In his day job, as a founder of the University Ventures investment fund, Ryan Craig bets on companies with education models — coding bootcamps like Galvanize, staffing companies like Revature, and career-focused gaming companies like Equity Sim — that can provide quicker and more affordable routes to employment than traditional colleges can.
In his forthcoming book, Craig argues that ventures like those are the first signs of a revolution that will “upend the traditional college route, as America falls out of love with bachelor’s degrees, particularly from nonselective schools.”
In this email interview, condensed and edited for clarity, Craig discusses the changes in the hiring landscape that prompted him to write A New U: Faster + Cheaper Alternatives to College (BenBella Books).
Q. You say that higher education faces not just an affordability crisis but also an employability crisis. What do you mean by that?
A. A major reason many college graduates aren’t able to repay their loans is they’re not getting good first jobs. First, colleges and universities haven’t done a good job aligning academic programs with what employers want. Higher-education institutions simply weren’t designed with a good interface to the labor market. And even if they were, few employers are interested in substantial, long-term interactions with universities.
Also, while most colleges and universities continue to prepare graduates with the cognitive skills they need to be successful, that’s not what most employers are measuring, particularly at the top of the hiring funnel. Specifically, digital skills now outnumber all other skills in entry-level job descriptions, across nearly every industry.
So when college students apply for jobs without named digital skills on their résumés, they’re literally invisible to hiring managers, who protect themselves from the deluge of résumés for online job postings behind applicant tracking systems, which utilize keyword-based filters to determine who gets seen.
The first job after college is essential. Research has shown that underemployment out of the gate is increasingly acute and persistent, resulting in reduced economic opportunity for a lifetime.
The result is what I call the “employment imperative” — the single biggest change in higher education over the past 20 years. Students now overwhelmingly enroll with a good first job in mind. Other considerations are secondary.
One of my goals with this book is to help focus colleges and universities on employability, particularly the first job. And this will require a much broader and deeper understanding of how entry-level hiring actually works today.
Q. If these alternatives are indeed better and more cost-efficient paths to employability, what about the other things that a college education should provide? I’m not just talking about socializing 18- to 24-year-olds. Doesn’t higher education ideally also provide graduates of all ages a baseline of skills and knowledge that we need in a 21st-century society? Just teaching people to code without putting them into debt doesn’t do that.
A. I’m acutely aware of this. As I say in the book, I start each chapter with (what I think is) a funny college story as an elegy to what might be lost with faster and cheaper alternatives. I enumerate the potential losses as fun, discovery, serendipity, and an educated citizenry, and discuss each in turn. But my main point is that we cannot afford to revisit the economic plight of millennials on Generation Z and future generations. Millennials have fallen behind prior generations in terms of income, wealth, home ownership, new business creation. It shouldn’t be a surprise that, as a generation, millennials have lost faith in capitalism, and don’t think socialism would be so bad.
So, in economic terms, the patient is bleeding out on the table. It’s a situation that calls for triage. And the first order of business is to address the economic situation — to make sure students are graduating into good jobs, without too much (or hopefully any) debt. This calls for faster and cheaper alternatives. The other things are critically important, but — as in triage — we have to save the patient’s life first before addressing them in turn.
Q. Many of the examples in A New U are based on companies that your firm has backed. Obviously you wouldn’t invest in companies like Revature and Galvanize unless you also believed in them. But a cynic might wonder if this book was just a way to put some intellectual patina on your investment thesis. Why did you write it?
A. I see a one-size-fits-all system of higher education that is only working really and consistently well for the privileged few. For years, it’s struck me as bizarre that our economy is so diverse, and yet there’s really only a single initial pathway to a successful career. There ought to be a multitude of pathways — certainly faster and cheaper, as no one’s likely to try to create pathways that are longer and more expensive.
This is important for young Americans looking to get their foot on the first rung of the career ladder. It may be even more important for the tens of millions of older Americans in last-century industries who are currently told that their only path to active participation in the vibrant digital economy runs through 120 credits and a college classroom — often an environment where they weren’t successful in their younger days.
