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> Most of the capturable value in education is signal of acquired knowledge and other factors. IMO, this is an extreme bias in the Ed VC community and explains

> Most of the capturable value in education is signal of acquired knowledge and other factors. IMO, this is an extreme bias in the Ed VC community and explains how they managed to flush so much cash down the toilet. In no particular order: 1. Tech focus. Most SWEs do not need a CS or even SE degree, and even if you do need that knowledge it really can be learned by hacking at things alone in a room. This ranges between "a lot less true" and "hilariously out of touch" in a lot of other fields. 2. The startup founder set skews toward the "independent learner" type. 3. Within VC/founder world, it's often actually true that university was for networking and prestige. This is one of my huge "you are so close to understanding how unreasonably BS your world is" pet peeves. Not everyone graduates from Stanford. The majority of college graduates attended colleges and universities that you've never even heard of. There are several thousand of institutions of higher education in the US. How many can you name? Sometimes I really want to say to EdTech founders/VCs: "just because you are incompetent and survive on your fancy Stanford degree despite knowing nothing doesn't meant that's true of all College degrees." (But not you in particular, of course, and this is just my inner narrative frustration... I don't mean it to be an attack on anyone in particular.) Most students really do need years of in-person learning that does not scale well. Most institutions provide very little signalling value. Most of higher ed is completely misunderstood by a set of Standford grads gambling with more money than most institutions have in their endowment. And I'm highly suspicious of counter-narratives from anyone who hasn't taught Calc II at the branch campus of a state university system. American institutions of higher education, particularly the non-elite private ones, have been capturing value from actually teaching people useful things for two centuries. It's hard, it won't make anyone a billionaire, and we should get back to the old model of doing things not-for-profit in an unscalable way and without federal debt subsidies. Where by "capturing value" we mean "updating aging buildings and paying faculty enough to live a normal middle class life", not "supporting a massive administrative apparatus" and certainly not "buying yachts for LPs". edit: various typos. Typed while in a meeting (about this very topic, as it happens)

