This is a post on the problems & solutions in higher education from someone clearly not qualified to make those observations. The only information I have is the 79 pitches from entrepreneurs large and small who are all trying to disrupt Higher Education from around the world. Besides that over 500+ articles, blog posts & discussions with several professors at the top colleges in the world.

The Higher Education market is largely a US dominated one. With over 4500 private, public and semi-public colleges and universities, this market is over $475 Billion. Over 9% of US GDP and close to $1.3 Trillion (pdf) is spent on education overall. While there is more spent on K-12 education, the higher ed market has more spend per student.

Most of the money spent by students in on tuition. Over 57% of the higher ed spend is on tuition. This goes towards educators, libraries, textbooks, facilities, etc.

The average 4 year college cost is reaching $30K+ per year for private colleges. Given that over 70% of US students end up with over $30K in debt after college, this clearly unsustainable.

With the advent of MOOC (Massive Online Open Courses) I personally believe it is only a matter of time before many of the 4500 colleges shut down. I personally think 50% of colleges in the US will close down in 10+ years. Similar for Indian colleges – over 50% of colleges in India will shut down in 20 years.

Most private colleges make money from endowments, grants, and then from tuition – in that order. Most of the moneyed institutions have “rich” students who then become alumni and donate to the college, many of the smaller colleges dont.

The average private college takes 2000+ students and charges about $30K per student. Lets say that is $60 Million per year.

Now imagine that the private college wants to take 20,000 students (online) instead. [They could also take 100,000 students, since nothing is going to stop them from doing that]. All things being equal and factoring in inflation, and the cost to run the university being largely the same, they would be able to charge $3K per student per year and still do well.

It is not a dream. It is going to happen. In 10-20 years, or likely sooner, but it is going to happen.

Would you rather get a degree from MIT and be taught by the top professor at MIT or a local college professor who may not have the level of depth and knowledge about the subject as the MIT professor?

You can do this from Saudi Arabia, Australia and India. That’s because even the folks in Newton, Mass, who live <100 Miles from MIT will be doing the same.

Most learning is going online. In a massive way. Higher education is as well.

Now, I understand the concerns.

A) The Internet do not replace the interaction you get in a face-to-face setting.

B) How can you build relationships with your students and network with them – which is the biggest value of a college 10 years hence? and

C) Online learning is still largely unproven.

All that will get itself sorted out with other offerings to supplement the MOOC.

In the future you will have interactions (office hours) remotely managed by professors.

In the future you will learn from your peers together as much as you will from the professor – which will build the relationships.

In the future you will have more teaching aids and tools to help you sort, identify and collate your learning better than textbooks.

That future is less than 10 years away.

I am going to shift gears and now try to talk to future parents.

What should you do? What are the things you can do to make sure your kids are going to be successful? This is primarily if your kids are between 0-10 years old.

First and (I cannot understate this) let your kids find their way.

If you can make the investment, buy them a tablet and let them learn stuff using the machine.

If you can get them to follow structure courses online (for older kids), I’d recommend Khan academy and other sites like those.

We dont have Television at home, but I am not convinced that’s the right approach for everyone. If you can get rid of the television, do it. I’d highly recommend it.

Kids will play more games than use the tablet for useful stuff initially but that novelty wears off in a few years. The % of core gamers and those that are addicted to gaming is still small. I am not saying ignore it, but be less worried about that than no exposure to games at all.

I dont think most parents will give up the school environment all together, since they need the kids to be “someplace” other than home when they head to work, but I would focus a lot less on grades at school.

In fact, grades will become irrelevant in 15 years, increasingly replaced by “show me what you did” instead of “how did you learn”. Why?

If you are MIT or Stanford and you want 20K students to take your course, you are likely to get less picky a decade from now. 

[Side note: Similar to startups these days, when being evaluated by investors, the focus is on product & traction, not on idea, grades tell me how you studied, not what you learnt].

