Week in Edtech 5/8/2024: OpenAI's Search Engine, Stanford University's 2024 Report on the State of AI, 4 Traits of Successful Founders by Jennifer Carolan and More! Feat. Jason Levin of WGU Labs and Brian Ashton & Van Christman of BYU-Pathway Worldwide

Join Alex Sarlin and Ben Kornell as they explore pivotal topics in this Week in Edtech episode:

🔍 OpenAI's rumored new search engine to challenge Google
🤖 Key findings from Stanford University's 2024 report on AI advancements and challenges
🍎 Apple's development of AI chips and new AI features in the iPad Pro
🏆 Essential traits that define successful founders, according to Jennifer Carolan of Reach Capital
📚 Concerns on AI in Education

Plus special guests, Jason Levin of  WGU Labs and Brian Ashton & Van Christman of BYU-Pathway Worldwide.

Don’t forget to subscribe to Edtech Insiders for more updates and insights from the forefront of educational technology!

Recommended Resources:
Western Governors University
Accelerator Pitch Competition Winner Release
WGU Labs Social Impact Evaluation Framework

Transcript

Alexander Sarlin: 0:04

Welcome to Season Eight of Edtech Insiders where we speak to educators, founders, investors, thought leaders and the industry experts who are shaping the global education technology industry. Every week, we bring you the Week in Edtech. important updates from the Edtech field, including news about core technologies and issues we know will influence the sector like artificial intelligence, extended reality, education, politics, and more. We also conduct in depth interviews with a wide variety of Edtech thought leaders, and bring you insights and conversations from edtech conferences all around the world. Remember to subscribe, follow and tell your ed tech friends about the podcast and to check out the Edtech Insiders substack newsletter. Thanks for being part of the Edtech Insiders community. Enjoy the show.

Ben Kornell: 0:56

Hello, everybody, it is Edtech Insiders the month of May, Mayday, mayday, mayday, we have problems in edtech, we're gonna be talking about everything from AI to K 12. to higher ed. But first what's going on in the pod Alex?

Alexander Sarlin: 1:13

Yeah, we have a really fun episode coming out this week. It's all about AI in the context of actual school environments. It's with Kunal the law and West Crizal, who are the AI administrators in Orange County, California, that is not a normal title. They are actually some of the only people in the country whose job is entirely about integrating AI into the school environments. And they're running a big student AI conference. So it's really interesting interview that comes out on Monday. Others coming soon, that we can't quite talk about, but some really fun ones. On

Ben Kornell: 1:45

the events front, we have some great events coming up tomorrow. And probably by the time you listen to this podcast, it will pass. We have a happy hour in San Francisco on May 9, my mom's birthday. And then on May 20, in New York City, we're doing an ed tech Happy Hour alongside New York, Ed Tech, meetup and future of higher education, and also Steve Shapiro at fine tuned learning. So that'll be a great time to bring the Ed Tech happy hour to the East Coast. And then we wrap things up with a happy hour in June, at the ISTE conference, we're doing that with brisk learning more details to come on that. And if you like baseball, we're teaming up with workshop ventures to also jump in to the Ed Tech Night at the Oakland B's. So you've probably heard of the Oakland A's. They're moving out of town. So who's up next? Obviously, it's the Oakland bees. So we'll see you there. I believe that's June 12. So much going on in the ad tech landscape ad tech world. But I think we'll start with AI. Let's start big picture. Top of the news is that open AI is thinking about jumping into the search game. I think for some it's a shocker. But for others, you know, check GPT it's just a natural window into the internet. And I can't tell you how many times I've been like, Man, I wish there were search results along the side, whatever I'm talking to chat GPT about what do you think about this? And how does this affect the Ed Tech landscape and the AI landscape? Alex,

Alexander Sarlin: 3:19

I think we've seen this coming for a while, you know, it's not a surprise, AI is a way to search the wild woods of the internet just as well as search. And arguably even better, because you can use natural language going in and out. We have already seen the goal. Do you know beta AI things in its regular search product? And I think the Google team, you know, we know right? When GPT landed, the Google team really went through a little bit of like an existential crisis. They were caught off guard, they pulled all of their big teams together, they incorporated the DeepMind team with the other Google AI team, which had been working separately until then, and basically said, we need to, you know, really put on the gas here. And I think we interpreted at the time is searches. I mean, it's their core business, you know, it's still where all the Google money comes from. So if there's anything that might rival search, the amount of money they stand to lose is astounding. And now, you know, I think their fears are getting closer to true and that others are really trying to impinge on their space. I personally, you know, I've said this pretty consistently for the last few weeks. I'm not that worried for Google. Because I think that Google is a very big company that is very thoughtful. I mean, big company doesn't preserve it. It could be disrupted here, but I think that Google has so much integration with so many different tools that we use every day. It has so much integration with Android phones, I've obviously Google is Android that I don't think they're going to be able to get pushed out of their core business by a relatively small company like open AI, but Microsoft has had a bone to pick for a long time. They're gonna throw money into this too. So yeah, I mean, we might see the the sort of Google Microsoft search wars, like sort of search wars round two after the the old dog pile, you know, AltaVista days. I still think Google's gonna win it though. That's all I could say. As of this moment, I would not put my money on the GBT search taking meaningful market share from Google. I've been wrong before. I may be wrong on this one. But that's my read, do you think it was gonna happen?

