The Unbundling and Bundling of Higher Education: On Collab houses, Minerva School and MBA Bubbles

A couple of weeks ago, the NY Times had an interesting article on the fact that College Is Everywhere Now.

“As the fall semester begins, many college students will be attending classes from the relative safety of their family homes. Others have arrived to live on university campuses, with varying amounts of success; even schools that enforce strict social distancing guidelines are seeing outbreaks of the coronavirus. But some students are pursuing a third option: Renting giant houses with friends — sometimes in far-flung locales — and doing school remotely, together. Call it the rise of the college "collab house."

This is an interesting evolution that few have anticipated. One, of course, could have expected, what the NY Times wrote about here How Colleges Became the New Covid Hot Spots.

"Everyone goes to the same places in Oxford, and I don't think the students are careful," said Megan Bernstein, 47, who said she had grown up in the town and was there to visit her father.

Trenton Jordan, 21, a junior, agreed. "Probably 99.99 percent of the people, when they go to an off-campus party, isn't wearing a mask," he said. "Most college kids are not worried about the virus."

But this is not the topic of this post. I want to go back and examine the notion of collab houses and their impact on the future of higher education. First, let me preface and say that I write this from an educator's point of view and as a university professor. I do not claim to be an impartial observer. 

The critical question is whether this is the beginning of the big higher education unraveling people have anticipated (or wished) for many years. To try to better understand the stakes and the different elements here, let's begin with understanding the bundle the university offers: We offer the following services: (1) We provide skills, both depreciating (software programming and financial analysis) and non-depreciating (critical thinking,  time management, etc), (2) Career services: universities are a two-sided market for employees and employers, where the university internalizes, through admission, the high cost of screening firms have to incur otherwise, (3) social networking: helping students build strong connections with their peers, but also weak connections with alumni, (4) time for personal growth: an excused vacation from the race of life; This is different between graduate degrees (such as MBA) and undergrad degrees. The former allows people to take time off to rethink their decisions after spending a few years away from school (for the first time since they are 3 or 4 years old). The latter allows people to develop their own taste and reason, being for the first time away from their family. This personal development time under the shield of a "trusted" institution, among peers is underappreciated, under articulated, but also clearly a privilege and (5) Credentialing which is part of (2): in some jobs, you do need a degree, or it’s common to ask for a degree, even if it’s not absolutely needed.  

Note that I didn't mention research as a service or a component, but the main claim the modern university makes (and I am using “modern” very loosely here) is part of the "social contract": we will educate your kids, and you will give us the freedom to study things at depth we may all not appreciate at first. It goes without saying that the belief is that the world is not static. Thus, you want people who are doing cutting-edge research to educate you on what to think and how to think (which hopefully will not depreciate over time), allowing you to prepare for the “wicked” world we all live in.   

As with every bundle, there are many attempts to unbundle it. For education: YouTube and Coursera offer videos and courses on every topic. Social networking: from LinkedIn (for the more professional side of the spectrum) to Tinder (on the other side, of whatever spectrum this is). Career: again, LinkedIn, and Handshake and some of the newer and more startup-focused, such as On Deck and Neo. GitHub for credentials (at least for the narrow area of programming) and Airbnb and Common for housing and more in-person social networking.  

Jim Barksdale, the former CEO and President of Netscape is known for his now-famous statement: "There are only two ways to make money in business: one is to bundle; the other is unbundle." So, if everyone is trying to unbundle you, and potentially monetize a part of that bundle by potentially offering a better service (or potentially offering that service to a segment of the population without the constraints of the other parts of the service), universities have multiple defense strategies: (1) Strengthen the bundle even further by demonstrating that the synergies (boy, I hate this word) are crucial (2) working with the regulator to prevent others from taking a vital element of the bundle, for example, working with the American Bar Association to present those who didn't graduate from law school from taking it (I hope you don't expect me to support this) or (3) offer a smaller bundle and work on integrating it with other services that provide better value, in the short term (and maybe in the long term). 

Unfortunately, the last thing I can say about university responses (and I am not talking about professors or students, who have been very innovative) is that they are innovative in trying to think about these bundles during this crisis. It seems that the only game that is being played is defense: trying to minimize financial risk (as well as a health risk). The pandemic may stay with us for a while, and we can't continue with the model of remote learning forever (at least not without significantly redesigning things) and we can’t continue with "let's bring the students back and then blame them for not being careful" version of it. The risk is too high not only for any specific institution but also to the higher-education institution. 

There is mounting pressure on the higher education system. For example, Peter Thiel has been saying for a while that the universities are going to be disrupted along the same line that the reformation disrupted the catholic church, by showing that you don't need the church (or the university) to achieve redemption and happiness (I am simplifying things a bit), opening the door for a much more decentralized model of learning. I don't think universities view themselves as essential to achieve success, but most of us believe that there are significant positive externalities among the components of the bundle that do allow for long term success. However, I don't think we have done enough to demonstrate and strengthen these bundles over the last few years. In fact, by making the university more siloed, we are doing the absolute opposite.  

One example of an interesting bundle is Minerva School. Minerva school, well before COVID, required all of its students to live together, but classes were taught online. The main benefits are (1) the ability to reduce costs of facilities, (2) The ability to take the discussion that happened online and analyze it afterward at a level that is impossible when the class is taught in person, and (3) most importantly, the ability to take the entire body of students and mobilize them from one city to another, allowing them to live in major global hubs, and exposing them to the world cultures and economies while still taking courses. This is not a very scalable model, but I don't think this is its mission. While you may disagree with many elements, it is admirable to be innovative. 

While the Fall semester is already underway, we can't not think about the Spring (and potentially next year). My suggestion for this Fall was to start an MBA bubble where students live in a big collab house (or collab resort, since most of these, are empty), and faculty live and teach there for short duration of times, say, two weeks. We have experience doing things like that already with our executive MBA students, albeit for shorter periods. Some of the most interesting discussions happen during lunch and dinner and "running office hours" (at 6 am, no less), or at the bar after classes. Whether these are scalable is not the right question. Also, what will remain after the pandemic, and whether these will fit is interesting, but not all that relevant. We must try to innovate not only with our curriculum but also with the type of experience we deliver, precisely along the dimensions of the bundle I mentioned above. 

In our conversation over a Zoom "fireside chat" several weeks ago, Ben Nelson, the founder of Minerva School (and a Wharton alum), said that what we see now is an earthquake that happens far and deep in the ocean. So, we may feel it. But the real impact is going to be the tsunami that occurs in a few years. We are not getting ready for it.