program in exchange for a share of the revenues for ten years, then you need to make sure your up-front investment pays off. This is true of any business that invests up-front in building products, including textbook publishers. In a multi-sided market, depending on how the compensation is set up, the marketplace owner shouldn’t care much about whether the company sells 100,000 units of one product or 1,000 units each of 100 products. For education, some programs are essential for students, local economies, and important business niches, even if they don’t require a lot of trained individuals. So a well-functioning multi-sided market should, all else being equal, offer more educational opportunities within a scalable model.
(Side note: Somebody other than me should write an analysis the strategies and pricing for 2U/EdX, Coursera, Guild, and other evolving university sales channels.)
Coursera sees evolution ahead
Maggioncalda also had an interesting question on the inevitable future-of-the-college-degree question:
I’m in Bangalore right now and I spent the last 10 days here in India. There is a demand — the government is trying to shoot gross enrollment ratio up to 50% by 2035.
They need 3.3 million more professors to serve 35 million more students. And so a lot of the demographics that folks are seeing in the U.S. is not consistent with what some of the demographic trends are in other parts of the world. And we are seeing college degrees globally be as revered as they have been historically.
So when we look at this on a global basis, I think a lot of it is going to be driven by demographic trends. I think that especially when you have rising middle classes, with a real premium on education, you’re going to see — we’re going to see a lot of demand for this. So we’re very bullish on the future value of a college degree.
Another thing is colleges are not sitting still. I don’t know, there might have been five or six examples in the scripts about universities putting Career Academy literally into their curriculum, so that when someone graduates, they don’t just have a degree, they’ve got a degree and an industry certificate.
I think a lot of people think of college degrees as this static thing that’s not going to change. But really, the competition among job seekers is going to be those who have maybe micro credentials and those who have college degree and micro credentials. So I think it’s going to almost always be worth it.
And on the affordability side, we see affordability really being driven by technology and, frankly, competition. So I think degrees are going to come down in price. They’re going to be a lot more job relevant, they’ll be much more broadly available and especially because they’re online, open up to the working adult population, which is a much, much bigger market than just young people who are between the ages of 18 and 24.
So we’re still very bullish on the long-term opportunity for degrees.
This answer hits many of the themes in e-Literate’s Changing Themes for Changing Times: rising economic value of the post-traditional student, merging of traditional and post-traditional student preferences, lifelong education, and regional maturation of education markets around the globe. (The company’s international story is interesting enough that it merits its own post.)
Coursera is moving in the direction of becoming a uniquely horizontal EdTech company, not because of its MOOC pedagogical model but because of how it has leveraged the reach of the initial MOOC growth to become a successful multi-sided market. They haven’t completed this transition yet. But if they pull it off, they could become the first hyper-scaled EdTech company on the planet.
But what about…you know…learning?
I’ve come to realize that I don’t have a clear sense of how much the Coursera pedagogical platform has evolved in the way I do with EdX. Nor have I seen much in the way of efficacy research coming out of the company (or out of its university partners but publicized by the company). I’m skeptical about the platform. Once you’ve baked a particular set of assumptions into your platform design (e.g., video lectures plus assessments as a primary learning mode), it’s hard to change those later. But since I haven’t meaningfully explored that platform in years—I don’t count a couple of random, poorly designed MOOCs that I never completed over the years—I am making a conscious decision to set aside previous assumptions and acknowledge that I don’t know much about its current state. The same can be said for its underlying data architecture, suitability for research, and actual efficacy research being conducted. I haven’t personally seen evidence of significant progress on any of these fronts. But as the saying goes, absence of evidence is not evidence of absence.
One of the tricky aspects about evaluating Coursera is that it isn’t just a multi-sided market (like Teachers Pay Teachers) or just a learning platform (like an enterprise-licensed LMS). It’s a fusion of both. It’s a compound, complex platform. Its marketplace can reach and connect many different stakeholders. Buyers, sellers, and enablers. Is their content production, delivery, and analytics platform equally able to serve these disparate learning needs and contexts? That’s a vastly more complicated feat to pull off than it sounds.
From an economic perspective, Coursera is clearly evolving from a second-wave to a third-wave EdTech company. They’ve gone beyond direct-to-consumer and are demonstrating what it looks like to design a company for an environment of increasingly global, lifelong, and universal education. I have less clarity about whether their core teaching and learning capabilities are up to the task. But despite the hit their stock has taken in the current market, they may be the best-positioned player to crack that code.