Ben Kornell: 5:23

Well, you know, what really is going on that I find most interesting is the search for unintended, a reliable business model. And what we're seeing is open AI has a six month lead consistently in front of everybody else in AI. But we regularly see people catching up to features or capabilities, and so on. And the premium pricing of open AI also means that it can be really hard for them to compete on value, when other people can offer maybe an older model or an open source model at a lower costs. And so, you know, the subscription, GBT consumer app definitely has had a huge boom, but the growth potential of that particular app is going to flatten out like most AI apps and most consumer apps. And so really, the two possibilities are open AI becomes the API engine that powers AI across companies, or to they become a consumer mega company, where they're able to monetize utilization through advertising. And so my sense is that this is actually a really smart move for them just because their daily active users are a source of potential monetization, how those users feel about paying a subscription fee for premium access, and also ads? You know, that would be a question. So will they have search features only, you know, ad free for premium. And then if you are free, you get ads. These are all big, big questions. But I will say the market has evolved so rapidly that these huge costs, these huge capital costs that open AI has undertaken to build these models are raising a huge bar to get revenue in at billions and billions of dollars. And their overall mission is to build AGI. So to do that they need a funding mechanism. And so could this be the business model? Could the API model be the model? It's hard to say? Because right now, it's super competitive out there. And what we know is, with high competition, you compete out all the margin. Yeah, I

Alexander Sarlin: 7:49

think it relates to another AI story this week. So we saw our ed tech veteran John Bailey, put out a really interesting article about takeaways from Stanford's recent report on the state of AI. And one of the things he called out that I think is really worth noting in this context is how much compute it is taken and cost, it's taken to train these Mega Huge models. So something Matt tower always says our guest hosts from last week is that, you know, the cost is so tremendous in terms of the just pure money and compute, which costs money, that this is what's really causing the moat for these companies behind even their close competitors, let alone you know, anybody in the tech space who might want you to nobody really is even considering building their own proprietary model. The question is whether they can stay ahead of the open source models, as we've said many times, but the reason I think it's relevant in the context that you're seeing right now is that I like that read that, you know, opening, I could become a ad supported mega consumer company, just like a Google for the most part, or they could sort of try to become the layer underneath the internet and some underneath the AI that everybody uses. So far, it feels like most of the moves they've made have been for the former, right, I mean, the sort of sneak peek of Sora, the subscription model, even the open model, where, you know, there's no sign in, like many of the things they've been doing have been very consumer friendly. And it makes me think that that is the direction they're going, which puts them in direct competition with Google. And if you look at these charts from the Stanford report, by far the most expensive machine learning models to be trained are Gemini and GPT. For they just sit there at Claude is up there now called to the new one from anthropic, but for the most part, you know, they're really sort of becoming outliers, which means that it feels like they're sort of, you know, in this neck and neck race to become the absolute best model out there, which then they have to decide which business model to take on. Yeah,

Ben Kornell: 9:49

you know, ultimately, in all of these scenarios, the people who are manufacturing the chips, you know, doing all the compute power and are the cloud out operators, they're the ones who are actually winning here, the value chain here is all crewing to those who are at the bottom of the pyramid or the bottom of the stack. And then the other group that I think we should not be blind to is those who have devices. And what you can imagine is if open AI becomes a search competitor to Google, and they even move, like 5% 6% of market share, that's a huge amount of dollars. But it also opens the window for companies like Apple who don't really have a dominant search play, or, you know, Microsoft with Bing could flip to open AI as their front end. It could allow people who are owning some of the laptops and mobile phones and so on, to actually make new programs the front door of the internet, because today by default, it really still is Google. Yeah,

Alexander Sarlin: 10:59

I agree. And Apple I think, is probably thinking very hard. Right now we saw this week, they announced they're developing their own AI chips, to your point about the bottom of the value chain and in video sort of has been cleaning up there, and promising new AI features in the iPad Pro, the chip that's going to be in the iPad Pro to your point about, you know, hardware, I think they see they're, you know, they have a monetary advantage over even places like Google, in terms of what they could invest in this if they really, really wanted to. And they have this incredibly strong hardware advantage over almost everybody else. So it's a very interesting moment for them. I mean, you can tell all these big tech companies, they see this as a potential for reshuffling, you know, the fangs or, you know, what did they call it? Now, there's a new name for the top tech companies, you know, they've been sitting on top for a long time, and they saw, you know, open AI sort of snuck near their ranks and Nvidia stuck, you know, what helpfully into their ranks while they were sitting there, and I think now they're starting to, you know, Joust for dominant position. And, you know, for the most part, it feels like they're still gonna win, like, I noticed such a depressing state, like I want AI to be room for real disruption. But I just don't see it yet. Because the cost is so high. And there's such structural advantages from software and a hardware perspective. But that doesn't mean it's not going to be great for Ed Tech, the cost is going to go down, I think these tools are going to be able to fuel incredible innovations in the tech sector. And we're already starting to see some really, really exciting new models of AI in edtech that we hadn't seen before. Yeah,

