The a16z Show - Fixing Higher Education & New Startup Opportunities with Marc and Ben

Episode Date: February 8, 2024

"The Ben & Marc Show" features a16z's co-founders Ben Horowitz & Marc Andreessen. In this episode, Marc and Ben continue their in-depth exploration of the current education system. While Part I of their discussion unpacked the crisis facing higher education, Part II presents solutions to overhaul the modern university.In this one-on-one conversation, Ben and Marc delve into actions that existing institutions can take to improve their current and future situations. This includes exploring new methods for talent recruitment, providing a more individualized education experience for students, and reducing administrative bloat. They also apply an entrepreneurial lens to each university function, revealing startup opportunities poised to emerge – including the building of brand new institutions, nonprofits, and research entities. Enjoy!Resources:*Watch Part I: https://youtu.be/7J2_G4oHRQ0*Watch Part II: https://youtu.be/EeIdalo2huIMarc on X: https://twitter.com/pmarcaMarc’s Substack: https://pmarca.substack.com/Ben on X: https://twitter.com/bhorowitz“South Park” episode mentioned in this discussion: – Eps 1505 (stream on Max): https://bit.ly/3HrZQg0Stay Updated:Find us on X: https://twitter.com/a16zFind us on LinkedIn: https://www.linkedin.com/company/a16z Stay Updated:Find a16z on YouTube: YouTubeFind a16z on XFind a16z on LinkedInListen to the a16z Show on SpotifyListen to the a16z Show on Apple PodcastsFollow our host: https://twitter.com/eriktorenberg Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Universities historically only were ever built to, you know, train a very small percentage of the 18-year-olds. How can we have a population that reflects America was kind of the goal, as opposed to what's the best product opportunity for students in populations where we're not doing a good job of recruiting? There's one educational intervention technique that reliably generates better outcomes, and in fact it generates what are called two sigma better outcome. So it's an intervention that routinely takes kids who would score at the 50th percentile of outcome and moves into the 99th percentile of outcome. We probably need to fix the old ones in and build some new ones.

Just give it fast the world, as you call it. The cost is risen much faster than inflation. And then you can just ask the question, are the results better than they were 20 years ago? Hello, everyone. Welcome back to the A16C podcast. This is your host, Steph Smith. Now, in a recent episode, you got to hear from, our co-founders Markandreason and Ben Horowitz, as they talked about the crisis in higher education.

Now, they did so by breaking down the 12 functions of the modern university, going all the way back to when these institutions were founded. But today, you'll get to hear part two of that very conversation as they focus on the present, exploring different solutions for overhauling the modern university, an admittedly difficult task, as they get into, especially given the many stakeholders with varying incentives. Mark and Ben, of course, take an entrepreneurial lens to this age-old industry, surfacing opportunities at every step, from recruitment to student experience to the administrative bloke. And if you're interested in hearing part three of this series, an extensive Q&A on the topic, you can go ahead and

check out the Ben and Mark Show wherever you get your podcasts. It's time to fix. As a reminder, the content here is for informational purposes only, should not be taken as legal, business, tax, or investment advice, or be used to evaluate any investment or security and is not directed at any investors or potential investors in any A16Z fund. Please note that A16Z and its affiliates may also maintain investments in the companies discussed in this podcast. For more details, including a link to our investments, please see A16C.com slash disclosures. We did an episode about a week ago on universities, so the prevailing kind of issues in the universities, the sort of crisis that they're going through. Very important to, I want to reiterate kind of why we did that one,

which I'd encourage people to listen to. Actually, first, if you haven't heard it before this one, and this is part two, but also kind of why we're doing it. So we're sort of discussing kind of this rolling crisis that a lot of the universities, particularly the American universities, are going through right now. Very important to understand two things from our standpoint. One is the reason we're digging into this topic

is really actually twofold, and we'll talk about both parts today, which is these are like incredibly important institutions for the country and for the people of the country and by extension for the world. So it's really critically important that what happens in American universities goes well. And it's a very big problem, not just for them, but for a lot of the rest of us,

when they don't go well. And look, Ben and I talked about this last time, but, you know, our personal stories obviously involve we're here where we are because of the great experiences that we had at universities. And then, you know, the university, both teaching process, generating graduates and research process, of course, is kind of the seed bet of everything in the tech industry in Silicon Valley and everything that we do every day. So these are important topics. The other thing worth noting is, you know, we're not just doing this to kind of criticize. We're trying to see if we can be constructive. And in particular, we're trying to take a look at the issue is not through sort of a moment in time, hot and the news kind of perspective, but rather

sort of a structural standpoint. So we're analyzing universities as if they're systems and their structures and they have incentives and they have ways of doing things. And those ways of doing things have built up over a long time and just the nature of large organizations and systems that build up over a long time is sometimes they accumulate problems and sometimes they need change and improvement and reform. So that's why we think it's a good thing to look at. The other perspective that we have is that there are clearly startup opportunities emerging. And we're going to talk quite a bit today, both about what the existing institutions could do to maybe improve their situations, but we're also going to talk about some of the startup opportunities that are

kind of flowing from the crisis in higher education. And by the way, those startup opportunities would probably be appearing anyway because the higher education system, you know, just can't reach most kids who need to get educated around the world. And so there would probably be startup opportunities even without issues. But it may be that if universities can't fix some of their issues, ultimately that there will be opportunities to build new institutions, new companies, new nonprofits, you know, maybe new research entities and maybe do more of the things that universities have historically done. We probably need to fix the old ones and build some new ones.