The goal of these colleges will go away from “exclusivity for some” to “knowledge for all” very soon. That’s the direction they are all heading. Will MIT as an institution or the lecture halls go away? – not likely. They will be the purview of the few rich kids who can spend $100K per year to be housed in 5 star luxury comforts. For the rest of us, a computer and an internet connection will suffice.

This next paragraph is going to unsettle a few folks, but hear my argument.

Focus on spending money *now* to help your kids, than saving money for the future. Most parents I know end up trying to save for education – by putting money in 529 plans, education savings plans and the like. I would use as much money you plan to save for the future into their education right now. Give them any edge they can get now and you will end up spending 1/3rd of what you originally planned for later.

That’s because the cost of higher education is going to drop dramatically for most students.

So who will hurt from these disruptions?

1. University deans, college presidents and the endowment chairs, who make over $1 Million per year.

2. Smaller unknown colleges who will see their enrollments drop dramatically and will likely have to shut down.

3. 529 plan administrators.

For the rest of us, quality higher education is going to be highly accessible.

This is going to be a very long post on design and startups in India and in particular the questions we have about design as a important discipline in India.

Speak to any investor and mentor / advisor in India and you will constantly hear the refrain “Indian companies need to get better at design” or “We dont design our applications very well and that’s the reason we dont have world-beating companies”.

Speak to an entrepreneur in India and they will state that “getting designers in India is very hard” and “hiring a design firm in India is very expensive”.

Over the last 1.5 years, we have been trying to solve the “design” problem for startups at the Microsoft accelerator and met with limited to no success.

The first part is to frame the “problem” correctly. Let us focus on the stages a startup goes through and look for opportunities and the needs for a designer. Then we will try to outline the solutions we offered and why (I think) they failed.

We’d love some advice on where we are going wrong and what we can do to solve this problem first for us in a small scale and then largely for the community in general.

In the very early stages the entrepreneur has an “idea” and they want to solve a problem. At this stage, they end up “napkin-ing” a solution and then trying to find ways to build a solution. Most entrepreneurs in India already believe they have a solution, so they do think they would be best at “designing” a solution as well. So the designers role is largely relegated to “give me some good color options” or “make me a kick-ass logo”, or “build a sexy website”. Most of this work is either done by friends or colleagues who moonlight and help the entrepreneur by offering a design.

In most hackathons  (over the last year I have judged and attended over 30 of them), the designer is the only role that is very hard to find in teams. You will get 20+ hack teams and only 4 designers. The teams that have convinced the designers that their idea will “win” the hackathon have designers. The rest of the teams end up largely having engineers perform “minimal” design.

The next stage is when the company is beyond the wireframe stage and actually building an application – mobile or web. At this stage, most folks would like to “hire” a designer, but complain that design talent at $8000 – $10,000 per year (4L to 6L INR) is too expensive. The entrepreneur believes the role of the designer at this stage is to take the “wireframes” they have designed and put together psd files, do a few revisions and then create the HTML and CSS files. Most entrepreneurs use inexpensive agencies or freelance consultants at this stage since they can’t afford to hire a full time designer. They also believe that hiring a full time designer is not something they can afford, since once the design is “complete”, they dont think there’s any work left for the designer. They’d rather hire a developer full time to keep adding features.

The stage beyond this is when they get some customer feedback and actually have users who are working with their application. This results in feedback that entrepreneurs are surprised with – things like – “It is not easy to use your application” or “I dont think the application is very nicely designed”. The other indirect way they get this feedback is when they tell me “I am not able to charge a premium for my product even though it has the same features as a US clone because my customers know that my app is designed in India”. At this point they do take design somewhat seriously and try to hire a designer. If they have gotten to this stage it is very likely that they have some funding so they can afford the designer who charges $10K per year we mentioned before.

Finally when a company is growing and scaling, new products, new features and new capabilities force them to think about design more seriously and they do end up hiring a design team – think of companies like Zomato, Cleartrip etc.

That is the background of the problem we encountered, which we have tried to solve in different ways.

