Disruption rolls on

Udacity’s recent announcement that it was pivoting away from free courses for all has been met by glee and relief from the anxious academic establishment. Their satisfaction, just like the hype that they deride, misses the point. MOOCs have always been a sideshow of the three-act play that is the disruption of higher education. Their inevitable retreat from the public eye that Udacity’s evolution begins does nothing to change the radical change that is coming to higher education models around the world.

The real disruption is being driven by models like College for America, which enable individuals to earn a degree at their own pace, from anywhere, using any methods. It is being driven by models like Kepler and Spire which combine online resources with the best in-person learning techniques, which have been proven through extensive research and experience but few universities meaningfully employ. And ultimately it is being driven by the fundamental flaws in current higher education models, flaws which charge young people a king’s ransom and often provide them with little meaningful learning or employable skills.

The irony of Rebecca Schuman’s polemic is that the current American higher education system is guilty of the same bias against poor people which she attributes to Udacity’s founder, Sebastian Thrun: consider, for example, the appalling 30% graduation rate of lower income students. Yes, MOOCs are currently an intellectual playground for the global elite. But so are many colleges and universities around the world. New models will take hold more slowly than in other industries due to the greater switching costs in higher education. But they – and the disruption they herald – offer the best hope for millions of poor people around the world and should be cheered by everyone who believes in equality of education and opportunity.

A Farewell to MOOCs?

There is some interesting news from Udacity, one of the big three so-called MOOC platforms. Their pivot clearly seeks to address some  of the most common – and warranted – critiques of the MOOC model to date. Their changes?

     1. Instruction – You can now get direct and personalized feedback from a coach on your work on the course;

     2. Doing, not just watching – Courses now include focus on applying skills to build things rather than just taking quizzes

     3. Business model – They pay for those first two features by charging students on a monthly basis. You take longer to complete the course you pay more – the approach taken by other emerging competency-based providers such as College for America.

These are sensible moves and signs that at least some providers are getting serious about the online course format. Feedback and real application of skills are the core of effective learning and the future of education – not simple recordings of the broken formats of the past – professorial talking heads – that has been the mainstay of MOOCs to date. It is also notable that Udacity course developers are all practitioners and leaders from relevant industries, not professors. While they can’t leverage big academic brands as others can, this is likely a net strength, providing them with focus, insulation from academics with fixed notions of course design, and a value proposition that customers are more likely to pay for (tech skills from industry leaders) than play with (humanities courses from academics).

At more than $100 per month, it would be hard to claim that Udacity will still be Massive or Open – MOOC hype is starting to deflate as sensible observers like University Ventures have predicted. But with their focus on employability, high demand technology skills, and formats that facilitate high quality learning, my money would be on Udacity surviving and thriving over Coursera and other for-profit platforms. 

 

The Switch

We write frequently about the confluence of factors that are driving an upheaval in higher education systems around the world: growing demand from dissatisfied families and employers, skyrocketing costs, and maturing technology, among others. But despite these forces, there is no doubt the transformation of higher education is going to be much slower and messier than disruptions in other sectors (there will be no Facebook or Google in this space). Another great blog from University Ventures sums up why in two words: switching costs. 

“Sebastian observes that Expedia was successful in getting consumers to switch away from travel agents because the switching cost was relatively low; if you make a mistake, it’s only a $500 decision.  But Zillow was not successful in its ambition of getting consumers to switch away from real estate agents; if you make a mistake here, it’s a much bigger mistake.  So switching costs are much higher.  With regard to higher education, switching away from a degree is an even bigger decision than selling your house.  Such a decision stays with you for life.  Based on current data, the average result will be 40% less income.”

Higher education is one of the costliest and most important decisions people make in their lives. They are thus understandably much more conservative about jumping on something new and unproven. This isn’t just the inertia of not wanting to switch to a new email client. This is a major decision that people think carefully about and for which many will see the risks of switching (no degree and therefore no career) far outweighing the potential benefits (better learning and employment chances at lower cost). Those two words neatly summarize why statements about the imminent end of universities and degrees is just bombast.

