Higher Education Needs Innovation, Here’s Why

Paul Freedman lets loose on higher education, technology, and the new learner imperative.

INTERVIEW | by Victor Rivero

Paul Freedman is the CEO and co-founder of Entangled Group and is a Principal Consultant at Entangled Solutions. A longtime advocate for the transformative power of a college education, he has founded, managed, and invested in a number of successful education ventures. Prior to Entangled Group, Paul was the founder and CEO of Altius Education, an innovative company in higher education focused on creating effective, personalized pathways to postsecondary degrees.

While still finishing college at The University of Chicago, Paul created Academic Engine, a college recruitment technology company that he later sold to Hobsons Inc. in 2004. After selling the company, Paul joined Hobsons as the president of its subsidiary focused on online student recruitment technologies, where he served for five years prior to founding Altius.

Entangled Solutions is a Strategy and Innovation Consultancy for Education. They work across boundaries to harvest insights and unlock the potential of the people and organizations poised to accelerate innovation and foster equity in education. And “we don’t split education into separate categories—we’re experts in how learners continuously weave life, work, and learning together,” says Paul.

Society is transitioning from an industrial economy to a knowledge economy where success is driven by higher-order problem solving, continuous learning, and deep domain expertise. But despite this radical shift, education has not kept pace.

Too many are being left behind: low-income, first-generation, and adult learners; the 30 million people with debt but no degree; the truck drivers and others soon to be automated out of a job; and so many students who have completed degrees but earn no more than high school graduates.

“We must aggressively pursue new, scaled learning solutions that support all learners in acquiring and signaling the skills and capabilities they need to flourish,” says Paul. “This imperative requires an ecosystem-wide approach that leverages the abilities of entrepreneurs, universities, foundations, companies, and government. Entangled provides an ecosystem approach to an ecosystem problem.”

What prompted your involvement in edtech, from where do you draw your passion for the sector, or even for the “transformative power of a college education” as your Altius website says?

Paul: My connection to edtech came through my family background. My father is a physics professor. My mother worked in research administration, and I grew up on college campuses.

I don’t know when, but probably very early in my life, that as soon as somebody exceeds their own expectations in terms of their education, their whole world changes. Education ends up being sort of an access card to a whole different set of outcomes and expectations and capabilities and networks.

I’ve subsequently noticed that it is most clear in a college education, but isn’t necessarily an exclusive property to a college education and that the same kind of world-opening experience can happen in certain informal educations where the unique aspect of it is just getting an education that opens up new networks and new knowledge bases.

What is technology’s role in improving higher education?

Paul: Well, when properly applied, technology should lower cost. It should be able to increase access and availability and should be able to provide data for optimization and improvement. That’s where technology is properly applied to any problem.

Those are the three things that technology does.

Technology itself is just an enabler for pedagogy or enabler for strategy or enabler for programs. It doesn’t snap its fingers and solve all problems, but where technology can be applied to education and the things that we’re most passionate about are things where they can lower cost, increase access, and increase efficacy.

How did you arrive at those three points? Sounds like a nifty, catch-all set.

Paul: Technology scales processes and it allows machines to do things quicker faster than human beings around patterns and that allows you to lower cost.

The computers can be available 24/7 . They can provide access to people all over the world. Machines have better memories than human beings, so they can collect data and if properly applied, that data should be used for optimization and improvement in ways that just would take longer with the constraints of human memory.

I don’t know that that’s uniquely what role technology can play in education, but sort of what technology, properly applied, plays anywhere and when applied to education, those are three good things to work on.

From Academic Engine to Altius to now Entangled Ventures, it’s been an interesting road for you. Your thoughts on this journey and any highlights that inform your current approach?

Paul: It’s been fun. It’s been longer than I care to admit. I was like 20 when I started at Academic Engine. This year’s going to be my 40th birthday. The story of my involvement in education innovation lasts as long as the rest of my story does combined at this point. There’s certainly been ups and downs.

I think I’ve all aspects of the edtech ecosystem and the tension between innovation and consumer protection and also seen various different business models. It’s been great. When I started with Academic Engine, the category of edtech really didn’t exist.

It certainly wasn’t an area that traditional venture capitalists cared about entering. It wasn’t an area that entrepreneurs cared about entering, and universities were still in the mindset of doing a lot of the technology development themselves as opposed to working with partners, and so it really was a category that didn’t quite exist yet.

The whole category has emerged during that sort of 20-year experience and that’s been exciting because I think it takes an ecosystem to make great changes and now you have really passionate entrepreneurs who could be probably making more money doing less valuable things, getting people to click on ads or something, but are choosing to try to build things in education.

You have investors who are willing to invest in education business. You also have a class of impact investors, which I think is great.

