The Startup Movement: Opportunities in Alternative Education

The Startup Movement: Opportunities in Alternative Education
Università Commerciale Luigi Bocconi - Undergraduate School - CLEAM Graduation Thesis by Luca Bovone - 1532274 Tutored by Carmelo Cennamo, Professor of Entrepreneurship and Business Plan

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Ai miei amati genitori e a mio fratello per l’incredibile sostegno

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Index 1. Introduction 2. What is the Startup movement? 3. Is there still a need for ‘traditional’ education? 4. The new opportunities 5. Massively Open Online Courses. The rise of Udacity, Coursera and Edx • What they are • How to make money with MOOCs: the business model. 6. Uncollege • What they are • How it works 7. A global, one world classroom. The mission of the Khan Academy • What they are • How it works 8. Traditional Education vs. Alternative Education 9. Conclusion

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Introduction. “Formal education will make you a living; self education will make you a fortune” Jim Rohn Jim Rohn was one of the best students of his high-school class. It was the 1950s, and Jim decided to drop out of school. He started working as a clerk and then started his path under the mentorship of John Earl Shoaff, at that time VP of Sales at Abundavita. Jim made his way into that same company and became billionaire by age 31. Steve Jobs and the Silicon Valley movement still didn’t exist, but Jim had a vision. In a world that is constantly changing, is formal education still the best way to pursue your goals and dreams? If you want to be a doctor, you probably want to take at least a few biology classes. But what we are noticing now is a growing movement of people that want to found their own companies. Why? Machines and technologies are taking up gradually more and more traditional jobs. Apps are making assistants useless. Not only traditional factory jobs are getting eaten up by technology and machines: think about travel agencies, for instance. Just ten years ago you would take your car, drive all the way to a travel agency to get your next trip set up. Now, you book your flights from your smartphone with Kayak and your hotel rooms with Booking. You don’t even print your tickets, you just swipe it under the QR code reader, and you are good to go. As unemployment is raising, demand for traditional jobs exceeds offer, hence the underpaid condition of most employees. In the book: ‘Never get a real job’, Scott Gerber, serial entrepreneur and venture capitalist, explains well how the 9-to-5 job conditions are just unacceptable “cubicle farms, incompetent bosses, strict dress codes, 60-hour workweek for a paycheck that barely cover expenses: it all sounded like a torture.” What comes out of the book is that leaving your ‘real’ job and starting a journey on your own business, can be (if done properly) more rational than sticking with the routine. As mogul Seth Godin repeats in his memorable speeches: ‘risky is the new safe’. Global unemployment figures are impressive. From a research of Dr. Paul D. Reynolds, Director, Research Institute, Global Entrepreneurship Center: “World wide, there are about 300 million persons trying to start about 150 million businesses. About
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one third will be launched, so you can assume 50 million new firm births per year or about 137,000 per day. As firm birth and death rates are about equal, the same number of active wide.” firms, say 120,000 probably terminate trading each day--world

Italy

Spain

Portugal

Youth Unemployment (% under 25) 60% 45% 30% 15% 0% 2013
* The Guardian, May 2013 * ISTAT, May 203

56% 38% 38%

* Property of the World Economic Forum

What is the startup movement? The term startup, became popular during the dot-com bubble, around the late 1990s. What have boo.com, kibu.com, and broadbandsports.com in common? They all spent tens of millions of funding and went bankrupt in just a few years. As many failed, around those years, many made the cut. Big players such as Amazon and eBay started their acquisition strategies buying giants like IMDB and PayPal. All of the founders of these internet based companies were recent grads or college dropouts. As a new golden-age, young people with just the basics of business or web development could build up a website, put it online and sell it for a ton of money. As time passed by,

