Originally published May 12th on Medium https://medium.com/lightspeed-venture-partners/the-future-is-happening-now-accelerating-into-a-new-world-of-edtech-part-ii-c18f382bf627
Higher Ed, Corporate Learning & Career Mobility
The coronovarius has accelerated us toward the future of learning, As my friends at GSV are apt to say, in education there is BC and AD — Before Coronavirus and After Disease. This is the second of two posts, see the first post on the early childhood and K12 sectors here.
As a Future of Work enthusiast, I constantly wonder — once COVID recedes, what new habits will stick, and what will revert to the status quo? To understand the future of workers we have to start in higher education.
Higher education has been in a crisis for some time. Prices have gone up, tuition has vastly exceeded inflation and wages (8x), and quality has not. On quality, 36% of graduates with debt said college wasn’t worth it and 43% of grads are underemployed. Costs for families increased as state funding declined and costs were shifted to consumers. I’ll spare you the longer version of the story here (email me anytime), but suffice it to say, things are not optimal.
I wrote posts in 2015, 2016, 2017, and 2019 about where I thought the (mostly post-secondary and beyond) education space was headed. The guiding themes informing these blogs were what my friends at University Ventures and the Christensen Institute call the “unbundling of the university.” This means that students can get the various components that a university offers, social experience, learning, research etc, from different places to best suit their needs, and often at better prices.
This happened first in Graduate education. There has been an explosion in the popularity of alternative education options. There has been greater interest in Masterclass than business school over the last 5 years. MOOCs, coding bootcamps, Masterclass, Udemy all contribute to this.
It’s happening in Undergraduate too, but slower, with part-time community college and online on the rise.
Covid accelerated all of this. What might the next few years hold for EdTech? Here are some musings on the next 1–2 years*:
The Future is Happening Now: My 2020–2021 EdTech Predictions
Please note, some of these were first reported in Techcrunch, this is a slightly extended take
- Five percent of colleges will close or consolidate — There are approx. 6,600 colleges in the USA and just 120 (1.8%) hold 74% of all endowment funds. Others rely on state funding (which is declining), alumni donations and tuition. Enrollment has been declining in higher ed since 2011 and 2017 was the first year where tuition accounted for over 50% of the average public college’s funding. A 2016 Ernst & Young report identified 800 colleges at risk of closing (12%). Today, presidents expecting enrollment declines are over-accepting. While a recent survey showed just 14% of students might take time off, 42% are rethinking where they will enroll. This is compared to just 6% of college students that typically transfer each year. This will disproportionately affect at-risk schools. This is without even addressing revenue hits to athletics departments that bring in over $100M annually at ~40 sports empires. I expect even with operating cuts and layoffs, 330+ schools will need to begin making changes in the next 2 years.
- Students will leave full-time college for online and part-time — While some schools will open back up in the fall, sub-par remote learning experiences are causing many 4-year students to say they’re not going back, even if things are open. Enrollment officers are also expecting a decline in the fall and Google Search trends for “bachelor’s degree” have trended down in the last month. The percentage of students enrolled exclusively online had already increased to 15% of students in 2017.
- University’s Admission + Credentialing functions will digitize –Two of the most core university functions include 1) admitting students and 2) credentialing their achievements. I believe universities will adopt & keep more hybrid tools — especially in online proctoring and virtual admissions / enrollment marketing. Exams for higher education will move online and stay there.
- A new social college experience will emerge — As universities unbundle and more students go online, I believe experience economy startups will fill the void and provide a curated, robust social experience for online college students. I recently wrote a post with thoughts on the rise of the experience economy which itself is undergoing a great deal of change.
- Beyond the LMS (Learning Management System) — Someone will develop a truly hybrid learning platform that is intended for both fully online learning and can be flexible enough to support offline LMS needs. It will likely allow for developer API integrations, have embedded exercise and grading functionality, ability for an instructor to jump into breakout groups, multimedia instruction formats, short, chunkable attention-span grabbing modules, pre-recorded video with instructor front-facing video technology such as what BYJU’S (LSVP portfolio company) and 2U use, messaging features, and important files on record.