These investors have recently emerged, and they’re more patient, more mission-oriented, and better aligned with education opportunities. Higher education institutions are also more open to recognizing that partnerships can be valuable and that they can focus on things that are within their core, but if they work with organizations that are specialist in certain enabling activities, that everybody can be more successful together.

I just want to understand Entangled a little bit more. Entangled has a portfolio, but there are also solutions and services that the firm provides?

Paul: Entangled’s an education impact studio. What we do is incubate, invest, and advise in companies that we think are part of this transition of what our education system needs for a knowledge economy versus what it was perfected for in a production economy.

We have a subsidiary called Entangled Solutions that works with higher education institutions, primarily, philanthropies and employers that are trying to figure out the future of higher education.

We work with them as strategy consultants and we help them really figure out their roles.

If it’s a higher education institution, we help them launch new programs or new strategies or enter new markets.

In the course of doing that work, co-building strategy with practitioners, we get a lot of insight into where the most innovative universities and philanthropies and companies think that the higher education market is going.

And that gives us insight that we use to figure out which businesses to build and which businesses to invest in—and also gives us a set of relationships where we come up with solutions.

If we’re working with a number of institutions that have common problems and we can define the problem or present a solution, we also have a built-in network of relationships who can be early adopters. And, if the solution we build works for them, they can ultimately become evangelists.

That’s how it works.

We focus primarily, most of our efforts and most of our investment, in companies that we incubate.

But when we find entrepreneurs and teams that are working on problems that we really care about and and are engaged with the network of schools we’re working with, then we will make investments and put our human capital resources behind helping those companies succeed.

You don’t fall neatly into any category, but do remind me of others such as Eduventures, or even Getting Smart, and some of the projects they are doing, even Whiteboard Advisors—but not quite them—these interesting entities with consultants, advisors, and strategists that team up to provide services. For example, do you yourself sit down with the other folks like Michael Horn, chief strategy officer—or others on your team—how does that work? Is it virtual?

Paul: First, you mentioned three organizations that we respect–and we work particularly closely with Whiteboard Advisors—that also do consulting, but have primarily different swimming lanes, either in terms of the areas of education that they focus on or the kind of work that they do.

Michael and I collaborate on projects where our expertise is both relevant. Often, he’ll be the partner leading the work and I would be a partner leading other work. And then we have other folks who hopefully will be as famous as Michael in the coming years who are leading other projects on behalf of other customers as well.

We often collaborate with those folks on projects together. We’re uniquely positioned really as builders and designers and creating de novo strategy—or looking at revising business models for the future, and everybody at each of those organizations has a very different specialty.

In terms of our team, we have a growing network of really strong partners and consultants who’ve created a fairly typical model based on the nature of the client work. We put a team together of our folks who we think have the best skillset, best experience to help drive the work.

Any particular companies or clients you want to highlight?

Paul: We’re proud of all the companies that we’ve associated with. We’ve taken the “less is more” philosophy where we don’t incubate every idea that we have. We just incubate the ones that we think are going to be best and most impactful.

We don’t invest in every company that we meet, even if we really like them. We just take a smaller number of bets and try to focus our energies, and so we’re proud of all of them.

The ones that have been getting the most attention lately, ones in our portfolio are: ReUp Education, which has been partnering with a growing number of universities to help them re-enroll their dropped out and stopped out students, so a really interesting area aligned with the continued focus on degree attainment and persistence, but the next link in the student service value chain.

There’s been a lot of investment in keeping students enrolled in school, but particularly adult learners have a more complicated life and stopping out and returning, it is a more common part of their journey and not necessarily a bad thing.

Schools need infrastructure to support that and ReUp has been, to my knowledge, the first organization that specializes in that and has had really phenomenal results.

The company we most recently launched has also been getting attention, for good reasons, is Pathstream, which has been creating partnerships between software platforms like Facebook or Unity where it’s a software platform.

But it’s also a core area of new job growth.

Unity is a platform used for game design or VR/AR design and Facebook, all the sort of —If you’re in marketing and you don’t market on Facebook, you’re doing something wrong.

We’ve been working with those organizations to build curriculum around their platform and then partnering them with community colleges and other higher education institutions to offer fully encompassing certificates and a path to jobs. It’s a new launch program, but it seems to be going really well and people seem to be excited about it.

Some of the companies that we’ve invested in that are getting well-deserved attention, one that we advise is Guild Education, which is the organization that is behind the recent Walmart initiative to invest more in their employees’ education and partnerships between higher education institutions and Discovery and Chipotle and Taco Bell.

They’ve been really successful at establishing these corporate higher education partnerships, which I think is a big part of higher education’s future.

