A collaborative search for the leaders and businesses that use information to unlock talent.

And especially Founders Ben Weinberger and Matt Berry!

Tivo announced today its $135mm acquisition of Digitalsmiths subject to customary closing conditions.  This Tivo Press Release superbly describes the company today.

I remember my first in-person visit to the company in 2007.  Ben, Matt, an admin/IT assistant and three computer vision engineers were working on fold-out tables in a Research Triangle windowless conference room.  The company paid its modest bills with web development work while working on the big idea to transform TV with data.  The path forward to the market was not clear.  The team had to iterate and adjusts its plans several times.  But all that work produced a digital media software company whose products reach  64% of US households as well as more internationally.

Digitalsmiths growth was propelled by software that worked and tremendous focus on signing and taking care of customers.

Easy to write but much harder to do.  Today is another great milestone for Ben, Matt, and Digitalsmiths!

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Abelard to Apple is an excellent book about higher education innovation.  Professor DeMillo, Georgia Tech professor and HP’s first CTO, writes in the preface that this book began as a five-page memo and expanded into a book.  The book has this wandering “… and another thing” feel to it.  This framework provides an excellent survey of innovation in higher education starting with the first European colleges in the Middle Ages and ending up with MOOC’s.  A very helpful read for those thinking about the current innovation wave in higher education who believe that to understand where we are heading, it is important to understand where we’ve been.  The book will stimulate questions about the continued dominance of the American higher education system compared to more nimble, international competitors not weighed down with the baggage of the past. I learned a lot.

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Imagine if either President Obama or Senator McConnell went on television and said the U.S. should return to the tax policies of 1998, when the President was a Democrat, the House Speaker was a Republican and the unemployment rate was 4.4%. Furthermore, what if that same leader said we should cut the defense budget to the 2006 level, a time when we were engaged in heavy ground combat in both Iraq and Afghanistan.  These are the policies that will be put in place if nothing is done to avert the Fiscal Cliff.  Would anyone panic if either of these policies were put in place?  Would any rational person describe returning to either of these times when the U.S. economy was functioning well as a “cliff”?  Yet, we hear an increasing drumbeat that we are heading for outright disaster unless something is done.

Returning the country to sensible economic policies would not be a disaster. It would not be change on the scale of a towering cliff of doom. Instead, the cliff is really a fiscal pothole our leaders have created in the middle of the road to the future.   Admittedly, mandating that these policies change in such an immediate and machete-cut fashion is idiocy but wouldn’t we all be better off if the current tax and spending policies were adjusted to a more fiscally responsible level?  Yes, defense sequestration (in the form of across-the-board spending cuts) is incredibly stupid because it doesn’t allow the military to either plan for or customize the shape of the reductions.   But it’s stupid not because of the scale of the cuts, but because of the mechanics – can anyone argue that we couldn’t adequately defend the country at the 2006 level of spending?

The only theatre here is whether our leaders can steer our rusty, leaking jalopy of an economy around the pothole they’ve created.  Because the fiscal cliff is not the real issue here.  The noise about it obscures the real issue blocking the road to a brighter future – the massive mountain of entitlement debt that looms over the road, representing a real crisis for the U.S. The nonpartisan Congressional Budget Office (CBO) has stated that our ballooning national debt will be nearly twice the size of the national economy in the next twenty five years. At that point, we will be lucky to escape a real disaster on the scale of what is going on in Greece. To get past that mountain of debt will take political leadership, capable of sacrificing the sacred cows of Medicare and Social Security spending, increasing revenue through tax increases on more than just the 1%, and perhaps most importantly, readiness to accept short-term pain for long-term gain – anathema to politicians seeking reelection.

If we are able to make those changes, we are more likely to finding ourselves driving a racecar  economy instead of the current rusted-out piece of junk economy, and we’ll be likely to get over that mountain of debt.

