Chapter
4
The Business Model
“An investment in knowledge pays the best interest”. – Benjamin Franklin
With the wide scale availability of almost any piece of knowledge you desire at your fingertips with a simple search on Google, the idea to charge such a premium for access to that knowledge seems ludacris. Furthermore, everyone should have equal opportunity and access to information that could help them better themselves and become better global citizens. For these reasons, knowledge should be free. On the other hand, the amount of information is overwhelming and it is hard to discern what information has the most utility for one’s life, challenges, or chosen mission. Curating information into a learning journey with ample support and resources to apply that knowledge then becomes more valuable.
So the question becomes, if we are not charging students for the transfer of knowledge, what are we charging them for? More simply, how does Evolve create a profit? This is answered in two ways. First by trimming the fat of a traditional institution to keep overhead low while maximizing the money and resources put towards the most important element of the university: the students. The second is by a diversified portfolio and financial model.
At Evolve we believe that the money that is paid for a students education should go directly towards what will benefit the student most - education. Seems intuitive and common sense, yet much of the traditional university’s cost drives tuition through the roof, leaving students to foot the bill for an inefficient business model. The following are ways that Evolve uses lean principles and keeps costs low for providing education to students.
"WE BELIEVE THAT THE MONEY THAT IS PAID FOR A STUDENTS EDUCATION SHOULD GO DIRECTLY TOWARDS WHAT WILL BENEFIT THE STUDENT MOST - EDUCATION."
First, we use existing resources and solutions whenever possible (Kosslyn, Nelson, 2017). We hold no ego in saying that everything must be disrupted in the current model of education. Sometimes effective solutions in providing education already exist. So we do not spend money on R&D to fix something that is not broken. We expand this mentality by not having one physical campus with a bunch of amenities like gym facilities, dining lounges, and media centers. Rather we use the existing infrastructure, including renovating existing buildings for student hubs, to provide these amenities. We let local businesses focus on providing services so we can focus on what we do best, proving education. This mentality is taken one step further by using existing 3rd party content, resources, texts, and other materials online rather than creating our own. We know many others have already put out extravagant content and it is more cost effective to license their content then spend time and money creating our own.
Second, we do not have an athletics department (Kosslyn, Nelson, 2017). Although physical sport can foster a wide variety of benefits such as health, community, and brand spirit, the cost of funding these departments and running their facilities are astronomical. Instead we encourage our students to join intramural teams in their cities. We also foster that spirit through other world problem solving competitions much like the XPRIZE does.
Third, we are not a research focused institution in the way that part of tuition funds research happening at Evolve. Rather research may happen within each individual’s studies or through real world internships or consulting for businesses and organizations.
Fourth, we do not have high salary tenure positions for faculty. Instead faculty are hired on yearly contracts and evaluated on their ability to deliver an educational experience that most benefits the student.
Last but not least, using a distributed administration, clearly defined roles and responsibilities, and a lean startup culture we keep the cost of administration down (Kosslyn, Nelson, 2017). We maximize the use of each faculty member and existing resources before ever hiring a new person or spending money on new solutions.
Many colleges rely on student tuition for most of their revenue, making students shoulder the heaviest burden of the cost of education. We believe it should be different. We believe that education is an investment that everyone who benefits from highly educated & skillful people should share. Those that benefit from this are the students, employers of these students, governments that these students are citizens of, and societies that these students contribute to, and of course the university itself. For this reason we believe that each of these parties should hold a stake in investing in a students education. Our main income source will be from those who most directly benefit from education, the students themselves, while other income sources are derived from indirect stakeholders.
The main income source for Evolve comes from a subscription service that has different tiers depending on where the student is in their journey.
At the lowest level, entertaining content marketing calls forth students by appealing to their passions, a drive to fulfill a mission, and desire for a different education. When students are sparked by curiosity to visit the platform, they will be greeted with a variety of classes they could take to upgrade their skills in passion areas they are interested in. This introduces the first tier, a freemium subscription where students sign up for the platform as a user in exchange to take a class for free. Self driven individuals could access our platform’s content for free and take any classes they desire. With the help of AI algorithms, the student could set up their own skill trees by inputting the problem they wish to solve and the AI would spit out the skills necessary to solve the problem. If the student wishes to have a badge or certificate awarded for the skill in order to show others such as employers, they can pay a small fee for the mastery evaluation of that skill.
Once students begin to dive into their passions and interact with the platform, they may find a motivation to pursue their interests further. This introduces the next tier for those that wish to have the full Evolve educational experience online. They would pay a monthly subscription fee rather than an overall tuition fee. The reason for this would be so that students only pay for the time actually needed to achieve mastery. The value proposition for paying for the full experience is to have the support and accountability of human components, from the group seminars to the life board of advisors which would support the curated learning journey. This is excellent for students who have other commitments in life that they would not want to give up to live in a community hub.
The following third tier would be for those that wish to have the full evolve experience with the added community benefit of residing in our community hub. In this tier they would pay the previous subscription fee plus a lease for their living space. Although rent price markets often fluctuate across cities, we will strive to make them the same price across all hubs.