This doesn’t mean that people won’t switch and current institutions won’t close. They will. But as Clay Christensen has articulated the change will be driven initially by people who don’t face those switching costs: those who can’t currently access even mediocre higher education. Another potential angle for those seeking to overcome this massive switching cost hurdle is to start be offering existing consumers the benefits without the switching costs. The complementary employment preparation program that Spire is planning to run in Kenya, for example, will dramatically improve students’ skills and employment prospects while not asking them to forgo their degree from a traditional institution. If the price is right – and, for many, the loans affordable – programs like these may be the way for the radical improvement of higher education to gain a foothold in many markets. As always, watch this space…

Keep Them Home

At Kepler and Spire, we believe that lower income students with few, if any, other opportunities represent the greatest potential for impact – both social and business – in higher education in Africa. A recent blog in The Guardian highlights how there is also a growing opportunity students with greater means. The social impact from serving these students will be lower, but they can help drive the economics of new models early on before scaling with the much larger population of low income students.

The blog cites that there are more than 35,000 Africans currently studying in the UK alone. The British Council and others have predicted that demand for spots in UK universities will grow in the coming years. Supply is simultaneously being constrained by increasingly tight restrictions on visas. That leaves the growing number of aspiring students with means with two options: pursue an institution in a country with lower barriers (eg, Asia) but likely less brand appeal or attend a new, high quality institution at home. The latter are largely lacking currently, creating the opportunity for new players.

The article notes two other interesting bits about higher education in Africa. First, that there is no branch of a UK university currently in sub-Saharan Africa since the only attempt to date (in South Africa) closed in 2004. This is inaccurate as we know of another UK branch that recently closed in Uganda. That only reinforces the broader argument: UK universities are 0 for 2 in operating in Africa.

Second, it reports that over one million students who are qualified are not able to find spots across the continent. Like most sweeping statistics such as this, it is broad guess. But it is generally in line with the huge unmet demand we have seen in each of the countries we have examined.

There is little doubt that equal or better learning can be delivered by institutions in Africa. It is now up to entrepreneurs to show the students currently hoping to go abroad that the value they can deliver significantly outweighs the – often unwarranted – prestige of the foreign institutions they plan to attend. As with so many aspects of higher education globally at the moment, watch this space.

Lean Schooling

Dai recently expanded on John Danner’s concept of applying the Lean Startup model to teaching. They make a compelling case for stripping down and constantly iterating instructional methods to get to learning goals. This approach is particularly exciting for higher education where much of the instruction seems designed to minimize the effort of the professor than to maximize the learning of the student (think teaching assistant leading classes and lectures on their current esoteric research topic with little relevance to classes’ learning needs).

But in addition to this promising path there is still much more to be gained from applying Lean Startup principles to their typical target: the product as a whole. In our field, that product is the overall schooling experience. Most schools and universities operate as far as possible from the Minimal Viable Product approach. Adding to a curriculum requires constant committee meetings. Most of the core components of the product such as the role of the instructor are sacred cows and are not meaningfully touched in attempts at innovation.

Summit Schools is a shining exception to this rule. As a new report by FSG highlights, Summit has truly embraced the MVP model. What is most impressive and inspiring about their work is that they were successful right out of the gate with a more traditional model. Most would rest on their laurels in that situation and not even consider the risk and arduous change management of radically changing the model. They took leap, risked criticism from without and within, and worked themselves far harder for only one possible purpose: to further improve the outcomes of their students. 

If there is such a thing as a non-sexual crush on an organization, I have one on Summit at the moment. They embody what we aspire to be – indeed what we must be if we can succeed in the huge ambitions we have set for ourselves – at Kepler and Spire. I highly recommend anyone trying to create change in education read the full report. But I have pulled three quotes in particular that best capture what we will be striving to build into our daily work in the coming years. 

 

1. Constant reinvention to get to the goal - Our approach is so novel in the countries we are working with and our challenges and ambitions so large, I think we will doing something seriously wrong if our approach one year from now is recognizable from today.
 
Two years into blended learning, Summit’s mix of self-directed online work and project-based group learning is nearly unrecognizable from the pilot that launched on Day 1. Summit’s journey – from using Khan for part of math class to removing walls and rethinking the entire school experience – started organically, but over time gathered purpose and speed. After observing how quickly its model shifted in Year 1, Summit set out to create a formal process for managing and accelerating this change in Year 2. Along the way blended learning has enabled innovation and has been a key piece of Summit’s evolution, but innovation at Summit extends beyond blended learning. It includes aspects of culture, student and teacher engagement, and more. Understanding the elements of Summit’s process for innovation, as well as how they fit together, is integral to understanding Summit’s success in blended learning across multiple iterations of its model. This framework also holds lessons for all schools looking to grow and thrive in the changing field of blended learning. 
 

2. Rapid iteration - The problem we are solving is so large and so urgent, we have to measure our improvement in weeks, not months.