Just give it how fast the world that's evolving. Yeah, I mean, look, like, you know, part of the context for all this is that universities, you know, historically only were ever built to train a very small percentage of the 18-year-olds, you know, in the world each year. I don't have the numbers in front of me, but the number of people who turn 18 per year worldwide, it's like an extraordinarily large number, you know, it's many, many, many, tens of millions. And so the sort of current higher education system, you know, was never built and is not built to accommodate that. It's built for a small number of religious scholars. Yes, originally, yes.

And then a small number later, a small number of secular scholars. And, you know, in the U.S., the universities have become sort of a much of a broad-based expectation that people go to college, you know, as we talked about last time. But even if you could send every 18-year-old in the U.S. to college, the U.S. is still only 4% of the population. And so 96% of kids, actually probably more than that every year, 18-year-old kids. are outside the US and most of them are in places that don't have, you know, physical colleges, universities. And so there's a general scaling problem, right, which probably needs to be addressed separately from the existing system anyway. So we're going to dive in a lot to all of that.

And then we have a lot of great Twitter questions, which we are going to get to at the end, or if we go super long, we'll do part three. We'll do part three. Okay, so the way that I think about how to get started is sort of the question that we left off at the end of the last podcast, which is sort of the okay. We have the last discussion. We went through all the issues, and then we kind of left angling. All right, what do you do about them? So this is a This is the What Do You Do Section. I wanted to start by talking about this, you know, the way we try to always do this in business is to try to start with like, okay, before you figure out what you're going to do, it's like,

okay, what exactly are your goals? And then, of course, the very next question, you know, from what are your exact your goals is sort of the question of what exactly are your goals for who, right? Who are you trying to satisfy? Who are the customers? You know, last time we listed out the 12 functions of the Modern American University, which you can hear all about it on that last episode. And then what jumps right out of the list of sort of the 12 functions in the modern

American University is, you know, the universities, the way they run today, they certainly have a large number of different constituents. So I made a list. I came up with, I think there's like 16 or 18 on the list. I'll list them real quickly. Students, faculty, administrators, board of trustees, alumni, donors, downstream employers who hire the graduates, parents who are very involved, of course, immigration officials, sports fans, regulators, politicians, the press, which is, of course, scrutinizes universities all the time, downstream policymakers who are influenced by the science and policy prescriptions coming out of the universities, and then number 15, society as a whole. So that was my society as a tough customer, by the way. Yeah, well, it very much is. And universities have designed

themselves from actually inception to have a big impact on broad society. You know, that's one of the goals is they are trying to reform society, advanced society. And so having put themselves in that position, they're naturally going to get scrutinized by society. Yeah. So how do you think about, From a leadership standpoint, right, and a management standpoint, and with your experience on the Columbia board, but for general leadership standpoint, how do you think about an institute,

like, you know, look, we all know, it's hard enough to just like run a company that just has customers. Yeah, right? Or customers and employees or customers, employee, shareholders, right? You two, three, four constituents hard enough. How do you even think about approaching the job

of leading an institution that has that many constituents? Well, I do think companies do have a lot of constituents also, but they're, I would say just a little bit have better clarity and uniformity on which are the most important constituents. If you look at us, like at Andreessen Horowitz. So we have investors, you know, we've got entrepreneurs, we've got employees of entrepreneurs, we've got our own employees, we have the press, we have society as a whole. Like all these things to consider, you know, in our kind of wealth management thing, We've got that kind of wealth management kind of clientele and all that kind of thing.

But I think it's very clear to us and we try to make clear to everybody in the firm. And I think everybody in the firm is very clear on it that if we don't attract the best entrepreneurs in the world, that none of the other things matter. So it kind of is, okay, great. You have all these people who have an interest in it. But you've got to get the main thing then. and anything that compromises a prime directive has got to go and be subordinated. And I think that, you know, in the universities, partly because of just sheer size of them, you know, you have people who have no concern about the students at all,

like large pockets of the kind of university that are only focused on kind of one of the other things. And that's where I think, you know, it starts to lose its focus and degrade the product for the most important. constituent, which I'd argue is students. Yeah, so if you were, you know, especially with your board experience, if you were placed in charge of one of these tomorrow, like how would you rank these? Or maybe that's an unfair question. Maybe the question is, how would you even go about figuring out how to rank them? Yeah, look, I think you have to kind of start with students, and then everything on the list

