2012 August 30 Thursday
Venture Capitalists And Universities Rush To Online Education

The VCs see a huge fat industry ripe for plucking and gutting.

So the VC guys and the start-ups look at K-12 and higher education, which between them cost over $1 trillion per year in America, and much more around the world. They see businesses that are organized around communication between people and the exchange of information, two things that are increasingly happening over the Internet. Right now, nearly all of that communication and exchange happens on physical platforms—schools and colleges—that were built a long time ago. A huge amount of money is tied up in labor and business arrangements that depend on things staying that way. How likely are they to stay that way, in the long term? Sure, there are a ton of regulatory protections and political complications tied up in the fact that most education is funded by the taxpayer. As always, the timing would be difficult, and there is as much risk in being too early as too late.

Still, $1 trillion, just sitting there. And how much does it cost for a firm like Learn Capital to invest in a few people sitting around a table with their MacBook Airs? That’s a cheap lottery ticket with a huge potential jackpot waiting for whomever backs the winning education platform.

The amount of waste and duplication in education is huge. Why should tens of thousands of explain calculus every year? Why not just record the lectures and use all live teaching labor for Q&A sessions?

When universities and colleges start doing massive layoffs think of it as the freeing up of a dwindling supply of high IQ labor.

The big name universities are in a rush to go online. They are starting to feel desperate.

A few months ago, free online courses from prestigious universities were a rarity. Now, they are the cause for announcements every few weeks, as a field suddenly studded with big-name colleges and competing software platforms evolves with astonishing speed.

Massive Open Online Courses (MOOCs) are taking off.

A group of online-learning ventures is collaborating on a new kind of free class to be offered this fall, known as a mechanical MOOC (for “massive open online course”), that will teach a computer-programming language by patching together existing resources from open-learning sites.

After software and cheap high speed connections cause a gutting of teaching staffs in most universities what comes next? Automation of medicine. The total costs of health care in the United States is well over $2 trillion. The potential for savings is therefore even larger. Though health care automation entails tackling a much harder set of problems.

Share |      By Randall Parker at 2012 August 30 10:34 PM  Education Online

James Bowery said at August 31, 2012 11:28 AM:

"As always, the timing would be difficult, and there is as much risk in being too early as too late."

Yeah, just ask Bill Norris.

PRCD said at August 31, 2012 7:46 PM:

Online colleges will be the WalMart of educayshun used to sop up money from proles who see themselves as better than they are. It will also be used by professionals for continuing education. It will not "disrupt" the normal model as these idiot pundits think. Like Steve Sailer said, "Online education sounds a lot like yesterday's correspondence course."

Doctors are increasingly seen as people to rubber-stamp decisions made by cheaper nurse practitioners and other non-MD personell. Software and testing can be used to diagnose illness, but it remains to be seen whether malpractice suits will strangle that idea in its crib.

More than likely, I think Kaiser's model will prevail for those who want private insurance and everyone else will get guvmint "care".

Randall Parker said at September 1, 2012 7:41 AM:


With major universities going online there won't just be Wal-Mart educational stores. There will be Nordstrom, Tiffany's, and Macy's equivalents in education. The normal model schools are rushing to get online.

As long as testing is proctored online can work. People will go to a testing center or even a university and get tested. So their knowledge will be vetted.

PRCD said at September 1, 2012 12:48 PM:

There's so much media hype on online education that I doubt it will pan out into anything meaningful. Generally the media is wrong about everything it hypes.

Mike said at September 1, 2012 1:29 PM:

I think I'm gonna start taking an online McDonald's degree on something. Doesn't matter what, just to get a degree paper that says I've learnt and can do something like pour soda or flip meat pads.

Randall Parker said at September 2, 2012 8:09 PM:


I think you should aim higher and go for a Quiznos degree. They have way better bread. Though tragically the Quiznos nearest me was not open today.

But you ask yourself: Train to get a low paid menial job? Or train to become unemployed in a very interesting topic?


My hype for online education started many years before the media hype and my hype is correct.

Did you know that YouTube has tons of major university history course lectures?

European History.


Remapping the Italian Renaissance.

French Revolution.

Yale, Robespierre in the French Revolution.

paulkael said at September 3, 2012 10:06 AM:

One faulty thought. Closing Universities and discharging professors will free up much needed high IQ labor??? Have you watched C-Span's show which features a class (usually history) at a prestigious university??? Class is usually so boring and on the level of the more interesting "Little Golden Books" of my youth. The teacher is inarticulate with the usual accompaning um's, like, or ackward attempts at hippness. The subject matter is so basic as to cause me to wonder if this is 6th grade rather than Harvard. The slant is usually geared toward modern day obcessions with race and gender. I have my doubts as to whether these birds in their gilded cages are ready for the real world. Greeters at Walmart perhaps.

Post a comment
Name (not anon or anonymous):
Email Address:
Remember info?

Web parapundit.com
Go Read More Posts On ParaPundit
Site Traffic Info
The contents of this site are copyright ©