Ben Kornell: 12:34

on the ad tech front, I will say the AI space has felt up for grabs. But now we're actually seeing some alignment and consolidation. John Bailey actually had a really incredible article, which highlighted the Stanford's 2024 report on the state of AI. And just so everyone has the context, this was the human centered AI group at Sanford H AI, not their education school. But it really did lead to some pretty profound insights and education. I think the main ones was AI and GPT is better at some things, but actually far worse than humans, at others. And so what you see instead of a up to the right, in terms of the overall quote, unquote, intelligence, it's actually very divergent by construct and area. So things like mathematical or computational thinking, AI actually does much worse than even a spreadsheet. And I found that part really, really interesting. There was also some study around the impact of AI on workers and which jobs would be replaced. And they've talked about customer support agents, for example. And they talked about consultants. And what they find is actually AI as an augmenter, is really, really powerful. But as a replacement, it's not sufficient. And so it does give me the sense that, you know, these roles are unlikely to go away, but their capacity or efficiency to serve a broader number of customers or clients really goes up. So it's a great article, we'll put the link in there. Any takeaways that you had from John Bailey's report?

Alexander Sarlin: 14:22

Oh, yeah, I mean, I mean, the one that really stood out to me was just the cost. There are these really interesting charts in there about basically the estimated, you know, training costs and compute needed for the different machine learning models, and it's just, it's so it's huge. I mean, they estimate that basically GPT and Gemini altra, probably cost you know, $100 million, plus maybe significantly more than that, potentially to train and met as Lama model is probably somewhere significantly less expensive than that, but using almost as much compute in a different way. I just found that really fascinating and also,

Ben Kornell: 14:58

just the training costs This is not the cost to operate or anything. It's just massive.

Alexander Sarlin: 15:04

Its massive. Yeah. So just exposing that I think is really interesting because you think these things sort of came out of nowhere. But it really was basically, you know, pulling all of the data that you possibly find out of the entire Internet. And more. I mean, we saw open AI this week make a deal with the company behind People Magazine and investor pedia and other media properties, just the insatiable hunger for data to feed into these very expensive training models is really the moat for these big MLMs. And in a way, it's really exciting because I think these MLMs are the API's behind them are going to power the sort of next generation of tech. So that was my big takeaway. You know, we've mentioned John Bailey a couple of times, there was a awesome article by Jennifer Carolyn, the founder of reach capital, or the co founder of reach capital, about the traits of successful founders. This week that I recommend everybody read, we will link to it, as we always do in the show notes that, you know, after experience is talking to so many founders, especially in the ad tech space. And then your article in the ad tech insiders newsletter, which was entirely yours. You know, I didn't even get to see it that much until it was really just about to come out. And I thought that was incredibly interesting. And I know it's getting a lot of attention. Do you want to give a little synopsis of the article for those who haven't read it and maybe add some color? Yeah,

Ben Kornell: 16:20

sure. Well, you know, I think both articles both Jennifer's article, and the tech insiders article are products of our times, Jennifer's first characteristic is the ability to sell for an entrepreneur. You know, in the past, there's been a product orientation around finding people who are great at building and of course, in Jennifer's article, she has customer obsessed as one of the features which could translate to product for sure. But it also translates to market. And I think what we're seeing more and more is that the ability to sell the ability to grow your company is becoming the rate limiting factor, not product development. And the kind of corollary to that is you need revenue coming in a growing business to feed the business and cut burn. And we're not seeing everyone kind of getting over that hump. And so, you know, there's different phases of downturns. And I think a lot of people hope that this would be a very, very short downturn. But now that we're entering month 24, of kind of this edtech winter, we're actually seeing some of the profound effects of that, which are, capital has dried up, and now people's runways have run out. And they're turning to the investor of last resort, which is often somebody who's already on their cap table and saying, Hey, we need money. And this time, those folks aren't able to do a bridge round because the valuation of the last round can't hold. So I'd say this is most relevant with Series B, C, and beyond companies where they had raised previous rounds at astronomic valuations. And they have a business model that requires significant burn for the seed and a company's they either didn't raise at such a high round, or they have the ability to shrink even smaller and just keep their burn incredibly low. But it's causing some massive, massive friction. And there's three or four companies that I know of directly, I can't really share the inside details of each one. But the founder is basically ceding control or in a battle to have control or not based on the new cap table, everybody's getting diluted, and the new capital coming in is coming with a lot of strings. And then second, the investors are really shaking up the who owns and who doesn't. And I think it's important for people in our space who don't understand how all this works. If there is a funding round and you don't participate, then you lose percentage ownership based on how much money comes in. Because these are down rounds, you have the ability to lose a massive amount, if not all of your equity in a company. So you may have invested 2 million or 10 million in a company. Now it's only doing four or 5 million in revenue, a new investor comes in and says I'm gonna put in 5 million. And if you don't put in another one or two, you're gonna lose it all. And this creates real dilemmas for the funds, the funds, who also are experiencing the same kind of pressure from their LPs or their investors to say, Hey, where are my returns? How's it going?

