Good Disruption: Online Learning

The following is a special series of the Darden Ideas to Action podcast, focusing on the power of disruptive innovations.

The Disruption, a lively discussion between UVA Darden School of Business professors Yael Grushka Cocaine and Mike Lennox on cutting edge technologies and practices that are challenging the status quo.

All right, Yael, very excited about today's topic.

How are you doing today?

I'm great, Mike.

I'm excited to, to talk to you about online education.

It's like a dream come true.

This is, this is like one we feel like maybe incorrectly or correctly that we, we feel some expertise on, right?

So I, I'm, I'm excited to hear your thoughts on.

Though I know some of them, uh, and of course, always happy to share, share my own thoughts.

Hey, but before we jump in, I, I wanted to, you know, go through some, uh, house cleaning things here.

First of all, I wanna give a preemptive thanks to Mark Wahlberg and the Funky Bunch.

Uh, hopefully we'll be getting the re-recording of good vibrations with good disruptions, uh, soon.

Um, I like to say, I like how you're consistent with your message.

We'll see how many weeks you carry that, uh, along and try and see if you can get your message out there to give us the rights for that song.

Well, I also have a new message because I've been thinking about ways to promote our, our podcast, you know, given our millions of listeners, um, are there, are there ways in which we can even, you know, bring in even few, you know, more millions here?

So I thought, what if we pick a fight with another popular podcast and encourage them to come on?

I don't know.

Do you have any popular podcasts you'd like to listen to?

I do actually.

I'm, uh, I'm.

I think I've told you for the past 21 years actually I've been listening for the same podcast every time I jog, and it's a, it's a, it's called Wittertainment.

It's on BBC 5 in the UK and it's all about movie critique and movie reviews.

Oh wow, and after 21 years they're going off air soon, so all their listeners, right, all their millions of listeners can kind of come over to our place.

See, I don't do anything nearly as erudite as that, so I like a smart list, you know, this one you mentioned, yeah, so this is like Will Arnett and uh Sean.

Hayes and Jason Bateman, and they always have like famous actor friends on and they just kind of, you know, riff off of each other.

So I'm thinking I want to pick a fight with them.

So I'm challenging the guys from Arrested Development, right?

At least 2 of them were, at least 2 of them were.

So I'm gonna pick a fight with them.

I challenge them to come on our podcast.

We, of course, would reciprocate and go on their podcast, you know, we'd be nice to do that.

We'll honor that.

Yeah.

So I mean, let's just see.

Let's just see if they, you know, want to participate in, in ours.

I think that you're onto something in terms of one of our future, uh, episodes should be.

About podcasts, our podcasts, uh, disruptive technology.

I like that.

I was just gonna simply say, you know, my wife always points out that a smart less is probably a good destination for me as well.

So that's, you know, fit in well, at least I would.

I don't know if she's a smart woman, a smart woman.

Well, I've liked, uh, Jason Bateman since I'm a young child, so, you know, uh, you know, that's another one that people have said I look like Jason Bateman too.

I don't know all these doppelgangers for me that are out there.

I see you seem doubtful that I look like him, a good question.

Yeah, no, no, no.

Good.

Well, let's talk about online, uh, education.

Uh, are you a big fan?

Um, that's an interesting question actually.

Um, I, I guess I would say yes.

I guess I would say I'm a fan.

Um, I am definitely intrigued by what's been happening and the impact on our field of education, especially higher education.

Um, but man, there's a lot of, a lot of questions, right, about what the impact is gonna be.

I, I'm curious, y'all, how would you even define online education?

That's a great question.

Um, so I would define online education as all of the instruction that takes place outside of a physical classroom, um, and that's pretty broad I know, um, but it's everything that could be done via video online forums, um, and it's done primarily online, not through, uh, snail mail like it used to be done with the Open University, um, so there, there are models that have evolved since.

Um, I wanted to go back.

You mentioned earlier that we feel a little bit of that we have some expertise.

I wanted to maybe to give some context.

Um, so both you and I are professors, we, so we work our, you know, our living is in higher education, so we understand something about the education space.

I think both of us have written cases on online learning and disruption to the, uh, higher ed model specifically.

Um, we both have multiple courses out there in various formats.