HDThoreaun 4y ago
> Most institutions provide very little signalling value. Signalling is the most important thing universities provide. The vast majority of jobs that require a degree don't require or care about what you learned. They just want someone who is able to get into university and pass with good enough grades. That's the entire value. Even community colleges provide large amounts of signalling value in that you dedicated a significant portion of your life to obtaining the degree, something many people legitimately are unable to do. Startup education has no signalling power because employers don't know about it and don't believe it is difficult to obtain the degree.
- thwayunion 4y ago
  The key differences: 1. if you aren't Stanford, trust is hard to gain, easy to lose, and nearly impossible to gain back once lost. One bad placement raises alarms and more than one poisons the well for an entire degree program. There aren't many regional employers per degree program, and national/global employers are a "reach job" for most students. This is something that non-elite institutions know in a visceral and painful way. They are so careful with the few regionally well-regarded degree programs they manage to build. The folly of VC world was obvious to those faculty, and their students (such as me), from the start. 2. if you aren't Stanford, most of your students probably really do need a couple years (at least) of in-person instruction before they are ready for the labor force. Again, anyone who has taught at one of these institutions just knows! Once every 10 years you get the type who didn't really need the degree to learn the material, and you do your best to elevate them past the institution's typical bar for outcomes. But the other 9 years, 100% of students require a lot of real work before they are ready. In other words, most institutions cannot afford to signal without that signal being extremely accurate. AND they don't have the type of students who don't really need the education. So they educate students and then signal the value of hose students not just through grades but also especially through things like referrals, letters, and so on. But, again, I wouldn't expect a Stanford or UIUC or Michigan grad to understand this world.
  - HDThoreaun 4y ago
    You again seem to be caught up in thinking “learning the material” is why employers want employees to have degrees. The material is worthless to them. I agree that most students do learn a lot from college, but it’s stuff like “how manage your time” and “how to succeed with minimal oversight” not calculus 2.
    - thwayunion 4y ago
      > You again seem to be caught up in thinking “learning the material” is why employers want employees to have degrees. Because it is. I'm not bullshitting. I talk with a lot of our top employers. They care about the actual skills and knowledge students bring. They can find plenty of people with good temperaments to promote into those roles if they only need warm bodies with good time management skills. > I agree that most students do learn a lot from college, but it’s stuff like “how manage your time” and “how to succeed with minimal oversight” not calculus 2. This simply isn't true for most students in most regional economies. No one is paying a premium for a piece of paper anymore.
etempleton 4y ago
You are both right, honestly. Much of the value of higher education as it is structured is the credentialing and the networking. Everyone knows what a bachelors is, a master’s is, a doctorate is. This is important. It means something. However you are also right that education works in person for a lot of people and there are a lot of values there. Community colleges are an under utilized resource to learn. Making money by educating people is a bad business. It is expensive and time consuming and the more you try to cut expenses the worse the education gets. Non-profit is the right model for it. If you really want to make money off the back of education build something useful for colleges and universities. They are big complex organizations with specialized needs where off the shelf solutions don’t cut it and there are enough of them to make a nice business out of if you come up with a solution that is dramatically better than what is out there. A lot of the technology solutions that are used barely work but there are few options.
- thwayunion 4y ago
  I mostly agree. The one place I split with you -- and hard -- is that I view the institutions in my life as charities. I am admittedly blessed in that all save one (my PhD school) really is basically a well-run charity. The only one that isn't public and sparten is not rich amd not elite. All are way more lean than most businesses (<10% of staff are non-teaching, and almost all of those are feeding students or keeping buildings standing/clean/powered... I can name every employee on the Administration floor off the top of my head). If you really want to make money off the back of education... don't. Build your thing and give it away at cost. But I do understand why someone who only spent time in places like my PhD school would feel differently and view these places as just another industry. I just don't think they are ready for the fact that 90+% of the market competition is way more lean, way more low-profit, and way more human-capital-intensive than any VC is interested in.
  - etempleton 4y ago
    I think higher education institutions should be non-profit. I do think there are a lot of financial pressures on most small-medium non-public schools that make them operate in a more business oriented fashion and they must do so to stay open. When I talk about making money I am talking about system utilized by colleges like enrollment CRMs, grading software etc. In most cases the only way those get made and are supported is through for-profit businesses.
edgefield 4y ago
As an aside, what if the “administrative apparatus” is as important as the academics? In SaaS companies, are sys admins and security engineers less important than the product developers? How important are the networking staff or the staff that handle backups? In higher ed, the administrative apparatus includes a myriad of critical functions and basic infrastructure such as advising, career services, mental health counseling, the registrar (course registration, transcripts), food services, the dormitories, building maintenance, cleaning services, IT, campus police, and on and on. Large universities are basically small cities.
deleted 4y ago
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Hermitian909 4y ago
> Most institutions provide very little signaling value. I don't think this is true. Most universities' signaling value is from the fact that they are accredited universities. They draw their signaling power for the institution of the university, maintained in part by the department of education. While I haven't checked recently if this survived, in the 2010s several universities offered their courses online and offered certificate of completion for $50-$300 per course. These kinds of programs fizzled because even if students did learn the material the certificates did not sufficiently signal to employers that the student had learned it. A friend of mine from one of these universities did an internal study showing that of those students who completed the equivalent of a bachelor's degree almost none found employment in their field. This result should be surprising if we think low tier universities have no signaling power. On a more conciliatory note; I generally agree VC ed-tech has been a boondoggle for similar reasons - a combination of misunderstanding education and realizing that no other part of education is monetizable enough to produce the kind of returns VCs want (barring certain extra-ordinary tech innovations that have not been forthcoming e.g. strong AI)
- deleted 4y ago
  [deleted]
- thwayunion 4y ago
  > This result should be surprising if we think low tier universities have no signaling power. To me, it's not at all surprising that "got the [equivalent of a] degree but didn't have the normal level of interaction with faculty" results in a vastly different outcome. You're assuming that the credential itself is the signal. For regional economies in the US who hire primarily from regional universities, the credential often isn't the primary signal. They'll ask for a reference and actually talk with a faculty member listed. Colleges and especially individual faculty have ties to major regional employers. Those employers understand that output is more variable (in large part because input in more variable). Other employers don't know anything about the institution at all and are likely to bin the app for any role that isn't eg low-pay or pure commission. So the institution maintains relationships with alumni and others making hiring decisions at their "strategic" new grad employers, mostly regional small and medium sized companies. Frank assessments from trusted faculty play an important role in securing first placements. This is particularly true for (low-)paid internships, which are often the primary feeder for new grad positions. If I know that the institution has mixed output and my phone call to the professor listed as a reference is basically "they completed some online modules but we didn't interact much", then I will probably pass.