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the social media phenomena took place and reinforced the startup movement. In a college dorm at Harvard University, a 21-year-old launched a website that could connect students at the same university. It was 2004, now, 9 years later, that 21-year old is worth around 13 billion dollars (yes with the B). His website, Facebook, is the most used social network on earth, with over 1 billion users. Of course, Mark Zuckerberg, once Facebook was launched, dropped out of Harvard and pursued his path in becoming a billionaire. In 2010, two Stanford grads launched Instagram, a photo-sharing app for iPhone. Two years later, the company was purchased by Facebook Inc for 1 billion dollars. These two stories are enough to reinforce the startup movement, to create someone to look up to. As Steve Jobs had Hewlett Packard to look up to when he first started Apple, now young entrepreneurs have Zuckerberg and Systrom (CEO of Instagram). A real, solid movement has of course his own literature and culture around it. The already quoted ‘Never get a real job’ is just one of the thousands of books about entrepreneurship and startups. The movie ‘ The Social Network’ by director David Fincher received 8 Academy Awards nominations and won 3. The movie made it clear in front of everyone: there are people at the very west of our planet, that become billionaires at 21 years old. But most importantly, without even graduating from college. Vala Halldorsdottir and Sesselja Vilhjalmsdottir’s ‘The Startup Kids’ is a documentary about young web entrepreneurs in the U.S. and Europe. It offers an interesting snap of what the lives of entrepreneurs are by a series of interviews with the founders of Vimeo, Soundcloud, Kiip, InDinero, Dropbox, Foodspotting. The American broadcaster Bravo launched back in November 2012 the TV Series ‘Start-Ups: Silicon Valley’, a show telling the tales of six young entrepreneurs in the Valley. Defined as a ‘Jersey Shore’ for startuppers, and very harsh criticism the show was removed and not confirmed for a second season. A documentary and a trashy reality shows: another sign of a what is now a consolidated movement.

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Is there still a need for ‘traditional’ education? As said in the intro, if you want to be a doctor, you probably want to take at least a few biology classes. But if your dream is to become a self-employed entrepreneur, is going to traditional institutions the right answer? Student loans surpassed 1 trillion dollars in November 2012.

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Lots of people bring this argument up when answering the famous question: is college worth? I say yes. College is still good for you if what you are going to learn and study over those three or four years is what you like, and more importantly will be useful and necessary for your dream job. If the question is ‘I want to be an entrepreneur. Is going to college worth?’, well here the answer is much more complicated. Running down the skills a young entrepreneur needs for starting up a business, it’s hard to find some that are actually taught in traditional universities. Since basic quantitative and statistics methods should be thought in high-school, they are useless in Universities. Subjects like: public speaking, team building, leadership, powerpoint presentation and excel work should be the core of a new way of learning. In the end, from a more creative and less analytic job such as a marketing employee to an M&A banker, what you end up doing is usually the same thing: work in teams, prepare powerpoint presentations and work on excel. Traditional universities, unfortunately, don’t teach that. They have hundreds of courses regarding very interesting subjects, that are not that useful in real life struggling. Just a few people, at least in Italy, know of the existence of iTunes U, an online platform provided by Apple, in which universities from around the world podcast courses of every kind, for free. If I am a 13-year-old from Kenya or a 65-year-old from Sweden, and I want to know more about Biology 1, I can simply log in my iTunes account and download or stream a full on course by top universities such as Yale, Harvard, Princeton and Stanford. Peter Thiel, co-founder of PayPal and first outside investor in Facebook, founded in 2010 the Thiel Fellowship, which will give 100 thousand dollars to top 20 under 20, to drop out of college and pursue their startup full time. I had the chance to catch up with one of the Thiel Fellows 2013, which was a guest speaker at the #startupday in Bocconi last May. Mark is a 19-year-old student at Babson College. Grew Up in Nashville, Tennessee, he moved to the private business school in Massachusetts mainly because of its known entrepreneurial focus. After a few months in college, Mark started his own business, GoalHawk, an online platform to keep track of your personal goals. Bored and depressed from school, he decided to apply for the Thiel Fellowship.

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LB: Do you think traditional colleges are still useful in order to become an entrepreneur? MZD: I think there is no definite answer to this. It is different from a case to case basis. It depends where the student is coming into the school. For me I felt I had matured very far past most of the people my same age so college wasn 't the right learning ground for me. However, most people aren 't starting their entrepreneurial careers in their teenage years so college could be useful in the sense of developing personal skills and qualities that are very intangible. LB: What was your experience at college? What brought you to drop out? MZD: My one year at college was pretty dismal. I felt there wasn 't flexibility for me to explore the things I wanted and for me to structure an environment that was conducive for my long term growth. There were two things that led me to drop out. The first one is that I was granted the Thiel Fellowship. The second thing is I realized that by being in college I was spending precious time and money in a form that wasn 't getting my the highest return on investment. LB: Do you feel like something is changing in education? How do you see ‘alternative’ education programs such as Uncollege & Khan Academy? MZD: I think there is a lot of change in education. I also think that UnCollege and Singularity have very little to do with it. UnCollege and their mantra of self directed learning is great if you have the discipline to control your own boundaries in life. The sad thing is that most people need strict guidelines in order to progress. I think most change is coming from initiatives like Khan Academy. If the useful stuff is not usually taught in college, and what I would like to learn or just find interesting is online and one click away, for free, why would I have to spend tens of thousands in traditional education? Here is where the big opportunity comes in. Since just a few years ago, if you believed in that notion, you would have no choice: spend your money in traditional education, or just go on unschooled for the rest of your life. Some people understood the need of a new, different and innovative kind of education and made a business out of it.

