Here at GCT, we spend a lot of time thinking about the intersection of education and technology – particularly as it relates to two key areas:
1.) As a robust and increasingly attractive market
2.) Through the lens of our educational programs, partnerships and outreach
Two of the companies in GCT’s first class aim squarely at educating students with real-life skills in unique and remarkable ways:
Hopscotch is a platform that kids use to code their own games and art in a fun, welcoming and collaborative environment. The thousands of projects that are published every week on the platform, and by an even split, across gender, highlight the appetite for, and opportunity to, teach students to love to code by placing it within the context of a fun and immersive experience.
NextGenVest arms students with practical skills they need to be productive leaders in the modern world. They ranges from how to manage personal finance (including student loans!) and how to prep your first resume, to how to interview like a pro. NGV does this on the micro (school) and macro (collaborative) level – online and in person – allowing the students themselves to learn by becoming the teachers of the content. We’re proud to host 300 of those students here at GCT in April.
What makes them both special is reflected in their growth and engagement: the ability to contextualize learning in a way that more fully engages the individual and enriches the educational experience. They also highlight how education, and perhaps more importantly, access to education is being transformed by technology.
This past weekend saw a flurry of great discussion around higher education, including “How to survive the college admissions madness” from Frank Bruni, while Chris Dixon and Paul Graham also had a great Twitter back and forth on a similar issue At the heart of both is the evaluation of the pricetag (and the value) of higher education.
While I’ll happily dust off my 12th-grade philosophy chops to note that in the Platonic ideal, education is a virtue – something that is a good in and of itself, and therefore requires no further justification – the fact that costs of education have outpaced price appreciation across nearly any other asset class across the long term and short term merits a deeper examination of the true “value creation engine” of educational institutions.
The following table provides a quick comparison across a few categories that represents the “value” drivers of education and six tiers of post-secondary educational institutions :
|Elite Colleges & Universities||“Middle Tier/Regional” Colleges and Universities||Public Universities||2 year Community Colleges||Trade Schools||For Profit Universities|
This tells us a few things:
● If you think that the core function of education is job training or employability, then the best ROI is at the “elite university and college,” “Public University” or “trade school” level
● The market is telling us that there’s a huge premium placed on “immersive experience,” as highlighted by the sheer number and cost of “middle tier”/”regional” private universities
● “For Profit Universities” of the University of Phoenix and DeVry ilk exist largely to prey on those who don’t know any better, and/or to prey on lax government loan programs.
At least two of these tiers deserve disruption: The market cap alone of the two largest for profit universities (APOL and DVY) is above $5 Billion; with average cost (tuition + fees) of $42k at private four- year universities, and an average enrollment of 1,920 students, that’s another $80.6 MM in revenue annually per school. Thank the for-profits for this much… they proved you didn’t have to be a 50+ year old institution to generate interest and yield admissions. But their credentials are dubious at best, leaving consumers still looking for that elusive value.
The massive debt burden awaiting most college graduates and (stifling economic growth) makes all that “immersive experience” that mid-tier/regional universities cling to as justification not enough to stack up. They don’t have the power of network and top flight instructors to justify the expense of an immersive experience. Given the arms race all these colleges underwent for facilities (justified in an era when “immersive experience” was more compelling, jobs more readily available, and alternatives no so well understood/pervasive), I’m not sure they can disrupt themselves. They may just have to go the way of the NCAA’s credibility and vanish.
The downside to this scenario would be the increasing disappearance of outlets for public civic discourse. Forcing education into night hours/weekends and disaggregated formats limits the vibrancy of the public forum. But new communities are emerging to take up this mantle. Accelerators and coworking spaces, coupled with the likes of GA, Fullstack, etc. are the new seventh tier of education. They are supplanting the traditional benefits of “credentials/reputation” with the upside of curriculum taught by experts in a way that responds to market forces and students that are dynamic in their own right. They are yielding value as evidenced by their expansion, enrollment rates, and job placement stats. They are creating and nurturing new, and ultimately more valuable networks. Indeed, the marketability of even elite credentials is facing erosion from the likes of Github.
GCT’s own selection process (and hiring) reflects these values. In fact, the only time we ever even look at someone’s educational pedigree is if there’s literally nothing else for us to look to as a proxy for performance. And our internship program immerses recent high school grads from 8 area schools with the very best startups in New York – providing them with real life hands on experience on an even playing field regardless of background. That 85% of them have been offered ongoing work with the companies they interned with speaks more to their abilities than ours.
Hopscotch and NextGenVest are just two examples of GCT companies that are making tech better and that reflect what we look for in companies: great teams building robust underlying technology that attacks lucrative and important markets whose needs aren’t served by existing solutions. If you’re working on something big and important, we want to hear from you. Apply now!