The New American University
American citizens are burdened with $1.7T in student loan debt, only half of which is currently being repaid because of default, forbearance, or some other type of deferment[i]. Politicians are exploring ways in which this loan crisis can be addressed, including debt reduction or debt elimination. While the prospect of having debt eliminated might sound good to former students who are struggling to find product-market fit (a sustainable job), it does not solve the root cause of the problem. Even if we wipe the slate clean for every former student (now and again in future instances), we will return to the same point of crisis at a much faster rate than we reached it the previous time. Why? There are a couple reasons:
1. Technology advancements, which lead to job automation, are occurring at an accelerated rate
2. Education costs are extremely high, continually increasing as the product lifespan decreases
With a need to continually grow and increase profits, leaders of companies are constantly looking for new ways to automate operations. As each new technology component is developed and integrated into the company, the daily activities that make up an employee’s job are changing. In some cases, these changes are manageable. A few activities are retired and replaced by a few newly created activities that typically require interactions with the technology. Each time this happens, a need for agile training and skill-based education surfaces. Many technologies, however, are much more disruptive and can eliminate a large portion of the activities that make up a person’s job – sometimes the entire job in one fell swoop. When entire blocks or collections of job activities suddenly disappear, a need for an entirely new set of skills and competency-based education emerges.
A key problem within higher education, particularly at universities, is the bundled approach to learning. Going to school for 4 years or even 6 years with graduate school is no longer sufficient to support a career. We are moving into a time where learning is a lifelong activity, and students will regularly have to return to school to reinvent themselves and stay relevant in the job market. The technologies that are automating businesses are being introduced more and more rapidly, and that is somewhat attributed to the increase in technology accelerators, like Ycombinator. If we think of this return to education as a learning lifecycle, the rate at which a lifelong learner completes a full cycle is going to increase with each time through. It will start to mirror the product development lifecycle that is informing it. In this case, the person is developing themselves as a product, rather than a company developing technology as the product.
To reduce costs, the university will have to consider a new business model, while also focusing on technology to automate operations. This will help to streamline development of new learning content in an accelerated manner, which will allow the content to keep pace with the technology that is being developed and the person – the learner and professional – that requires development. While the logical next step would be pro-rated individual courses, that is not a viable long-term option because the cost is way too high for a person that is out of work or compiling gigs to create a full work week. There is no guarantee that a single course that costs thousands of dollars will create the value-add required to gain new employment, and every cent spent by an unemployed person or independent contractor needs to return value. Gambling on a school or system that has previously failed to meet your expectations – one that charged upwards of 6 figures for a product that had a shelf life of under 10 years before requiring you to return and buy a completely new product – is a high risk that many cannot afford to take. Trust in the product from alumni is diminishing because it is not proving to be reliable and sustainable.
Education, as a product, is like a car. Citizens need an American-made car that is cheap, reliable, and continually helps them arrive at work so they can earn a good wage and provide for their family. That car cannot be one that constantly requires expensive trips back to the dealer for small tune-ups, and it needs a classic-but-modern design that will not go out of style. Henry Ford created a car company that was hyper-focused on product, process, and people. He imagined a car built from interchangeable parts that were pieced together in a sturdy way that kept it from breaking down. To make sure the car was cheap and widely accessible, he focused on cutting down production costs by optimizing people and processes.
America needs a higher education system built from interchangeable parts that are pieced together in a way that does not break down and keep us from getting to work. When one part goes out of style, there needs to be a new part that takes its place and updates or modernizes the vehicle. A part that allows us to pull over, do a quick tune-up, and re-route to a new work destination without having to spend a bunch of money at the shop or lose a bunch of time waiting for the fix. Time is money. Universities cost far more than the high tuition – they cost four years of earning potential.
To build this vehicle – this education system – we must focus on people, process, and technology. The product needs to become the technology and the network, not the education. We must create education that is cheap and widely accessible, and to do that, we cut down on production costs by optimizing and automating workflow and breaking the system down into small, interchangeable parts – parts that are interoperable across university networks and interchangeable across degree programs or work requirements. The smaller the parts, the more workers (creators) we can include and the more work we can do in parallel. The future of work is distributed activities, and within each activity will be the embedded knowledge, education, and discussion required to complete the task. The activity, which is paid and completed by remote workers, will be “home work” within this education system.
This may feel like a lot to take in, so let us break it down into smaller parts and discuss each individually.
