Mark Cuban is known for mouthing off. Typically it’s from courtside at a Dallas Mavericks basketball game (he owns the NBA team), from a leather armchair on the set of the hit ABC show Shark Tank (he’s a regular), or from the op-ed pages of the business press (where he often rails against the U.S. Securities and Exchange Commission).
His natural milieu isn’t a wonky Twitter debate about education policy. But on a recent Saturday night, when you’d think one of the country’s best-known billionaires might have more entertaining ways to spend his time, Mr. Cuban spent an hour on social media spouting his education views while sparring with Sara Goldrick-Rab, a sociology professor who advocates for free community college.
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Mark Cuban is known for mouthing off. Typically it’s from courtside at a Dallas Mavericks basketball game (he owns the NBA team), from a leather armchair on the set of the hit ABC show Shark Tank (he’s a regular), or from the op-ed pages of the business press (where he often rails against the U.S. Securities and Exchange Commission).
His natural milieu isn’t a wonky Twitter debate about education policy. But on a recent Saturday night, when you’d think one of the country’s best-known billionaires might have more entertaining ways to spend his time, Mr. Cuban spent an hour on social media spouting his education views while sparring with Sara Goldrick-Rab, a sociology professor who advocates for free community college.
Mr. Cuban’s comments included a critique of accreditation, a call to eliminate the tax-deductibility of donations for college buildings, pleas for greater use of open-source textbooks as a way to save students “real money,” and some tough love for students who hadn’t learned to make good financial choices.
At one point, he even tangled with Ms. Goldrick-Rab over her research findings on the growing number of students struggling with food and housing insecurity. “Every kid that eats ramen noodles has food insecurity,” Mr. Cuban retorted.
“You could’ve knocked me over,” Ms. Goldrick-Rab said later, of the exchange. The two had met two years earlier, when they were both on a conference panel in Arizona. They disagreed about a lot back then, too, but at heart, she’s a fan. Ms. Goldrick-Rab, who will soon take a post at Temple University, appreciates that a business personality like Mr. Cuban is “intellectually engaged” on those issues. “I would like to see more people like him feeling free to ask more questions and just jump in,” she says.
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Of course, Mr. Cuban does have a stake in the future of education. He’s an investor in at least four start-up companies focused on higher education. And he’s been a vocal critic of what he calls the “ridiculous” spending by colleges on administrative salaries and glitzy campus facilities, and the “easy money” of student loans. The education business, he says, “is a mess.”
Being an ed-tech investor doesn’t make someone an expert on college. And that’s certainly not a label Mr. Cuban, 57, has tried to claim for himself.
I would like to see more people like him feeling free to ask more questions and just jump in.
But the business titan and onetime Dancing With the Stars contestant has become a valued mentor to a select group of education entrepreneurs and at least one college leader. For better or worse, he is also a visible and often-provocative voice for shaking up the higher-education status quo, a stature that may have as much to do with the tone of the times as with the merits of Mr. Cuban’s ideas. These days it seems just about anyone with a fat wallet feels entitled to play higher-education critic.
Mr. Cuban shared his views on education in a series of email exchanges with The Chronicle last month. His comments in this article are also drawn from an interview with this reporter two years ago, as well as his public remarks from the panel with Ms. Goldrick-Rab and other sources.
“When I see something that is wrong and fixable,” says Mr. Cuban, “I have no problem speaking up about it.”
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A Search for ‘Pain Points’
It’s in his role as an investor that Mr. Cuban is most hands-on with education issues.
His investment philosophy is simple. He says he looks for “pain points” in industries — students’ aversion to high-priced textbooks, for example, or the anxieties about the value of a traditional college degree — and puts his money into companies that are trying to fix them.
He has stakes in four young companies: Copley Systems, which tracks students’ academic activities with a data system that helps colleges keep them on track to graduate; Degreed, which provides a digital platform for people to showcase a variety of educational credentials; Packback, which began by selling short-term rentals of digital textbooks but is now shifting to offer online communities for students and professors who use the same books; and Ranku, which helps colleges create more-effective systems for finding and enrolling online students.
Mark Cuban on What Ails Higher Education
Mark Cuban has strong ideas on what’s wrong with higher education. Among the key issues, as he sees it, are:
• Student debt: Mr. Cuban owns the website collegedebt.com, which maintains a running total of cumulative student debt. The tally now surpasses $1.4 trillion, nearly twice as much as car loans, according to the site, and he says the student-debt burden is a serious problem for the entire country. He argues that students who take on too much debt are part of the problem, too. Eventually employers will look down on such students, he predicts: “It’s going to be the equivalent of putting a drunk picture on Facebook.”
