As elegantly produced as movies and as engaging as great novels

MIT professor Woodie Flowers argues that higher education’s current approach to online learning is misguided:

We decided to assume that the world could hardly wait to see our huge pile of PDFs, PowerPoint presentations, classroom locations, teaching assistant lists, and other assorted bits of information about our courses.

Instead, universities should produce new learning materials specifically for the online world:

In their highly developed form, learning materials would be as elegantly produced as movies and video games and would be as engaging as a great novel. They would be ‘smart’ to both accommodate the learners’ varied styles and yield data to facilitate their continuous improvement.

Each year, 600,000 first-year college students take calculus; 250,000 fail. At $2000/failed-course, that is half-a-billion dollars. That happens to be the approximate cost of the movie Avatar, a movie that took a thousand people four years to make. Many of those involved in the movie were the best in their field. The present worth of losses of $500 million/year, especially at current discount rates, is an enormous number…. even a $100 million investment could cut the calculus failure rate in half.

Online courses are to offline courses as movies are to plays. The marginal cost of delivering online courses is minimal. The potential audience is everyone with a smartphones and an internet connection – about 1.5 billion people today and growing quickly. There is no reason we shouldn’t be investing as much to produce online courses as we do to produce Hollywood movies.

The credentials trap

I talk a lot to people who are deciding between startups and established companies. They’re usually early in their careers and have been exclusively affiliated with well-known schools and companies. As a result, they’re accustomed to praise from family and friends. Going to a startup is scary, as Jessica Livingstone, cofounder of Y Combinator, describes:

Everyone you encounter will have doubts about what you’re doing—investors, potential employees, reporters, your family and friends. What you don’t realize until you start a startup is how much external validation you’ve gotten for the conservative choices you’ve made in the past. You go to college and everyone says, “Great!” Then you graduate get a job at Google and everyone says, “Great!”

But optimizing for external validation is a dangerous trap. You’re fighting over a fixed pie against well-credentialed peers. The most likely outcome is a middle management job where you’ll have little impact and never seriously attempt to realize your ambitions. Peter Thiel’s personal experience illustrates this well:

By graduation, students at Stanford Law and other elite law schools have been racking up credentials and awards for well over a dozen years. The pinnacle of post law school credentialism is landing a Supreme Court clerkship. After graduating from SLS in ’92 and clerking for a year on the 11th Circuit, Peter Thiel was one of the small handful of clerks who made it to the interview stage with two of the Justices. That capstone credential was within reach. Peter was so close to winning that last competition. There was a sense that, if only he’d get the nod, he’d be set for life. But he didn’t.

Years later, after Peter built and sold PayPal, he reconnected with an old friend from SLS. The first thing the friend said was, “So, aren’t you glad you didn’t get that Supreme Court clerkship?” It was a funny question. At the time, it seemed much better to be chosen than not chosen. But there are many reasons to doubt whether winning that last competition would have been so good after all. Probably it would have meant a future of more insane competition. And no PayPal. The pithy, wry version of this is the line about Rhodes Scholars: they all had a great future in their past.

Great institutions can prepare you for great things. Credentials can open doors. But don’t let them become an end in themselves.

Capabilities and sensibilities

“The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.” – F. Scott Fitzgerald

One reason running a startup is so interesting is the constant tension between opposing ways of thinking: short-term vs. long-term, internal vs. external, saving vs. investment, etc. At large companies, responsibility for these ways of thinking is often spread across multiple business units. In startups they fall on a few people, usually the founders.

As a founder, the most important tension is between your capabilities and sensibilities. Capabilities are your talents and resources. Sensibilities are the way you see the world. Successful founders usually have an unlikely combination of capabilities and sensibilities. The right sensibilities without the right capabilities means a good vision, poorly executed. The right capabilities without the right sensibilities means building something your market doesn’t want. Getting both right creates founder-market fit.

There are advantages and disadvantages to being an experienced entrepreneur. Disadvantages include the fact that, with age, you are more likely to have obligations outside of your startup. You also risk having calcified sensibilities. Counterbalancing this is greater self-awareness, and, ideally, the wisdom to choose markets that match your sensibilities and cofounders who augment your capabilities.

“Meaningful” startups

There is generally a lot of enthusiasm in the startup world these days. But some observers worry that too many startups are working on “features” instead of world-changing ideas. Founders Fund published a provocative article summed up by the subtitle: “We wanted flying cars, instead we got 140 characters”. Alexis Madrigal writes in The Atlantic that “we need a fresh paradigm for startups”, and dismisses the significance of recent “hot” startups:

What we’ve seen have been evolutionary improvements on the patterns established five years ago. The platforms that have seemed hot in the last couple of years — Tumblr, Instagram, Pinterest — add a bit of design or mobile intelligence to the established ways of thinking.

One thing these critics need to be careful about is that, as Clay Christensen has long argued, many important new inventions start out looking like toys. Twitter (Founder Fund’s headline example of a “trivial” startup) started out looking like a toy but has since transformed the way information is distributed for tens of millions of people. Madrigal dismisses cloud computing as “a rebranding of the Internet” whose only effect has been to make “the lives of some IT managers easier,” overlooking that cloud-based services solve the “third party payer” problem of enterprise sales, thereby completely changing how enterprises adopt new technology.

That said, I generally agree with the sentiment that the startup world is too focused on chasing trends. I don’t think this is the fault of entrepreneurs. I meet entrepreneurs all the time who are working on ideas that seem quite meaningful to me. Some of them are building futuristic new technologies. Some are trying to disintermediate incumbents and thereby restructure large industries. Others are trying to solve stubborn problems in important sectors like education, healthcare, or energy.

The problem I encounter is that many of these “meaningful” startups have trouble raising money from VCs. An entrepreneur working on groundbreaking robot technology recently joked to me that he’d have an easier time raising money if his robots were virtual and existed only on Facebook. He was only partly joking. His startup will require a lot of capital and doesn’t have an obvious near term acquirer. Only a small group of VCs today will even consider such an investment.

Big timing

“Big timing” is a phrase I’ve heard a lot lately which refers to people who are “higher ranking” acting disrespectfully toward people who are “lower ranking”. Example usage: “so and so VC partner big timed my associate,” meaning they talked down to him/her or didn’t meet with him/her or whatever.

Big timing is a huge mistake. Why? 1) big timers vastly underestimate the degree to which senior people trust their junior people, 2) most non-jerks (no matter how successful) interpret big timing to be an insult to their firm and therefore to their senior people, 3) junior people are often far more active and informed than senior people and therefore great people to spend time with.

It would be great to think that in the startup industry, people would realize that today’s junior person could become “big time” tomorrow, and that you should therefore be meritocratic and respectful to everyone. But that’s not my experience.