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The new opportunities The misalignment between what traditional education offers and what you actually need in order to make your entrepreneurial dream come created new opportunities. The United States, and the Silicon Valley in particular, which has been the heart of the startup movement, have seen quite a few ‘alternative’ education ventures. Dale Stephens, unschooled by the age of 12, founded Uncollege, an online platform for ‘hacking your education’. We will see more of that in the following case studies. You want to start-up an internet business but you don’t have a clue about web development? Get on Udacity, and learn how to code, for free. In the following pages I will provide you with a series of case studies, analyzing how from the need of ‘alternative’ education, so many new ideas flourished. And which business model is behind it. Massively Open Online Courses. The case of Udacity, Coursera and Edx What they are. Udacity was founded by three roboticists, Sebastian Thrun, David Stavens and Mike Sokolsky, who believed much of the educational value of their university classes could be offered online for very low cost. A few weeks later, over 160,000 students in more than 190 countries enrolled in their first class, “Introduction to Artificial Intelligence.” The class was twice profiled by the New York Times and also by other news media. In October 2012 the venture capital firm Andreessen Horowitz led the investment of another $15 million in Udacity and Thrun was mentioned by The Guardian in the list of people championing open internet. Georgia Institute of Technology has announced a partnership with Udacity to offer an online Masters Degree in Computer Science for $7,000, down 80% from the existing cost of $40,000 for the on-campus program. Suddenly, students from around the world will be able to earn a very valuable degree, from a top institution, at 80% discount.

