Breaking Down Start-Ups and the World of Higher Ed

As we have blogged about before, the higher education market is one that is ripe for disruption.

Higher Education 1.0 has lasted for about 200 years and has been an awesome business. In what other industry has the pool of customers expanded almost every year, and, as volume increased, prices have vastly outpaced inflation for so long?

NUMBER OF BACHELORS DEGREES CONFERRED IN US:

So where's the disruption?

One of the first businesses to really monetize on the internet's vast global reach was online (many times with offline campuses), for-profit schools that built a system for adult learners and part-time students. As recently revealed to general public through a ton of bad press, much of this growth was driven by government grants & subsidies - but they still rocked it for about ten years.

Here is some data on the expansion of online learning:

Now we are experiencing an influx of companies attacking the space - through different means. I like the way Yury Lifshits on Mashable breaks it down into these categories:

New Institutions
Learning Management companies
Online Content
Networks and Marketplaces
Live Training and Tutoring
Learner Tools
Collaborative Learning
Funding and Payments
Hardware for Education

All of these categories have good, funded start-ups focusing on the space, but in different ways.

Basically, someone can attack the market in one of three ways:

•Cost (Delivering same product more cheaply)

•Efficiency (Building software to make education process more efficient)

•Product (Building a better product than the current offerings)

Just for kicks, here's a matrix of three categories and examples of companies we feel fall into those categories.

None of these really address one fundamental problem - what to do after you have delivered this awesome new content/taught the student better/cheaper, etc...? For the most part, they exist within the framework of higher ed 1.0.; augmenting the old business of delivering education in better and more efficient ways to the expanding student pool, which is great, but does not address one aspect of the business - how to measure the better learning outcomes derived from these new companies.

Of course - one "learning outcomes" focused industry is test-prep, so you see very successful companies and start-ups attacking that space (and advertised metrics for their performance), which translates to massive investment dollars, innovation and resources to attack that specific space.

Where does the CBL Exam fit into this group? Allowing students to demonstrate their learning outcomes to top employers around the globe in way that is consistent across all these different delivery mechanisms. That way - all these start-ups can have that metric to guide their outcomes. If we create the standardized test to a typical, broad college curriculum, it opens up a whole new world for ranking, and critiquing not only students - but the education they receive.

Breaking Down Start-Ups and the World of Recruiting

It seems that 2011 will see a lot of start-ups in the recruiting field pop-up, attacking each step of of the recruiting eco-system. I think a lot of start-ups are trying to solve each step of a traditionally inefficient process, while duplicating what happens offline anyway (referrals, info gathering, etc...)

I did a quick scan of Quora.com (check it out if you have not yet), and came across this question: What are the most interesting startups in the recruiting and hiring space?

From the companies mentioned there, I would break the market down like this:

Problem Trying to Solve: Company

Information: Glassdoor

Networking: Brazencareerist

Matching: Roundpeg

Screening: CBL Exam =-)

Interviewing: Sayhired

Referrals: MatchFWD

Employer branding: KODA.us

Hiring/applicant tracking: Jobvite

It's cool to see an inefficient market be attacked on so many levels - as the distribution of job postings was disaggregated from the newspaper business by Monster, Hotjobs and Careerbuilder (and 100's of other awesome niche websites) in the past - the actual communication of a job's listing and someone indicating interest in that job is basically saturated. These new firms are a kind of job searching 2.0.

As new channels open up (Facebook, LinkedIn, Twitter) there is definite "data exhaust" problem - a job opportunity must be curated, managed and optimized to get the best solution (on both sides). In my opinion there is a challenge here: start-ups that depend on volume of candidates (and postings) to serve corporations must grow in a way that controls for quality with volume- or risk being muddled by players on both sides.

Unemployment and Entry Level Hiring

Since the recession has began, various publications have written stories about how entry level recruits are handling the recession and how they have had to adjust their plans by taking part-time internships, unpaid work, or volunteering until the economy picks up and employers begin hiring again.

Even as the economy starts to turn the corner in its long recovery, data unfortunately suggests even the recent gains in employment are focused on more experienced recruits.

Here are some tidbits from various reports released by research firms around the country over the past few years.

From Michigan State:

This is from Brookings:

And finally, here is the unemployment rate for recent college graduates from the BLS:

So what is the bottom line? Basically, as the economy heats up and the economy turns - jobs will start to come - but will start to increase first at the experienced hire level. This makes getting that finding that first job all the more important - and increase your earning potential in the later years of your career (as there are so few entry level hires right now - the 2/3 year experienced hires at full time jobs will also be valued).