Instead of adjusting its instructional model on a semester or annual basis, in Year 2 Summit San Jose completed each Build—Measure—Learn cycle in 1-2 weeks – a pace of iteration that enabled much faster improvement than the school had ever experienced before. 

 

3. Collective innovation - This approach – and our model as a whole – will only succeed if everyone who works with us, including our students like with Summit, eats, sleeps, and breathes the impatience for and rigor of improvement. In my brief time on this world, I have come to learn that the primary factor that distinguishes great, game-changing institutions is their unswerving focus on the impact they are seeking to achieve. If less than that impact cannot be tolerated, there will be continuous, is not always clean, improvement.

In sum, a culture of innovation stems from innovation as a shared responsibility, with different stakeholders – from CEO to student – each responsible for decisions that influence the overall model. 

I hope we can expect that we can follow Summit’s example and that many other education institutions around the world will do likewise in the coming years.

A step towards the blended utopia

In a recent post, I discussed how online classes need to evolve far beyond the “talking heads on screens” to realize the full potential of blended learning. A recent article on the Relay model of teacher training captures the best example of that evolution I have seen this far in my meanderings through the increasingly dense jungle of online courses. Unsurprisingly, the course is driven by two giants of the movement to improve the rigor and quality of teaching, Doug Lemov and Norman Atkins:

 

I logged onto an online lesson for a module titled Engaging Everybody, taught by Doug Lemov, managing director of Uncommon Schools. In the 3¾-hour lesson, Lemov lectured for three or four minutes on each of four techniques that he promotes to keep youngsters involved in class, techniques he labels “wait time,” “everybody writes,” “cold call,” and “call and response.” Each of Lemov’s minilectures was followed by a few pages of online reading from his book Teach Like a Champion, and an essay question or two that students answer online (see “Tools for Teachers,” book reviews, Spring 2011). Then came several short videos showing teachers using each technique in the classroom, with Lemov noting the teachers’ use of an apt pause or effective gesture.

 

Note that Lemov lectures for only 3 to 4 minutes compared to the 40+ blocks of lecture that typical for many of the courses currently available on Coursera and the other platforms. The narrated review of experienced professionals putting the lessons into practice is also a nice touch. Hopefully we will see many more courses experimenting with combinations of methods like this and equally significant innovation and the incorporation of those courses with fully complementary in-person engagement.  Onwards with the blended revolution!

Seeking the Hitchcocks of Higher Education

We at Kepler have been working with the Stuart Bowness and his team at MediaCore  this year to build the vital technological underpinnings of our model. I recently worked with them to put together some thoughts on what is now needed to realize the full potential of the growing revolution in blended learning. In short, the analogy of the current state of online education as the earlier days of the movies is apt and we need the first Hitchcocks of the field and to avoid the Camerons and Bays who will inevitably appear with much dazzle and little substance. The full piece is here

If you are an aspiring Hitchcock of online education, we would love to hear from you. (In fact, we’d love to hear from you even if you are an aspiring Michael Bay of online education, though we may find you a bit odd).

 

 

Dreams deflating on the tarmac

The Kenyan press continues to buzz with stories on higher in education in the country.  Like others, this article seeks to bludgeon the reader with the human faces of the crisis. This one, however, manages to penetrate my normally thick emotional-manipulation-armor. It does so unintentionally in relating the elation of John Juma, the protagonist of the piece:

I am now a happy man. I will join the university and hopefully liberate my family from the yoke of poverty,” he added

Quotations like these litter the international development literature so I normally quickly pass them by. But it is the false hope embodied in this sentence that grabbed me. Who is going to tell John that his chances of learning the skills he needs to achieve his dream? Who is going to tell him his even weaker chances of getting the well paying job that will enable him to truly transform his family’s future? To be sure, his prospects are much better than if he had not been admitted to university at all. But it is still roughly a coin flip that five years from now on John will be walking from interview to interview with a hard earned degree in his hand with his vision of university as his family’s path out of poverty withering in the heat.

The harsh law of the iron triangle of higher education means that steps to rapidly expand capacity like this one in Kenya will decrease quality and therefore John’s chances of employment. Rather than stirring hope, news like this should increase the sense of urgency among those working to transform higher education in Kenya and other emerging countries.

 

Universal university trends

Dramatic price increases. Spiraling student debt. This must be higher education in the US, right? 

Sadly, the higher education news out of sub-Saharan Africa is echoing that of the US these days, with reports of rising debt in South Africa and price hikes in Uganda. We have been expecting this as traditional African university models are subject to the same unsustainable dynamics, including Baulmol’s cost disease, as their counterparts around the world and public budgets are tight. However, it highlights the urgency of developing new solutions to higher education across the continent to prevent a rapidly rising number of young people from being not only unskilled and unemployed, but also insolvent. 