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Coursera is a massively online open courses institution started in 2012 by Andrew Ng and Daphne Koller, both from Stanford University. As of April 2013, Coursera has 70 top tier partner universitites, 3.2 million users and more than 100 university courses available for free on their website. The company is heavily VC-backed, with over 22 million dollars in funding coming from Kleiner Perkins Caufield & Byers (KPCB) and New Enterprise Associates (NEA) but also from the California Institute of Technology and University of Pennsylvania. Coursera provides the widest range of subjects from biology to economics, all provided by internationally recognized institutions including Yale, Princeton and Stanford (Harvard and MIT are obviously on their own platform, Edx). Edx is an online learning platform created by Harvard and MIT in May 2012. The two bostonian institutions committed around 60 million to the project, as a way to expand their worldwide reach through free online education. A year later, other 25 top universities from around the world joined the website and Edx can now offer courses from other top American institutions like UC Berkeley, as well as European and Asian universities. Edx is the only one non-profit MOOC between the three I have analyzed so far. But Edx President Anan Agarwal has made it clear: at one point, the program needs to be self-sustaining. How to make money with MOOCs: the business model. With all the services launched in 2012, and with all of them being heavily covered by either Venture Capital or Universities funding, at their start-up stage, they had cash to burn. All of the three MOOCs focused first on locking down partnerships with reputable professors and institutions. Coursera is, as of May 2013, the only one of the three actually producing revenues. They offer partner universities from 6 to 15 percent of the gross revenues generated by their courses on the platform, together with 20 percent of profits coming from "aggregate set of courses provided by the university". In January 2013, Coursera obtained approval by the American Council on Education for providing certificates (just for designated courses) that are valid as college credit. The exam is
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taken through ProctorU, an online platform that connects proctors and students via webcam. This service, identified by the label ‘signature track’ has already made up for 220.000 $ in the first quarter of the year. The biggest expense for Coursera is accounted by streaming lectures. However, Daphne Koller, CEO and co-founder of the company, says: “Students who drop out early do not add substantially to the cost of delivering the course,” she says. The most expensive students are the ones who stick around long enough to take the final, and those are the ones most likely to pay for a certificate.” Another source of revenues for MOOCs could be doubling as a headhunter company. This path, that seems to interest both Coursera and Udacity, would be of tremendous value for the companies. Headhunters in Silicon Valley get paid around 20 percent of starting salaries, which, talking of a software engineer, would be around 15 thousand for each student placed. Both of the platforms, could provide employers with data-rich profiles, not only simple resumes. While Udacity also profits from full paid courses like the cooperation with Georgia Tech, Edx has a slightly different approach. According to President Agarwal, the MIT/Harvard platform has two options for their partners to choose from. One is the ‘university self-service model’, which allows partners to self-produce online courses, that will be first catalogued as ‘edge’ and will gain the official Edx course badge just after a quality-review done from Edx experts. Once the course is up and running, Edx will get the first $50.000 generated by the course and other $10.000 for recurring courses. The rest of the revenues is shared 50-50 between Edx and the partner. The second option is ‘edX-supported model’, which provides production and design consultancy by edX expert, covered by a flat fee of $250.000 plus $50.000 for each additional term the course will be online for. As Mr. Agarwal affirms ‘ we don’t quite know what the key source of revenue will be’, edX is exploring different models, such as the pilot licensing deal with San Jose State University, that had encouraging results. The opportunity of offering certificates is also under consideration (edX holds a deal with major test provider Pearson VUE), as well as profits sharing from additional material sold through the website, such as books suggested by professors, something Coursera is already doing through Amazon Publishing. Another suggestive idea for edX is using the MIT and Harvard brand to give online students (especially overseas) incredible networking opportunities through
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meetings, conferences in which professors, top students from the home universities and recruiters could take part, bringing an additional value to being part of the edX community. Uncollege What it is. Uncollege is one of the most unique and actually ‘alternative’ learning systems out there. It is an online platform that provides various tools to young people that want to further refine their knowledge or just want to have an ‘out of the box’ approach to education. The website features a good amount of useful resources for young entrepreneurs consisting in useful links, books on ‘critical’ subjects such as coding, entrepreneurship and funding. The ‘core’ of the Uncollege unschooling process though, is the Gap Year program, which in 12 months provides you with a remarkably wide range of experience that for Uncollege founder Dale Stephens are much more useful than the skills learned through a traditional college degree. This is the manifesto of the Uncollege movement: “Many people pay too much for university and learn too little. You can get an amazing education anywhere—but you’ll have to stop writing papers and start doing things. You need an excellent education to survive in a world where 50% of the population is under 30. Subjects taught in traditional universities are often contrived, theoretical, and irrelevant, promoting conformity and regurgitation rather than innovation and learning. You don’t have to decide what to do with your life at age 18. You can contribute to society without necessarily having a university degree. You cannot rely on university to give you a complete and relevant education when professors are often more interested in researching than teaching. If you want to gain the skills requisite for success, you must hack your education.”
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How does it work. The Gap Year program is divided in 4 stages: The Launch-Pad, Voyage, Internship and Project. During the first ten-weeks you live in San Francisco, the heart of the startup movement, where you focus on meta-learning skills such as finding mentors, goal setting, and building a network of contacts in Silicon Valley. You develop these skills by fronting real-world problems such as build a website or organizing a BrainParty. In the second stage, the Voyage, the ‘un-student’ completes a three months period in a foreign country. Uncollege provides with a 2000 dollars fund towards your expenses, and helps you plan your trip, options are to work or teaching english to children. This stage is specifically built in order to dramatically increase fast-learning, adaptability and living on a budget. Third, critical stage is the Internship. Three months of strict deadlines and long office hours in order to get used to the working environment, build a strong network of potential mentors, clients and partners. The final step, the Project, asks the participant to master the precious art of ‘Delivery’. During the first few weeks you need to set a ‘deliverable’ goal such as building a mobile app, or organizing an event and by the end of the Gap Year you need to get it done. This is to help you build confidence in showing to other people what you believe in. Dale Stephens, founder of Uncollege, unschooled by the age of 12 and writer of the recently published ‘Hacking your education’, is considered as one of the pioneers of radically alternative education. He has been featured on CNN, The New York Times, The Huffington Post, ABC and Fast Company above all. I had the chance to ask him a couple of questions about where education is going. LB: Differently from other institutions I have analyzed, such as Khan Academy, Uncollege is for-profit. How do you guys make money? Do you think this is a sustainable business model in the long run? Do you think there is a market opportunity for a lower cost/shorter time education? DS: Our main revenue source is money from tuition for the gap year program. I think there is definitely room for short term education, look at things like Devbootcamp, (another successful short program that teaches you how to code in 9 weeks, Ed.)
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LB: Do you think a traditional education process can be subbed 100% by what Uncollege offers? Does one year (‘gap year’) with uncollege provide you with all the knowledge needed to start-up and/or an entry-level job? DS: Depends on what knowledge you start with. I don 't think 1 year will give you all the knowledge you ever need, but I think we should take more time to specialize later in life. A global, one world classroom. The mission of the Khan Academy Salman Khan was a senior analyst at a hedge fund, holding an MBA from Harvard Business School, a M.Eng and a BSc in electrical engineering and computer science from MIT. After tutoring his young cousins live and through Skype sessions, he started uploading these short review classes on YouTube, just as a mere ‘add-on’ for his cousins. ‘As it turns out, my cousins called me up and told me that they preferred me on Youtube than in person’, Mr. Khan said during his speech at TED. It was 2006 and that was the start of Khan Academy. Today KA has 10 million students and can be considered the largest school in the world. As stated on the website: “KA is an organization on a mission. We 're a not-for-profit with the goal of changing education for the better by providing a free world-class education for anyone anywhere”. All the material is completely free of charge.