Tokenized Networks
The true value of any university is the network — the people that make up the community (teachers, students, and workers) and the businesses or services that are accessible within that community. When a school like MIT or Harvard requires high scores and performance criteria for minimal admission slots, they are doing this to create demand and increase the value for the network, just like Bitcoin increases network value by placing a hard cap on token supply. Each university should create their own economy with a coin that is unique to their network (i.e., ASU coin), and the goal of the network managers — the university administrators — should be to increase the value of the currency and create new ways for that currency to be used in transactions by members of the network. The ideal network would operate as a free marketplace.
It is important to note, however, that rarity does not necessarily make a coin more valuable than a coin that is accessible to everyone. There are many ways to build value behind a currency — rarity is simply a feature to ensure that those who currently hold the currency will not have to worry about diluted value should other value-creating strategies fail to increase or maintain a coin’s value. One such way to create accessible education with a valuable coin is through use of community accelerators, which will be discussed in this paper.
Knowledge Capital
The most important thing that is being exchanged within the tokenized networks is knowledge that enables people to work and earn. Just as nations track Gross Domestic Product (GDP) as a key indicator for economic success, these networks will track Gross Domestic Knowledge (GDK). The networks that creating the most activity around knowledge creation and sharing will be the highest valued networks. Their coin will be worth the most. It might be easy to think of this as a student purchasing a class, but remember, the product is now the technology. As new features are created to automate operations and enable network members to create content, the number of people participating as workers will increase, which means they are earning taxable income. We will dig into this a little further when talking about learning modules and micro-credentials, as well as in the next section for Value-Add Taxes.
Value-Add Taxes (VAT)
University networks will set their own transaction fees (tax rates), which means they will earn a certain percentage every time value is created within the network. If a student learns something and that does not result in an increase in transactions, that education likely had minimal value for the student. The best alternative is to allow that student to continue exploring other courses until they find their path to value creation. We can do this by funding community course modules up-front, allowing exclusive access to investors, and then moving the course into a public library or syndication across networks over time.
This is not as simple as a 1-time fee when a student gets paid for their job when exiting the college or university. The goal is to always keep alumni engaged and operating in the network to receive services and accept gig offers from accelerator companies to build experience and increase value. When an individual’s value increases, the value of the network increases. We want to keep alumni constantly returning for upskilling and new learning to increase their value. We want the revenue generated from VATs to consistently trend upward in alignment with the upward economic mobility exhibited by each student. Eventually, we want each student to launch their own independent company/network or learning module that leverages the decentralized network of service providers (gig workers) to maximize value creation.
Network Accelerator
One way for universities to build value behind their coin is to become a startup accelerator, using trusted research as foundational inputs for nation or network-building. This creates a hybrid game of Risk and Sim City, where competing universities invest in home-grown startups to build and scale their network in exchange for equity tokens that are held in a reserve to back the value of the currency. As new companies and course modules are created in the network, new hiring opportunities are made available to student workers in the network. These companies should be built based on the needs of the network, which means things like doctor offices and hospitals might be funded early on, thereby dissolving linkages of health insurance to long-term, career jobs — which will evolve into part-time gigs — and re-associating the insurance with the home community/network of the lifelong learner.
Investments are not limited to companies. As previously discussed, we want members of the network to create learning content as well. There is a diverse group of talent within each university network. Remember, the value of the university is the network. Universities need to enable alumni that are skilled in different domains and industries to create learning content within a marketplace, allowing transactable licensing deals around the content. We will discuss these learning modules shortly, but this is an ideal way to bridge the gap that exists between university education and the needs of businesses. From an accelerator standpoint, members of the network can create demand for certain learning modules, and the learning network can invest in that module as startup class. This gives the school partial equity or royalties on future earnings for the course on top of the VAT that will be earned for every transaction within the learning module, even after an exclusive rights deal is achieved and the module or program enters syndication.
Learning Modules
Learning modules are created by members of the network, and they function as interchangeable parts. Think of this as Amazon or Netflix for learning. Individual alumni or teams of alumni can build out learning modules/programs like startups. As they start to gain traction, these teams can start to attract other domain experts from the alumni pool to create new lessons, books, or activities. As more and more alumni get engaged as workers, there are transactions to pay them for work – for sharing their knowledge within the network. When there are transactions, the university earns through the VAT on the network.
Businesses and alumni that are reputable domain experts leverage a system of peer review to publish and endorse content within each module. These endorsements establish a trust rating within the marketplace, so students can gain comfort in their investment. The student will be able to see that a learning module is highly regarded by domain experts or companies where they wish to gain employment. If they take and complete the learning module, the student will earn a micro-credential. This makes recruiting within the network extremely easy, as companies can target students that have completed desired learning modules in addition to their base studies.