So on Coursera, I think you have many.

We were, we were both early adopters.

I actually had one of the first courses on Coursera in 2012, I believe it was.

So, uh, early adopters.

So, so from all of that and from our just personal exploration, which we'll probably talk about in a moment, uh, at least we've been, uh, dappling in this space for a while, and, and that's maybe uh.

A little bit of our expertise.

Yeah, no, I'm glad we got, we got to that.

I, I, I like your definition, by the way.

I think, um, it is important to recognize that distance education has been around for over 100 years.

These old correspondence cases, uh, courses where you kind of mail in the, the great, uh, what was it the great lecture series where you get like a DVD in the mail, um, but it's a little different now.

What, what would you say is different about kind of what we.

See in online today versus the old correspondence courses.

Yeah, beautiful.

I think that, um, from a market perspective there's opportunities now that uh the time is just right.

So like a lot of the other disruptions that you and I have talked about uh in various formats, a lot of the other disruptions are, you know, infused by the fact that computing has evolved, uh, broad, you know, broadband and internet access has evolved, uh, so the world feels.

Uh, bigger and smaller at the same time, there's all these tech this technology that enables us to get to individuals where they're at.

The video, uh, machinery and technology has become more sophisticated and at the hands of more people, um, so from that perspective, the market is ripe, OK, so the demand that was always out there, people who, who maybe wanted to consume the product were just not as able to consume it now they can now they can because more people have access to it.

At the same time, uh, the demand is there also from a personal journey perspective.

Learners are.

Having more careers during their lifetime, they're pivoting at the age of 30, 40, 50.

This didn't used to exist as often, uh, in the world around us, and these days it's endless.

People are picking up new careers and new transitions, and they wanna stay current and they wanna stay viable.

And so the, the demand for new courses and new, uh, explorations at different stages in life is there as well.

I, I think it's really important.

I, I find sometimes when we talk about higher education and online education, the mental model people have are 18 year olds.

Going off to college and so undergrad and the, you know, the vision of, you know, walking the quad and going to parties and, and obviously that's still a very important part of college, um, but it underestimates the amount of college students there are that don't engage in that modality again non what we might have called back in the day non-traditional learners who are working, uh, who maybe have been in the workforce for a while and coming back and to your point, you know, people who aren't necessarily.

Seeking college degrees but are just simply looking for refreshing of skills and and uh updating their their learning, uh, not necessarily getting like an undergraduate degree.

Yeah, exactly right.

I think the, the global online learning market, um, is expected to be, you know, billions, hundreds of billions of dollars.

We're talking $400 billion by 2026, and part of that is from the various modalities and formats.

We're not just talking about the undergraduate population, we're not just talking about North America, we're talking about.

Certain courses, uh, you know, secondary degrees, uh, uh, postgraduate courses, we're talking about boot camps and, and just specific professional courses, shorter courses that are certificate bearing, um, at all ages at all kinds of locations around the world, and so really when you think about it that way you can kind of get a sense for why it's so big and why the potential is so huge there.

It reminds me of my early days with my MOOC with Coursera and some of the use cases we saw, you know, the first thing we saw, uh, and this was a business course.

Strategy, um, but the average student was 35 years old.

Um, many of them had advanced degrees already, uh, and for them it was about, uh, improving their skill set as they try to maybe apply strategy within the organization they're working or looking to get a promotion and the like, and there were so many, um, use cases in those early days that just kind of warmed my heart.

Um, I remember I had one group who was out of Mongolia, uh, they're Mongolian business, uh, leaders, uh, they were getting together as a cohort and.

Uh, taking my course and kind of working as a learning team.

There was another group, uh, you'll appreciate this one that was, uh, for detente between Israelis and Palestinians, and so they were going through a whole series of MOOCs, uh, together, uh, to kind of build affinity and break down barriers.

Uh, and the last one I'll mention, there was a group of women who were in a, um, a shelter, uh, for, uh, being abused, and they were using, uh, these courses to be able to learn how they could start their own businesses, uh, and kind of get their feet underneath them again.

So you hear these use cases again, it's not just the 18 year old seeking, uh, you know, their college degree.

Definitely not.