is a little bit in service of students to varying degrees. So the faculty, right, are obviously in service of the students. The administrators are in service of the students. the alumni are to kind of give money to support the students. And they're kind of, you know, depending on, you know, what your issue is in attracting the best, kind of brightest students and giving them an experience and a kind of product and a career,

the things that they're looking for that's optimal, you know, you would kind of prioritize things to get you to there. And like, there's always things that, you know, regulators are, you know, something that any business has got to mitigate or, you know, deal with and so forth. And that's not going to be a primary thing, but you have a small team. Hopefully, that's focused on that. But I think, you know, you can easily lose the thread if, you know, you manage to noise levels or, you know, the press is probably the most distracting one, right? Because if the press calls us a name or says we're not doing our job, then all of a sudden, like a huge focus goes over there. and that, you know, if you're not careful, that'll distract from, you know, what you want for your kind of main customer.

And that's, I think, to a large degree, you know, what's happened, which is why, like, cost, like, how is it possible that tuition has gotten so high? Like, what the hell were you optimizing for that let you think that your students wanted, like, that was a good idea? And I think there were some market corruptions, right, where the government's providing. loans to students. So that kind of led to upward pressure. And then there's, you know, other things like professors can get jobs in the private sector that, you know, which is a kind of a more scalable sector in terms of making money that could pay, you know, potentially a lot more than you could pay in academia. So that drives salaries up and so forth. So there's a lot of factors that lead to that. But like at the end of the day, like, how the hell do you end up with a product that

cost $300,000 and gets the average student a job that's worth, you know, like 50, how are they ever going to pay back $300,000 if they only make $50,000 a year? Like, that's insane. And that's kind of where I think the product for the student has fallen apart. And so maybe that's a good place to start and like, okay, so what would you do to get cost at the university under control? And I think, you know, one of the kind of big things that we've learned, which is, you know, it's stunning when you hear it, but like it got there incrementally, obviously, which is, you know, at many of the kind of elite institutions, the number of administrators outnumbered, number of students. Right.

And it's like, okay, that's an opportunity for savings. And I think, like, if you just tighten your belt, you'd go, okay, like, maybe we can do it 20% reduction there and so forth. But if you think about it a different way, I mean, to me, it's very analogous to, you know, we had a debate recently when the Biden administration hired 86,000 new IRS agents. And it was very partisan debate, as it always is, like, you know, why are these people coming after my money? Like, what are you cheating on your taxes? But that wasn't really the interesting thing. The interesting thing was anybody kind of in our business would go, well, you could have just hired seven good software engineers.

And they would have done a far better job than 86,000 agents at figuring out who was cheating on their taxes because it's like it's a data, it's a forms problem. Like, this is what computers are amazing at. And AI is, you know, people talk about what AI is good. I'll tell you what AI is really good at filling out forms, looking at forms, getting data out of forums, comparing that data to what the data should be figuring out things, anomalies in the data that no human could, you know, it's amazing at that. And couldn't AI do all these administrative tasks?

Could you just get rid of like that whole thing or like whatever, 95% of it? And then, you know, you're starting to get cost back where they are. Well, if I could, just a couple of things on that. So one is it begs the question of who your constituency is, because if your top constituency is the administrators, to the extent that the institution is being run for itself, right, then obviously that's a direct threat. Yeah, look, I think that's always the thing in

organization, right? Like one of your constituencies are your employees, but when your employees take precedent over your customers, that's usually the end of the business, right? Like, this is kind of the pattern. In the private sector, you tend to go bankrupt a lot faster because there aren't government subsidies and tax credits and there are so many goodies that the universities, you know, have access to and are part of their constituents that that's not something that happens in business, but eventually over time in the long run, if the employees become more important, and then the customers, you get to the same end. Yeah, one of those sort of quirks and the incentives of the whole thing,

see if this makes sense, is that one of the parties that's not a constituent, to your point you just made as shareholders, right? So for-profit companies have shareholders. The universities are nonprofits. They don't. But the consequence, very interesting, incentive consequence of being a nonprofit, which is a nonprofit, right? The whole point is that you're not for profit.

You're trying to generate profit. And so you're sort of implicitly trying to break even. And so if you have the opportunity to have rapidly ramping revenue, because of subsidies, you then actually have every reason in the world to ramp expenses at the same rate, right? You don't want to tell you massive margins, exactly. Exactly. Like, it's not your purpose to generate margins.

You wouldn't be able to do anything with the money anyway. It might even cause problems because it would cause people to scrutinize what's going on. And so there's this thing where with a nonprofit, the expense statement that, you know, will scale to meet the available funding, sort of on autopilot, right, to make sure the thing goes to break even. And this is the counter argument to people argue that nonprofits are somehow, you know, better lined up to do good things than for profits, which is like, okay, what if they're actually wired it just like grow expenses to the moon, you know, and basically on the tax

per dollar. Yeah. They think that there's definitely an aspect of that. And I think that the university math is a little bit, if we can raise prices, then we will. And they kind of benchmark against each other. So, you know, student loan money pours in. Harvard raised their tuition.

