Positioning Techniques of The Non-Profit University in For-Profit Education Ventures (2019)

Colleges and universities are looking more intently for new sources of revenue; for ways they can leverage their people, spaces, and other resources profitably. The ways in which they go about this task, with whom they partner, and how the institution perceives its strengths and weaknesses is frequently informative and, occasionally, counter-intuitive. 

Screenshot 2019-08-30 17.48.54.png

The recently launched venture by Arizona State University, “Cintana”, is especially interesting. It reflects, I propose, the limited confidence universities have in their capacity to develop new sources of revenue without private sector involvement - even when, as in this case, the venture involves activities that are seemingly fundamental to the institution. It also points to the continued importance of the university-as-a-brand when selling services to other universities. 

The University’s Role

Cintana defines its purpose as helping universities outside of the U.S. increase their capacity to serve more online and on-campus students - to scale, in other words. Cintana is a privately-held organisation, but ASU will be represented on the Board and ASU Enterprise Partners, the university’s holding company holds equity in Cintana: (ASU Looks Overseas . . . ).

The timing makes sense: growth in demand for higher education is far greater outside of industrialized nations and growth of international enrolment in the US is stagnant due to visa regulations, high-tuition levels, and, of course, the Trump factor.

Source: ICEF

Source: ICEF

ASU describes its’ role as providing the members of the Cintana Alliance of universities with “mentoring”, “content”, and “advice and consulting on improving operations.” (Online Education Start-Up . . .).

ASU is more familiar than most institutions with what’s involved with increasing the scale of education. They serve 73,000 students at five campuses and 39,000 online. Yet, Cintana is not going to be led by someone from ASU, nor from another non-profit institution, but by Douglas Becker. Until 2017 Becker was the CEO of Laureate Education Inc., one of the largest for-profit college and university operators in the world, which serves 875,000 students at 25 institutions and more than 150 campuses. 

Here is where things begin to align: Laureate Education operates well-beyond its US home. They own institutions and have partnerships with other institutions in the UK, Europe, Saudi Arabia, Brazil, and beyond. 

And Cintana is leaning heavily on the talents and experience of other professionals from the for-profit higher ed industry. Becker is bringing other, senior professionals with him from Laureate, including Robert Zentz — former senior vice president and general counsel for Laureate; Wadiah Atiyah — former CEO of the Middle East and North Africa region for Laureate; Agueda Benito — former chief academic officer for Laureate; Emiliano Diez, former senior vice president of operations; Chris Hill — formerly Becker's chief of staff; Rob Polston — former CEO of the Laureate's online partnerships business and CEO of Laureate France; Paul Tan — former senior director of business development and strategic initiatives for the Asia Pacific at Laureate.

From this vantage point the venture looks a bit like a modified version of Laureate Education. 

I suspect most of the value that ASU will bring to this venture resides in its identity as a public, non-profit university. It’s well-understood by business development professionals in higher education industry that a non-profit university is the single best tool for opening doors at other non-profit universities. We can anticipate Cintana consistently and loudly referencing its partnership with ASU in its promotional material. While Cintana’s team of professionals from the for-profit sector will do most of the work, they know that the partnership with ASU is an important marker of credibility and the most efficient way to get access to decision-makers. When soliciting new institutional partners, a new deal is on-the-line, and Cintana needs to underline its’ affiliation with the sensibilities of non-profit universities, maybe they’ll call on Michael Crow, himself — one of the most visible university presidents in the US.

Cintana.com/news

Cintana.com/news

This isn’t new, by any means. Vendors have been enlisting academics, academic leaders, former academics, and others that can bridge the language gap between business and academia. But it’s noteworthy because ASU is actually one of the few institutions that could speak with some authority about scaling up online and on-campus enrolments. But it still turns to the private sector to do the heavy-lifting; to deliver much of the knowledge and services. 

This arrangement reflects a recognition of the institution’s strengths and weaknesses which, itself, is terribly rare in higher education. Few institutions can match higher education for its naivety about its capacity to take on new functions - whether it’s mental health services, security, or the design and production of consistently high-quality online programming that truly leverages technology. 

But ASU - or at least its leadership team involved in this venture - still feel the need to wrap this entity in the clothing of academia. They know how decision-makers at other institutions - those they wish to include in the Cintana Alliance — typically respond to solicitations by private companies looking to profit from activities normally owned and controlled by the university. 

There are obvious parallels with the OPM industry. Online Program Management companies like 2U and Pearson do much of the heavy lifting involved in designing, developing, marketing and managing online programs for their clients. But every opportunity is taken to hide the presence of the OPM; the institution is the identity put forward to students, but also to faculty that have frequently voiced concerns about these partnerships. The OPM business model rests on the assumption that the institution isn’t prepared to take on the task of building a scalable online program - whether due to finances, a perceived sense of urgency, or limited internal resources, while simultaneously reflecting the importance of the university brand; a brand based on the public’s belief that the university has the skills and resources required to offer high-quality online programs. 

And Outlier.org

A new start-up announced only a week earlier than Cintana draws on the university brand in a different way. 

outlier.org

outlier.org

Outlier is producing a set of General Education courses for the community college sector. Like Masterclass, which the founder of Outlier co-founded, the courses rely on high-production value, well-regarded academic researchers, and a price point far lower than the industry average. Calculus 1 and Introduction to Psychology are slated for September release. 

Students can then use this credit at the institution of their choice. But, as with Coursera and Udacity, there’s no guarantee that other institutions will accept these credits for transfer. That the people behind those MOOCs invested so much time and money (mostly other people’s money, mind you) launching these ventures without a full understanding of this basic flaw of their business model is one of the great mysteries of the 21st century. 

But Outlier has taken the extra step of launching with the University of Pittsburgh as a source of validation. Students who complete a course successfully receive a credit from the University of Pittsburgh.

The importance of the University of Pittsburgh in this arrangement is not , then, that it serves as a place for students to make use of the credits earned by studying with Outlier. If that was Outlier's business model, they would be essentially be in the business of producing MOOCs that serve merely as a "lead generation" tactic for a particular institution. (ASU and other institutions tried that approach: producing "open" courses that only have value at the institution that produced the course.) And, obviously, the likelihood that the students completing these courses at Outlier will choose to continue their studies with the University of Pittsburgh is infinitesimally small.

Rather, the agreement with the University of Pittsburgh is designed to act as a signal to other universities that the Outlier courses are legitimate and worthy of credit. Without widespread acceptance of these courses for credit by a wide range of universities, Outlier will be relegated to the far more competitive and price-conscious “alternative education” market (e.g. udemy, Skillshare, General Assembly), regardless of the value that these courses may offer. 

See also “How Efforts to Compete in the Alternative Education Market Can Erode the Competitive Advantage of Traditional Universities