Version 1 of our solution was to hire a seasoned design firm to do a 2 day (shortened from 5 days) workshop on design for entrepreneurs. While very well received initially, most entrepreneurs felt they liked the content, but they needed a person to implement the learning from the workshop. In other words – do it for me, don’t just tell me.

Our version 2 of the solution was to offer a design mentor for each of our startups who would spend 1/2 day or 4 hours each month helping the company with design. These mentors were seasoned practitioners at other companies who took time to help startups. The feedback we received after 3 months was there was too much “advice – gyan in India” and too little “action”. The entrepreneurs felt that the design mentors were able to point out issues that needed fixing but they were not willing (or more likely did not have time, since they were in a full time role already) actually implement the changes. Given that most entrepreneur teams did not have a full time design person on staff, the “advice” was useful and obvious, but they could not be implemented.

Version 3 of the solution was to hire a full time design staff of 4 resources (including a project manager) who will work with the companies to help them with the user experience, design and development of their application. These resources were available to all our companies, and they could very easily sign up to use these services, by just speaking to the project manager and outlining their design requirements, which could be as small as a new logo to as involved as a new website design or as complicated as redesigning a new application user experience.

After 4 months we abandoned the program, for 3 reasons. First, the resource utilization was less than 25% by our startups. Second, the design firm came to the conclusion that requirements from several teams were too vague and simple and third, many companies did not value the design team enough to give them quick turnaround (i.e they took 4 weeks to respond to the designer) on their design which they requested in the first place be done “in a week”.

Now we are back to the drawing board. While the high level problem “Indian startups need design help” gets visceral reactions including furious head-nodding and shaking of the head from investors, entrepreneurs and others, we still dont know what the solution to this problem is.

If you are an Indian entrepreneur who is in one of these stages, I’d love some advice and comments on what would be the ideal way to help you solve the “design” problem.

Or just let me know if I am barking up the wrong tree and let me know if there’s really no problem.

Afterword:

This post touched a nerve with over 20+ comments in the first hour of posting. There are a few clarifications to make. The design firm we used was excellent, because the same team is used by our accelerator at Israel and they LOVE working with the team. Second, I am looking for some suggestions on what do you think we should do to help, instead of just comments like “Founders should do design”. They don’t help us understand what we should do to help our founders.

I had a chance to see the agenda for 6 startup events that are taking place over the next 2 months. NASSCOM Product conclave, TIE Con Delhi, TechCrunch India and 3 other media events by local folks.

As part of our work at the accelerator we also track the top 137 key “startup speakers” in India. Just so we know who the most frequent, popular and the most sought after speakers are.

Here’s the headline. The same 35 – 40 folks are speaking at all these events. Its almost as if we have run out of ideas in terms of speakers. There are possibly 2-3 reasons for this I think. One, event organizers feel if they get a top name speaker, then the attendees have a reason to come. Two, they probably do not want to “upset” the important folks so we end up having panels of 5-6 people on a 30 min slot and by the time we finish intros and a 2 min spiel by each panelist, we are done. Third, we really dont have too many articulate, insightful speakers so they same names come up all the time.

The second part of the problem is the format and structure of the event. There is a “same-ness” to every one of these – panels, reverse pitches, fireside chats. Throw in 10 “startup pitches” a-la American Idol and you have a $100K profit event.

Most of these events are fairly formulaic, now it seems. Throw in a few ecosystem partners, you will be guaranteed about 300-500 attendees and most likely this event is churning at the low end $50K to $100K or more if the event is larger.

While many event organizers will tell you this is what folks are asking for and signing up for, they are also looking for fresh ideas on how to change the format.

I think the number of events is going to increase not decrease in India because most folks running these events are making good money. While I used to think that 50% of the folks attending these events are the same that appear in each event, I have been told otherwise. Many of the folks (over 50%) are putting their toe into entrepreneurship and looking at ways to network with prime movers who are those 30+ speakers I mentioned above.

I would love to get some ideas on both topics and formats that you think we should experiment on.

P.S. I am as guilty as the others in helping program manage some of these events or help put the structure together for these, so I am as much a part of the problem. Which is why seeking help possibly redeems me.