We can raise our tuition. Like, and, you know, it just kind of cascades down the system. And, you know, that kind of translates into higher salaries, more administrators, more this, more that and so forth. But yeah, it certainly needn't be that way. And I think the idea of lowering tuition is a good idea. I mean, if you were to, you know, we'll get into this, but if you were to start a university from first principals, like, why would it cost $60,000 or $70,000 a year? Like, that's outrageous. Or it seems outrageous, like, to, you know, educate a student. Like, their best well, we know.

efficient way to do that. Yeah, well, and it's one of these things where you can just look at what it cost 20 years ago, and you can look at the fact that cost has risen much faster than inflation. And then you can just ask the question, are the results better than they were 20 years ago? Yeah. Right. And so it's sort of by definition, it's like, okay, that's something you see in business also, which is just like, okay, what if we just went back to the cost structure we had 20 years ago or five years ago?

Yeah. Right. And like, where's the product actually? Ask the people who are actually running it, by the way. Correct. But if you're looking outside in, like, it is a really key question. In other words, like, you've proven historically that you could do it at a lower cost structure because you were doing it at a lower cost structure.

Yeah. Right? The reason I bring it up is like you can't find an institution. You cannot find a university today that's trying to do what you're describing. As you said, they benchmark against each other. They're all on the same track. Yeah. So you could kind of say, okay, that's some sort of inductive proof that is not possible to do what we're saying because like nobody's even trying.

But the counter argument to that is, no, it is possible to do it and we know it is possible to do it and we know it. And three years ago. Yeah. And three years in a way, right. Like, you know, inflation adjusted. Quetutions grown at more than double the rate of inflation. Something like triple the rate of inflation on a sustained basis. Yeah.

So clearly, clearly. Well, the other thing that's really interesting is, okay, if you're at $60,000 a year or like above, that's probably a little more than the cost of having a like full-time, like, very smart instructor for your child. or for your teenager or whatever. So you could literally assign every student, like a really good instructor to teach them all these subjects full-time. Like, no other student, just one student.

And it would seem like you'd get potentially a better outcome with that method. So like once you get to that level of absurdity, it's probably time to take a look at it. Let's talk about that for a second because there's actually a lot of historical evidence been for what you just said. So if you go back in time,

aristocratic education in prior societies, it was always one-to-one tutoring. Like, the offspring of royal families were always tutored one-to-one. And then you have these amazing historical precedents. And Alexander the Great is kind of the apotheosis of this because his tutor was Aristotle. Right. It's just pretty good, right? And then, you know, even like the Greek philosophers, like Socrates and all those guys, you know, their day job was, you know, what they did in the mornings was they did one-on-one

tutoring to kids in Athens. And then in the afternoon they hung out at the Agora and talked about things. But their job was actually tutoring. And, you know, that was obviously an amazing civilization. So there's a lot of, like, specific historical precedent. And then there's this thing in the education research, which is really striking. So one of the things in education research generally is that it basically fails. Sort of all of the attempts to come up with systemic interventions to approve educational outcomes

basically fail. And this has been the case for many decades. Like pedagogy and things beyond tutors. Is that how you think about it? Yeah, they just don't. Most things you want to do, whether it's Head Start or this or that or electronic, you know, laptops in the classroom, or you just name any number of things where people have tried to inject money or new practices.

into the classroom at any level. And basically, it's the null hypothesis keeps proving out over and over, which is they just don't change anything. And actually, it's funny, the Gates Foundation actually, right, it was just very heavily involved in education philanthropy.

I actually put out a report a couple years ago where they kind of go through this in detail. And it's very kind of discouraging in the sense of, look, it's easy to say like a good teacher will do better, but it's much, much harder to say we're going to make a million teachers better, right? So even the things that work in the micro level, they just don't scale.

There is one exception. There is one educational intervention technique that reliably generates better outcomes and in fact, it generates what are called two sigma better outcomes, so two standard deviations. So it's an intervention that routinely takes kids who would score at the 50th percentile of outcome and moves them to the 99th percentile of outcome,

and it's one-on-one tutoring. Oh, yeah, one-on-one. You know, this is also true with autistic kids. They've done similar research, and the one thing that works is one-on-one tutoring. Or the one thing that's proven of all the interventions consistently. There is a perfect with UCLA Yvarlovas who kind of proved that out. It's very consistent across all types of students, interestingly.

Right, right, exactly. And so there's this thing called the Bloom 2 Sigma Effect, the researcher who did the work on this, his name is Bloom. So it's called the Bloom 2 Sigma Effect. And it's kind of this great whale of education, which is like, wow, we actually know how to make education much better than it is. It's just historically been economically impractical.