The numbers.
10 million students 4200 videos 200 million video views 6 million unique students / month 2 million problems solved / day translated in 24 languages in 20.000 classes
*data from www.forbes.com

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How does it work. The learning method consists in a series of short instructional videos, along with interactive quizzes and tools for teachers to track student progress. The system is full of gaming dynamics, like earning badges, which is a very used mechanic in video-games. Along with providing the best, funniest, more engaging experience for students, Khan Academy also provides teachers with a variety of tools to improve and track their student’s performances. This data-oriented approach seems quite obvious, seen Sal’s quantitative academic and professional background. Teachers can see where students stopped, how long did they watch each video for. This allows instruction to be more personalized, and to personify teaching by using technology. This revolution consists in the role of the teacher too. From teaching the actual class and prepping and grading exams, let’s be generous, maybe a 10% was dedicated to direct contact and helping students. With this method, classes and tests are left to the system and the teacher can focus 100% in helping students solidify foundational concepts, knowing who needs it and at which point of the learning process using the data charts provided by the Academy. The traditional class homework - repeat - spot exam structure keeps every students at the same level. A student that gets 90% and a student that get 60% equally go through the next step, causing holes in their preparation that usually affect future classes and performances. With the Khan Academy, everyone can have his own pace. An algorithm generates math quizzes until you get it right ten times in a row, showing a full understanding of the concept.

* Property of the Khan Academy

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Data provided by the Khan Academy shows that many students, as the one represented by the blue line in the graph above, can have a rocky start or spend a longer time on one topic, while speeding afterwards, reaching the top of the class. This would not be possible with the traditional learning method. Khan’s dream of free education for everyone seems becoming a reality. Expanding to many subjects, including prep for tests such as the GMAT, and hosting material from schools like Stanford School of Medicine and MIT are just a couple of the latest achievement of this revolutionary institution. While many other institutions, as we have seen, are backed by venture capital funds, Khan Academy is only funded by philanthropists, there is no employee equity and there will obviously be no IPO. Bill Gates defined Khan Academy as the future of global education, and it seems like I can’t find anything to disagree with him. Formal education vs. Alternative education Course choice. Edx offers just courses from Harvard & MIT, making it the most limited online institution. Udacity offers a pretty small range of courses and subjects, but very specific and going from beginner to advanced. For instance, I would not find anything about Financial Markets or economics, but I could find a very well done Computer Science course that brings you from nothing to proficiency in a remarkably short amount of time. Khan Academy has a different approach. With more than 4200 mini video courses, it does not provide with full on university-like courses. But they are all gathered by subject so you can decide to maybe review just the lecture about ATP without re-taking the whole biology class. The range is pretty wide and goes from basic arithmetics to computer science, micro and macro economics, and as mentioned earlier, GMAT test preparation. The big leader here is Coursera which is now able to reach its students with 100+ full on top-tier university courses, through more than 70 worldwide partners giving the opportunity to obtain official recognition and credit for that course, for a price as small as 50$ per course. With the current Coursera offering, I
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re-built the core curriculum of my undergraduate degree at Bocconi University. In the table below, you could see how the 7 those core-courses could be learnt online from the best professors at the best universities in the world, even giving you the choice to pick which one you like the most. The flexibility of this alternative education institutions allows the student to shape his degree on his passions and professional goals. Through one of the above systems, or even better a combination of those, I could easily get all my core knowledge in finance and economics, and adding up basics of computer science or graphic design. Traditional education gives you the widest choice in term of courses. But especially the European system does not allow you to mix up your curriculum based on your preference. If you choose to go to business school, you will not be able to go deeper in other subjects.
How my core-classes would look like if learnt through Coursera.