And so first those stories, uh, warm one's heart, um, and I have similar kind of anecdotes from my project management where so many individuals around us find themselves in a position where they don't feel like they were trained properly, they don't feel necessarily confident that they know how to tackle their first experience as a project manager, um, and they can take this course online and within 4 weeks they have so much more machinery and context.

Kind of execute their projects and that's what these courses are all about.

It's getting these skills out there to the people.

So you, you, you said something really interesting just there.

You said they're not getting the skills they need.

So I'm gonna play the role here of the, uh, the gadfly as it comes to higher education.

So this, this critique that's out there that we're failing, we're failing in higher education, we're not providing the training old fashioned formal old fashioned 4 year college degree education here, uh, and that these modalities are, are.

You know, serving a need in part because colleges and universities are, are failing.

Do you, do you buy into that narrative?

I think it's a, it's a very interesting, uh, challenge to the current model, and it's a valid critique.

I mean, you and I are professors here.

We are employed, uh, by a university and we both know that there are challenges to offering any course that we want, uh, that we find important and interesting.

Sometimes we're bound by our, our teaching load, by our research necessities, and our time is limited and faculty want to offer these products.

To the world, but they don't always have the audience locally among their physical students on grounds to to provide enough uh uh to satisfy that uh that that desire and so opening these or breaking down these walls and opening the door to online education for us to be able to put a course out there and find the learners wherever they are actually I think can address some of that critique especially because the universities are limited physically and otherwise by what they can offer uh in in person.

You know, it, it makes me think about Clay Christensen's critique about universities and that, um, they all look the same, right?

You know, so putting my strategy hat on and I know, you know, some people have a negative reaction when we think about universities as, as an industry sector, but let's just go with it for a second here.

Um, there is shockingly little differentiation between universities and the way they structure themselves, um, the way they hire and promote faculty, uh, the types of students they're catering to.

Um, and, and that opens up opportunities, right?

And it's, it is a little surprising that there aren't more universities trying to differentiate themselves in position in ways to cater to these other use cases that are out there.

And it's not only that they are very similar to each other and they offer a similar, um, set of courses and expertise, but it's also the case that the business model, as a business model, higher ed.

On one hand it's super stable, but it also hasn't evolved like the 1000 years, you know, we've been meeting in person and there's been a lecture at the front of the room and there's been a, a, a, a dialogue and some kind of information was disseminated, but that has not evolved as much and students of today, you know, in today's world where they consume everything on their phone.

They're open to exciting new ideas.

They're open to learn in different ways.

They consume things off of TikTok in 5 minutes, you know, 1 minute.

That's a, that's a long, that's a long TikTok, right?

Like they, they consume it in bits and little pieces, and they look for us as faculty to innovate and to push out the content in different ways, you know, this, this pouring about universities not evolving.

I will disagree on one point, and I have two college-age, uh, kids.

Yours aren't quite there yet, not yet, counting the days, counting the days the days.

You better hope they don't listen to this podcast, um, but one thing that has changed is tuition.

Tuition has gone up, uh, majorly across the board in higher ed, especially over the last 20 years.

Um, what, what are your thoughts on that?

Like maybe what's driving that?

And again, where does online come in?

This is again why I think this industry is, uh, so ripe for disruption, and, uh, we can talk a little bit more in a moment of whether it's a good disruption or not, but it's definitely ripe for disruption.

Tuition has gone up.

Tuition, nobody can deny the fact that tuition has gone up across the board.

Uh, the loan, the amount of loan that students are, are that young adults are carrying these days is just unheard of, uh, especially in the US, but this is true, um, elsewhere as well.

Um, it's gone up, uh, it keeps on growing up way faster than inflation go up, and the costs, on the other hand, the university's costs have also gone up at a, at a similar, if not a, a more alarming rate.

Which implies that there is very little flexibility in the system.

We are getting more, less and less money from the state, less and less grants.

Uh, there isn't as much investment from public funds in these organizations, and now they're caught in the situation where they have to maintain high salaries, faculty, uh, very high fixed costs related to facilities.

It's all about attracting those students in person and so that kind of race, uh, the, the ramping up of tuition in order to.

Deal with it to combat with the increase in costs is leading to not a good point.

