A new model for higher education
Photo by Joshua Hoehne on Unsplash
COVID-19 has brought universities back into the headlines.
Whether they’re saving the world with cutting edge immunological research, “sinking the economy” with controversial statistical analysis, or ripping off students by charging them top dollar rates for remote learning, the media simply cannot resist bashing the Ivy League and its understudies.
Like so many areas of our lives, the pandemic is accelerating a structural trend in higher education. People have been saying the model is broken for years. Universities (especially the household names) have been criticised for charging high fees, failing to deliver value for money, and generally not moving with the times. And all the while, the student debt burden looms over young people like a mountain that grows taller with each step of the climb.
The truth is that the world has already moved on. As consumers have become more sophisticated in their everyday relationship with technology – accessing on-demand content in the form of Netflix, Amazon, Spotify and other immersive platforms – their expectations have changed. They don’t aspire to convenience, excellence and affordability; they expect it. The same goes for higher education. Young people expect great things from education. They expect universities to leverage technology to create immersive and rewarding educational experiences. And they expect value for money.
Squaring the circle.
Since the first wave of the consumer internet boom in the early 2000s, companies like Amazon, Google and Netflix have disrupted and deflated significant parts of the economy. High profile universities have battled on, belligerently ignoring the deflationary influence of technological innovation and doubling down on the traditional sales pitch: “brand is everything and it’s all about the alumni network”.
This isn’t just cynicism; students and teachers at the world’s finest academic institutions buy into this message with a fervour resembling that of a religious cult. And there is certainly truth to the idea that when you spend $70,000 per year on an undergraduate degree from an Ivy League you raise your market value, predominantly through access to the brand’s global network.
But what people are missing is that brand name and cost are not mutually exclusive. Until now, this has certainly been the case – doing a degree via the Open University or even piecing together a modular programme of study via online platforms like Udemy and Skillshare (even Youtube) simply could not complete with the prestige and network effects accrued by attending the great campus-based centres of learning in America and Europe. Sure, online platforms have encouraged students to save time and money by skipping traditional education channels and “learning from home”. But something has been missing.
Now a third way is emerging, one that promises to square the circle and transform the way that we think about education.
The sales pitch.
What do you actually get when you go to university? It strikes us that the “sell” really consists of 3 components:
Knowledge – the content of university education is important. Knowledge and expertise breed confidence, which breeds success.
Accreditation – an arbitrary configuration of characters that you can put on your resume which should increase your chances of being invited to a job interview. Brand is everything, we are told, and this is certainly true at the job application stage (once in post it tends to be irrelevant, as it should be).
Network – plug-and-play access to a national (preferably global) network of like-minded people, committed to propelling each other forward.
These are clearly HUGE benefits. But look closer, and you notice something interesting; they are not exclusive to the university. They are, in fact, bound up with the instructors who teach there. Just look at David Malan, Harvard’s rockstar Computer Science professor. Aspiring computer scientists and developers go to Harvard simply to study under his tutelage.
Top universities understand the power of celebrity, which is why they pay big money for the best academics to conduct research and deliver tuition. And the academics know it too – they monetise their market value with high profile job moves akin to those of professional football players or superstar prop traders.
But the Lionel Messi’s and Christiano Ronaldo’s of the academic world have been unable to escape the yoke of the mothership and reach students directly. So they’ve been stuck with audiences crammed into lecture halls and perhaps the odd broadcasting and/or publishing gig.
Enter the influencers.
In just a handful of years, the influencer model has transformed the media industry. Traditional media companies sought to monetise the relationship between content creators and consumers; platforms like Youtube, Facebook and TikTok have decimated that model by enabling influencers to go direct-to-consumer.