There's just no way that you could afford to have a 101-1-1-2-1-2-over-over. Until now. Until. We have to sit-alone money should go to. You know, quite possibly, right? Well, by the way, it's also good, like, you know, one of the big critiques of academia, I think, from people like us, it's just that, like, when you go into academia, you're in this sort of bubble of a world. So if you're kind of coming up with new social sciences, theories, or what have you, you know,

you're testing them among, like, you're kind of wrapped in people like yourselves. But if you go back and you say, well, Socrates's ideas at least have to stand up to his students in a much more direct way because it's a one-on-one and they're going to have questions with this, where I think that if you're kind of elevate yourself to, here I am, king of the class, and I'm going to give you a grade, so you better not say anything nasty about my research. Like, that's a very different kind of a thing, I think.

So, you know, it could be helpful on both sides in a way, although it doesn't quite take the expenses down, but it would hold them steady. for me, you know, one tutor, for me three students or something, right? Yeah, but look, it's also the reference. And look, the expectation, I think, has to be the, look, if current trends continue, then tuition will keep rising

at three X, the rate of inflation or something like that. So we'll be having the tutor would cost, yeah. Yeah, we'll have a follow-up to this podcast, you know, five or ten years from now, and it'll have crossed the million dollar mark, right, per student, right? And at that point, the economics actually become quite overwhelming in the direction of one-to-one instruction. So sitting here today, it sounds crazy that you would make this switch,

but it's starting to sound sane. And so it's interesting to at least have like an indexed a potential competitive system, at least for the sanity check. So anyway, with that in mind, we immediately launched into kind of one of the more pie in the sky ideas. But let's go back to like the challenge of like, you're put in charge of one of these institutions tomorrow.

And you know, you're responsible for the turnaround or the reform that needs to happen, which by the way, and look, you know, a lot of smart people at the trustee level and president level and donor level and so forth are trying to reform the existing schools. So I think it's talking about that. So Ben, let's talk about the fix the university kind of plan.

You wrote an outline prepping this. So if you want, I can go through it by point or you could just launch it. Yeah, let me get into a thing that will illustrate the kind of customer problem in the systems thinking issue, which is, and I hate to get into it because it's controversial, but I'm not going to get into the controversial aspect, which is kind of this whole diversity, equity, inclusion, and how these programs are designed. And I'll just contrast it with the way we designed our program, which, you know, we call it a talent program, but it's essentially the same sort of thing. Because we designed ours with the kind of

potential employees in mind. And I think that the system that was designed for the university was designed more with the press in mind. So how can we have population that reflects America was kind of the goal, as opposed to what's the best product opportunity for, students in populations where we're not doing a good job of recruiting them, right? Like very different ideas on how you would start the design. And so if you start the design with, okay, we need 14% black students, whatever percent Jewish students is percent white students, et cetera. And by the way, we've got legacy and this kind of thing.

Then that forces you into a methodology that is kind of whatever race or gender-based, where you're like literally having them self-identify themselves on their applications and then trying to kind of funnel them through there. What's the problem with that? Well, there's a lot of like very weird side effects. Like first of all, if you look at graduation rates or outcomes or so forth for diverse students are much worse than for your main students. So like if you're designing for the student, you would never design it that way.

That would be like an important metric. But that's not the important metric. The important metric is how many you let in. And so, you know, that's, you know, that's, you know, that's a important metric. that's corrupting. Then the second corrupting thing is everybody knows about that checkbox. And so once, you know, the student arrives, now I'm like a little bit of a second class citizen because people are going to judge. Well, you can say, well, that's racist to say that. Well, yeah, but you set it up. Like people don't unsee. Like, I apply. I check, you know, my Asian box

or whatever that I'm checking. I know there's other boxes. And then like I read the news. So I know like how that works. And so like that kind of whole design based on trying to achieve a goal so that the New York Times says, I'm not racist as a trustee or a faculty or whatever gets you to that outcome. Now you contrast that. So how would you design it if you're designing for the customer? Well, I can tell you because like we started the firm. And this was, it's important to know this is pre-me-to, pre-George Floyd, pre-when anybody cared about any of this stuff in Silicon Valley. And so what we kind of said was like, how do we get competitive advantage on talent? And we thought, well, there are certain talent groups that don't get recruited

and certain talent groups that are over-recruited in Silicon Valley. Computer science students from Stanford are heavily recruited, MIT students, so forth. So we started with, well, what about the second tier, the top students, the second third-tier universities and computer science, can we go after those? And, you know, we put them on our list. Second one was veterans. Veterans don't make their way to Silicon Valley often, you know, because they just don't know that they're welcome there or whatever, you know,

whatever reason. So that could be an advantage. And, you know, they tend to be good at things that we need, like very loyal, trained in leadership and kind of process development, things that we really kind of lacked in technology. So we had a team to recruit veterans. And then the other kind of two that if you just like that the numbers that were way lower, were like blacks and Hispanics. And so we had teams for that.

So I was in charge of that part. By the way, like note that because it's a talent program, we didn't hire anybody to run diversity. And you know, like these colleges to run the programs they have have like hundreds of people. But if it's just talent, then the people who are in charge of talent, which is like, of course, you know, people run the firm. Okay, so early on, like we're probably 2010, 2011 now.