Wharton - University of Pennsylvania Microeconomics University of Illinois at Urbana-Champaign Macroeconomics Financial Accounting Financial Markets Statistics Business Strategy University of Virginia Corporate Finance Wharton - University of Pennsylvania University of Melbourne Wharton - University of Pennsylvania Yale University Princeton University Ludwig Maximilian University of Munich

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Price. This is where it gets ugly. The average tuition fee at an American university in the past academic period (2012-2013) was $22.000 for public and $43.000 for private 4 years colleges. That is per-year expense, which bring costs up to around respectively 90 and 160 thousand for your undergraduate education. And that is not considering the growth of college tuition, which last year has been 4.8% for public schools, more than double the inflation (2% for the period fall 2011 - fall 2012). Coursera, Udacity and Edx, even if the first two are for-profit, are totally free of charge. Uncollege, costs 13 thousand dollars for a one year, but that is supposed to set you for taking up a job in a startup or directly starting your own, considering the international exposure, internship experience and a few, super-practical skills it provides.

The graph below shows the trend of tuition fees for the last 25 years in the US only.

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Return on investment. We need to define categories of students, in order to classify the impact of traditional and alternative education. A: Jobs that need traditional education. The degree is necessary to have access to that career. Example: Lawyers, Doctors. ROI traditional: High. ROI Alternative: 0. B: Jobs that could need both. Traditional 9-to-5 jobs, from banking to HR, from consulting to marketing. Here is the big discussion. While you might (as showed in my example before) find all the academic knowledge online, an education based only by online learning totally misses the social interaction part, and of course, what we called ‘meta-learning skills’ which is definitely important for management roles especially. So, in terms of return on investment: still pretty high, you pay nothing and at least get down all of the subjects you need, at your pace, with flexibility to learn something else. For what concerns traditional education, schools are moving forward to a more experiencebased curriculum, but are still far from providing the real life skills actually needed on the job. Here the return on investment is very variable, it depends really on how well you do your studies, how good is the reputation of the uni, how good is your network exc.. This is the most classical of the model, with a ROI that could be medium-high (avg school -> good job) to low close to 0 ( good school -> no job), with the second hypothesis supported by the data of growing youth unemployment. C: Third case scenario is education needed for entrepreneurs. That person that wants to start his own company right away. The ROI here is much higher for what we call alternative education. Apart from the fact the many of the most brilliant entrepreneurs do not hold a traditional degree, 90% of the skills and knowledge gained through traditional college is useless to start up. It’s a big investment of time (3-4 of the most creative of your years) and money ( from 90 to 150 thousand dollars). Resources that could be spent in other ways: build up your character by traveling, attending conferences and networking events. For this particular kind of people, the Uncollege curriculum reveals pretty good and useful. With the expense of 13k you get many experiences like work, volunteering, learning languages and basic but crucial skills for entrepreneurs such as public speaking. Some important more academic based
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subjects such as business planning or basic accounting principle can be easily tackled in less than few weeks with an integration of courses from Khan academy, Coursera or Udacity free of charge. I have tried to draw the conclusion to this comparison in the table below, showing all the data I have gathered for this study.

The table shows a recap of all the data gathered for traditional and alternative education systems.

MOOCs Uncollege Coursera Users Courses Price 3.2 M 100+ 0*** 70 top uni globally Edx 675 k 59 0 Harvard, MIT + 25 partners Udacity 400 k 25 0 Georgia Tech, San Jose SU 10 13k

Khan Academy 10 M 4200* 0 Stanford & MIT

Traditional Colleges Public 90k** Private 160k**

Partners

-

* 4200 mini-videos, they cannot be considered proper classes ** That is the average cost of tuition and board expenses for AA 2012-2014 *** All the courses are available for free. In case you want to earn a certification, the cost would vary, with an average of 45$ each certification.