HDThoreaun 4y ago

> Most institutions provide very little signalling value. Signalling is the most important thing universities provide. The vast majority of jobs that require a degree don't require or care about what you learned. They just want someone who is able to get into university and pass with good enough grades. That's the entire value. Even community colleges provide large amounts of signalling value in that you dedicated a significant portion of your life to obtaining the degree, something many people legitimately are unable to do. Startup education has no signalling power because employers don't know about it and don't believe it is difficult to obtain the degree.

thwayunion 4y ago
The key differences: 1. if you aren't Stanford, trust is hard to gain, easy to lose, and nearly impossible to gain back once lost. One bad placement raises alarms and more than one poisons the well for an entire degree program. There aren't many regional employers per degree program, and national/global employers are a "reach job" for most students. This is something that non-elite institutions know in a visceral and painful way. They are so careful with the few regionally well-regarded degree programs they manage to build. The folly of VC world was obvious to those faculty, and their students (such as me), from the start. 2. if you aren't Stanford, most of your students probably really do need a couple years (at least) of in-person instruction before they are ready for the labor force. Again, anyone who has taught at one of these institutions just knows! Once every 10 years you get the type who didn't really need the degree to learn the material, and you do your best to elevate them past the institution's typical bar for outcomes. But the other 9 years, 100% of students require a lot of real work before they are ready. In other words, most institutions cannot afford to signal without that signal being extremely accurate. AND they don't have the type of students who don't really need the education. So they educate students and then signal the value of hose students not just through grades but also especially through things like referrals, letters, and so on. But, again, I wouldn't expect a Stanford or UIUC or Michigan grad to understand this world.
- HDThoreaun 4y ago
  You again seem to be caught up in thinking “learning the material” is why employers want employees to have degrees. The material is worthless to them. I agree that most students do learn a lot from college, but it’s stuff like “how manage your time” and “how to succeed with minimal oversight” not calculus 2.
  - thwayunion 4y ago
    > You again seem to be caught up in thinking “learning the material” is why employers want employees to have degrees. Because it is. I'm not bullshitting. I talk with a lot of our top employers. They care about the actual skills and knowledge students bring. They can find plenty of people with good temperaments to promote into those roles if they only need warm bodies with good time management skills. > I agree that most students do learn a lot from college, but it’s stuff like “how manage your time” and “how to succeed with minimal oversight” not calculus 2. This simply isn't true for most students in most regional economies. No one is paying a premium for a piece of paper anymore.

etempleton 4y ago

You are both right, honestly. Much of the value of higher education as it is structured is the credentialing and the networking. Everyone knows what a bachelors is, a master’s is, a doctorate is. This is important. It means something. However you are also right that education works in person for a lot of people and there are a lot of values there. Community colleges are an under utilized resource to learn. Making money by educating people is a bad business. It is expensive and time consuming and the more you try to cut expenses the worse the education gets. Non-profit is the right model for it. If you really want to make money off the back of education build something useful for colleges and universities. They are big complex organizations with specialized needs where off the shelf solutions don’t cut it and there are enough of them to make a nice business out of if you come up with a solution that is dramatically better than what is out there. A lot of the technology solutions that are used barely work but there are few options.