Alexander Sarlin: 19:41

So,

Ben Kornell: 19:42

we're in that phase where I think, you know, there's a lot of restructuring and recapitalisation that could end up with many of these larger VCs being operating companies where they actually hold majority shares and 1012 20 companies If you're going to have a bunch of VCs that are going to say, I'm out, and they're going to go to zero, and they're going to have to write those down, which will hurt their future funding rounds and kind of bring their returns down. And then third, you're going to have more fire sales. Because if someone can't get this to happen, they're gonna end up being better off selling for $1, than going for some sort of restructuring. One thing that I have been surprised about is the m&a activity really hasn't met the moment. That is probably because the private equity firms that are in a position to acquire because of you know, they have the cash, they really need to find businesses that also have positive cash flow. So if you're sitting on positive cash flow, and your business isn't going lender, it's just a bad time to do a refinancing, you're better off just holding steady. And so you know, we're seeing a bunch of ad tech startups hitting dead ends. I don't know if that resonates with you, Alex, it's like, it's really tough out there right now. 100%.

Alexander Sarlin: 21:06

And we actually just got breaking news just within hours ago, that beam is in talks to buy PowerSchool, which is big and very Wacky News that just broke hours before we're recording this. And I think it speaks to your point, which is that, you know, the people outside of the ad tech space who are looking to come in and sort of scoop up companies we saw Kahoot get bought by private equity. Not that long ago, you know, they're looking for companies with a lot of traction, and with a lot of core value. And you know, they're not looking to make big bets. They're not, you know, they're trying to be very speculative in that. So they're looking for winners, people that are sort of proven that they can win. And it leaves so many other companies a vast majority of ad tech companies out of that possibility as a as an exit. And then the VCs are trying to figure it out. And I mean, you know, I wish I could get deeper into the minds of some of the big ad tech VCs right now. We we've talked to a few of them, they're terrific. You know, these were people who have followed this space for a really long time. But I think in this AI moment, and this sort of edtech winter moment, combining is a lot of confusion just about where to put chips, and what would happen in this kind of crammed down moment. It is scary, I think I mean, I've been wondering about, you know, whether philanthropy and foundations are becoming a much more viable option for funding for certain types of edtech companies, or even whether companies should be thinking more about, you know, getting their funding directly from the bigger ad tech companies from the Pearson ventures from the big publishers, basically, from places where they say, I'm running a really interesting AI play, you know, if you You set me up with enough money to keep it running and build a little bit of a business, it can be sort of incorporated into your larger process we saw that with with Hmh and rideable and Amira and it's almost feeling like that's, as you say, you know, series A still seems maybe viable. BNC isn't because companies just so few edtech companies get that big, that they have this sort of endless, you know, growth, it's just we haven't seen that much of it. And the companies that had proven out, you know, you mentioned in your article half of the unicorns are not considered unicorns anymore. Some of the biggest IPOs we saw Chegg And Coursera. And to you is stocks really suffer and they're doing turnover. You know, he's just sorted by Jews. So the companies that sort of people were starting to hang their hats on as the examples of, you know, escape velocity at tech companies are proving to be exactly that. And I think it's just spooking everybody in the tech world, which is, it's scary to me. I hope that some of the predictions in your article about you know that, you know, we're coming on two years of Ed Tech winter. And if this stuff starts happening in May, there may be an exacerbation of some of the problems. I hope that there is some turnaround we've all been looking to for AI to do to help with that. And I don't know if it's moving fast enough. I also agree with you about the m&a is I think it's been surprising how few m&a is we've seen at this moment where we know that all of these smaller startups are having trouble raising. But also they haven't been scooped up by the, you know, by the handful by the bigger companies, which I expect it to happen.

Ben Kornell: 24:30

We were at ASU GSB. And we were expecting there to be big m&a announcements, and we were expecting also like a sober environment given the market traction, and yet it was it kind of seemed like aI really distracted or bolstered optimism. Actually on the AI front. I know we just covered the big tech AI. But there's also some really interesting new data that came out this week in K 12 about AI that may have implications for these companies and their paths. I'd say first off really conflicting information about educator AI use. And we've seen everything from like eight and 10. Educators have used AI to this new Rand survey courtesy of one of our favorites. Dan Meyer, he's a math guru and genius. Also substack extraordinaire, he point out that 18% of teachers have used AI or chat GBT or a product like that ever. And 8% use regularly. The question was, I regularly use AI tools and products in my work as a teacher and actively seek out new AI tools and products to use myself 8%. So this is a RAND survey, fall of 2023. So of course, everything's a little bit lagging. But it does raise these questions around, will AI be the new like, boom? Or are we actually seeing it fall short in terms of adoption, problem solving, and ultimately monetization? I have some other thoughts on this, but curious, your immediate reaction? As we've been looking at this data for really like two years now. And Dan's article was kind of a shocker.