It's exactly as you describe in terms of industries that have been disrupted.

It's a clear indicator that something has to change.

Yeah, I, I totally agree.

I mean, I think we see again, like you said, the pullback from states funding universities, especially obviously public universities, uh, there's a nice correlation with rising tuition with the pullback from state funding.

Um, I also think it's interesting to note that there is this competitive environment.

We're competing on, if you will, the cost side, right?

There are very few levers that push back on the demand side, partly because demand, dare I say, is very inelastic for higher education, and that's partly driven by the fact that people recognize there is an ROI and there is value into getting a degree in terms of your future, um, career success, um, so it's a recipe for, as you see some of the horror stories written about like, you know, do you really need the lazy river.

Uh, you know, pool for your students and um the fancy, fancy new cafeteria, right, and we're competing on amenities, um, and that's just driving that cost, um, further.

So again, let's come back to online.

So we just said, all right, maybe we are ripe for a disruption.

We are, but I want to challenge you a little bit in that disruption.

So, uh, one critique that I hear a lot about online courses is this lack of community.

So we can go and have online learning and even, you know, as you mentioned.

Uh, through correspondence when we did it through snail mail, uh, the, the big disadvantage there and the value that you're not necessarily getting is that community, is that alumni, is those, those people that you get to know, the friends that are in school with you that are then forever change your life, uh, long term and, and, and, and form that, that cohort that you rely on throughout your career.

How do you get that?

Can, can online learning really mimic that?

I think the answer is no.

Well, there's some things they can do, but uh, you know.

I'm on record as saying, um, online education is inferior to residential based education in my mind.

Like let's just put that out there, um, now some people use that as a defense to say, well, why are we all doing online education?

And I think what it's missing are some of the, the, the cost dynamics here.

Um, so I always like to point out, you know, which is a better car, you know, is a Porsche better than a Kia.

Now, no offense to those who drive a Kia, but I think most people would say, wow, a Porsche is, is a nicer car.

Um, yet there are far more Kia sold than Porsches.

Now why is that?

Well, the obvious answer is a Porsche's really expensive.

So despite the desires to have that rich collegiate experience, you know, with the lazy river and the parties and the good courses and everything that comes with a modern day university.

At some price point, people are going to switch to the lower cost option, even if it is slightly inferior.

So I would argue that it might not be slightly inferior, so which maybe strengthens your point even more, but like I would argue that for certain individuals that are, uh, perhaps a different generation with a different set of needs, I mean they meet their spouses online, they work remotely, they, uh, they, they communicate with their family online, they text more than they talk on the phone.

Phone, uh, they watch all their videos on their phone.

Like this is a different generation of individuals, especially after the pandemic, and we don't get me started on that, that see their social life just as much on Discord and Facebook, maybe maybe not Facebook, that's outdated, Instagram and Discord than they do, uh, in person, and it fits their, their needs.

They can join when they want but hold back if they don't want to, and it gives a lot more of an individual sense of freedom.

Wouldn't that be the thought.

No, and I, I, I would add to that from a learning perspective what we've seen is some really creative attempts, um, to customize education to the individual learner.

Um, I think you were with me when we went to visit Newton.

This was years ago, yeah, and they had done some really interesting work and continue to do some interesting work where if you think about a learner, let's say in math, and they're going through and they're taking some assessments and maybe because you again you have arguably thousands and thousands of people taking these assessments, you could start to recognize that.

This person doesn't understand, let's say, natural logarithms.

Well then they would immediately be given a tutorial on that topic.

So you think about traditional education, you know, we're pretty good at kind of, uh, educating the kind of the collective, but very hard to customize it to that individual learner who might be falling behind in the classroom.

Totally, and we're not utilizing any data science or any analytics with any kind of online footprint.

So these courses that are primarily taught online, whether asynchronously or synchronously.

They can have data collected.

They can track over time.

They can look at the time series.

They can test engagement, and they can pick up on individuals that would otherwise in a traditional sense actually fail out of the system and, and don't and will not complete their degree.

Here's a, there's a system in place.

There are people who can reach out.

There are adjustments, as you mentioned, to kind of supplement and complement the learning to really bring everybody to speed and even the online community with Slack and Discord and the like.

