Why Grad Programs (probably) Wont Head Off The Threat Of Accelerators

Last week I posted about how General Assembly-style co-working spaces/incubators are about to disrupt higher education, offering basically the same value to their customers at a fraction of the cost of institutional education.

Near the end I said non-essential grad programs would either “wither on the vine or else radically transform themselves to stay alive, becoming much more like accelerators in the process.”

I thought about this some more after hitting “publish”, and I thought about the book The Innovator’s Solution. And I realized that grad programs are much more likely to wither on the vine over the next several years than to radically transform themselves.

Why? Because they make all of their money from big, full-time tuition payments. That’s what sustains them, and so that’s the ball they’ve got their eyes on. The BIG money. If you said to them, “hey, there are these guys up the street who have set up a place where you can take a “class” whenever you want for $40 as a drop-in, and where you can rent out space for a couple hundred bucks a month” they’d look at you with a blank stare and say “so what?” Those kinds of numbers mean absolutely nothing to them. If grad schools even tried to set something like that up, it would be a huge loss for them – it would be energy and resources taken away from making that BIG money, the full-time tuition payments that they’re going after and that keep them alive.

So they decide to do nothing. It doesn’t hurt them to ignore those co-working spaces, they think – they’re going after $40 night classes, while schools are going after $30k a year tuition payments. They ignore the whole thing, and focus on expanding their high end – finding more students willing to pay top-dollar for education.

Meanwhile, the co-working spaces/accelerators keep improving – offering better classes, getting stronger teachers and mentors, getting better spaces, better equipment. And of course upping their prices a bit as they go. As they mature, more and more people flock to them as an alternative to institutional education.

At some point of course the grad schools catch on – oh shit, they’ve got to do something fast before the accelerators drink their whole milkshake! But by that point it’s too late. The balance has tipped, and people are flocking to new modes of higher learning, and grad schools suddenly look like stuffy old things from the 20th century.

That’s classical disruption at any rate, as Clayton Christensen would lay it out. That’s the way it supposedly works (and it’s already beginning to look that way between grad schools and accelerators, IMO).

What’s interesting in this case is that this is education – many of the people who help run these institutions know all about disruption and how it works. Many are no doubt personal friends with Christensen himself.

So does that change the way the game gets played out, or not?

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