📚 The future of higher ed


March 9, 2021

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On Monday, $GME stock jumped 40%+ on news the company tapped activist investor and Chewy co-founder Ryan Cohen to lead the company’s pivot toward online sales.

The Big Idea
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Coursera’s IPO signals big changes ahead for higher ed

At certain points in 2020, Google search volume for “masterclass” surpassed that of “business school.”

Folks are increasingly questioning the value of traditional higher ed. Why pay Harvard $80k per year when you can take the university’s computer science courses for free on YouTube?

That’s a reality partially brought on by Massive Open Online Courses (MOOCs) over the last decade.

And now, one of the largest MOOCs, Coursera, is going public

In 2011, Stanford professors Andrew Ng and Daphne Koller posted videos of Ng’s machine-learning course online. In short order, 100k+ people viewed it — and boom, Coursera was born.

Today’s Coursera isn’t that different, just magnitudes larger: The platform boasts:

  • 4k+ courses from 200+ schools and companies
  • 77m registered learners
  • A 59% 2020 revenue jump, to $293.5m

Coursera offers everything from one-off courses to certificate programs and some accredited bachelor’s and master’s degrees.

But it’s not the only MOOC shaking things up

EdX built its name around free Harvard-MIT computer science courses and has 35m users. Another, Udemy, is used for upskilling by 80% of Fortune 100 companies.

A widely reported challenge for MOOCs are completion and re-enrollment rates, which in 2018 sat around 3% and 7%, respectively, according to an MIT study.

Which leaves the future of higher ed unclear

The market for online degrees is expected to reach $74B by 2025 — and by 2030, the global education market could reach $10T.

NYU Professor Scott Galloway predicts we’ll see hybrid offerings from partnerships the likes of MIT/Google, UCLA/Netflix, and Berkeley/Microsoft that offer “80% of a traditional four-year degree for 50% of the price.”

But the jury’s still out on how online degrees will replicate the magic and unbridled joy of a beer pong tournament.

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Snippets
  • Tech pain: Even as the Dow Jones Index rose nearly 1% on Monday, the tech-focused NASDAQ fell 2%+ as people continue to sell off high-growth tech stocks that have gotten frothy.
  • Microsoft hack: The company is responding to 4 zero-day vulnerabilities being exploited by a state-sponsored Chinese group, following the recent SolarWinds hack that impacted 18k organizations around the globe.
  • More from cyberspace: McAfee is selling its enterprise unit to Symphony Technology Group for $4B, a year after Symphony bought another security firm (RSA) for $2B.
  • PayPal makes a crypto purchase: The company is acquiring Israeli crypto security startup Curv. The price of the deal is unknown but reported to be up to $300m.
  • GE is sending off its aircraft-leasing business (1.6k+ planes) in a $30B+ deal with Ireland’s AerCap in an attempt to restructure the company.
  • Speaking of airplanes…Amazon acquired a minority stake in air cargo contractor ATSG for $131m (we wrote more on Amazon’s shipping ambitions here).
Digital Privacy
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“OK, now take the exact same photo but from a slightly more artistic angle” (Source: Getty Images / David Paul Morris)

Google will stop tracking you for ads… but there’s a catch

Google announced last week that it will stop selling ads based on tracked individual browsing history (cookies).

But it’s likely not an instance of the company adhering to its former unofficial motto, “Don’t be evil.”

As Y Combinator’s Paul Graham notes, it’s more likely that Google simply found a more effective way to target ads that’s less prone to regulation.

So, what juicy data is Google using now?

Google says it has been developing a privacy sandbox (an isolated environment where code can be tested) to target ads without collecting user data from various sites.

Instead, machine learning will categorize users into groups or cohorts with thousands of other people with similar interests. In layman’s terms, this just means they’re following a more amorphous, blobby version of you.

This sounds great on the surface… but there’s a catch

The Electronic Frontier Foundation (EFF) pointed out a year ago that Google’s plans for a privacy sandbox may be less positive than they appear to be.

“Today, trackers follow you around the web, skulking in the digital shadows in order to guess at what kind of person you might be,” writes the EFF. “In Google’s future, they will sit back, relax, and let your browser do the work for them.”

Google gets to keep Googling, while organizations without Google’s data (read: everyone but Google) will have to find new ways to target ads.

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Investor of the Day
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Salesforce CEO Marc Benioff (straw hat) creeps into photos like he creeps into late-stage venture deals (Getty Images / Joe Scarnici)

The largest tech companies have in-house VC firms. And few have been on the investing hot streak that Salesforce — the $190B+ software giant — is on right now.

Salesforce Ventures notched ~$2.2B in investments gains last year, with investment markups accounting for ~40% of its earnings per share (EPS).

Here are some 2020 hits, per CNBC:

  • Snowflake: A $250m investment at the data warehousing firm’s IPO is up more than 3x
  • nCino: A 12%+ position built up over many years that is now worth $800m+ after the fintech firm IPO’d last year
  • Zoom: A $100m investment at IPO that Salesforce exited last year after a 3x gain

Last week, Salesforce Ventures scored another win when another one of its investments — identity management startup Auth0 — was acquired by competitor Okta for $6.5B. The firm’s $120m investment saw a 3.4x gain in just 8 months.

Startups like Salesforce’s money because the company is hands off (doesn’t take a board seat) and doesn’t block deals.

TRENDS

The post-pandemic industry set to boom in 2021…

Our latest Trends report outlines some of the biggest post-pandemic opportunities our researchers could identify.

We focused on one space that’s been picking up exponentially more interest since the new year started  –

Vacation experiences in the post-pandemic world.

In the report, we outline the largest business opportunities our analysts could identify in niche travel & experience spaces – ideas you can get started on this week.

When you read through, you’ll learn:

  • How you can double down on the $1B “glamping” trend and create outdoor experiences people want to pay for
  • How VR/AR experiences could redefine vacation, and some ideas to get you started
  • The $10M opportunities in niche “travel boxes” and the strategies that have proven successful
  • And much more.

If you’re not already a member of Trends, sign up today for a free trial to get access to the full discussion.

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