I would argue that you can mimic really, really well what goes on in person if you're thoughtful about your online learning, uh, platform.

Now let me push you on this because the, uh, dropout rates for online education, especially the University of Phoenix's of the world, are much higher than we see it at at least some of the traditional universities.

Yeah, some, some of the programs have been more successful, um, uh, to you report across their portfolio, and many of their degrees have been with, um, kind of.

Elite or high end schools, um, and those online degrees have high, high percentage of graduation, close to what you would see in person, but you're right, it is variable, and I think the quality of these courses that we see online is also pretty wide ranging, and that's part of the, part of the trick is identifying which online program you buy into and, and how are you're gonna find all of those, all of that value that you're looking to get.

I want, you could, could you mentioned to you, so for our, for our listeners who aren't familiar with that, can you talk a little bit.

About because there's so many different players here and they're all doing maybe slightly different things.

So the online program managements, the OPMs of the world, they're called another acronym, right?

OPMs, online program managers, they're so these management companies, what they do is that they help universities, um, uh, get their material online and out there to the learners, and they do it in a variety of business models and in a variety of types of, uh, engagements, uh, to use one of them, we met them even before they went.

Public, I think they were called, uh, at the time, um, a tutor, uh, we met them in New York as well, um, um, and their model is a revenue sharing model which is very specific and also very controversial in many ways.

They absorb all the costs.

They invest all that is needed, uh, to help the school get online.

They do all they pay for all the filming they recruit the they help the school recruit the faculty, help them develop their materials, think about how to deliver online, which is different.

Um, they do all the marketing costs and recruit all the students, but then they share the tuition, uh, for many years as long as the contract lasts with, uh, the university who has the, the brand name.

Um, and so that is their model.

Uh, they have a very savvy data science, uh, group that helps with all of the analytics, and that's an example of a revenue sharing model.

Then there are other, and can I just add to that, you know, we talk, uh, a lot about MOOCs, these massively open online courses.

Uh, a lot of these two you programs though are still selective admissions, so they're not just open to everybody.

You have to apply and be admitted into the program, even though it is an online program, right?

So maybe the distinction there is that they.

Are online programs that are not degree bearing and then there's the world of online programs that are degree bearing, the university accredited degree program, so it has the same rigor and the same quality of uh the instruction that the university would have for residential programs.

I, I'm glad you mentioned that too for, for our listeners, you know, there are things like degrees which actually there is a whole apparatus to verify so you hear like accredited programs, um, there is then a world of let's call it certificates.

Which I like to say is the wild wild west.

And so there are certificates being given for someone to spend an hour online listening to a few videos, and then there's certificates that are 2-year programs that are very engaged and very rigorous, and we don't necessarily have a, a mechanism for differentiating them at this point.

Yeah, and so, so folks interested in the space should definitely, um, inquire exactly what kind of, uh, certificate or what kind of accreditation they get at the end.

Uh, but going back to the OPM market, at one spectrum there's the, the two years of the world, the companies that share your revenue and help you get online.

And then as you there's a continuum there with companies that provide certain services or just a platform online or we just help you record some courses or we just to help you with the marketing of your courses, uh, to universities who do it all by themselves they have the studios like the one that we're sitting in here they have the personnel like the people who are recording us today, um, and yes, and, and they, and they, um, they have the capability to do a lot of it in house and.

They own that process, not only the IP and the content, but they own the process and so universities can really or those active in higher ed can really decide where they wanna be on that spectrum, what kind of partner they want to work with, um, and how they wanna kind of move online.

And I think some companies are even looking at the Google and Amazons of the world to collaborate with them.

So universities are working with, you know, tech companies to say, oh, let's put on a let's start a university together, uh, and make it.

It open to the world.

Well, so we've been dancing around the disruptiveruption topic.

So let's, let's take a deeper dive into that.

Um, you know, it has been said by some that the end of the university as we know it is near, um, that we'll only have 10 universities in the future or pick your number there.

Um, this idea that there are these players, big tech players who are entering this space, uh, where, where do you fall on this?

Where do you fall on, um, how, uh, this is gonna, gonna shake out?