As the first of a three-part series, I’ll be facilitating a webinar sponsored by OpenLMS on university/workplace partnerships on Wednesday, November 2nd at 1 PM EDT.
I’m excited about this series for a few reasons. First, it fits well with my new themes for e-Literate. Second, I really like and respect the OpenLMS folks, so that will make the conversations more interesting and fun. And third, for those of you that don’t know OpenLMS, it has an interesting Moodle story. I know Moodle has dropped off the radar in many US colleges and universities but it continues to thrive and evolve in the rest of the world, in both educational and workplace settings. I’m curious to revisit it in light of my interest in workplace and international trends.
Why the OpenLMS folks are interesting to me
Some of the key executives at OpenLMS, including CEO Phill Miller, cut their teeth at Angel Learning under Ray Henderson. For those who are too young to remember, Angel was widely regarded as one of the most interesting and ethically run companies in the LMS space. Ray was legendary—and still is among grizzled veterans—for his ethical, community-minded leadership and attention to customer service.
I first met Phill in 2005 when we both participated in a panel on ePortfolios at SUNY Brockport. He’s a solid guy with broad knowledge of the EdTech landscape and the kind of curiosity and engagement that I have come to expect from Angel veterans. While he is technically a panelist in the series, I expect he’ll be raising as many questions as he will be answering, somewhat in the style of my Blursday Social conversations. I’m pretty careful about how I approach sponsored webinars; I don’t do paid commercials. Having Phill as a panelist throughout the series was my idea because I’ve known him for 17 years and have confidence that he’ll have substantially more to offer than just the sponsoring CEO’s perspective.
As a company, OpenLMS has an odd origin story that started when Blackboard decided to acquire Moodle hosting companies. Predictably, this triggered some concerns and politics, leading to Blackboard exiting the partnership program run by Moodle Pty and losing the right to use the Moodle trademark. I’ve written about these events elsewhere. I’m ethically comfortable working with today’s OpenLMS, which is no longer owned by Blackboard. The main reason I’m mentioning the history here is to be clear that the core of the OpenLMS product line is Moodle.
The company has a strong global presence across six continents in both higher education and workplace learning. People forget that while the major commercial LMSs have been picking up steam internationally, Moodle still has an incredibly strong presence worldwide.
In fact, you may be surprised to learn that Moodle is currently the second most widely used LMS in US and Canadian higher education, with 21% market share, according to my old friends at ListEdTech. And I suspect it has had significantly more success crossing over into the workplace market, although I don’t have data on that point. Their ability to straddle these two markets puts them in an interesting place to talk about the overlap and connections. And it also presents them with some interesting challenges regarding how to bring these two customer bases under one roof, which is a topic I’m interested in exploring.
All of this is to say that the company is an interesting source of perspective for a variety of reasons.
The series
I’ll be facilitating three webinars. The first one, as mentioned, will be on connections between higher education and workplace needs. The second, which will be held on December 7th at 1 PM EDT, will be on international higher education and, in particular, the connection between US universities and international students. In the last one, on December 18th, I’ll be exploring the current state of OpenLMS, informed by the previous two conversations. (Stay tuned for more details on the 2nd and 3rd webinars, including registration information.)
My goal for all three webinars is to talk about the major trends while exploring OpenLMS’s perspectives and insights based on their particular place in the market.
I recently ran across a white paper called Ideas for an Affordable New Educational Institution out of MIT’s J-WEL center. While the paper contains no groundbreaking new ideas, the gestalt of it is interesting and timely. My first thought after reading it was, “If I were designing the Cal State system in 2022, starting with a blank sheet of paper, this paper would be one decent blueprint to start from.” That kind of practical synthesis is valuable and, sadly, under-rewarded.
And as it turns out, I know and respect one of the authors. My call with him confirmed my sense that this paper is worth writing about.
The context of the paper
It’s often hard to know where these sorts of papers are coming from—and what they might lead to—without additional context. J-WEL is one of many funded centers at MIT. To what extent is the university’s leadership aware of the paper? What are the odds that MIT might act on the recommendations? What are the motivations of the authors? What do they think or hope to accomplish?
