Sramana Mitra: But you have to be careful. Remember what happened in the media industry. All newspapers started giving out content free. At the beginning they hadn’t done that. If they had given some content free and had the kinds of payrolls and paid content strategies [they do now], giving some of it free and for the rest you would have to pay, they wouldn’t be in such a soup. Now they are trying to go for more viable business models. The problem with the market is that if at one point you make everything free and get people used to this free drug, people have a very hard time paying for it later.
David DeWolf: That is right. I think you need to hit the nail on the head, and that is exactly why I don’t think the top brand names are safe just because they are the top brand names. That is exactly my point. They have to continue to disrupt or be disrupted, because the ecosystem will ultimately change and you can’t just flop to the hot thing of the day. You have to continue to innovate.
SM: There is more these top universities bring than just a bachelor’s degree. There is also the network, which is an extremely powerful ecosystem. It has perfectly differentiated assets that they are able to charge for. However, I think if everything starts being free and if you are giving out all of your intellectual property free as a university, I don’t think that is the right strategy.
DD: That has to be debated. What you will ultimately find is that there will be winners and losers. Take the equivalent of what happened in the media industry. When people started giving out everything free, you had a bunch of new companies come up that became aggregators of information. The Googles of the world were born because they were able to aggregate and help find and locate that content. They provide access [to information] to more and more people.
SM: If you never gave them access to begin with, they would have never become that powerful.
DD: Exactly. What could very well happen is that value can be eroded because of this early innovation and this early road into the MOOCs, where we see companies that are starting up and that are curating educational content, that are providing certifications of learning, etc. They are not doing the teaching themselves, they are leveraging other people’s teaching platforms and intellectual property and just validating that the knowledge transfer has happened. If that is where the education industry will be going, I don’t know. But I could absolutely envision one scenario where in 25 years the leading education companies are like Google, and they provide the ability to find and locate relative training and education, and maybe then they are certifying that you have learned it and providing credentials on top of it. Who knows? We don’t know what the strategy is. But we do know that significant disruption is taking place right now because people are exploring different ways of monetization or even lack thereof.
SM: The education industry, because of all these disruptions, is a good next vertical to build a significant business in. No matter what, they will have to do some kind of technology strategy in this, and there is going to be technology product development needed to support that strategy.
DD: You just hit on a key point there. It is not just the technology strategy that is important; it is also the product strategy.
SM: There is going to be a business strategy that is technology driven and that will require institutions to develop technology products to deliver that strategy.
DD: That is the exact order it is going to happen. It happens through rapid experimentation and continual evolution.
SM: Thank you, David.
DD: It was a pleasure.