After a student completes their education, they can continue their subscription and have continued access to the Professional Development Agency and can easily jump back into new skill tracks as they approach new problems or need reskilling. Furthermore, we will continue to market to our alumni to bring them back at different stages in their lives and careers to promote lifelong learning.
Students will be allowed to declare financial hardship upon which fees are automatically waived and will be covered by other income sources. We do not wish to seek financial assistance through student loans or government aid.
Universities hold something highly valuable to organizations: an excess of human capital consisting of the most innovative minds. For this reason, Evolve allows access to the untapped potential of the university to tackle the biggest challenges in these communities. The results of this partnership are simple but significant: innovative solutions for complex problems, real-world experience for students, and meaningful change for all those involved. The university would act as an external consultant and would charge a competitive rate for solutions produced for organizations.
For these communities they benefit from:
For the students they benefit from:
The skill driven education of Evolve offers a unique opportunity for employers to screen new employees and reskill existing employees for the skills they need most. This is accomplished through a few different means.
The first is employee skill screening where Evolve will provide a business with the capability to assess prospective employees for a given level of expertise and skill mastery by having the prospective employee take a set of assessments. Evolve would charge for such assessments.
The second is businesses could also outline their own skill trees necessary to complete a position. Potential talent could then test mastery of those skills on the platform. If they did not have the skill then they have the ability to take the class to gain mastery. Evolve would charge for such assessments.
The third is enterprise level education in which Evolve would provide businesses with access to an enterprise version of the platform, which will allow employees to upgrade their skills while employers can look at performance records of training. Evolve would charge for access.
At the core of Evolve is a desire to solve the world’s greatest challenges. As a student declares a mission and begins mastering their skill tree, they may find that the best opportunity to execute that mission is by building a business. At Evolve we strive to equip our students with an entrepreneurial mindset and provide them with resources and expertise they need to launch their company if they so choose to. In support of this cause, Evolve partners with students, the world’s brightest minds, to build a company of enduring meaning and value. We invest money into promising student startups and partners with them to transverse the early stages acting as co founders and holding equity in their companies.
In return Evolve offers three benefits:
The Evolve endowment will manage and indefinitely perpetuate a pool of financial, real estate, or other investments for the specific purpose of providing education to our students. This is a long term play where we take a portion of our profits and invest them with the goal that future investment income will replace the need for students to pay any costs to education. It will be structured so that the principal value is kept intact, while the investment income is used to further reduce the cost of education for our students. We will not hoard our endowment funds, but rather make sure they are used for our number one stakeholder, our students.
Luminaries believe education is our chance to make the world better. They are a community of supporters who are invested in our students unique goals and mission to revolutionize higher education. Luminaries share the support of investing in students in 2 major ways.
The first way is by sharing wisdom. Luminaries form an important network of knowledge and resources that we can tap into when shaping our students’ experiences. Luminaries champion students in their own communities, connecting them with any employer, university, mentor, or potential new friend they should meet.
The second way is through donations. A luminaries donation will make it possible for Evolve to provide an accessible life changing experience to a broader range of students and community members. Luminaries contribute a monthly donation that fits their budget (even donating as low as $2 a month). Donations should be separated from overhead costs so that 100% of the money goes towards the student’s education and pursuit of their mission. Inspired by New Story Charity, Luminaries will be connected to and directly shown how their money impacts the students life through impact metrics and student’s stories. For this reason, a sister Evolve non-profit organization may need to be set up in order to allow donations to be tax deductible.
Luminaries would receive special recognition by:
Certified B Corporations strive to balance purpose and profit and creates benefit for all stakeholders and use business as a force for good. They understand that society’s most challenging problems cannot be solved by government and nonprofits alone.
Their values strongly align with those at Evolve (B Lab, 2020):
As a result of alignment, we will become a B Corp and be held accountable for considering the impact of our decisions on our students, faculty, community, environment, and society at large.
This mission will require far more talented, bright, passionate, and capable individuals than I could muster alone. It is important to note the one character trait that is true for each individual on the team. We are missionaries not mercenaries. We are doing things for the mission, not for money at all costs. What is to follow are the types of people I believe will be required in order to get the university off the ground. The cofounder and I will do everything to start and we will grow from there.
I will act as co founder and CEO of Evolve. Knowing that I am more introverted, big picture, and an artist, I need to surround myself with others who compliment my strengths and mitigate my weaknesses. I am the dreamer and the person whose passion goes beyond anyone’s expectation. My talent lies in dreaming big and being passionate about what the company could achieve in the future. I communicate that vision with clarity and decisiveness I am also a jack of all trades, wearing several hats and solving a lot of different problems. As CEO, I lead from the front, championing the rest of the team to follow and lead in their respective roles.
Possible Core Responsibilities of CEO:
Holding & delivering the vision
Assembling and championing a team to execute that vision
Obtaining and securing resources to execute that vision
To complement my experience, style, and knowledge base, I will need someone who has strengths in all of my weaknesses. This person is most likely to be extraverted, systems orientated, and entrepreneurially savvy. They are excellent at helping to inform the vision and breaking it down into actionable steps for execution. They are highly effective at communication and check their own ego at the same time. They are a coach and highly effective at leading others.