Through a quirk of fate, I am fortunate to know one of the five professors from different disciplines who are listed as the paper’s authors. S. P. Kothari was a Professor of Accounting at the University of Rochester during my brief stint as an English graduate student there. I helped him with a couple of writing projects as a way to earn a little extra cash. He was unfailingly kind and always expressed gratitude that seemed out of proportion with the modest help I offered. Beyond that, two things stuck with me about S. P. First, he was interested in designing software to teach students accounting. This was back in the 1990s, so it was early for a professor outside of an education or computer science department to be thinking about such things. Second, while I knew nothing about his field, the clarity of thought in his academic writing and the celebrated status of some of his co-authors suggested to me that he was an up-and-comer.
I was certainly right about his career prospects. He went on to chair MIT Sloan School’s Department of Economics, Finance and Accounting; then became Deputy Dean of the school; and eventually serve for three years as the Chief Economist for the Security and Exchange Commission of the United States before returning to MIT. Despite being at the top of his field,
S. P. clearly never lost his passion as an educator. I gather the same is true for his co-authors. The group started its work with some funding from J-WEL and continued on a volunteer basis afterward because they all cared about the project. I did not get the impression from S. P. that MIT will be picking up this work. But the authors are still trying to bring attention to their proposal in the hopes that somebody will take it forward.
That, then, provides the lens through which the paper should be examined. It is a passion project by highly accomplished scholars in diverse disciplines, none of which is education, and supported by some limited funding. Accordingly, I read it with the same spirit of generosity in which it has been offered. At the same time, it’s worth acknowledging that the document contains some tensions and elisions that are typical of such endeavors. The authors make clear that this paper isn’t a fully formed, shovel-ready proposal. Rather, it is a thought piece and discussion starter.
The context of the need
The authors state their rationale and goals up front:
The conventional model of higher education is facing growing skepticism. With rising tuition costs, ballooning debt, and concerns about preparedness for the work force, many are doubting the value of higher education. Alternative credentials and online offerings are gaining currency.
Viable solutions to these challenges will require abandoning some of our long-held assumptions about how institutions of higher education should operate. But our core educational values—that each learner deserves individual attention and encouragement, and that education should nourish the entire person and not simply provide short-term skills—must be preserved. So we reject solutions that involve replacing teachers by robots, taking all lessons online, or demoting the humanities.
We describe an alternate model for baccalaureate education that offers key levers for addressing these challenges. We list the features of this hypothetical “New Educational Institution,” or NEI, below. NEI is intended to be a new class of institution that is different from traditional R1 or R2 research universities. The focus of NEI will be on majors such as computer science and business, and eventually, broader areas of engineering and design.
This proposal might be called radically conservative in the sense that it is intended to conserve the best parts of an American-style liberal arts education by re-imagining it but not rejecting it. It will take on the challenges of cost and career value without rejecting the value of liberal arts of human teachers.
The authors confine the scope of their NEI to “eventually, broader areas of engineering and design.” In this respect, I think they may be too modest in their ambition. To understand the potential role this model could play, we need to review a little history.
The 1960 California Master Plan—the template from which the modern US higher education system has been built—had a variety of limitations and trade-offs, but one of the most glaring from the very beginning was the lack of identity for the middle tier. California created three systems for higher education. On the bottom was the California Community College System. Any student anywhere in the state would be within easy commute of a college that could offer a two-year degree, an on-ramp to skilled work, and the ability to transfer credit to four-year institutions. Community colleges accept the top 100% of students who apply.
The top tier, the University of California System, would comprise universities that offered advanced degrees and conduct significant research. These institutions would be selective and model themselves after prestigious private universities in their range of activities and emphasis on scholarship.
In the middle was the California State University System. More selective than the community colleges but less selective than the UC universities, these were intended to be four-year universities for students who would benefit from a liberal arts education and perform skilled work but did not need the benefits of studying with top scholars in the field. To prevent Cal State from competing with UC, the former universities were not to offer graduate degrees (although that prohibition didn’t last long).