So, uh, I think it's definitely disrupting and in a, in a sense it's disrupting something that was a long time coming.

I think there will be, uh, some consolidation and there will be some centralization, so the top end universities, the elite universities, the R1 universities will maintain their position, um, and they will, uh, perhaps have more capability to expand their door and attract more students, which is a good thing for the world, more students getting high quality, uh, uh, education.

Um, the technologies companies will come in and help train their workforce and help people reskill themselves for those jobs, which is good for everyone, uh, so where you have less job, uh, jobs lost and more people able to convert into the second phase of their or the third phase of their career.

Um, but we will see a fair number of universities shut down, smaller schools, smaller colleges having to close their doors, which is unfortunate, but maybe it's also about efficient overall efficiency and just a natural, uh, you know, transition in the market, which was bound to happen at some point.

Easy to say unless it's your, you're.

Yes, that is very true.

Yeah, I'm a big believer that there's gonna be, um, a, a bifurcation and maybe 3 positions that kind of end up here.

Um, I do.

I think maybe there's 4000 universities in the United States alone.

There's a lot and a lot that, um, maybe listeners have never heard of in the like smaller players.

I think they're at real risk of, um, remaining viable moving forward.

I think we'll continue to have a set of elite selective residential based universities, um, that if anything might see their demand go up, um, as they provide a differentiated branded good, um.

Uh, how many of those schools, that's kind of the interesting question to me.

I mean, are we gonna be talking 10?

Are we talking 20?

Are we talking a few 100?

So the reason I think it will be somewhere in the middle and not as small as maybe uh you know the extreme uh believes is because there is still something surprisingly regional about education.

There is still something about the fact that uh the local brands are stronger in their region, you know, in the US that's a few states in Europe that's maybe the neighboring country, but you know you and in in Asia it's the same.

And folks still like to, or still individuals still seem to have some preference for local, uh, locally derived, uh, education.

Uh, it also strengthens their, their community, right?

The people that they live with, the people that they work with, the people that they see themselves long term sticking with, um, and so that will give us still some good decent spread.

Let me push you on that though, because I believe there's also what I would call the Toyota position out there, right?

This idea you really like to compare things to cars.

I am wearing a lots of cars, so you're, you're calling me out on that, um.

Yeah, so I think we don't see, let's call it the Prada, and no, actually it's not the product.

Yeah, so I'm thinking of, you know, a good quality lower cost, uh, exactly, and, and that volume, that's the big thing, you know, if you think about market share again, you know, all of our listeners who hate higher ed being compared to businesses, I'm sorry, we're business school faculty, um, you know, Harvard, a top university, has minuscule market share, right?

They, you know, you would think they would have a bigger market share, but no, it's minuscule.

So the possibilities when you think of online of scaling and we're starting to see certain schools, Arizona State comes to mind, Penn State comes to mind, and Harvard expanded with their, uh, Harvard Business Analytics, they have several 100 more than they used to just right in the non-degree space, in a non-degree space.

But I think, you know, for these other universities, once they start to say, hey, let's have 200,000 students or 300,000 students, why not have 3 million?

Why not have 30 million?

And so to your point about the localized part, does that start to get trumped when it's like I can go to my local university or I could get a really high quality degree from Penn State for $10,000 all in, um, you know, does that start to, you know, make even that regional play a difficult position to have?

Yeah, I, I mean, I think that I don't think that it's gonna go away.

I think the regional play is still going to be a strong force in higher education, um, and, and we live in communities.

Right, we live around people we live, the majority of us still are drawn to there's a big wave of folks drawn to cities even after the pandemic, um, uh, students like to have, you know, eye contact.

They like to know that they can reach out to somebody that they've, they've met in person and talk to them about their business needs or talk to them about their career moves and talk to them about their, their, their even their social, uh, um, ideas, and I think that that's gonna maintain itself like that value add that universities provide that.

That kind of affiliation and that physical connection will still be maintained seeing the, the, the logo, the brand on a building, recognizing it, feeling a part of that, that is not going to go away as much as as I'm a believer in online learning.

I think that that is still there.

Let, let's talk about the ones that we do think will be going away.

Tell me, how do you think that's going to play out?

What is that?

What is that disruption going to look like in higher ed?