Alexander Sarlin: 26:20

Yeah, I mean, I don't have much to add. Other than that, you know, we've covered a number of different polls from different entities that have come out basically trying to figure out whether AI was really making its way into classroom usage. And it's just incredible how far apart the polls are coming in their results. As you said, you know, we had one from District admin magazine just a couple months ago, that literally said more than eight in 10 Teachers reported having used generative AI, that's 80% versus 8%. We've also seen all sorts of polls about students and teachers starting to be more and more concerned about, you know, the plagiarism use case, which I thought this was we were sort of over this, but we are clearly not it is still policies have still not been clear. And it's just I mean, I don't know if that's related to the low usage. And this RAND study whether people are starting to be like, the squeezed isn't worth worth the juice for AI for me yet, because people are worried about it. My students are worried about getting caught for things my we don't want to get into a deep fakes situation. Or maybe I just don't know anything about it. And maybe, let's get rid of our sort of bias of people who talk about this all the time. You know, maybe teachers just have other things to think about an AI like learning loss and absenteeism and mental health crises. And, you know, funding from the state. I mean, who knows charter renewals? Like there's a lot going on in school environments. So I mean, this is dismaying, because it definitely makes it feel like you know, all of these AI classroom tools are not positioned to become the great Savior of edtech. If it's not if they're not being used in the classroom, what are your other thoughts about it?

Ben Kornell: 27:56

I have three thoughts. One is, they may be using AI tools, and they don't realize it. You know, as we've talked before, Google is largest edtech company in the world. And we we've seen a drumbeat of announcements from them some coming up soon. And think Google is also hosting a big summit in June, on AI and education in New York. So they may be using AI tools and not realizing that it's AI tools. Second, I think there's an challenge of AI for AI sake versus the use cases that people really value. And so like an auto grader, for example, is AI, but it may not be front and center as hey, you're now using AI in the same way that you might with tragic, do you think the third one is actually related to another headline that we've seen, which is, even if AI tools are adding so much value, the cost of labor is really driving out margins in K 12. for really any other product, even curriculum is under pressure, just saw that the average teacher salary just hit 70,000. And while that's a abysmal, super, super low, it's also a huge increase relative to the increase rates that we've seen over the last 20 years. And so the way that it works with union negotiated teacher salaries is that they almost never go down. And so we're seeing high water marks being set time and time again on educator salaries. And so that means there's less to spend, even if you're adding incredible value as a tool. So my thought is we need to understand, in edtech, how we might be part of transforming the value prop to educators that allows them to scale so that we could actually have teachers making $100,000 But maybe serving more students or in more different ways. Because the the way The rocks work in this as the big rocks are, you know, the union contracts and the teacher salaries and then whatever's left, the sand that you can pour in is getting smaller and smaller by the day because of facility costs and human capital costs.

Alexander Sarlin: 30:15

We're coming on to our amazing guests segments. But I want to just quickly do a couple of very quick headlines that we will get to shortly if we don't this week, which is one, after taking the scalps of many Ivy League presidents, the House Committees on education in the in the government are now grilling right as we speak that, you know, the head of New York City Doe, the montgomery county, maryland doe, and you know, the superintendent of Berkeley, basically in a similar way to what the same playbook they did in higher ed, they're talking about anti semitism and why people aren't cracking down on it. And obviously trying to really, you know, strike out of these these liberal districts. We also saw community colleges great article about community colleges starting to roll out AI programs at scale, often in conjunction with Intel, which is doing a really great community college AI initiative. So we don't have much time to talk about them now. But they're really great. Also, OpenStax just got a $90 million grant from NSF OpenStax has been on a huge roll. They're doing amazing things recently. So

Ben Kornell: 31:17

hideaway Open Stacks, if you don't know about it, follow it now because they are about to revolutionize open source, education, AI everything. I mean, they've really been on a tear. Yes. One more thing before we flip to I think that's also a headlines from yesterday was awso SCHMIDT futures has spun out their education team. So Schmidt futures, Eric Schmidt pledged over a billion dollars for AI in social impact fields, including science, medicine, and education. And I think one way to take it is, this is a great way for them to focus on education. And it's called Renaissance, which is a little confusing, because Renaissance Learning is a private equity firm in our space. But Renaissance philanthropy, it's a joint effort with multiple funders kind of backing it. At the same time. I think if you read the tea leaves, it looks more like man AI is having incredible impact in science. It's having an incredible impact in medicine, let's double down on that. Education is hard to change. So we need to have more of a consortium approach. And so by spinning it out, it becomes less about Eric Schmidt and Schmidt futures, and becomes more about a collective of funders coming together. I think that it's ultimately bad for our space, because it means less total capital in the pipe, but will be really interesting to see. We've seen the the philanthropic landscape changing quite a bit in the last year. All right. With that, Alex, I think we're ready to go to our guest.

Alexander Sarlin: 33:01

For our deep dive. Today we're talking to Jason Levin, the executive director of WGU. Labs, WGU labs associated with Western Governors University and incredibly innovative higher education institution. Welcome to the podcast, Jason.

Jason Levin: 33:17

Thanks for having me.