• Wasteful spending: He argues that the availability of student-loan money fuels wasteful spending by colleges. “Easy money has led to colleges’ spending money on ridiculous ‘drive-up appeal’ features for their universities, which in turn increase tuition prices,” he says. All of those stadiums, food courts, and fitness centers, he says, are just assets that depreciate in value and require continuous spending for upkeep. “They become boat anchors,” he adds.
• Academic labor: He has criticized colleges’ overreliance on adjunct instructors, likening the practice of paying instructors low wages while charging students full price as “arbitrage.”
Mr. Cuban was one of the first outside investors in Copley. Keith Clougherty, a software developer and a founder of the company, has known Mr. Cuban since the mid-1990s, when they would run into each other at e-commerce trade shows and occasionally catch up using AOL Chat. In 2013, 18 months after starting his company, Mr. Clougherty wrote to Mr. Cuban, seeking a small investment. “Within two minutes he pinged me back,” says Mr. Clougherty. He declines to specify the size of the investment but says it was less than $1 million.
Especially in the early days, having Mr. Cuban as an investor was a big plus. With thousands of ed-tech companies out there, “his brand and his dollars helped us break through,” says Mr. Clougherty. Mr. Cuban’s willingness to lend his celebrity to the companies he backs, as with his participation at that panel in Arizona, during the 2014 ASU GSV Summit, certainly helped too.
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Today Copley says its software is in use on 50 campuses and involves about 250,000 students.
If there’s any downside to having a brash businessman like Mr. Cuban as an investor when selling to the higher-education market, the founders of his four companies in the market say they haven’t encountered it. “It either goes unnoticed” or it’s a plus, says Michael Shannon, who landed a $250,000 investment from Mr. Cuban after he and his Packback co-founders appeared on Shark Tank in 2014 to pitch their company. Mr. Cuban is one of the show’s original “sharks” — the investors who grill entrepreneurs about their pitches and decide on the spot how much they’ll invest for a share of the company. Whenever Mr. Shannon speaks to professors and others on campuses, he finds “it’s incredible how popular the show is.”
Kim Taylor, a founder of Seattle-based Ranku, says Mr. Cuban’s involvement made it easier to attract additional venture-capital investors. “There’s a thing about Mark that others like to follow,” she says. But his popularity goes beyond the VC crowd. “My grandmother knows who he is.”
Mr. Cuban is more than a figurehead for those education ventures. He typically demands weekly updates, and, while he doesn’t take seats on boards of directors, he communicates frequently with the founders via text message and Cyber Dust, an app whose messages disappear. (He created Cyber Dust after the SEC used his private text messages in a failed insider-trading case against him.)
“He’s our most-involved investor,” says Ms. Taylor, who became acquainted with Mr. Cuban through friends whose companies he had invested in. When she began her company, he heard about it somehow — “he reads everything,” she says — and connected with her via Facebook. He was the first one in on the company’s initial $1-million round of investment after talking with her casually one afternoon in New York City. “There wasn’t a slide deck,” she says of her nontraditional pitch to him. “We were in a bar.”
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The ‘Megaphone’ of Celebrity
David Blake, chief executive of Degreed, says he sought an investment from Mr. Cuban after admiring the mogul’s posts on Blog Maverick. He emailed him out of the blue, and after a few exchanges of emails and a few weeks, Mr. Cuban became one of nine investors in a $1.8-million seed round. The company, which goes by the slogan “the future doesn’t care how you became an expert,” has since raised an additional $28 million.
Mr. Cuban has opened doors for the company as it has begun seeking corporate partnerships, going so far at one point to write personally to a chief executive and chief technology officer at a Fortune 20 company he knew to tell them, “here’s why I invested, and here’s what I love about them,” says Mr. Blake. “There was quickly a fire lit there,” he says, and Degreed got a meeting. The company reports it now has about 100 corporate clients, 115 employees, and more than one million users.
Mr. Cuban does more than make introductions. He has advised Mr. Clougherty to be bolder and to “stick your chest out a little more,” the Copley co-founder says. And when Ms. Taylor confided to him once about a “gentleman client” who was being “unreasonable and rude,” she says the advice he gave her about the importance of keeping a client happy helped her work toward a resolution. (He also reminded her that “karma’s a bitch,” so she shouldn’t let an annoying client get under her skin.)
Despite all of his far-flung interests — Mr. Cuban’s website shows his investments in some 100 companies, including substantially larger ventures like the Landmark Theatres chain — colleagues of his note that he manages to be generous with his time in dealing with young entrepreneurs.
