A Dot-Com Entrepreneur's Wild Ambition: Drive Education Costs to Zero

Melissa Golden, Redux

Michael Saylor, chief executive of MicroStrategy, whose online education company seeks to offer no-cost courses to the world: Traditional teaching is like "giving people thousands of rubber mallets and asking them to drill a hole through a mountain. We need nitroglycerine."
November 11, 2012

Michael J. Saylor was early to the free online-education market. In 2000, Mr. Saylor, then a dot-com billionaire as chief executive of a business-intelligence company called MicroStrategy, promised to give $100-million to open a new Web portal that would provide quality education for the masses at no charge.

That plan got derailed, though, when he lost $6-billion of his fortune in a single day of stock trading during a U.S. Securities and Exchange Commission investigation. The online-university project was sidelined.

These days, Mr. Saylor is back. Not only has he rebuilt Micro­Strategy, but in the past few years he has also channeled his still-prodigious wealth into changing higher education.

He compares traditional teaching to "giving people thousands of rubber mallets and asking them to drill a hole through a mountain." He said, "We need nitroglycerine."

His "nitroglycerine" is, a nonprofit online university he backs as sole trustee of the Saylor Foundation. Saylor's model is to offer students a free, one-stop shop for self-paced college courses. aggregates free content offered by open-source providers like MIT OpenCourseWare and Open Yale Courses, and groups it so that students can pursue a continuous sequence of courses in a major.

The model takes a different approach than that of high-profile providers of massive open online courses, or MOOC's, mainly in its role as an aggregator of online content into comprehensive courses. Instead of following a professor through a series of video lectures and peer-graded exercises on Coursera, for example, students in Saylor courses read, listen to, and watch material from different sources and grade themselves using answer keys.

A unit in a Saylor world-history course, for instance, includes a video lecture from a Harvard professor, content written by academics the foundation hires, excerpts from textbooks, and free quizzes from Pearson Education. encourages students to earn credit for its 267 courses via outside accreditors, many of which are recognized by major colleges.

Eventually, Mr. Saylor hopes, the site will include courses for all levels of education, kindergarten through college, and serve students around the world.

The entrepreneur is nothing if not sure of himself. He finds face-to-face teaching methods archaic, and says a lifetime of education can be delivered on a tablet. His views can be found in his recent best-selling book, The Mobile Wave: How Mobile Intelligence Will Change Everything. "The old ways of teaching are slow and expensive," he writes. "But with mobile, cost plummets, access broadens, and pedagogy rises."

Small Beginnings

For now, though, does not provide "massive" open online courses—it reaches only a small audience compared with larger online players like Coursera, edX, and Udacity. Those MOOC providers have managed to attract hundreds of thousands of students, pulling in interest because of media attention and the elite universities offering the courses.

Saylor has experimented with different platforms; for now, most of its traffic comes from iTunes U, Apple's free online platform for educational materials.

The foundation has posted 21 of its courses there since May, and three of its courses are posted on Google's new open-source platform, Course Builder, said Sean Connor, the foundation's community-engagement manager.

As a growing number of providers enter the free-education market, is struggling to find how it fits in. Alana Harrington, the foundation's program director, sees the growing number of providers as a positive development because students have more options to educate themselves. Many students taking Saylor courses are also taking MOOC's. "I don't think we compete with names like Harvard and Stanford," she said. "We can direct our students there and use the content they create and share with the world to enhance our courses." 

 The Saylor Foundation office overlooks the Georgetown waterfront here, and it's a small operation still working to gain traction. About 200 people work for the foundation; 34 are in house, and the rest are remote consultants responsible for creating courses, researching content, and reviewing courses for quality, Mr. Connor said.

Mr. Saylor's interest in online education stemmed from his experience at the Massachusetts Institute of Technology, which he could afford to attend only because of an ROTC scholarship. He often found himself sitting in lecture halls, thinking he could view lectures more comfortably on video. He founded MicroStrategy in 1989, two years after graduating from MIT.

Remembering his experience there led him to establish his foundation in 2000, planning to use it to finance an online university. But that year the Securities and Exchange Commission filed civil accounting-fraud charges against him and two other executives, accusing the company of exaggerating its revenue in financial reports read by investors.

In a settlement, each executive paid fines, and $10-million in company stock was paid to shareholders. Mr. Saylor lost $6-billion when stock prices plummeted; he was "distracted" from the online-education pursuit, he said.

The technology to drive an online university wasn't available yet either, he added. "I didn't want to squander the money I had investing in a technology I didn't think was going to be effective and practical," he said. He returned to the idea in 2008, after MicroStrategy's business had recovered, and had revenue. The foundation began with the goal of offering courses in the 10 most popular undergraduate majors.  

 The foundation hires groups of academics to look into required curricula for majors. Then it finds course designers who help identify free material from sources like MIT OpenCourseWare or Khan Academy. "We've always had this internal slogan that there's nothing better than Google," said Jennifer Shoop, the foundation's content-development manager.

Academic editors hired by the foundation edit the curated content, which is then posted online. The course then undergoes another round of review by a panel. The result is a curated list of education links that Mr. Saylor and his colleagues say add up to the equivalent of a college major. Since open-source textbooks are difficult to find, the foundation has awarded $20,000 each to four textbook authors willing to relicense their textbooks under Creative Commons.

Despite Mr. Saylor's enthusiasm, the foundation has not gained much momentum yet, said Richard Garrett, vice president of Eduventures, an education consulting company. Though the site offers high-quality academic content, he said, the largely self-paced nature of the courses and the lack of peer engagement could drive students to other online programs instead. "The question is, is it a sufficiently engaging and immersive experience and sufficiently social to command mainstream rather than marginal interest?" he said. "We may be coming to the point now, with the MOOC's commanding so much attention, where we need a bit more glitz and glamour and personality around Saylor to compete."

Grading and Credit

Unlike other online courses, which glean data from students, users are not required to register on, although they can fill out an online profile.

Only about 500 of the 7,000 students who have filled out such profiles have made them public, which makes social connection difficult. The foundation added a study-group function to the site this month to solve that problem, said Devon Ritter, Saylor's special-projects administrator. Students have also asked for a way to gain course credit. They have three options: They can take the College Board's College-Level Examination Program test for that subject; register with StraighterLine, a company that provides courses and credit recognized by some accredited colleges; or take a test through Excelsior College, through a partnership between that nonprofit college and the foundation. More than 250 colleges accept StraighterLine credit, while over 1,500 accept Excelsior credit.

Mr. Saylor says his foundation is only a piece in a greater effort to advance digital learning, and he says larger players will make the greatest impact. "The Saylor Foundation is meant to be a gadfly to encourage Google, Apple, MIT, Harvard, the United States government, and the Chinese government to aggressively pursue digital education," he said. "We just want to do things on the periphery to get people comfortable with the idea, so that they can go beyond where they are right now."

Enrollment at brick-and-mortar colleges in the United States and Europe won't change much as a result of online education, Mr. Saylor predicts. He prefers to focus on technology's potential global implications. "The benefit of rich families putting their child through Harvard is always going to exist," he said. "But it's quite evident that there are 700 million peasants in China who are never going to go to Harvard."

Correction, 11/11/12, 2 p.m.: This article originally said the number of Saylor employees was about 200. Some of those are consultants, and 34 are employees. The article also called Excelsior College a for-profit institution; it is nonprofit. The article has been updated to reflect those changes.

Correction 11/12/12, 8:30 a.m.: This article originally said Saylor had only 500 students who had filled in online profiles. In fact, 7,000 students have filled in online profiles; only 500 of those have made their profiles public. The article has been updated to reflect that.