Many of our most pressing social challenges — the rise in inequality and reduction in socioeconomic mobility, the loss of hope from the sense that good jobs are out of reach — challenges that are fueling political extremism, are a direct product of the lack of alternative pathways to good jobs.
I see myself as more missionary than capitalist. It so happens that the best solutions we’ve come up with to this problem — solutions that scale — are private-sector solutions incorporating our concept of last-mile training (although we also support not-for-profits doing the same thing, many of which are included in the book). Last-mile training has the potential to provide hundreds of alternative pathways to good jobs, and to close America’s skills gap of nearly seven million unfilled jobs. I’m passionate about solving this problem, and it’s a privilege to partner with passionate entrepreneurs who are equally committed to solving this problem at scale.
I get that the “private-sector involvement in higher education” well has been somewhat poisoned by for-profit universities. But keep in mind that none of these new pathways take [federal] Title IV dollars. And many of them are guaranteeing employment outcomes without charging any tuition. That’s a risk-reward profile that’s the polar opposite of the problematic for-profit universities of yesteryear. And also of many traditional universities.
Q. You went to Yale, for undergrad and law school. Many of the other folks now arguing that students need alternatives to traditional higher education also boast degrees from elite institutions. Is this a case of you and your compatriots wanting something different for yourselves than you espouse for other people’s children and families?
A. We currently have two systems of higher education. There are selective schools, which continue to produce very strong student outcomes — although how much is due to “added value” versus the high caliber of the students attracted to these institutions remains an open question. But there are only 200 selective schools. For too long, nonselective colleges have operated under the umbrella of selective universities and the fiction that a degree is a degree. Employers know that’s not true. Students and their families are slowly coming to the same conclusion.
If your child is admitted to a selective university, and it’s affordable, no one will be a bigger cheerleader of your decision to enroll than me. In fact, the value of a selective-university degree is so high, I recommend bending the affordability criteria to the breaking point, and being willing to take on much more debt.
If your child is considering a nonselective university, and the aid package doesn’t make it affordable, you should see a bright red light. The book includes a directory of 250 faster and cheaper alternatives, like bootcamps, income-share programs, apprenticeships, and staffing models that lead to good first jobs in growing sectors of the economy, like IT and health care. Often these are the very jobs that college graduates want but can’t get because they don’t have the technical or digital skills.
To be clear, in suggesting that some students will be better off selecting faster and cheaper alternatives, I’m not arguing for less postsecondary education in aggregate or per capita. That would be economic suicide for America in today’s globalized knowledge economy. What I am arguing for is a restaging of how postsecondary education is consumed. It needn’t be “all you can eat in one sitting.”
After a faster and cheaper pathway and success in gaining a good first job, students will absolutely need pathways to boost their cognitive and executive-function skills, in order to move on and move up in their careers. Colleges and universities are best positioned to develop and deploy these cognitive skill-building secondary and tertiary pathways.
Q. You finished writing this about eight months ago. This world moves fast. Based on what you know now about higher ed and hiring, is there some trend or topic you’d add now?
A. It’s become clear that scaling solutions to America’s education-to-employment problem must address two distinct frictions. On the student side, there is “education friction.” Education friction is why individuals fail to upskill themselves. This is a result of the time, the cost, and — most important — the uncertainty of a positive employment outcome. Education friction is a major cause of the continuing skills gap.
On the employer side, there’s also “hiring friction.” Hiring friction is why employers are loath to hire candidates who haven’t already proven they can do the job, due to risk of a bad hire or higher churn. Hiring friction helps to explain all the unfilled good jobs, and why employers are increasingly requiring years of relevant experience for positions that should be, and once were, entry level.
The most scalable last-mile training models will be those that eliminate both frictions. Eliminating education friction means last-mile training with no financial cost and a guaranteed job. And eliminating hiring friction means allowing employers to evaluate candidate performance on real project work before being asked to make a hiring decision.
Goldie Blumenstyk writes about the intersection of business and higher education. Check out www.goldieblumenstyk.com for information on her book about the higher-education crisis; follow her on Twitter @GoldieStandard; or email her at goldie@chronicle.com.