Alexander Sarlin: 33:19

So first off, for those of our listeners who might not be familiar with WGU or WGU labs, give us the sort of elevator pitch. Why is WGU so amazing? And why is labs such an interesting part of their strategy? Yeah,

Jason Levin: 33:32

so Western Governors University was founded by the Western Governors Association, 19 governors in the western states to bring high quality education to people in the rural West. Since their founding, 26 years ago, we have expanded delivering online computer based education to students in all 50 states. We have 175,000 students today, which I think makes us the largest university in the country. We're the largest we've largest teacher's college in the country, we confer more teachers than any other institution licensing teachers in all 50 states. And WG Labs is a r&d and innovation arm of Western Governors University. And so our strategic purpose is really to expand the aperture of innovation beyond just the institution itself. Yes.

Alexander Sarlin: 34:22

And so WGU Labs has incubated a number of different ideas and companies over its existence. And I know just at the ASU conference just last week or so a couple of weeks ago, you had your I think inaugural pitch competition, if that's right, and the winner was a really interesting company that works with disabled education. Tell us a little bit about the pitch competition. And the winner as well as I'd love to hear more. I mean, we'll tell our audience more about some of the really interesting and tech initiatives wgo has supported over the years.

Jason Levin: 34:53

We invest mostly in the seed and pre seed stage for education technology companies that are a aligned to the mission of Western Governors University to create pathways to opportunity for all people. And then so we had a pitch competition, we had over 60 applicants, really interesting companies, we invited the four finalists to come to ASU GSB and have a final pitch competition. The winner was a company making space, which provides vocational education for people with disabilities. So we felt that it was really mission aligned. It was a really fun event, we had some judges from across Western Governors, university executives in the system, who don't normally participate in the investment decision. So that was fun, to involve the college more broadly, and it was a great company, the winner got $50,000 in cash, a $25,000. Contract with Wu to do a pilot and then$25,000 with the services for our accelerator. So

Ben Kornell: 35:53

love to talk a little bit about how you think about innovation and distribution of innovation. One of the biggest challenges in our space is actually customer acquisition cost or you know, channel or spread. And now we are seeing the advent of really large universities, like Western Governors that serve a really diverse population, when you incubate or develop or partner with somebody who's truly innovative. How do you leverage Western Governors as a channel to reach people? Is it kind of broadcast you use pilots? But how do you think about that rollout process from innovative idea all the way to full scale implementation? Yes,

Jason Levin: 36:36

so not everything we incubate or invest in will be a perfect fit for WSU, because it's such a unique model of education. But we do try to find things that we can scale through the institution. Generally, we'll do a research pilot, where we'll help the company get integrated into the system, meet the decision makers, design a pilot and then conduct the research to see if we get the results we want. We've probably like I'd say, like a third of the companies we invest in fit that profile, we invest in some companies that, you know, are really outside of the WG wheelhouse, for example. And model is one of our portfolio companies. That's a skills to jobs marketplace. And they provide training to people directly into jobs powered by America's Community Colleges. And right now they're focused in like advanced manufacturing robotics, which Wu doesn't offer and wouldn't offer in the foreseeable future.

Alexander Sarlin: 37:33

I mean, one of the connections that at least it appears from the outside between what Wu and WG labs both do, is they really are operating on a sort of student centered education model. It's really about how do we create innovations and lower costs for the end users lower time investments for the end users? At part, one of the reasons why WG EU has that 175,000 enrollment, which is incredible is that it offers really flexible competency based models of education that they people can't get elsewhere. And it makes you know, degrees possible, especially for older learners, or people who are working full time or have chronic illness who have families. I imagine that also influences your investment decisions. It's already the ones you've mentioned, are sort of connected to that concept of, you know, how do we really help learners succeed on their own terms, you know, rather than sort of helping institutions, you know, polish up their own offerings?

Jason Levin: 38:32

Yeah, the first three questions we always ask, is it student centered, cannot be big and isn't transformational. I'd say we're impact investors, as much as we're venture investors, our Investment Committee screens really heavily for impact alignment, mission alignment, we have a social impact rubric that's on our website that we score our investments against, and we have thresholds there. So it's WG us and nonprofit we're mission driven. First and foremost,

Ben Kornell: 39:01

I love the model, similar thing that I work on with Common Sense Media and the K 12. Space. Given that you're thinking about not only what's learner centered and could serve your students today, but also where we're headed. What's getting you most excited about down the road four or five years from now? What are you looking at? What are the trends you're seeing that are getting you excited? And just help us understand, you know, best case scenario? What are some of the innovations and technologies you're investing behind that you think could be transformational?

Jason Levin: 39:34

Yeah, I mean, I'm excited about the potential for generative AI to disrupt the cost curve again, and improve quality and increase access.

Ben Kornell: 39:42

Can you tell us what you mean by disruptive cost curve?

Jason Levin: 39:45

Well, you know, we've effectively passed the Turing test, right, the computer speaks English now. And so given that, like, what can it do from an educational standpoint? So, you know, we've known For a long time that you can create a Computer Tutor that's as good as a human, who was very tedious and expensive to create those computer humans, it was basically nested IF THEN rules. And now that constraint is gone. And so I think there's a lot of application. I think there's a lot of interesting assessment applications. So how can you engage in more authentic, non invasive type of assessments with the new technologies? So I'm excited for the potential I think, you know, it's going to be really hard to get existing institutions to change. And that might not happen. But I do think, you know, like the internet enabled W GU, to disrupt the cost curve and bring a flexible education. I think this is a next generation disruptive technology.