I'm kind of working on this problem. And, you know, I'm getting kind of input from people I know who have recruited from those populations, who know them, know the special skills that might exist, how to attract people, and so forth. And this is a very funny story to me. So I'm at lunch in Menlo Park at a restaurant called Stax, which you know well, with Steve Stout, who, you know, kind of came from the entertainment industry, is kind of, you know, in music in particular, and rap music in particular. So, like, dominated by African-Americans. And, you know, I'm talking to him about it.

And he says, Ben, do you know why there are no black people in Silicon Valley? Just like that, he says. And I said, no, why are there no black people in Silicon Valley? He said, look around. There are no black people in Silicon Valley. And, like, literally, he was the only black person in all of the stacks is a pretty big restaurant. It's the only person. And so I was like, oh, that's interesting.

And I looked up, you know, so United States is 14.3% black. But Palo Alto, Menlo Park, you're talking 2%. And so, like, right. right away you go, okay, this isn't even an attractive place to live or for whatever reason, people haven't even moved here. So like, maybe we need to start there. And so what did we do? We did film screenings and gatherings and meetups and barbecues and kind of tried to get to know the people that we wanted to recruit, know what would make for a good work environment for them by just spending like regular time. And then we started to go, okay, here's a place in the firm

where we need this talent. We already know all the people. We know who's the best we've spent like we've invested the time and we're going to get them. And so then you come to the firm and our retention, our promotion rates and so forth are very good because we were always focused on the talent. We never cared about the New York Times because at that time, the New York Times didn't care about it.

And so like you just get to a very different outcome when you focus on a different customer. And I'm going to kind of tell the last part of the story, just so I can map it back to the university. So a few years ago, maybe it was five years ago, Henry Lewis Gates, who was the very famous, very talented professor of African American history at Harvard, called me up because he wanted to basically raise money from me and has this thing to hip-hop archive at Harvard. And he said, Ben, I want to create a fellowship called the Horowitz Hip Hop Fellowship at Harvard. And I go, well, skip, like, if you call anything that, then everybody's going to hate me because Horowitz hip-hop like sounds like really, you know, effed up. I said, but I have a friend, Nas, who deserves to have a hip-hop fellowship named after him. And I'll call Nas and see if he wants to do it. And, you know, we go through that and we call it the Nas Hip-Hipop Fellowship.

So then, you know, they want to have a big event at Harvard and invite Nas there, you know, which I do. and I get a call, you know, leading up to the event from Lisa New, who some of you may know, she's married to Larry Summers, who was interestingly fired as president of Harvard for saying something, you know, non-diverse. And she said, Ben, you know, I've been reading Nas's lyrics. I said, you've been reading his lyrics. She said, yeah, I said, you haven't been listening to his album? She's like, no, no, no, just reading the lyrics. I'm like, okay, you know, the albums are good, too, but whatever. And she said, you know, like, he's so. good, like, I can't even believe how good this guy is. I'm talking like Ralph Waldo Emerson,

Walt Whitman, he's like that level good. And I was like, wow, that's amazing. But the thing that I realized when she said that is Harvard never recruited Nause or anybody like Nause. And if you think about it, right, black people dominate, dominate music in the United States. So why aren't you looking for the talent, doing the right things to recruit them? Why are you looking for the the color. And that's, I think, I think a lot of the things at the universities, if you're going to take a system's view of it, you've got to start back there and say, like, how do we find the talent that we just, our regular process doesn't get to, change our process, change our way of doing things to get to that talent, and then it's going to be better for us, better for the talent,

better for the mission, all those kinds of things, as opposed to letting some outside for us tell us what we should be doing. And I think that's really emblembrate. of a lot of the things that I think have gone sideways in the university when it comes to, you know, diversifying the student body. Yeah, so let me steal man the question, right, that you get in response to this. And I'll use my special skill here. I'll use my special skill here of I'm an obsessive on all these topics. And so I try to be able to think about it from all the points of views. So I'll play super woke here for a second.

Which is like, look, Ben, like, you know, the whole point of the DEI programs, like the universities is to try to like make sure that every field, like, engineering as an example, has, like, equal representation by population. It feels like you're arguing that we should give up on that in favor of an approach that sounds like it involves stereotyping, which is we should take away the focus of recruiting black people in the engineering program. We should increase the focus on taking black people in the music program, and we should do that on the basis of a stereotype that black people are better at music than in engineering. Like, how do you, yeah, how do you, how do you explain that, how do you explain that given the moral framework people are starting with? Well, look, I mean, I think the truth of the matter is, is, Look, different, everybody's in it.

First of all, like, everybody is an individual and should be treated as such in that sense. But, like, I think anybody with half a brain, well, who's observant can observe some kind of very obvious things about different populations that they're interested in different things. Like, people have different interests. So forget about even talent or this or that.

And it goes by group and by culture and so forth. And this is, you know, there are things like every comedian makes jokes about, you know, men like to sit around and watch sports and, you know, women like to watch other things and so forth. And that's very bad to say these days, obviously. But if you look at just job categories, you know, I think veterinarians are 80% women. And nurses is like much higher than that. Those are good paying jobs. Psychologists, by the way, at the university level, we were just psychologists or at us up like 90% or 95% women now.