Possible Core Responsibilities Of COO:
Lead the execution of strategies
Co-leadership of the team
Focused on finding profitable product market fit
As a large element of Evolve will require a heavy technological infrastructure to support its vision, the need for a highly skilled individual in coding and technology development will be required. This person will have a passion for education, and highly likely that they are a self taught programmer and developer. They are focused on mastery of their craft and using these skills to produce life changing innovations. This person is the glue between the science of learning and the technologies best suited for supporting those. They are responsible for developing and shipping new technologies to support learning and teaching. They are also responsible for hiring more people in the technical team and bringing together various technologies in order to fulfill the vision.
Possible Core Responsibilities Of CTO:
Identifying existing tech or Inventing New Technologies to execute vision at scale
Developing and fine-tuning the university’s strategy for using tech resources
Leading team of technical developers
This person will have a strong aspirational purpose and an even higher vision for the company. And most importantly, they must know how to transform it into reality and capture the hearts and minds of those inside and outside the startup. They’re in charge of directing who the Evolve curriculum will be sold to and how it will be positioned to students. They are responsible for identifying market opportunities, defining the product being built, and determining the return on investment. They conduct student interviews, user testing, and data analysis, and distill the insights gained into an implementable strategy. They then lead the product team to bring that strategy to life. As for the student experiences, they will set the requirements for each feature and explore how they will benefit the student’s experience.
Possible Core Responsibilities Of CPO:
Identifying product market fit
Bridging evolve curriculum with students
Leading all aspects of student experience
The CMO’s focus is on making Evolve the most unique university out there – and how to spread the word about it in the best way possible. They are a storyteller, growth hacker, and analytics geek. They are responsible for creating and building the startup’s strong brand identity, healthy customer roster and established references. They are a driving force behind engagement, retention, creative and brand strategies, along with all marketing communications. Highly skilled in everything from copywriting, sales funnels, and social media marketing.
Possible Core Responsibilities Of CMO:
Brand Identity & Storytelling
Student Championing & Growth driving
Marketing communications
This person is the guy at the party who knows everyone else. The connector fosters a network of crucial contacts and connections that will help build relationships with students and eventually get major investments and help the university grow. Their focus is in marketing, outreach, and communication initiatives for the institution. They make connections between businesses, governments, and organizations with students for consulting projects.
Possible Core Responsibilities Of CDO:
Making Network Connections for student outreach
Making Network Connections for the community network
Manages all public relation efforts in marketing efforts of the university
Because of the complexity of multiple stakeholders in Evolve’s business model, an intermediary person with a keen eye on where money is going for the students and the university is crucial. This person is focused on metrics and results to produce the best possible outcomes for the use of the universities financials. They are responsible for managing the financial health of the Institute and its operations. The CFO holds the university accountantable with figures.
If too much money is being spent in a certain area, or it’s not being utilized correctly, the CFO can highlight it and come up with a solution. They are responsible for all the universities financial processes and reporting requirements to external organizations. They are also responsible for making sure that students who wish to attend Evolve are financially capable of doing so.
Possible Core Responsibilities Of CFO:
Taking control of the university’s financial planning and risks associated with future goals
Managing budgets for student financials
Managing long term equity investments in student startups
Charismatic, confident, and convincing. This person has demonstrated a ton of soft skills and is great at turning a brilliant idea into flowing profits. They need to convince students, their families, and external organizations to take a gamble on an untested education, an unknown university… and hope it pays off. They need to convince potential students to take a chance, and this requires not only confidence and persistence, but also a deep understanding of the university, its mission, and its culture.
Possible Core Responsibilities Of CSO:
Overseeing the entire process of prospecting to close
Recruiting, training and managing sales reps
Passionate about education and steeped in research about the science of learning, this person is the educational powerhouse of the team. They bring a deep expertise about higher education, possibly having experience working with other alternative education models. They are responsible for curriculum development, curating third party content, and achieving student learning outcomes. Their number one goal is making sure that students are getting the knowledge and skills needed to fulfill their educational goals.
Possible Core Responsibilities Of CAO:
Developing core curriculum of Evolve to prepare students for fulfillment and mission execution
Measuring Impact metrics of Evolve’s education on student outcomes
Ensuring the success of our students means being deeply connected with them, making sure they are getting the most value out of their time with Evolve, as well as making sure they have an unforgettable experience with the university. They will be a guide for students from entry admission to graduation and beyond. They connect students with resources needed at every stage, responsible for the safety, growth, and development of students outside of class, and facilitates opportunities for integrated learning.
Possible Core Responsibilities Of DOSA:
Handling Admissions Process
Navigating Students through the evolve learning journey
• Keeping contact with student after graduation to promote lifelong learning
Promoting student happiness and success
With a love for combining world class people with well oiled systems, this person leads our people who directly influence our students success. They are responsible for managing our team of Evolutionary Board of Advisors & training new advisors.
Possible Core Responsibilities Of DOF:
These roles are not set in stone but what I believe to be the people needed on the leading team when the university is at full force. As we move from the founding team who will be doing all these roles to a full team, these roles will begin to take greater form.
comments