Raise Labs/RaiseMe is another company that we’ve been involved in for a really long time—really since our beginning—that is doing really interesting micro-scholarships for high school students to ensure that they’re better prepared to go to college and find colleges that might fit their long-term desires better, and in a pretty innovative way.

There are others and I love them all. I’d hate to pick favorites.

What key elements need to be present in order for you to see potential in an edtech startup?

Paul: Our model is that we primarily focus on companies that we incubate, so we spend more of our time thinking about, “Is this an idea or concept that we want to invest behind and build a team and make a business?”

We do sometimes look at other edtech startups.

Really, we’re more idea, concept, problem to solve first.

And so, if there’s a problem that we think is worthy of solving and there’s an organization that’s already out there that has the right mission alignment, the right team, and a little bit of momentum—then we will definitely rather support them than compete with them.

There are so many things to be done. We just want the problems to be solved.

We don’t have to do it ourselves if we believe in a team that’s doing it, but we don’t really—we’re not a VC, in that we are evaluating pitches every day and we really invite people to come and share business plans or decks with us.

It’s more the opposite direction, where we are starting first with understanding the landscape of big issues and big problems that we think need to be addressed in the higher education ecosystem.

And we either address it by building our own company—or our own organization that tries to tackle a problem. Or, if there’s an organization out there that we can believe in, supporting them.

We could write a book—and books have been written—or a whole essay series on this. According to one narrative, higher education is teetering on the brink of major disruptive forces.

Do you agree with that? If so, what are those forces? And tech have to do with it?

And while we’re at it: what are your thoughts on exorbitant costs such as tuition, textbooks, and all the student debt involved in higher education?

Paul: We definitely could do all sorts of interesting books or podcasts and it’s a hard question to tackle but let me sort of address it at the high level.

First and foremost, I think college costs too much.

Everybody who’s been involved in higher education at any level is complicit in that problem.

We let the cost structure get to the point where it’s becoming increasingly unaffordable to the middle-class and out of reach for a lot of families.

And that’s not right.

We look to our higher education system to be a democratizing force and the recent data suggests that, if anything, it has been reinforcing class hierarchy.

That’s a problem that desperately needs to be addressed.

I don’t necessarily buy into the narrative of, “College is going to be disrupted” or, “There’s going to be an Uber for college or a Netflix for college.”

If you look at the higher education system, it has been more resilient than any other kind of institution. Full stop.

Of the institutions that are over 500 years old, a significant percentage of them are colleges and universities. They’re tremendously resilient.

What we believe is that we’re at a fundamental inflection point where the mode of operating college isn’t working as well as it was before, and it needs to be fundamentally changed.

We think that that’s going to lead to a certain number of colleges—probably a more significant percentage than we’ve seen in the last 100 years—going under or merging or fundamentally changing their structure.

But we also think that a lot of the colleges that exist now will adapt their model, make changes, deliver new types of programs, and be extremely successful.

As a little bit of a higher education historian, there’s a lot of similarities between what’s going on now and what was going on in the 1900s and the end of the Agricultural Age and the move to a production economy.

You had these, what were considered disruptive upstart universities, like University of Chicago and Carnegie Mellon, which were launched to disrupt the Ivy and elites and liberal arts colleges at the time.

Those institutions brought a lot of change to higher education and are now part of the elite mix themselves. And I think that you’re going to see the same thing, to some extent, again.

Now, in terms of technology’s role, I think technology has a simple role, which is:

If well-applied, technology should lower costs, increase access, and increase efficacy.

If one of the fundamental problems is that the business model of higher education has created a pricing problem that’s undermining its fundamental mission, and if technology can lower costs and increase access, then you start to think that the solution to the problem is going to be technologically-driven.

Ultimately, the solution is applying technology to the right problems in the right places.

I will finish by saying that technology’s only a tool, and only an instrument of pedagogy and process and programs. It doesn’t do anything more than that, so you still have to have really thoughtful programs.

You have to have the right pedagogical model and focus on serving the right students with the right value proposition, but given where we’re going, that focus done properly and underpinned by technology support is going to be the future of how higher education is delivered.

Years ago, I interviewed Mayor Tom Menino of Boston in his City Hall office. Walked in to meet him, and before I said a word, first thing he said was: “You’re not from Harvard, are you? You’re not one of those Harvard guys?” He launched into a rant on their [now $37.5 billion] endowment, and ‘what have they done for Boston?’

And speaking of elite colleges, a certain handful have the latitude, the power to be resilient, they’re sitting on a heap of money. They could form an accelerator, incubator, they could ask, ‘What’s happening with our competition? Okay, we’re going to whip up whatever, and become a disruptive force ourselves.’ They can take control that way.

