Education seems like an attractive market to entrepreneurs. It’s huge. It has low competition. Its core technology comes straight from the Stone Age. Why won’t you create something cool here?
Education is different. Not only because of ideology, but because of the very Stone-Age technology that looks replaceable. Universities didn’t change much since they had come out of monasteries a thousand years ago. And they are highly competitive despite that. You won’t find another industry in which a company remains on top for nine centuries.
Most startups created thus far compete with textbooks, not education. New textbooks now work in a browser and interact with the reader. Online courses offer lectures and materials from the best teachers. But it’s not the university experience, as the teachers themselves agree. Books remain books even online. Best books were in libraries for centuries. It never withheld the learners.
Education is cooperation. Cooperation happens in groups, and groups are limited by definition. Harvard might have a million students (after all, Walmart has 245 million customers weekly), but then it would be an ordinary place. Until groups are small and carefully selected, its members may learn from each other and the faculty. In other words, education is all about one limited resource: people’s attention. IT can’t scale up people’s attention yet. It does routine stuff and does it well, like crawling petabytes of data daily. For this, it’s more likely to create the next Google worth $300 bn. than to create a $10 bn. business in education.
PS: Investors agree:
A list of various definitions given to economics by major authors in the field over the last two and a half centuries. I think it’s missing the most recent popular definition, which circulates among economists, that economics is the study of incentives. Anyway, the official positions are the following ones:
- James Denham-Steuart, An Inquiry into the Principles of Political Oeconomy (1767): The great art therefore of political oeconomy is, first to adapt the different operations of it [the state] to the spirit, manners, habits and customs of the people; and afterwards to model these circumstances so, as to be able to introduce a set of new and more useful institutions.
- Adam Smith, The Wealth of Nations (1776): “A branch of the science of a statesman or legislator” with two objectives: providing the people with ‘plentiful revenue or subsistence’ and providing the state with enough revenue to provide public services.
- Jean-Baptiste Say, A treatise on political economy, or a simple account of the way in which wealth is formed, distributed and consumed (1803): A simple account of the way in which wealth is formed, distributed and consumed.
- John Stuart Mill, “On the Definition of Political Economy; and the Method of Investigation Proper to It” (1836): “The science which treats of the production and distribution of wealth, so far as they depend upon the laws of human nature” or “The science relating to the moral or psychological laws of the production and distribution of wealth”
- Thomas Carlyle, Latter Day Pamphlets (1850): Dismal science.
- Alfred Marshall, Principles of Economics (1890): Political Economy or Economics is a study of mankind in the ordinary business of life; it examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisites of wellbeing.
- Lionel Robbins, (1932): Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.
- Jacob Viner (probably): Economics is what economists do.
- Paul Samuelson, Economics (1948): what, how and for whom to produce goods and services.
- Paul Samuelson, Economics (1967): Economics is the study of how men and society choose, with or without the use of money, to employ scarce productive resources, which could have alternative uses, to produce various commodities over time and distribute them for consumption, now and in the future, among various people and groups in society.
- Albert Rees, International Encyclopedia of the Social Sciences (1968): [Economics] is the social science that deals with the ways in which men and societies seek to satisfy their material needs and desires.
- Paul Samuelson, Economics (1970): Economics is the study of how men and society end up choosing, with or without the use of money, to employ scarce productive resources which could have alternative uses, to produce various commodities and distribute them for consumption, now or in the future, among various people and groups in society.
- N. Gregory Mankiw, Principles of Economics (2012): The study of how society manages its scarce resources.
“The good life is one inspired by love and guided by knowledge.”
— Bertrand Russell, What I Believe