The problem with this approach is that the United States lacked (and still lacks) a distinctive identity for a Cal State-style institution. Other countries have various interpretations of a vocational university with distinctive goals and personalities for students with certain types of life and career goals. In contrast, the Cal State system and the middle-tier colleges and universities in other states generally lack a distinctive purpose that drives a different approach. This lack of differentiation from their research-oriented cousines creates a few problems. First, the tiers became castes. State colleges and universities that lack the R1 or R2 Carnegie designation are not generally perceived as places students go to pursue different goals but rather as “lesser” versions of research universities. Colleges want to become universities and universities want to become research centers. Why? Because that’s where the money and prestige are. Everything from college rankings to funding flow from the implications of this classed system.
It gets worse. Graduate students are encouraged to aspire to research while being taught nothing about teaching. And why not? Faculty generally advance in their careers based on their research, not their teaching. Meanwhile, because the middle-tier institutions are modeled after their R1 cousins, they make the same research demands on faculty and incur expenses for building out facilities that are not focused on creating well-educated citizens, successful professionals, and thoughtful human beings. Money that could be used to build better connections to employers, add more advisors, or cut tuition is instead spent on the same trappings as research universities.
I’m not claiming that all mid-tier institutions are this way or that Cal State universities are this way. Rather, I’m suggesting that the design of the system, and particularly the lack of a distinctive and valued purpose and identity for mid-tier institutions, creates enormous pressure on these colleges and universities to engage in behaviors that tend to raise tuition while lowering teaching quality.
Higher learning for the rest of us
What if universities were places where you go to learn? What I mean is, what if there were universities that exist tobe places where you go to learn stuff that you need or want to learn? What if that was their main purpose? Not to generate research. Not to be the place that coming-of-age movies are made about (although personal growth counts as “stuff you need to learn” and would not be ignored).
Education would be cheaper. The report’s authors point out that “the actual cost of instruction amounts to less than a third of total expenditures for four-year colleges today.” Exactly how the money flows is…complicated. The authors use the example of regulatory costs for a research university with a hospital to illustrate expenses. Now, given that S. P. is a celebrated financial expert and I am not, I want to be careful with this next bit. The authors imply that this extra cost is cross-subsidized in tuition. I strongly suspect this is true in many cases. The literature I’ve found on the topic over the years is murky. And this itself is a problem.
Clark Kerr, the architect of the aforementioned California Master Plan, also described the modern research university as “a multiversity” where comparison of costs across internal interest groups is discouraged. Kerr’s problem in 1960 wasn’t economic. The California State Legislature was in the mood to write big checks for education. His problem was political. He had to hold his coalition together. Infighting would not help. Which means that comparing how much money goes to one group over another was discouraged. That which doesn’t get measured doesn’t get managed. It’s likely that teaching in general and large lecture courses in particular cross-subsidize functions that don’t directly benefit undergraduates in many institutions. For some students, one could make an argument that being educated by leading researchers provides them with direct benefits. But others probably get little from it.
And the truth is that many academics get little from it as well. If you’re not a star researcher, life as a young academic can be brutal. And if you care about your teaching more than your research, your career prospects will suffer.
A good portion of the paper argues that all parties would be better off if professors were trained, supported, and rewarded for effective teaching of relevant (though not narrowly vocational) skills and tuition money were invested high-quality, well-trained, well-supported educators. It’s not a novel idea. Again, the value of this paper is not in its original approaches but rather in its synthesis of various well-established ideas into a coherent idea of college. The online, CBE-oriented mega-universities are one realization of this new balance. This paper offers a second, complementary vision. One that holds onto more of the residential liberal arts college tradition.
What a Neo-Cal State would be like
Regular e-Literate readers will be well familiar with most or all of the recommendations in the report:
Research requirements for professors should be de-emphasized and should focus on either applied research or research in the scholarship of teaching.
Multidisciplinary courses showcasing the practical value and contribution of the humanities would be the new core curriculum.
Deconstruction of degrees into stackable micro-credentials would enable students to get credit for progress and to move in and out of the workplace as needed.
An added benefit of stackable credentials is that each micro-credential could have more design coherence and value than a collection of individually chosen courses.
Active learning, with strong training and support for the faculty, should be the rule rather the exception.
All faculty would have status that is often referred to as “professor of practice,” meaning they have full employment status, promotion largely based on their teaching, and elimination of tenure/non-tenure distinctions (which is usually implemented as long-term contracts and participation in shared governance but no tenure).
Students would be encouraged to participate in co-ops, where full-time, paid jobs count toward their academic degree (and students may simultaneously take online courses).