And all that in light of the fact that there’s a boot camp, vocational training, community college, more direct workforce pipeline theme emerging, where the future of education is more directly connected to the future of work these days.

So, my question is, where does that leave higher education? In some ways, just a networking club providing a certain well-roundedness in the humanities and sciences, but for a grossly exorbitant membership fee only widening the rich-poor gap with an occasional breakthrough story that is the exception, not the norm?

Paul: A hugely rich and really good question. Look. I would say this. Harvard didn’t get a $37 billion endowment by having a bad value proposition—so you have to recognize that Harvard does have a good value proposition.

I think you’re totally right that elite universities—you’ve seen this. Elite universities, flagship public universities, universities with great brands and resources—can sit back and watch the innovation happen, and then pick the models that work and jump on them.

You’ve seen that with 2U for online programs.

You’ve seen that now with Trilogy for boot camps.

You will continue to see that.

You’re also right that Harvard can make huge investments in things that are innovative because they can—and that acts as a perfect example of that.

That will continue.

The thing that Harvard can’t do, or any of the elite institutions, is to change their stripes about what their value proposition is.

If you’re looking at programs that aren’t designed to be a cloister for your onboarding experience, designed to serve learners who lack the academic preparation to go to Harvard—and are looking for a short-term, a lower-cost, halfway to a job.

Despite the belief, the well-founded belief, that Harvard is a great academic institution—that doesn’t mean they can teach every type of academic program. They’re very different business models. They’re very different constituents. They’re very different learners. And, actually—elite institutions are poorly-equipped.

That’s where new providers will emerge to serve newer education consumers. That’s all fine and good.

The reason why there’s this talk about future education being the future of work is because frankly, in a knowledge economy, you need a more educated workforce population.

It’s something like 60 some-odd percent of the population needs an education past high school. We have a system that has been getting 40% of students educated, so there’s 25% of the population that now needs educational attainment.

That’s not going to come from Harvard, because that’s not their consumer.

And they don’t know how to effectively address the educational needs.

It’s not the right programming mix, and it’s not who they’ve been working with.

And so you’ll see that newer providers will emerge to enter and support that gap in attainment. And I don’t think there’s anything wrong with that.

My view, an emerging view, is that these worlds don’t have to be as rigorously separated as they were before. I just think it’s an order of operations, and to some extent, it fits with Maslow’s Hierarchy of Needs.

If your life situation is such that you are supporting children, or your parents, or yourself—and your fundamental concern on a day-to-day basis is paying for rent and paying for food, then you don’t have the time or space to focus on critical thinking.

The problem you have to solve is lower in the Hierarchy of Needs, but if you find an educational pathway that gets you a first job, a high-paying job so that those needs are solved, then you can start focusing on needs that are higher up that tree.

I think you’ll find just an emerging population that ends up having access to the elite format of higher education, the networking components, the critical thinking components, the things that aren’t just job training. But they might do that after they’ve had an educational pathway that gets them their first job.

It’s one of the reasons why we really like the “guild” model—because we think that after you have a job is a really great place to think about a college education. If you were trying to trade off “college education” for “ability to pay your bills”—then no matter how much you might want the college education, there’s a certain order of priorities.

What’s on the edtech horizon? Any major trends that will rock the world?

Paul: Edtech’s a category that’s going to be around for a while—I mean, it’s going to be around forever.

What’s underpinning the trend is society has made a transition to a knowledge economy, our education system hasn’t kept up, and there are a whole bunch of products and services that need to be in place to enable that transition.

And a lot them are going to be able to have a for-profit business model that’s going to enable investment.

There will be years where edtech is hot and there will be years where edtech is cold, but it’s not going away as a category.

In terms of trends, we’ve touched on some of them: the intersection, the interoperability between higher education and career—where a lot of the new solutions will come, when you have challenge on both sides of the market.

Companies are not finding the talent that they’re looking for or they’re not assessing it properly. Higher education institutions aren’t necessarily preparing students for the jobs of the future or allowing them to demonstrate their skills, and so that intersection point is going to be where there’s a lot of activity.

We’re also going to see a lot of activity on a global scale that isn’t just taking an elite university and creating a campus in a foreign country; you’re going to start to see the sovereign walls break down as it relates to edtech. The reason why is because a knowledge economy is a much more connected economy.

We’re doing a logo design for one of our companies and we have graphic designers from literally all over the globe bidding on the project and doing the work.

Technology enables that cooperation and communication from all over the globe. And the educational needs [worldwide] are much more similar than they ever were before. So, the areas that we’re really focused on are the intersection of higher education and career—and what that means on a global scale.

Victor Rivero is the Editor-in-Chief of EdTech Digest. Write to: victor@edtechdigest.com


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