Yeah, well, it's a good question.

I think, um, you might tell us a little bit about, uh, you think that there's going to be some.

Some cannibalization or or some schools eating uh uh buying each other out in some ways and and leveraging that, um, I think that some of it is just gonna be a natural, uh, decay.

Some, some institutions are just gonna shut their doors, uh, like companies do sometimes, you know, to declare bankruptcy and, and shut down.

I think we're gonna see a a some, some number, maybe not huge numbers and.

It's not gonna all happen at once, uh, but it will be a continuous, no, you know, ongoing, cumulatively we will see the effect in a few years where smaller schools, probably smaller colleges that have less of a research focus will eventually shut their doors.

Yeah, I mean, I agree.

I think the one observation that I make is there's no active exit market for universities like there are for businesses.

Um, and so you think, what do you mean by that?

Yeah, yeah, so what I mean by that, if you think about businesses, there are of course bankruptcy laws, uh, there are the opportunities to sometimes get acquired by others, uh, and, and, you know, some of those assets become part of a new company.

What we see in universities is you have things like endowments, you have.

You know, gifts that have been given that are money that sits in the bank account sits in the dedicated, you have, uh, often a passionate alumni base who does not want to see their alma mater, you know, uh, go away, um, and, and often, you know, assets, you know, beautiful universities and the like, uh, physical, physical resources.

Um, with that said, we know, um, there have been dozens of universities that have, you know, in essence gone out of business, uh, and every year, uh, that, that occurs, um, so I, I do think it will accelerate, um, very tough decision obviously to, to shut down for the leaders of those institutions, absolutely, yeah, um, let me ask you, uh, the following before I, I know that we still have to take a stand if this is a good disruption or a bad disruption, but before we do that.

Uh, sometimes, uh, it's really interesting to think about, you know, practice what you preach, right?

Uh, you and I have talked about the fact that neither of us, I think, have any cryptocurrency that we're all sitting on.

Um, we know that you drive at least one, if not, uh, two electric vehicles, right?

So, so we know about that.

Uh, have you taken any online courses?

I know I've signed up for many.

Have I ever completed one?

Oh, that's great.

I think I might be in that boat.

I, I've definitely signed up for courses.

I've definitely, um, participated in them.

Um, and, and yet have I completed them?

Probably not, because again, it's what are you looking to get out of them.

I'm, I'm fortunate, as we call our PhDs, they are terminal degrees, so I'm not seeking, uh, another degree.

My wife would kill me if I did that.

Um, so you wouldn't go and take a residential course right now, right?

But, but in terms of learning, you know, especially for these.

Topics we're talking about on technology, it's hard to keep up with the pace of change.

So sometimes there are just amazing resources, courses online on cryptocurrency or uh blockchain or whatever you want to think about, and, uh, those can be, you know, really useful to kind of stay on, stay on our game.

I agree, and I'm, I'm drawn to do the same, and I teach data science, and I know that what I taught last year is already old.

Fashion and out of date and yet I have yet to complete an online course and I feel like as much as I'm a defender and a and a and an expert and I believe in online learning and I have invested all of these resources in coming up with alternative modes of delivery and thought about the synchronous and asynchronous space and how different they are and what materials is suitable when.

At the end of the day, I turn around and I realize that I have not completed one line, one online course, and so yes, yeah, I, I always joke that I've, uh, taught more people business strategy than anyone in the history of the world, which is a huge, you know, brag there just simply because of the logo, yeah, yeah, because of the early days of my Coursera course.

I mean, you know, hundreds and hundreds of thousands of people going through the course, not that many completed it, so I, I gotta be a little cautious there.

They signed up and they, you know, did.

A little bit, but they didn't necessarily complete, which is one of the big critiques of online education is for whatever number of reasons we can imagine, it doesn't necessarily lock in that affinity and I would come, you know, this question about the failures of higher ed and the debt that people are incurring.

A lot of the evidence is it's because people drop out.

That's where you really, obviously you don't get the return on investment if you attend college, spend a lot of money, acquire a lot of debt, and then don't complete the degree.

And again we're in rarefied air at the Darden School at the University of Virginia.