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Yes.  Because everyone will be a student.  Given all the press about MOOC’s, the higher education bubble, and value of a college education, much of the discussion treats the students within narrow labels.  My experience in online education over the past 10 years showed me the diversity of the student universe.  Many online students are adults and outside the 18-22 year old age range typically envisioned of a college student.  And the diversity doesn’t just happen at the college level.

Advanced Academics, a Chrysalis investment eventually sold to DeVry, is an online high school.  It is not much of a leap to imagine that an online school could fill gaps in the K-12  system: the rural school who lost its only Spanish teacher and needed someway to teach out its students, the super tennis player or ballerina who traveled too much to attend a regular school, etc.  What I did not imagine were the seemingly large numbers of students whose families moved very frequently.  The new school at which they arrived taught biology to high school freshmen while their old school taught it to sophomores.   As a new sophomore, the student needed some way to catch up on that biology credit required for graduation.  We called this credit recovery.  The biggest surprise, however, was that for many kids the social setting of school was a poor learning environment.  We had numerous examples of kids who were doing poorly in school.  Removed from the classroom and provided a computer, with access to a teacher if they wanted one, these kids performed remarkably better when they could control the learning environment.

And this student diversity continues to blossom at the college level.  In discussions about Straighterline, or Coursera, many people view these schools through the prism of their college experience.  In the United States, there are 24 million college students.  Only 15% attend ‘selective’ colleges.  The market is vast.  The students are the typical 18-22 year-old.  They are adults who must go to school around work and family demands.   They are students in other countries who have no chance of attending a US college, which are clearly the best in the world.  They are students who will not thrive in the residential college environment.  They are students without a lot of money who should have better options for college than borrowing $10K + to see if college is right for them.

The student of the future is everyone.  That students now have an expanding range of options to achieve at the college level is yet another wonder of the internet age in which we live.

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Thanks to Matt Miller and Kevin Carey for telling the Straighterline story!

Matt Miller points out Straighterline’s real innovative potential here.

The juicy part of Kevin’s Senate testimony is below:

“Consider the company Straighterline. It was created by an education entrepreneur and is located here in the Washington, D.C. area. Straighterline offers online courses to students for a flat subscription rate of $99 a month plus a one-time charge of $39 per course, for all the courses students can take. They can enroll in accounting, statistics, calculus, biology, and other introductory classes. The textbooks and course materials all come from the same major commercial publishers that regular colleges use. Individual tutors are available, online.

Straighterline’s prices are so low because, as I noted earlier, once you make the initial investment in online course development, the cost of serving additional students is very small. And also because Straighterline isn’t paying the sunk costs of maintaining football stadiums, research departments, vice-provosts, and so on.

Straighterline currently serves several thousand students and is growing. This education comes at no cost to the American taxpayer because students aren’t allowed to use federal financial aid to take Straighterline courses.

That’s also the problem. Straighterline is a victim of higher education regulation. Not the kind of regulation that traditional colleges like to complain about, where they are required to disclose basic information about themselves in exchange for billions of dollars in federal funds. This is the regulation that traditional colleges cherish — regulation that protects them from competition from innovative companies like Straighterline.

Federal financial aid like Pell Grants and subsidized loans can only be spent at accredited colleges. Who controls the accreditation process? Existing traditional colleges and universities. What incentives do they have to allow innovative low-cost competitors into the market? None. What incentives do they have to keep them out? Many. And the more expensive traditional colleges get, the bigger those incentives grow.

Straighterline has managed to make a business by laboriously forging partnership agreements with accredited colleges who agree to accept their credits. But this just illustrates the absurdity of the system.

The higher education market needs many new, high-quality, low-price competitors to act as a counter-weight to traditional colleges and universities bent on increasing prices forever. To be sure, students also need consumer protection. One kind of innovative affordability policy would open up the federal financial aid system to low-price entrepreneurs who are willing to be transparent about and accountable for the quality of the services they provide. This policy would include educators and companies who only provide individual courses. If you can specialize by providing the world’s greatest college calculus class, and only that, why should you be excluded from the system?”

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