Micro-Services
Within each learning module, instructors and domain experts can create micro-services. These micro-services are value-add features within the learning modules, with operate within these micro-economies. Students can pay extra to for office hours, small group sessions, or 1:1 meetings with domain experts, and the price might vary based on the channel through which the interaction happens (video, chat, email, phone, etc.). Learning experiences can be added as well, such as on-the-job training, conferences, or skill-building seminars. All these things create value by enabling a transfer of knowledge, and that transfer is captured through transactions on the network.
Homework is Remote Work
By aligning activities with learning module lessons, we can create remote gigs that students complete in exchange for payment from companies that are launched and operating in the network. This creates an agile integration of work and learning, which allows the lifelong student to earn money and live (without loans) while they are engaging with new learning paths. This also allows the student to build a resume of work that is verified, reviewed, rated, and automatically aggregated on their profile to establish proof of work and learning without a need for constant background checks. As these activities build (like blocks or links in a chain), we can start to match the student to larger projects that span the duration of a course or fill a gap time when the student takes a class break. All this work is creating transactions and the value of those transactions continues to increase over time.
Alliances
Many universities already have a starting alliance, which is the conference to which they belong. For a school like ASU, that would be the Pac-12. With tokenized networks, we can start to create massive value through these alliances for lifelong learners. The goal should be to find the right strategic partners to fill programming gaps. If a school is strong in engineering and another school is strong in medicine, those two schools could be good alliance partners. Within these networks, students will be able to cross-register. A passport to one university will grant access to alliance partner networks. This will not be limited to standard education. It will also include access to rec leagues, workout centers, co-working spaces, and healthcare, to name a few. There are existing models in place today, like the cross-registration agreement with MIT, Harvard, Wellesley, and other local schools.
One way to attract strong alliance partners is a strong network of learning modules and hiring businesses. While learning modules may seem like the type of thing that universities want to keep to themselves, there are a few things to consider. One issue is the ability to attract top teaching talent when teachers move to become independent workers. These teachers are less likely to give up full control of their IP. Instead, they might provide exclusive networks rights to their programming for a period of time, after which time the programming is open to external networks for licensing. This would be a move to syndication. By attracting strong strategic partners, a school is unlocking a new set of opportunities and achievements to increase the value of each teacher, student, or alumni, which will enable that alumni to earn and create knowledge within the network to return value.
Distributed Campuses
The goal is to create a network that allows students to consistently engage through their lives, and it is highly unlikely that every student is going to live in the same college city forever. A city like Boston, which is home to 35 colleges, would have be the size of the United States to support such a population. The solution will likely be remote, satellite campuses across the nation (and eventually world). Some of these campuses might be owned-and-operated by the university, while others might be affiliate campuses. There will also be campuses of alliance schools that are accessible with learning passports.
Eventually, though, these campuses will just be the local community. The building with the doctor office or co-working space — it is just a building on a street corner. Classes, work, and events are conducted in the co-working spaces. Over time the network expands to include the state, and then a collection of states (a United States), and then a union of nations operating as a single internet focused on education.
Teachers will start to invest in TAs to administer courses at satellite campuses, taking a portion of royalties for their transactions, allowing them to scale services and retire on the licensing contracts. We will likely see local Airbnb networks pop up for students that are working, learning, and travelling (experiences) in different areas to obtain housing with minimal network transaction fees and alliance deals. Everything within network is provided at a discounted rate — it becomes more costly when trying to obtain services outside of the network, like healthcare.
Teacher Tours
Top professors and learning module instructors will start to travel around to different satellite campuses to lecture — sometimes for a full course and sometimes for a single lesson as a guest lecturer. We will start to see the best teachers having large audiences, like Tony Robbins, where they create multi-day experiences around their lessons. These in-person experiences will be ticketed, which results in additional transaction fees within the network — on top of the book sales. Top educators will be like touring musicians in many ways. Musicians themselves will become educators in their domain, mixing education sessions as part of multi-day tour stops. It is all a part of the learning experience. It is all aggregated to profile each citizen’s lifetime learning experience.
In future articles, I will dive deeper into each of these areas, expanding on the value-creation opportunities for university communities that provide no-upfront-cost education and elite services, like healthcare and fitness, to meet the needs of the lifelong learner. I will also break down areas of education where we can start to significantly reduce costs, including the funding and publishing of books.