Nowhere is this disruption more apparent than journalism, where once ascendant newspapers have been reduced to putting up freemium paywalls and begging for donations from readers. The best journalists have mostly moved on, embracing new technologies to build deep connections with their readers via Twitter, Youtube, blogging platforms and the eponymous podcast. And a new generation of journos have skipped the traditional entry point to the industry entirely – rather than cutting their teeth as interns at newspapers on Fleet Street, they’re using Facebook Live to interview guests at home or earning an income from distributing content via Substack.
Influencers have all the power. They can build audiences and (to a certain extent) take people with them if they decide to switch platforms. Like universities, platforms pay good money to attract influencer talent, as Joe Rogan’s podcast deal with Spotify demonstrates – it’s just that they have much bigger wallets.
The influencer model is particularly well suited to learning, helping to avoid the cookie cutter effect that plagues traditional education. Hence David Malan’s self-conscious (and highly successful) drive to build a distance learning empire, albeit one endorsed by Harvard.
As times change, people change. We have embraced decentralised, direct-to-consumer media. This is particularly true of young people, who consume almost all their news via social media. And now they are embracing it for education, too. By consuming content from different instructors, students can build a bespoke multi-disciplinary programme of learning. Or, they can focus obsessively on a single area of interest. The key is here is choice – and when you add that to convenience and affordability, you’re onto a winner.
Evolution of a model.
The influencer model as applied to education is still evolving. Right now, influencers can compete on content but universities have the upper hand when it comes to accreditation and network. But is it really that hard to imagine a time in the near future when students name influencers on their CVs and tap into alumni networks from classes they’ve taken online?
Turns out you don’t actually need to attend a campus based university to get accreditation, network and knowledge. You just need a phone. The technology is simple and universal; we’re just waiting for culture to catch up. But that’s what culture does... catch up. Ten years ago online dating was seen as something weird, extreme, perhaps even dangerous. Now it’s the norm. Could education be heading in the same direction as journalism, dating, music and TV? Of course it could.
Academics have always been valued by society. But the way in which they are valued is changing. It’s our belief that these individuals are massively undervalued; as the culture shift in education gathers pace and we enter the era of the “rockstar professor”, their stock will soar. The influencer model is just so scalable; rock bottom fixed costs with (almost) unlimited revenue potential. What’s not to like? If you’re able to build an audience of several million people who are interested in learning from you and meeting other like-minded students through you, great riches lie in store. Here at Three Body Capital we spent a lot of time thinking about how we can profit from this insight.
The intangible benefits of Beer Pong.
The purpose of this thought piece isn't to bash universities or blithely predict their demise. After all, everyone in our team attended uni and benefited hugely from the experience. We just want to point out the possibilities that online platforms present and extend the disruption narrative into a new domain with huge implications for human wellbeing.
There are of course, ancillary benefits to attending university. Personal development across a holistic constellation of extracurricular experiences (outrageous house parties and Olympic standard Beer Pong) is a huge draw for many people. And simply getting away from your family and asserting your independence is another important benefit that’s not to be underestimated. Universities create a point of leverage for young people who crave independence, but aren’t ready to go it alone in the “real world”. For some, it’s a priceless opportunity to consolidate their social identities, diversify their social oeuvres and perhaps even reinvent themselves. Such intangibles matter just as much as GPAs.
For all these reasons, there isn’t going to be a mass extinction event in the higher education sector any time soon. But the glacial force of technical innovation evolution is accelerating into a landslide that will crush institutions lacking a clear positioning and sales pitch to students.
An uplifting thought.
Enough talk of disruption. The trend towards decentralised learning is incredibly exciting and uplifting. Democratising higher education increases its addressable market by orders of magnitude. Think of how the world will change for the better when billions of people in developing countries can access high quality education cheaply and efficiently? Or how global cooperation will improve and “truth” will evolve when people can learn from instructors in developing countries who might have a totally different perspective on society, politics, economics and culture? Some call this “reverse innovation” – we call it opening your mind and being receptive to new ways of looking at the world.
Let us all give thanks. The playing field is being levelled. The market for human advancement is about to get a lot more liquid. And we all stand to benefit.