The university shifts to a trimester schedule to more easily accommodate long internships.
Visiting faculty fellows augment the regular faculty to bring more research, innovation, and real-world experience into students’ academic work.
An active but balanced extra-curricular schedule is encouraged and supported.
Facilities are designed for use. The section on this topic doesn’t provide a lot of detail, but the reference to libraries, which have evolved from warehouses of paper books to collaboration spaces, is a give-away. S. P. mentioned to me verbally that more online education (presumably along with off-campus coops) will reduce the amount of physical plant investment the university will need to make. Taken together, we can imagine a campus that is the academic analogue of a WeWork facility.
(I’ll address the use of EdTech separately in the next section.)
Can you close your eyes and envision such an institution as a coherent and attractive mid-tier institution where you would be comfortable sending your own kid? I can. Many details are still missing, of course, which I’ll touch on in the last section of the post. But strikes me as coherent.
Further, while the NEI envisioned by the paper out of MIT is most easily applied to engineering, design, and business, I’m not sure why it would need to be so narrow. The biggest challenge I can see is that they call for co-ops, which are hard to implement broadly. But if we add in multi-term project-based learning as an acceptable substitute, I think it could work broadly.
Would it be a good education? The best longitudinal study of educational outcomes that I know of is the 2014 Gallup Purdue Index Report. It correlates aspects of students’ college experiences with the vast collection of employee research the company has conducted over many decades, looking at various dimensions of long-term well-being such as wealth, physical health, mental health, and social connections. Gallup collectively calls these measures “wellbeing.” The Gallup Purdue research correlated survey answers about various aspects of college life to various measures of success later in life. According to the study, students’ of thriving in all five areas of Gallup’s wellbeing index were
1.7 times higher if “I had a mentor who encouraged me to pursue my goals and dreams”
1.5 times higher if “I had at least one professor at [college] who made me excited about learning”
1.7 times higher if “My professors at [college] cared about me as a person”
1.5 times higher if “I had an internship or job that allowed me to apply what I was learning in the classroom”
1.4 times higher if “I was extremely active in extracurricular activities and organizations while attending [college]”
1.1 times higher if “I worked on a project that took a semester or more to complete”
Tellingly, the researchers found no correlation between the type of university respondents attended and their likelihood to answer positively to the questions above. Selective institutions were no better (or worse) than non-selective ones. Large universities were no better (or worse) than small ones.
The design of the NEI as described in the paper would optimize for every single one of these student experiences.
EdTech
Unsurprisingly, the part of the report which generated the most cognitive dissonance for me is the one I know the most about: EdTech. Overall, the paper is commendably broad in its survey of various strands of educational reform, given that it was written by a group of non-specialists mostly in their spare time. Which makes the technology section stand apart. It’s so very…MIT. Some years ago, the folks inside EdX began talking about “SPOCs”—small, private online classes. They invented a name for these classes, explicitly positioning them in relation to MOOCs and implicitly positioning them as if they were MIT investions. In fact, tradtional-sized online courses have been widespread for almost 30 years. Much of the innovation in the field has been at access-oriented colleges. As far as I have seen, MIT’s approach to this educational form hasn’t been particularly innovative—in fact, it has been retrograde in some ways—and its framing has been ahistorical.
Whoever was briefing the paper’s authors on EdTech apparently never got outside that frame, because the EdTech section largely centered on converting MOOCs to SPOCs to digital textbooks for use in flipped classrooms. This blind spot had the side effect of also blotting out the history of digital curricular products that are actually designed for use in a classroom which, when designed for classroom use often look quite different than MOOCs and can be used in more rich and interesting ways. And finally, the often video lecture-intensive nature of many MOOC designs tends to undercut the overall tendency of the NEI’s design to break out of the “second-class citizen” status that today’s mid-tier universities suffer under. Having students watch regular video lectures from a “real” professor would tend to undercut the authority of the instructor in the room.
That aside, the authors make a few astute observations about the promise and perils of the MIT-centric frame they work within. First, they note that disintermediating the textbook publishers—my phrase, not theirs—with university-created content can subsidize the continued investment by the universities creating the content. While the MOOC is not the right format for this model, a two-sided curricular materials market in which universities are both sides of the market absolutely is moving in the right direction.
