Trump Aside, Why Higher Ed Needs Entrepreneurs
Three Reasons Entrepreneurs Can And
Must Fix Our Colleges
While I’ve heard the declarations made by Mr. Trump and our President described as everything from inspiring to unethical, one thing is for sure: Higher education is facing a Napster Moment.
I define a Napster Moment as when someone with no business being in your business comes along and puts you out of business.
For example, if a college kid with a line of computer code can derail the recording industry, how long will it be before a high school kid wanting to be a college kid does the same? For those paying attention, the entrepreneurial-driven education revolution has already begun.
Don’t believe me? Google Kahn Academy or MOOC.
Why is a revolution underway? Because the catalysts for dramatic and sudden change within higher education (the Napster Moment) are all in place:
- Things are getting more complicated as regulations increase. (Has anyone gone through the college or loan application process lately?)
- There are fewer “traditional” entrants (and plenty of nontraditional ones).
- Competitive pressures are increasing. (Who ever thought we’d see the Ivy League universities offering classes online? Note that tweed jackets look just as bad virtually as they do in real life.)
- Margins are shrinking for most of the players.
- Product complexity is increasing. (Try to find something that isn’t offered as a degree by some school, somewhere—i.e., puppetry. I am not kidding. According to Yahoo’s education site, you can get a master’s degree in puppetry at the University of Connecticut. Go Huskies!)
- There is a flight to the high-scoring end of the bell curve (which explains why an average ACT score of 30+ is something colleges now care about).
- There is an imbalance of power in the supply chain. (Will professors and federal student aid officials have as much power in the future?)
- Consumers are very interested in alternatives. (Could this be why Donald Trump got into the action?)
I strongly believe what the higher education system needs is more inspired entrepreneurs and less bureaucracy and/or government intervention. (I do think there is a role for government to fund university research in a slightly different way than it does now, but more on that later.)
Here are three reasons why it’s time for more entrepreneurs to jump into the pool:
Entrepreneurs Drive Simplicity; Governments Drive Complexity
There is new rhetoric about government-sponsored college scorecards, new loan standards and increased regulation. This should be the glorious signal to all entrepreneurs that there will soon be an even more complicated way to get through school, creating an opportunity to develop innovative, simpler alternatives. You are officially in charge of the simple alternatives. In a world where fewer clicks is better, almost anything can be bought by pressing a button and the best customer experience wins, simplicity is becoming the price of admission into the marketplace—and I hope it will soon be bundled with the literal admission into any higher education pathway.
Governments are not known for simplifying. Our tax code has nine times as many words as the Bible. According to the Washington Post, Obamacare took up a choking 10,000 words. I’d write more about this, but I believe most readers have spent time going through security at the airport or standing in line at the Department of Motor Vehicles. It almost feels like someone is trying to make the process less efficient. I can assure you that an entrepreneur did not design these systems—but one will be behind the reinvention of higher education.
Entrepreneurs Are Creators, Not Victims
It turns out that Ashton Kutcher has entrepreneurial blood running through his veins. The world now knows this because the once hardworking boy from Iowa made a speech at the Teen Choice Awards recently in which he gave kids everywhere some coaching about success.
While describing many jobs he had growing up, he said, “I believe that opportunity looks a lot like hard work…and I’ve never had a job in my life that I was better than. I was always just lucky to have a job.” You could almost hear all the hard-working parents out there exhale in relief. Finally—and from an unlikely source—comes some truth about being successful: It is not given to you; you must work for it.
When it comes to higher education, our government leaders risk creating a culture of entitled victimhood by telling young adults they deserve to go to college. Victims are people who see problems as persecution rather than challenges to overcome. We all play the role of victim occasionally, but to stay ahead, we must create a culture of creative entrepreneurship, not victimhood (and right next to every victim is a person or government telling him he just got screwed).
As a guy who graduated college with plenty of debt to pay off, I was proud of my education and very aware of my responsibility to do something worthwhile with my life. The debt wasn’t a burden; it was just another challenge to overcome. I never felt entitled to a college education. Most of the successful people I know didn’t either.
Are young children entitled to a good education? Absolutely. Are young adults entitled to a college education? Absolutely not.
Entrepreneurs are more likely to set up a competitive structure that will challenge young adults to rise up, be creative and take accountability for the outcome—not expect yet another government entitlement.
Better Execution Is Not The Opportunity
Visionary people do not ask if something can be implemented because they know that execution doesn’t matter until the future can be imagined; imagination first, implementation second.
Our academic and government cultures are stuck in a conversation about how to better implement an existing system. In the meantime, entrepreneurs like Salman Kahn are busy reimagining how motivated kids and parents can learn from anywhere for (gasp!) free.
Throwing significant resources at tweaking student loan availability and an inefficient educational system is like focusing on making horse carriages more effective while a guy named Henry Ford is off designing the car.
So do I want government completely out of higher education? No. One place I would actually like to see increased government involvement is in research funding—but in exchange for a piece of the action. If a professor or university profits from research funded by the government, the government should get a return on its investment. Ten percent of the gross profit strikes me as fair. If there is no commercialization, the professors and schools don’t owe a thing.
However, my idea includes the government providing the funding only, then staying the heck out of the process.
In one strange and perhaps unintended way, I do believe the government has already made an impact. When the government said they were going to fix health care, just the prospect of congressional involvement was enough to get many stubborn and deeply rooted executives making dramatic changes. Many of these same executives hadn’t noticed that entrepreneurs had been working to change the system for years. I think we’re facing a similar situation with education, and maybe the current debate will cause even more entrepreneurs to enter the fray, perhaps this time more successfully.
I hope so. We need them, too.
Article originally published August 31, 2013, on Forbes.com