 

Lets talk about risk, baby

Lets talk about uni-ver-si-ties. Lets talk about all the good things there can be (with apologies to Salt-n-Pepa). Risk is not as exciting as sex, but it is at the core of dramatically improving higher education around the world.

Let me start with some fascinating news out of Oregon this week. The state government has approved a little known education financing mechanism that is often viscerally rejected as modern indentured servitude: the human capital contract. In this model, students repay the financing of their education not through the current standard of principal plus interest (i.e., debt), but rather through a fixed proportion of their earnings (i.e., effectively equity). The approach has been around for decades (centuries, in fact; they were originally mooted by Adam Smith in the Wealth of Nations), but has never caught on due to the operational challenges (tracking income for the often long repayment periods) and ethical concerns (try raising the idea with ten people and see how many respond immediately with revulsion). New outfits like Lumni and Pave are trying to build markets for the instrument, as highlighted in this recent Economist article, but they have a long way to go to prove their viability and reach meaningful scale.

The Oregon adoption is a surprising – even shocking – and welcome legitimization and path to scale for the model. At a time when young people across the country, and increasingly the world, are being ground down by massive student debt, this approach offers some hope.  It reduces the downside risk for students (if you aren’t earning, you don’t owe anything), while remaining a viable business model for those with capital. As a result, it could reduce the number of young people whose potential is suffocated by Sisyphean or through the necessity to spend years in soul-crushing corporate jobs to shed the burden. To be sure, Oregon is an experiment and there are many pitfalls in its path in the years ahead. But an experiment in an entire state system is nothing to shrug at and this is yet another clear sign that people are finally starting to wake up to the unsustainable trajectory of higher education and pursuing radical new solutions.

Yet even this appealing financing method is just a band-aid that will do little to staunch the flow of blood from the gaping wound that is the current higher education system. Young people are currently being crushed by student debt because they are not being adequately supported to learn relevant 21st century skills, complete their degrees, and secure attractive jobs. High drop out and unemployment rates will similarly undermine wide use of human capital contracts:  investors rather than students will feel the pain and be unwilling to extend financing beyond the most talented students, who need the support least. To truly change the outcomes of higher education and the prospects of young people, we need bold solutions to the core affliction of the system: the lack of performance incentives for universities and colleges.

Financing is fundamentally about risk. In current education loan schemes (particularly the til-death-do-us-part system in the US), the student bears the bulk of the risk. In human capital contracts, some of that risk shifts to investors (student risk is now overpayment if they strike it rich). In both approaches, the institution that is actually responsible for delivering the product that is being financed, the university, holds no risk. The university gets paid regardless of whether the student completes their degree and secures a job. They may face indirect consequences (e.g., lower enrollment) if many of their graduates end up unemployed. But this is generally a faint risk since the quality of universities is currently judged by measures such as the sport facilities or research produced rather than student outcomes. As such, institutions’ current incentives are to focus on superficial trappings (many US universities spend millions of dollars every year on lawn care) and high-profile research rather than students’ employability (as we have written before, most consider career services to not be their core business).

The natural solution would be for universities to start bearing some of the risk. In this model, they would put up some of the money alongside the student or investor. If the student does well, they, like the investor, would stand to make more than they put in, which they could use to further improve their quality and therefore student outcomes. If the student drops out or ends up unemployed, they also lose. Those incentives could be linked to the individuals running the institutions – if many students are unemployed and the institution is losing money, managers are docked pay or sacked. Ensuring that incentives are not skewed in the other direction (e.g., pushing students into safe but unappealing jobs) will require some finesse. But many institutions and sectors around the world have been effectively using performance-based payments for years (this is simply a cash on delivery approach to higher education) and higher education does not transcend the quantification of results.

It may seem strange for someone who is in the process of launching a new university to argue that higher education institutions should assume more risk. But this is a challenge that we at Kepler would welcome. Carrying more risk will enable us to reach more and poorer students (by effectively lowering prices). And it will increase the pressure on us to achieve our goals of significantly increasing learning outcomes and employment rates. Institutions that have the confidence in their approach to take some more risk can offer the best value proposition to both students and loan providers and could therefore thrive in the rapidly evolving higher education landscape. We still have many details to work out about our student financing approach, but we will surely look closely at this potential to literally put our money where are mouths are. As always, watch this space.