Second, they note that “a social contract [for the use of digital curricular materials] needs to be established at the beginning of the class. And during the course, the coaching and in-person elements must reinforce the back-and-forth between the online content and its absorption and application.” The broken social contract is a core problem with analog curricular materials as well. Students are asked to purchase an expensive 400-page book of which they will be asked to read perhaps 15%. But the professor assumes that the students didn’t read and therefore lectures on the topic of the reading. The students feel like they’ve wasted their time so they stop reading, leaving the professor with the (correct) sense that students don’t do their homework. “Social contract” is exactly the right term. The paper’s authors then point out that educators need to be trained in how to integrate these materials into the give-and-take with their students, which is true. But at its heart, the issue can be drawn from those top three effect sizes in the Gallup Purdue research: Students want to know their professors care about what they do, what they learn, and how (and who) they are.
Finally, the authors talk about co-creation of curricular materials with the “SPOC” provider. They list a few benefits of the approach, but two I didn’t see are (1) infusing the teaching expertise of the NEI professors of practice into the curricular materials design, and (2) bringing both diversity and localization to the students’ curricular experiences. e-Literate followers will recognize both this co-creation function, the renewal of the social contract around homework, and the two-sided market as hallmarks of my recently deceased start-up, Argos Education.
The paper leaves a lot more to be explored in the potential for technology to support what I’ll call “medium-residency” universities. While the envisioned NEIs aren’t quite low-residency programs like Goddard College (or no-residency online programs), the sense of campus community and the nature of student touchpoints changes in an environment where students are routinely off-site for long-duration co-ops and are routinely engaged in hybrid or online learning. This has far-reaching implications for how students are supported, how work is organized, and how technology enables these changes. But that’s another topic for another time.
Who will do this?
The authors of the papers were very clear that they had not created a business plan and are aware of numerous practical implications that were beyond the scope of this work. That’s fair. I’ll raise one practical concern at this stage.
A major disadvantage of this approach relative to scaled online universities is the up-front cost. Regardless of any benefits in ongoing operating costs, the upfront costs of either building or radically rebuilding a physical campus are considerable. Further, if this is intended to be a model rather than a one-off demonstration, then somebody would need to take it on at scale.
The obvious candidate is an existing state university system. That would require a legislature with foresight, unity, and budget, not to mention a faculty union ready to embrace the idea. It’s a big lift.
In normal times, I would write this off as a good but impractical idea. These are not normal times. We are approaching a tipping point of punctuated equilibrium in higher education. It’s hard to know what will come next, except that it will be necessarily different from what’s come before. So now is the time to put all good ideas on the table. However improbably they may seem from the perspective of the world as we lived it yesterday.
Several articles caught my eye this week. Connecting the dots, I’m seeing two patterns emerging. First, post-traditional students being recruited aggressively by a surprisingly broad swath of colleges and universities. One could argue this trend started with the MOOCs and with OPMs like 2U moving upmarket, if you consider employed white-collar college graduates as post-traditional. This target group is now expanding to students who either didn’t complete their degrees or didn’t go to college at all. Meanwhile, early signs suggest that “traditional” college students are looking more like post-traditional students in that more of them are not willing or able to give up their work and home lives to spend four years immersed in a residential college experience.
If these trends hold, then the universities that have been hailed for pioneering student success initiatives under the banner of equitable education will become models for a large portion of the market that hasn’t been as driven by equity but now needs to reach an keep students who maintain lives outside of college because they need those enrollments to survive.
Enrollment shifts
We’re still in the early days of “post-pandemic” higher education. ((I put “post-pandemic in scare quotes because, even though we’re pretending the pandemic is over, we don’t really know what will happen next with it.)) Enrollments have been down. Early reports suggest they are still dropping but at a slower rate. How much of that is due to the pandemic and financial hardships it caused? How much of it is because of the red hot economy? Or a combination of those two? For students who skipped college, how many of them will come back? To what degree is the demographic cliff starting to bite? How will a possible recession and escalating international tensions impact international student inflows? The combination of these questions guarantees that we will not get a simple or uniform answer as to what will happen next. Add in the fact that some of these factors are changing faster than the data are coming in, and we have a confusing picture.