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Conclusion. Is the startup movement changing the landscape of the education industry? Yes. Is there a huge market opportunity for making money out of it? Yes. Coursera is showing it. Is traditional education dead? No. But it’s heavily hurt. Someone needs to save it. What is happening in the education industry is shown in the figure below.

Formal education is living in a limbo between two, more effective ‘stereotype’ of education, the one that is only experience based, brilliantly performed by Uncollege, and the one that is based on specific knowledge on demand, like the MCOOs and the Khan Academy. That position is a double edged sword. In fact, right now, most institutions are none of the two. What the education system needs to be, is both. Brilliant universities, such as Stanford, nowadays considered the best University in the world by many, are exploiting new technologies instead of fighting against them. The only way for traditional universities to survive, is actually changing radically their approach to education, focusing their curriculum to those real life skills that a person actually needs out of college. You can learn derivatives by yourself in front of a computer, but you cannot learn public speaking, teamwork, networking. Those are the skills that really need to be developed in that amazing cultural meeting that are university campuses. Ambidextrous innovation, on one hand changing the way schools deliver contents, using MCOOs for instance, and using time and resources saved to invest in getting their students out there, make them travel, experience new cultures and work first hands on real life problems. What about Europe? This paper has been talking mainly of a phenomena taking place in the USA. However, as every macrotrend, it will come in the old continent sooner or later. I think that Europe in many ways

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has a more rooted tradition of education, so it will be harder and take more time to change it. In Italy we have some of the oldest universities in the world, the UK has those institutions that were (and still are) copied by the Americans. As the startup movement is spreading to Europe, transforming cities like Berlin, Barcelona and even Milan in big startup hubs, that ‘air of change’ will reach us too. The key for our education system to survive and improve instead of die is the same: embracing the change instead of fighting it.

"Don 't let school interfere with your education" - Mark Twain

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Bibliography Movies: Halldorsdottir, V and Vilhjalmsdottir, S (2012). The Startup Kids. Books: Stephens, D.J. (2013). Hacking your education: Ditch lectures, save tens of thousands, and learn more than your peers ever will. New York, Penguin. Gerber, S. (2010). Never Get a real job. How to dump your boss, build a business and not go broke. New York, Wiley. Web Magazines: Kolowich, S. (2012). How will MOOCs Make Money?. Insidehighered.com Rivard, R. (2013). Twice as Many MOOCs. Insidehighered.com Rivard, R. (2013). Free to Profit. Insidehighered.com Adams, S. (2012). Is Coursera the Beginning of the End for Traditional Higher Education?. Forbes.com Onink, T. (2013). Georgia Tech, Udacity Shock Higher Ed With $7,000 Degree. Forbes.com Noer, M. (2012) One Man, One Computer, 10 Million Students: How Khan Academy Is Reinventing Education. Forbes.com Kolowich, S. (2013) How EdX Plans to Earn, and Share, Revenue From Its Free Online Courses. Chronicle.com Santelli, F. (2013) Centomila dollari per lasciare l 'università e diventare imprenditori a vent 'anni. LaRepubblica.it Databases: The World Bank database US Bureau of Labor Statistics Bloomberg World Economic Forum
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Bibliography: Movies: Halldorsdottir, V and Vilhjalmsdottir, S (2012). The Startup Kids. Books: Stephens, D.J. (2013). Hacking your education: Ditch lectures, save tens of thousands, and learn more than your peers ever will. New York, Penguin. Gerber, S. (2010). Never Get a real job. How to dump your boss, build a business and not go broke. New York, Wiley. Web Magazines: Kolowich, S. (2012). How will MOOCs Make Money?. Insidehighered.com Rivard, R. (2013). Twice as Many MOOCs. Insidehighered.com Rivard, R. (2013). Free to Profit. Insidehighered.com Adams, S. (2012). Is Coursera the Beginning of the End for Traditional Higher Education?. Forbes.com Onink, T. (2013). Georgia Tech, Udacity Shock Higher Ed With $7,000 Degree. Forbes.com Noer, M. (2012) One Man, One Computer, 10 Million Students: How Khan Academy Is Reinventing Education. Forbes.com Kolowich, S. (2013) How EdX Plans to Earn, and Share, Revenue From Its Free Online Courses. Chronicle.com Santelli, F. (2013) Centomila dollari per lasciare l 'università e diventare imprenditori a vent 'anni. LaRepubblica.it Databases: The World Bank database US Bureau of Labor Statistics Bloomberg World Economic Forum 26