Yeah, and I think there's nothing wrong with that. And then similarly, like, coal miners are almost all men. You know, people work in like oil rigs are almost all men. You know, MMA fighters are mostly men, although there are women who do it. And there's nothing wrong with that. And so, like, there are, I think you do have to, you know, in any kind of program where you're trying to get, you know,

and the whole point of diversity is diverse interest, diverse talent, right? Or ought to be anyway. And so if you're going into, you know, a population that's got a different culture and very likely different interests and, you know, and by the way, everybody's got different genetics too, then you kind of have to be a little more creative

about just saying we're only going to, Like, if you say we're only going to look at, you know, these test scores and these grades and these kinds of courses, then obviously, like, those populations aren't showing up on that. That's why you have the program. So you can either go, well, we'll just still put them there where they haven't shown an interest or an aptitude yet or, like, or some of these students haven't, whatever. or we can broaden our criteria to things that make big contributions to society and are important. And people may be able to do better than our friends, the white and Asians, like over here. And so, like, that's the choice you have. I mean, you know, like, and I think it's just a better choice.

So, yes, you're not going to get equal distribution, just like, you know, like you don't get equal distribution in almost anything in life. It doesn't even make sense, math-wise, by the way. Right. Like, because the population is 14%. First of all, like 14% in total across age groups, not 18-year-olds. So like, you're already fucking off. And then we're going international.

So you're way off. And so you're mapping to a number that's a fake number. And now you're not just mapping it to the university. You're trying to map it into every subject. And this is just like, it's just, it's almost, the American epidemic and enumeracy is kind of affecting the whole logic of how these programs work. And the problem is it's to the detriment of the people you're trying to recruit. I give you a very good anecdote on this.

So you and I just had breakfast with a kind of prominent trustee at one of the most important universities in the world. And he made it like a very offhand comment, which he thought was the most obvious thing in the world that really kind of stopped me in my tracks, which he said, look, even if we accepted every black applicant, we went hit 14%. Right. And so you're so unattractive as the top university in the world to that population that you can't even touch that number.

So your problem is obviously, you know, like not in, you know, making race to create. Your problem is you don't even know what you're looking for. You don't know what they're interested in. You don't know how to create an environment, you know, that's beneficial, where they're going to have great careers coming out of it. You haven't done any of the real work. You're just trying to like meet some number that doesn't even make any sense.

And that's, to me, that's the issue. Well, take it a step further. Just double-down. This is a real issue right now and real issue for many people, including, as you said, the people that everybody's trying to help. So your friend, Henry Louis Gates, long-time professor at Harvard actually was, pointed out 20 years ago, I think, all the way back in like 2004. There was a big article in the New York Times Archives.

is really interesting from that era. And the two sources for it were him and then Lonnie Gweneer, who was one of the top black law professors in the country at the time, I think also a Harvard, maybe also a Harvard professor. And later, she was like almost on the Supreme Court at one point. So these two very highly respected black scholars, you know, experts professors.

And they made this case at the time. They said, look, what these institutions are actually doing is they're bringing in African and West Indian immigrants to satisfy the African-American quotas. Yes. That is exactly what's happening. Right. There are more Nigerians.

I believe there's more Nigerians. at Harvard than African Americans. Right. Yeah. Right. And of course, like, look, at an individual level, you know, fine, you know, great. You know, great, you know, I'm totally in favor of having, like, highly talented Africans and, you know. By the way, Nigerians, nothing to do with Somalians, like genetically. This is the weird thing about this race theory that people are kind of promoting is they're not even, like, related to actual races. I mean, or actually genetics. And it's just some. weird government category.

Government, government, over, over categorization. And then, you know, specifically back to like what everybody thinks they're trying to do, which is if you're trying to help African Americans, right? And your answer to it is we have to bring in lots of like literal Africans in West Indians or some, or other population groups to do it. Then you've certainly, like, again, to your point, like, something has gone wrong in pursuit of the goal of helping African Americans. Yeah, I think, look, I think it's clearly not working also in the, yeah, I mean,

there were there, you know, with the kind of ruling on affirmative action, there were so many studies that showed that, um, it didn't actually help African Americans 50 years. You know, forget whether you think it's a good idea or bad idea or fair or not fair. The results were really bad. And I think part of the reason the results were bad is the kind of programs were designed and the, you know, and that like most of the people were African anyway, not African America. Right.

So. Exactly. Well, so, well, the other benefit to the Africans is they pay, they're more likely to pay full freight, right? So from a universe from a financial standpoint, yeah, yeah. Well, that's right. The other incentive, if you're taking expenses through the roof, you need some people paying full freight.