So I’ll start my analysis with “As the Pandemic Wanes, All Eyes Are on Enrollment” by Liam Knox and Sara Weissman at Inside Higher Ed. As expected, the data are confusing and preliminary, while the analysis necessarily includes a significant amount of guesswork. Institutions are announcing enrollment upswings before official numbers are out. Enrollments of black, first-generation, and low-income students are down overall, according to author Nathan Grawe . On the other hand, institutions that are primarily black- and Hispanic-serving saw a 9% increase in FAFSA applications. Terry Hartle, senior vice president of government relations and public affairs at the American Council on Education tells us that selective schools have done well, as have schools in states with growing populations.
Pennsylvania State System of Higher Education Dan Greenstein is quoted as saying,
There’s no way to fill that gap on the back of what I’m going to call traditional students, high school age[.]… And there’s no way to fill that gap on the back of students who can afford the relatively high price of higher education. You’ve got to figure out a way to open the aperture.
Right. This is where we are headed. For a variety of short- and long-term reasons, recruitment of traditional students is no longer a complete path to financial stability. The quote above is from the chancellor of a state system that has been in academic crisis since before the pandemic. But very few institutions feel safe right now.
Here’s another revealing quote:
At William Paterson University in New Jersey, matriculation rates fell by over 10 percent this fall; meanwhile, enrollment in its online programs, collectively known as WP Online, grew by 57 percent.
“Our online growth is good news and a testament to the quality and appeal of our offerings,” the university’s president, Richard Helldobler, wrote in a letter to faculty. “However, the full-time, main campus population is the biggest source of revenue, so reversing these declines is imperative.”
This university president is giving us a view into how leadership is thinking in some institutions. Online enrollment has grown by 57 percent for his university but the full-time, main campus population is the biggest source of revenue. Maybe this is a recruitment problem in the short term. But do we know if that shift to online is temporary? Maybe the real long-term solution is to switch up the revenue mix by leaning into the growth in online.
Meanwhile, in a section titled “Private Colleges Branch Out to Stand Out,” the article tells us “A Pew Research Center analysis released this month noted that Hispanic enrollment more than doubled in the last two decades, growing from 1.5 million in 2000 to 3.8 million in 2019.” Many of them, interestingly, are going to public four-year institutions. But we also get this anecdote:
Chris Domes, president of Neumann University, a small private Catholic institution in Pennsylvania, also believes his university was spared the declines faced by some other small private institutions thanks to its focus on underrepresented students.
Enrollment at Neumann fell from 2,506 students to 2,212 last year, but it held steady this fall, and first-year enrollment rose 9.5 percent compared to last year. The majority of the freshman class, 63 percent, are first-generation college students. About 40 percent of the student body are students of color, and more than 40 percent are eligible for the Pell Grant.
“We serve a big percentage of underserved populations,” Domes said. “The demographic shifts are primarily in white and wealthier communities … We feel the community we’re serving is another piece of headwind against the demographic shift, because those are not where the drops are.”
Here’s another university president telling us about his sustainability strategy. He is describing underserved populations not as an equity mission but as a sustainability opportunity. This doesn’t mean that the university only sees underserved students as revenue sources. Rather, it suggests that equity and sustainability goals are increasingly aligning for a broader range of institutions.
Anyway, while the Inside Higher Ed article authors do a good job of trying to present chaos in an orderly, sense-making way, chaos is chaos. We don’t know where enrollments are actually headed. We know a little more about how the universities are reacting to the change. For the short-term, many of them are trying to improve their recruitment of whoever they traditionally have been able to recruit. But some are beginning to recognize that the pool they have been fishing in is too small and getting smaller. To thrive in the future, they will need to reach and serve different students.
Seventy-seven percent of students surveyed want to take at least some online courses. In fact, 26% of students who are opting for “mostly face-to-face,” leaning into the traditional campus experience, still want to have some online courses. And 51% percent of students surveyed want half or more of their courses to be virtual. Preferences are shifting:
Think about this for a moment. How have your own work preferences have shifted regarding the mix of in-person and virtual work meetings? How have your colleagues’ preferences shifted? What are the pros and cons? When you dig down a layer below your global preferences, which sorts of activities are you more likely to want to have virtually and which would you prefer to have in person? What’s the calculus for you? For most of us, these preferences have some texture to them related to how you get your best work done, how you socialize, and how you need to balance work with the rest of your life. Why should we expect students to be different?