thwayunion 4y ago
I mostly agree. The one place I split with you -- and hard -- is that I view the institutions in my life as charities. I am admittedly blessed in that all save one (my PhD school) really is basically a well-run charity. The only one that isn't public and sparten is not rich amd not elite. All are way more lean than most businesses (<10% of staff are non-teaching, and almost all of those are feeding students or keeping buildings standing/clean/powered... I can name every employee on the Administration floor off the top of my head). If you really want to make money off the back of education... don't. Build your thing and give it away at cost. But I do understand why someone who only spent time in places like my PhD school would feel differently and view these places as just another industry. I just don't think they are ready for the fact that 90+% of the market competition is way more lean, way more low-profit, and way more human-capital-intensive than any VC is interested in.
- etempleton 4y ago
  I think higher education institutions should be non-profit. I do think there are a lot of financial pressures on most small-medium non-public schools that make them operate in a more business oriented fashion and they must do so to stay open. When I talk about making money I am talking about system utilized by colleges like enrollment CRMs, grading software etc. In most cases the only way those get made and are supported is through for-profit businesses.

edgefield 4y ago

As an aside, what if the “administrative apparatus” is as important as the academics? In SaaS companies, are sys admins and security engineers less important than the product developers? How important are the networking staff or the staff that handle backups? In higher ed, the administrative apparatus includes a myriad of critical functions and basic infrastructure such as advising, career services, mental health counseling, the registrar (course registration, transcripts), food services, the dormitories, building maintenance, cleaning services, IT, campus police, and on and on. Large universities are basically small cities.

deleted 4y ago

[deleted]

Hermitian909 4y ago

> Most institutions provide very little signaling value. I don't think this is true. Most universities' signaling value is from the fact that they are accredited universities. They draw their signaling power for the institution of the university, maintained in part by the department of education. While I haven't checked recently if this survived, in the 2010s several universities offered their courses online and offered certificate of completion for $50-$300 per course. These kinds of programs fizzled because even if students did learn the material the certificates did not sufficiently signal to employers that the student had learned it. A friend of mine from one of these universities did an internal study showing that of those students who completed the equivalent of a bachelor's degree almost none found employment in their field. This result should be surprising if we think low tier universities have no signaling power. On a more conciliatory note; I generally agree VC ed-tech has been a boondoggle for similar reasons - a combination of misunderstanding education and realizing that no other part of education is monetizable enough to produce the kind of returns VCs want (barring certain extra-ordinary tech innovations that have not been forthcoming e.g. strong AI)

deleted 4y ago
[deleted]
thwayunion 4y ago
> This result should be surprising if we think low tier universities have no signaling power. To me, it's not at all surprising that "got the [equivalent of a] degree but didn't have the normal level of interaction with faculty" results in a vastly different outcome. You're assuming that the credential itself is the signal. For regional economies in the US who hire primarily from regional universities, the credential often isn't the primary signal. They'll ask for a reference and actually talk with a faculty member listed. Colleges and especially individual faculty have ties to major regional employers. Those employers understand that output is more variable (in large part because input in more variable). Other employers don't know anything about the institution at all and are likely to bin the app for any role that isn't eg low-pay or pure commission. So the institution maintains relationships with alumni and others making hiring decisions at their "strategic" new grad employers, mostly regional small and medium sized companies. Frank assessments from trusted faculty play an important role in securing first placements. This is particularly true for (low-)paid internships, which are often the primary feeder for new grad positions. If I know that the institution has mixed output and my phone call to the professor listed as a reference is basically "they completed some online modules but we didn't interact much", then I will probably pass.