“The good thing about him is he’s more patient than you would ever imagine,” especially if you know about Mr. Cuban only from watching him during a Mavericks game, says Howard A. Tullman, who runs a start-up incubator in Chicago called 1871 and says he has known Mr. Cuban since “before he was rich.” (That would be prior to 1999, when Mr. Cuban sold his company Broadcast.com to Yahoo for $5.7 billion.) Both men are investors in Packback.
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While Mr. Cuban may not be steeped in the nuances of higher-education policy, says Mr. Tullman, it’s not like “having a Kardashian endorse an education company.” That Mr. Cuban is willing to use the “megaphone” of his celebrity doesn’t trouble him in the least. “If he said consistently no one should ever go to college again,” says Mr. Tullman, “that would be a problem.”
When people have ‘particular interests in particular outcomes based on their investment portfolio, we have to be wary.’
But the outsize megaphone that a billionaire can command can sometimes be dangerous, warns Audrey Watters, a writer who follows the education-technology scene. People like Mr. Cuban or Peter Thiel, another billionaire who’s famous for deriding colleges, are sometimes “given credence when they don’t really have a clue.” Ms. Watters says their critique of colleges exemplifies a current “Silicon Valley narrative that education institutions stand in the way of the future.”
She understands the appeal of their argument. “Clearly higher ed is facing a lot of challenges,” notes Ms. Watters. But when people have “particular interests in particular outcomes based on their investment portfolio, we have to be wary,” she argues. For them, “the fix is going to be a product” rather than, say, more public funding for colleges. “They aren’t necessarily white knights.”
‘The Ultimate Accreditor’
Mr. Cuban, for his part, says it’s important to call out the higher-education system for its faults, which include college-marketing efforts that “reflect the same tactics that companies desperate to stay alive undertake,” or accreditation, which he calls “too much of a cartel.” It’s the employer who hired the graduate or the customer who buys the music student’s music that reflects the quality of education, he says. “That’s the ultimate accreditor.”
Unlike some other entrepreneurs, Mr. Cuban hasn’t made noises about starting his own college. But he has some strong feelings about what such an institution might look like: For starters, he says, it would have a “fraction of the administration” of most institutions, few specialized buildings, a wide range of courses, including the liberal arts, and a variable tuition model, where the price of a course would be based on the size of the class, how much it was in demand, and the expertise of the instructor.
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Such variable-priced courses “would allow students to inexpensively experiment with different classes until they determined what they wanted their major to be — or to take classes purely out of interest.” He says any college he built would not include NCAA athletics.
Those ideas may seem simplistic to many traditional-college leaders, but the lower-the-price ideology that underpins them does resonate with some in academe. That includes Michael J. Sorrell, president of Paul Quinn College, a historically black institution in Mr. Cuban’s home city of Dallas where 84 percent of the students are needy enough to qualify for Pell Grants. Mr. Sorrell and Mr. Cuban befriended each other about two years ago, around the time Paul Quinn was developing a new work-college approach to lower its tuition.
Their conversations “about how you think about delivering education” helped to form its revised strategy, says Mr. Sorrell. And when Paul Quinn announced its new New Urban College Model, in early 2015, the news release noted that Mr. Cuban would be developing an open-source course on entrepreneurship for the college that would be made available to other institutions.
“I don’t even have a word for it,” says Mr. Sorrell, of Paul Quinn’s relationship with Mr. Cuban.
As for Mr. Cuban’s relationship with his own alma mater, those ties are hard to characterize, too. He and Indiana University at Bloomington’s president, Michael A. McRobbie, haven’t had any deep heart-to-hearts about the state of higher education, a university spokesman says. But Mr. Cuban did agree to appear in a cheeky commercial for the university that features an actor who’s a look-alike for a young Mark Cuban.
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He has also donated to the institution, but not in any extravagant way. His most recent gift was for $5 million, in June 2015, for a new video and broadcasting center that will include technology for making broadcasts in 3-D and virtual reality.
And even with his philanthropy, he remains true to his critique. He says his money comes with a stipulation: It can’t be used for buildings.
Goldie Blumenstyk writes about the intersection of business and higher education. Check out www.goldieblumenstyk.com for information on her new book about the higher-education crisis; follow her on Twitter @GoldieStandard; or email her at goldie@chronicle.com.
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The veteran reporter Goldie Blumenstyk writes a weekly newsletter, The Edge, about the people, ideas, and trends changing higher education. Find her on Twitter @GoldieStandard. She is also the author of the bestselling book American Higher Education in Crisis? What Everyone Needs to Know.