At the moment, we don’t have any way to correlate the winners and losers in the Inside Higher Ed article with changing online learning preferences in the EDUCAUSE report. All we have is the one anecdote from William Paterson university. Well, not quite all. The student quotes from the “modality preferences” section of the report are quite consistent with what we would expect to hear from post-traditional students, e.g.,
Having to commute would be more stressful. It would probably negatively impact my learning because I have a job that I have to prioritize over school with regard to my schedule.”
[And also]
I won’t be able to finish my degree unless I can do it online. My dad is in remission from cancer and doesn’t have any protection from COVID.
These are students with lives outside of school. Now, we don’t know too much about the sample. And yet, 71% of them are in the 18-24 age bracket. About a third of them were in community colleges, but 25% were in PhD-offering public universities. It certainly feels like the needs and preferences of “traditional” and “post-traditional” students may be merging.
Spending money to reach students
The third story I want to bring up, by Doug Lederman of Inside Higher Ed, is “When to Outsource Online Learning, and When Not To.” It provides a summary and analysis of a report from UPCEA on how to decide whether to hire an OPM or build in-house capability for online learning programs.
After pointing to other OPM reports, the article contrasts the UPCEA report in the following way:
The report doesn’t explore the question of whether institutions should expand their online offerings, or the all-important question of how to go about going online in a way that furthers their educational mission. It picks up at the point where a college or university leadership might decide how to do so—utilizing its own money, people and capacity, or with outside help.
UPCEA’s report is a “how to” guide. And the most desired features highlighted in the analysis are funding the development of a program and marketing it, the latter of which got particular attention. “[B]uilding the enrollments, typically through (sometimes) sophisticated digital marketing efforts—tends to be the skill set that most institutions believe they lack in house….”
This quote from Tyton Partners’ Trace Urdan made me sit up in my chair:
“Attracting working adult students to graduate programs and degree-completion programs is extremely difficult at the current moment for everyone given competition from a still-hot labor market,” Urdan said. “No one is happy with leads or conversions, and no one anticipated how challenging the current moment would be. This is a problem for everyone, not just OPMs.” [Emphasis added.]
Trace rightly connects degree completion programs—often associated with institutions like WGU and SNHU—with graduate programs, including the ones for elite universities served by the likes of 2U. (2U, by the way, just announced its first MicroBachelors programs.) Whatever a student’s age bracket and educational attainment may be, if she has a life and priorities outside school, she is going to be harder to reach and harder to keep. She has less attention to give and few resources in general.
The post-traditional student is becoming the new traditional student.
Some implications
The 20th Century was a kind of golden age of the traditional liberal arts university in the sense that the pool of 18-year-olds who aspired to go to college expanded dramatically while the cost remained affordable. While nstitutions competed with each other, most did not have to work to convince students to go to college straight from high school, attend full-time, and make college the main focus of their lives. I believe those days are over. They are not coming back. On the other hand, lifelong learning used to be a lifestyle choice for most people. Now it’s a necessity for many. Higher education must embrace these realities to survive, thrive, and above all, serve its purpose in the 21st Century.
If I’m right about this, then the majority of US colleges and universities need to rethink and retool. Tim Renick’s work at Georgia State University to reduce summer melt and reduce administrative barriers for students to success will no longer be seen as primarily an equity effort for the underserved. It will become a template for all kinds of institutions. The lessons learned by large online universities like SNHU, WGU, UMGC, and ASU Online about how to retain online students and deliver quality online education will be lessons that residential campuses will have to embrace. Every college education will be digitally enabled. Even the most traditional residential campus will need to embrace online, blended, and hybrid as parts of the mix that its students demand. After all, even students who can afford to focus on nothing but college for four years will expect to have as much freedom to work remotely as knowledge workers do these days. Everything from physical plants to term lengths to degree structures will have to be rethought for mainstream institutions.
This, in turn, will change the daily work lives and even the professional identities of many people working on these campuses. The nature of the professorate will change. Universities will need to become more centrally managed and coordinated. And this may happen shockingly quickly as universities face existential pressures for survival. This is what punctuated equilibrium looks like. Positive feedback loops run amok. The unthinkable becomes possible and then inevitable.
The last ice age endured for 11,000 years. But it did end.