- Companies will begin offering student-debt payoff as a benefit — The CAREs act included incentives for employers to pay student loans up to $5250 tax free. Companies like Rightfoot, Tuition.io, Goodly who help company’s administers loan benefit programs others will benefit from this. In the short term (2020) while companies are cutting budgets this likely will not thrive, but I expect this to see a big uptick as the economy recovers.
- Companies will begin to offer degrees — I’ve been writing about this trend since 2015 and believe that the time is now for tech companies to begin partnering with universities to offer 2- and 4-year degree programs. Examples like Guild Education and the ASU-Starbucks partnership (now spun out as InStride) show there is demand amongst both companies and their workers. In the next decade, students who are unaffiliated with these companies will be able to attend “Snapchat University” or “CVS University” and receive a bachelor’s degree in marketing or pharmaceutical sciences (examples). Co-branding with schools that have enduring brands will help avoid fears of earning a degree from a tarnished corporate brand. 3-party solutions, i.e. Guild (tech): University (students): Employer (jobs), will especially succeed.
Workforce / Career Mobility
- Labor Shift into New 21st Century Roles — Last Mile Delivery, Online Entertainment, Online Education, Telehealth, Virtual Event Services — I expect the 33M people who were laid off to date to begin shifting into 21st century roles, some of which are just being created today such as virtual event services roles (if you’ve been to an unwieldy zoom with more than 20 people you know what I’m talking about). For the first 3–6 months people will hold out in hope of retail and restaurant jobs returning, but even as things open back up, capacity will be reduced, consumer fear will linger, and workforce needs won’t be the same. So by late summer to fall, when things are not back to the way they were before, more workers will shift to these industries and burgeoning roles.
- Healthcare Bootcamps will become big — As people begin looking for stable jobs, healthcare will be an obvious choice. It’s an industry with one of the largest labor shortages, employs the most people, and is facing an even greater future need due to aging Baby Boomers. Training to become a doctor or nurse can take years while allied healthcare roles such as medical assistants can take 4–8 months. Tech-enabled healthcare bootcamps could serve this space as coding bootcamps have in the last decade. Given current safety and PPE concerns, I expect this to become bigger in 2021 once the healthcare work is more under control.
- Unemployment / job transition companies will grow — Outplacement firms haven’t had a refresh in some time. I’m already seeing a number of startups focusing on this space that are bringing fresh consumer-facing brands and new models to the space by creating membership, life-long learning models. There is a whitespace for a consumer coach / HR provider.
- Companies will design for more flexible workforces with labor trade agreements — By many standards we already had a fairly flexible labor workforce with companies routinely tapping into temp contractors, salaried employees and gig workers as labor pools when needed. Recently McDonalds in Germany worked with grocery companies to lend staff who were otherwise sitting idle. This also happened in China recently and Accenture has set up a marketplace to facilitate labor trades. More companies will structure flexible labor forces not just by worker classification and geography (remote work), but through cyclical shift agreements with complementary companies.
Bonus Point: Vertical labor marketplaces will begin deeply embedding educational services into their offerings as the gap between job searching and re-skilling shrinks. Companies like Incredible Health (nurses), Toolbox (construction), Swing (teachers) can upskill and credential through their platforms, improving the value of their supply.
Things That Will Not Stick
- Language learning levels will likely peak during coronavirus and then subside, but to higher levels than before. Language learning companies that focus on career mobility, are credit-bearing or have an employer-pay model will retain users better.
- Remote teaching — remote teaching is a pale comparison to robust online learning. Professors who rely on a lecturing head speaking at students over zoom will not have improved on the classroom trope of the monologuing lecturer.
I’m ready for better higher ed outcomes and for people to have more fulfilling career journeys. We have made some progress but are still in a student debt crisis caused by an inefficient higher education system. I hope that this crisis, for all the calamity it’s brought, will at least give us more options for fulfilling careers.
If you’re building a company that will serve the future described above, think I’m wrong, or have a different opinion about what will happen, school me (pun intended). You can reach me at firstname.lastname@example.org