Our students graduate and the like, but that's not true, uh, at a large number of higher ed institutions, uh, many with, you know, completion rates less than 50% even, um, it is, is online better or worse than, uh, what we're seeing in residential schools?

And I'll add to that another critique, uh, so it brings us to a good place to, to make the verdict around good or, or, or bad disruption, but, um.

Um, another critique that you hear, especially in those models that I mentioned around the revenue sharing models, is that once you bring in companies and corporates to play in this space, once there's more players, because this is a, you know, multi-billion dollar industry, so you have all of the companies that are, are standing to gain from the online learning space, uh, what does that do to tuition that raises in, in many ways it, it, you know, it's your move to, to the Kia of the world, right?

Supposedly it's producing a product that is, is more accessible.

But we also see creeping up of tuitions because there's more people that want to share uh the revenue and so some of these universities that are putting out their online degrees are charging a fortune for a degree in.

You know, um, uh, being, you know, nursing or, or, or, or all kinds of, um, different qualifications that just don't have the ROI, right?

Once tuition is that high, the salaries are not that high in there, right?

So social work and the like, and so how can you justify charging so much for like a master's in those fields?

Yeah, no, that is a huge issue, huge issue.

So, all right, should we tackle it?

Should we tackle good disruption, bad disruption, no disruption?

Yael, what do you think?

Um, I'm.

Definitely on the good disruption side, um, I am, uh, very solid in this space, uh, not only personally have I felt like this has been an exciting space to be in to learn.

I think it helps me think about my pedagogy for my both my residential and my online teaching and classes, um, so I think it's good for the world to have these alternative form formats educating people that cannot afford to take the time off to do a residential program or even the time off to attend.

Uh, an like a part-time professional degree, but are, are really bound by whatever else is going on in their life to do an online, uh, self-paced course.

This is a gift and we, it is our obligation to provide this gift to the world.

Yeah, maybe not surprising.

I'm right aligned with you.

I, I do think this is a good disruption, you know, again, putting my strategy hat on.

If we think about the market needs and the diversity of those market needs, we need more diversity in the modes of engagement for higher education and so online education is providing, um, different, different business models, different types of these modalities to arise to meet the learner where they are and I, I think while this will be disruptive, right, and again I do think we're gonna see university, and already happening, universities, some universities are gonna in essence go out of business and, and the like.

All in all this is gonna be good because it's gonna create these differentiated opportunities for students that that meet them where they are and again for any faculty who might be listening to this, you know, I, I think by and large, especially at the um more selective universities you're protected um I don't think.

You know, Harvard or UVA, we're, we're not disappearing anytime soon.

I always like to point out that if you think about, uh, resilient organizations, um, universities are probably second only to religion, uh, and if you think about businesses, there's very few businesses that are over 100 years old.

Surprisingly, there's very few governments that are over 100 years old.

The US is actually one of the longest standing continuous governments, uh, in the world.

Um, the US was founded arguably in 1776, probably better.

Say 1789 when the Constitution was passed in some in Europe might argue with that.

There are, and there are that some, but when you think about universities, I mean, University of Virginia is, uh, 1819, I believe, and we're not even, you know, there's much older ones in the US.

The US is, is a young education system compared to what you can find in Europe.

Yeah, I don't know what like Cambridge is like, I don't know, it's, it's old.

It's really old, 1000 years at this point.

Leuven is hundreds of years old, right, close to 1000, but, um, yeah, I think if you think.

About all of the audiences that have not always been able we haven't been able to cater to right? uh um either mothers or fathers at home with young siblings or with young kids and young uh individuals to take care of, uh, folks attending to their elderly parents, individuals that are, you know, we have MDs that wanna get their MBA and so like accommodating crazy schedules and busy lives and individuals that otherwise would opt out here's our opportunity to embrace that and and online learning will provide that.

Excellent.

Hey, this has been fun.

Yes, it's been great.

Thank you, Mike.

Thank you.

And I'll see you online in our next course.

As always, we just want to thank our producer Gary, our lead researcher Becky, and of course Mark Warberg for providing our, uh, theme song.

Uh, we're waiting to get that recording, but hopefully we'll receive it soon.

Disruption is a podcast from the University of Virginia Darden School of Business.