Alexander Sarlin: 40:47

That's really, I think, a fascinating and great note to wrap on. But WVU has been on our radar for many years. It's such an incredibly innovative and amazing institution. I love the way you just framed it. As you know, the internet allowed these Western Governors to put together a model that actually serve the educational needs of people far beyond our traditional higher ed system and has been rewarded handsomely with these enormous, you know, enrollments and people, it's changed so many lives, we definitely hope that that AI starts to push the cost down even further, and frankly, disrupt the traditional model of higher education as much as it should have been disrupted by WVU and SNU. It others and even more. Thanks so much for being here, Jason with us. Jason Levin, Executive Director of WG you, labs.

Jason Levin: 41:37

Thanks for having me. We'll see you guys later. Thanks, Jason.

Alexander Sarlin: 41:41

For our deep dive today, we have very special guests, Brian K. Ashton, who is the president of BYU-Pathway Worldwide, which is doing really innovative work in higher education. And Van Christman who's the associate academic vice president of BYU-Idaho. Welcome, gentlemen to the podcast.

Brian Ashton: 42:01

Thank you. It's nice to be here.

Alexander Sarlin: 42:02

So what is some of the most exciting news coming out of BYU-Pathways right now is that you just announced a three year degree, fully accredited three year bachelor's degree for the first time ever. Tell us a little bit about that initiative, where the idea came from, and what you're offering to students?

Brian Ashton: 42:23

Yeah, thank you. This is something we and our partners, like BYU Idaho have been working on for a long time. And Van and his team have done just a great job working with the accreditors. But let me tell you why we want to go down this road, our students are a little bit different, they tend to be older, they're all working, most of them working full time. And we're an international institution. So we have students in over 180 countries, many of them are below the world poverty line. And so they need to get jobs quickly. The idea behind the three year degree was if we could get a three year bachelor's degree, we could reduce the time it takes to get a bachelor's degree by 25%. And reduce the cost by 25%. So that would allow them to improve their work situations much more quickly, and reduce just the cost of tuition, which is a huge benefit if you're one of our students.

Alexander Sarlin: 43:20

100%. Yeah, you mentioned that more than 60% of your students come from countries all over the world. 180 countries, Philippines, Nigeria, Brazil, where, you know, obviously dollar means something very different in a lot of those countries, you also offer one of the most inexpensive bachelor's degree. So tell us about the cost, even outside of the 25%. What is your sort of cost per credit hour compared to other online degrees?

Brian Ashton: 43:48

Yeah, so our cost per credit hour is $81. With a three year bachelor's degree, that means you can complete a degree in the United States for$6,200. Before scholarships, that's amazing. With our minimum scholarship, which everyone can qualify for, you can bring the cost down in the United States to $5,500. Now outside the US, we base tuition, it's you know, we take a ratio between the GDP per capita in the US and the country that we're operating in. And so in places like Africa, the cost for the entire degree is often less than $300.

Alexander Sarlin: 44:26

So tell us a little bit about the relationship between the BYU pathway worldwide initiative and Brigham Young University in Utah as people may know it traditionally.

Brian Ashton: 44:37

Sure. BYU pathway along with Brigham Young University, and other schools are sponsored by the Church of Jesus Christ of Latter Day Saints. The church has what we call the church educational system consists of four campuses. So Brigham Young University in Provo, Utah, BYU Idaho, in Rexburg, Idaho, then BYU Hawaii, which is obviously In Hawaii, and then finally enzyme College, which is in Salt Lake City, Utah. And then the online institution for the church educational system is BYU pathway worldwide. We are also the access provider. And so we actually take the curriculum that is provided by BYU Idaho and enzyme college and make it available to students all over the world, as I mentioned over 180 countries. And so van Chrisman is with me here today because the Northwest Commission on Colleges and Universities, accredited degrees through BYU Idaho and through Anza, and college, those

Alexander Sarlin: 45:41

numbers are absolutely astounding. I think anybody in the higher ed world listening to this, their job may be just hit the floor. You know, we saw Georgia Tech offer a really innovative degree in computer science over the last few years. And their big claim to fame was it was you know, under $10,000 $8,000, you're talking about a $6,000 degree that goes down to 5500. That is also geo priced so people can afford it from all over the world that is truly remarkable. People don't often realize I think sometimes in the US that a three year degree has a global precedent, you know, the United Kingdom offers three year degrees and always has, I think, you know, maybe you could talk a little bit about where did we get the idea that four years is necessary for a degree? And why are you beginning to question that common belief?

Brian Ashton: 46:27

Van why don't you go ahead and take that one.

