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Our business firepower in the United States begins with our educational system. In many ways, that system is stuck in the analog world, a throwback in time. What this means is that the education market is ripe for entrepreneurial change. There’s massive opportunity for innovative thinkers and companies to upgrade and improve the system.
To that end, StartupNation interviewed Donn Davis, Co-Founder and Partner at Revolution LLC. Together with Steve Case and Ted Leonsis, Davis leads Revolution Growth, which invests in and helps build innovative and impactful companies. Revolution Growth looks to attack existing, multi-billion dollar markets ripe for disruption with innovative companies, and the education market fits squarely into this scenario.
Davis co-founded Revolution LLC with Steve Case in 2005. Prior to that, he served as CEO of Exclusive Resorts LLC from 2004 to 2007. Davis built Exclusive Resorts from a start-up to the #1 market leader, and scaled it to $1 billion of real estate assets and operations in 40 worldwide destinations. From 1998 to 2003, Davis was a senior executive at America Online and AOL Time Warner. (Also, at 29 years old, he was named Counsel for the beloved Chicago Cubs, and was the youngest team attorney in Major League Baseball negotiating player contracts!)
Here is our interview with Donn Davis, and his thoughts on the disruptive change that is needed today:
Revolution invests in people and disruptive ideas that can change the world. How is it that in today's advanced society a single person, or a startup in a garage, can change the world?
Davis: At Revolution we look to invest in and help entrepreneurs build innovative new companies that can disrupt traditional markets ripe for change. For example, we are proud of our disruptive companies such as Zipcar in the transportation market, Living Social in the local commerce market, and Exclusive Resorts in the vacation homes market. What fires us up – me, Steve Case, Ted Leonsis, Tige Savage, and the rest of our team – is to build lasting companies that can positively impact the way people live and improve how the existing market operates.
To your question specifically, one person can absolutely make a difference – that is the history of entrepreneurship. Two people with a big idea started Google, same for Apple. We believe that driven people with big ideas can come from anywhere in the US, not just Silicon Valley. Indeed, part of our investment philosophy is identifying talented teams located in markets that are outside of the usual hotbeds of venture capital – we are betting on a “rise of the rest” strategy that seeks out great companies and great entrepreneurs wherever they launch a business.
You have written in the past that "Tuition for universities and colleges is up six-fold in the past three decades, and at the current rate will double again in 15 years." How are we supposed to nurture the next wave of entrepreneurs when higher education is growing out of reach for so many?
Davis: Student debt now exceeds consumer credit card debt. The out-of-control cost of a college education presents a challenge to parents, students, and the macro-economy – but this crisis-level cost issue can also be a positive catalyst for much needed change. Education is ripe for a disruption driven by technology – one that will allow institutions to do more with less, improve outcomes for students, and equip faculty with the tools to re-imagine the teaching process.
Today’s students live digitally – but after arriving on campus they go back in time to an analog experience. It is easier for today’s student to watch the TV show “Pych” on their iPad than to re-watch their “Pych 101” lecture while studying for the test. The in-classroom lecture is an educational dinosaur that can evolve using currently available technologies. There has not been much innovation in the classroom (in fact, it seems the last major classroom technology was the overhead projector a generation ago), and certainly higher-education has not benefitted from harnessing technology as almost all other major industries have.
We invested in a DC- based education company called Echo360 that is the leader in allowing universities to “plug in the classroom” – that is, bring technology to the classroom to both improve learning and to increase efficiency. For just $15 per student, per year (or three lattes), universities can enable the professor to record the classroom lectures and digitize the associated materials. For students, it results in better outcomes, as they watch a lecture anytime, anywhere, on any device that is most conducive to their individual approach, and can repeat parts they do not yet grasp. (I can’t count the number of times that despite my best intentions, I awoke startled mid-lecture at 9 am with my notes in gibberish). For faculty, this results in higher and better use of their time and expertise, as they can also record the lecture once for students to watch before class, so that classroom time is free for higher-value, interactive, teaching-learning moments, from debate and discussion to projects and guests.
What are some ways universities can improve the educational value to students?
Davis: Historically, educational institutions expanded through expensive buildings and adjunct campuses – investing hundreds of millions in capital and tens of millions in annual operating expenses. That is not efficient, and that is a big part of the cost problem. Today, technology enables teaching and learning outside the physical class room and beyond the scheduled class time. I studied in the library using books. My kids study from the coffee shop using their laptops. I had to walk across campus on a specific day and time to ask my professor a question. My kids email their professor with questions and ask other students for help in virtual study groups. By embracing the digital revolution, universities and colleges can expand using software, not hardware, to efficiently reach more students off-campus and better serve those on campus.
What other business in education do you see playing a disruptive role in years to come?
Davis: Currently in vogue are universities starting to offer select courses online for free to non-enrolled people around the world (these are called MOOCs – massive open online courses). We applaud this innovation, led by companies like EdX and Coursera. But innovating “outside the system” is not enough – we need to use technology to attack the heart of the issue. Today, 95% of all students are on campus and 95% of the tuition dollars are spent for a degree. Universities and colleges must innovate for this core paying customer! Focus on lowering the cost and improving the experience for those 30 million students on campus at 15,000 institutions.
Should the study of entrepreneurship be included in our high school curriculum?
Davis: My partner Steve Case is a leading voice nationwide for the good that entrepreneurship can bring to society. In the last three decades, entrepreneurs launching new businesses have created almost 40 million jobs – nearly all of the net jobs created over that period of time. Entrepreneurs are the drivers of innovation and economic activity in the country. Do we need a specific course to teach that – probably not. Should we promote the virtues and opportunities of pursuing a career off the beaten path as an entrepreneur – for sure.