Van Christman: 46:29

So the tradition in the United States 120 credit hours actually comes? It's the Carnegie unit. And it was actually originally created for faculty pension. It had nothing to do with learning, it had nothing to do with getting a degree it was simply for faculty pension, and that that has become the tradition, you have to have 120 credits for a bachelor's degree. And we just question it, because we say it ought to be about learning it ought to be about have you learned the material you need to learn for this degree rather than you've jumped through 120 credit hour who 100%

Alexander Sarlin: 47:10

We've heard people in the higher ed world sort of question that Carnegie unit tradition for a number of years, but very few have actually made moves to disrupt it. And hearing you talk about the history of it and how it just came from, you know, faculty pension and has become what they say reified. Basically, we believe that there's some, there's got to be some great reason why for years is right, and he started looking at it, there just isn't, it's incredibly exciting to see a school of BYU stature, really moving into this space aggressively. So I have to ask, you know, for other people in higher ed, who maybe are thinking about doing innovative pricing models, innovative world, you know, global degrees, how do you convince, you know, I mean, how did this go over this idea inside BYU? And how long did it take for people to get their heads around this innovative approach,

Brian Ashton: 48:02

and maybe I can give a quick overview, and then van can give you a few more details. You know, we started with the needs of our students. And as I mentioned, you know, they need to get in the job market quickly. And we've done a lot to get there, including using stackable job ready certificates. So instead of creating all the value, at the end of your degree, we're creating value all the way along their experience. So they get two to three job improvements. While they're in the degree. And they're learning each of these certificates, three certificates, equals a plus some general education leads to a bachelor's degree, they can get jobs, they can improve their jobs, because they're learning job skills with each certificate. But you know, as we looked at the design of the curriculum, what we realized was that the elective credit was being taken by our students at the end of their degree. And typically, elective credits taken at the beginning, so that students can figure out what they want to major in. Well, our students already knew that. And so, you know, they would go through our introductory program, they would take their first certificate, their second certificate, the third to finish the general education. And then they just have elective credit leftover and they were taking the easiest classes, they could just finish. And so when we talked with the accreditors for our students, at least, that didn't make a lot of sense. And so what we've done is we've kept all the learning outcomes, all of the major classes, but we have just simply eliminated elective credit and for us that made a lot of sense. Then can you talk about working with the faculty?

Van Christman: 49:37

Yeah, well, we started looking at this actually the first time we looked at it was in 2009. But you have to have of course, accrediting body willing to talk at that point in time. It wasn't the wasn't really an option. So it got put on a shelf for a number of years. And 2019 We brought it back out due to some articles. Psychologen three, group. And we started talking to the accreditors, they had changed their standards a little bit to make it more open. But it took us visiting with faculty for a number of years. So we started in 2019, and finally got approved in August of 2023. And it's just been implemented. And it's just been a process of helping faculty to really look at the students that we were serving, this is a limited number of programs, they're online for these different this different student population. And I think that really helped our faculty to see that, okay, it makes sense for this population of students.

Alexander Sarlin: 50:45

It's such an important insight. And I think, you know, we've seen a couple of other innovative universities, obviously, you think of SNU, you know, Southern New Hampshire and Western Governors have sort of related insights where they realize, hey, these students are not here to explore their, you know, liberal arts options, they're not here to take, you know, 10 different, you know, postmodern fiction, in my first year of college to figure out if I wanted to be a comparative literature major, like, Yeah, that's great, I had the privilege to be able to do that. If you're from Ghana, and you are trying to get a degree so you can get a better income, and support your family. That's not your experience at all, and getting them the most efficient. And the most, you know, cost efficient and time efficient outcome from your higher education is exactly what these students are here for. So it's amazing to hear that the faculty also grasp that that difference in need from the student body was underlying the difference in in structure. It's very interesting to hear you say how they did the electives, it makes perfect sense, right? If you're there, because, you know, you offer business technology, communication, health, family services, and Professional Studies, somebody starting that degree knows which one of those they want to get into, right, they know they're looking for a health degree or at a technology degree. They're not exploring, they're going to do their electives, when they have to, which is at the end. And they're gonna do as easy classes as they can, because all they need is that certification that allows them to change their lives. It's such an amazing insight. So let me ask one more question. Because this is this is such an exciting initiative. Why do you think the accreditors have sort of come around on this, this has been the blocker for three year degrees and other kinds of innovation for a long time. And you're accredited by NW CCU in the northwest, what has changed since you know, 2009 to 2019, that may enable this kind of innovation,

Van Christman: 52:37

I think, a couple of things. One, the leadership has adjusted, you know, they change, obviously, you get new, new people in there. But they've changed their standards, Northwest changed their standards, other accrediting bodies actually still have 120 credits written into their standards. And until they can sit down and rework those standards, it's a huge barrier to these kinds of programs. Northwest changed their standards, and that opened the door. And then with all of these conversations, they were willing to say, Yeah, let's try this.

Alexander Sarlin: 53:15

It's so exciting. And I feel like this is a pioneering effort that everybody in the higher education system should be looking at and saying, How can we follow this lead, whether they're in a creditor, whether they're a university president, whether they're a faculty member, because for so many students, especially online students, and especially global online students, what they're looking for in an online higher education experience is so different than what we've traditionally thought of in the US. So, thank you so much for being here with us on a tech insiders week in ed tech. Brian Ashton, president of BYU-Pathway Worldwide, and Van Christman, associate academic vice president at BYU Idaho. Keep up the incredible work will follow this initiative as it expands. Thanks so much for being here. Thanks,

Brian Ashton: 54:03

Alex. It's so great to be with you.

Van Christman: 54:04

Thank you very much.

Alexander Sarlin: 54:06

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