Which turns out to be immigrants. Okay, good. So let's, you know, that's obviously a big, a big chunk of the reform, fix the university thing. But let's walk through the rest of the fix the university turnaround plan. Yeah, so, you know, one big thing is the credentialing system, right? Which, you know, and this, again, like, this is probably the most important thing to the student is that once I pay all that money,

once I spend all that time, that at the end of it, I've got something that's very valuable. And I think there was just a report that like half of companies are dropping their like bachelor degree requirement, which kind of says, well, the credential no longer means much. And so I think that, you know, if you don't like the SAT part, then you probably need to fix the SAT part. So, you know, like make it better. But it does prove something to employers. And it's very hard to, you know, get rid of a measure like that because, you know, what are you replacing it with? you're replacing it with grades, if you talked about last time, there's massive grade inflation.

So that doesn't really work. You know, are you doing recommendations? Like, what are you doing that an employer can't do themselves? And the brilliance of the SAT, by the way, is as an employer, it's actually illegal to do a general aptitude test. So if you're looking for just whatever, and as, you know, we sometimes call them in sales, an all-around athlete, then or an all-around mental athlete. you know, you'd like to have some aptitude measure. And if you don't like the aptitude that's being measured, then, you know, like, enhance that. But to get rid of that is kind of nutso from the student perspective.

And then the second thing is grade inflation itself. And in a way, it's easy to fix because you just go mandate a grading curve and just go back. You know, C is average. F is fail. A is two standard deviations up. B is one standard. Just have it mean something very straightforward. Are you talking about kind of trying to zero in on the absolute

grades with the indicator? You're talking about literally grading on a curve and having a force distribution. Like literally grading on a curve. Right. So grading on a curve used to be more common, I think both in educational settings and also in employee evaluation settings. And companies like Microsoft used to do it kind of famously in GE. And then it feels like it.

it feels like it's gone very much out of style. Yeah. Because the criticism, right, is it sort of forces you, it sort of guarantees that you're going to have people who don't make it. And so the criticism is like, you know, what if everybody in the class is actually really good? And then you're singling out people who have to be cut from the bottom because you're forcing the grade in the curve thing.

And so isn't that unfair? And so I haven't seen anybody great on a curve in many, many years. And so how would you kind of re-explain that to people in a way that they would think it's a good idea to bring it back? Yeah. I think it's different at companies and in universities, by the way. So I think it actually works probably in some ways better in universities in the sense that, like the trouble you run into companies is like you're relative to the next employer.

So if you hire the top thousand employees in the industry and then you rank them on a curve and then you fire the bottom 10%, those are better than the people on the market. And so you get into that kind of thing and so forth. So there's this need to mix in the absolute level. The other thing is that the companies that were famous for it, Intel and Microsoft would actually fire the people at the bottom of the curve. And that has implications and so forth. One could argue, you know, Intel and Microsoft did pretty well. You know, they started with those programs before they were giant monopolies and they became giant monopolies.

So that actually kind of worked. So, you know, it's kind of a retrospective that that stuff is bad. But in the university, you know, I think if you grade it that way, you don't actually, I mean, you know, if you feel like, okay, the failing point should be lower than, you know, and the whatever, two standard defiations below the average, then you can do that. But the meaning of who's the top student at Harvard, to have clarity on that is pretty powerful. And then also to have clarity on,

oh, this is what it takes to get through four years and get a degree, a bachelor's degree, to your point last time about conscientiousness, it really kind of fulfills that promise. And so, you know, look, we've gone into this self-esteem is all that matters thing, but the result of that is massive student debt. We just lied to everybody. So you're doing fine.

You're doing great. It's all good. Give us your money. And then, oh, guess what? You owe $300,000 and you can't get a job. And, you know, that's the problem. So to me, that's a much bigger problem than the self-esteem problem or the, you know, know, you know, your three deep standard deviations below the average and you flank the class,

you know, at that point, you probably don't know the material well enough, you know, to get a passing grade, let alone what you get now, which is an A minus. Right. Well, the other response I think would be like, look, every professor, every teacher and every manager and every employer are fully aware that you have a distribution of talents and capabilities and results and performance in every group, right? So there is no employer that does what you just said a few minutes ago, which is they hire the thousand best people. Yeah.

Nobody ever does that. I mean, everybody would love to you. Nobody ever does. You always have a distribution. There's also, you know, it's not just smarts. It's effort. You know, effort is a big thing that goes into, you know, not only a grade in school, but goes into like performance on the job. And, you know, and look, I would say the other thing, you know, just in life that you learn when you employ people and every employer knows this is,

you know, not everybody is good at everything. So like the important thing is like, what are you great at? And then like, where, how can we put you in a position for your highest and best use? We use this term all the time. You know, like where can you make the biggest contribution and let us get you there and not have you do something you're no good at? And I think this whole, you know, anti-credential kind of way that we've got in universities, you know, people come out of the school.

we don't know what their highest and best used to. They might get, you know, they may be like the greatest. I tell you, Robert Smith is who's the, I guess he's CEO of Vista. He's the founder of Vista. He's kind of rent it. You know, it's very, very sharp on this. He's a person I probably rely on most for ideas in this area. And one of the things he says is, look, we get guys, we kind of have to reclassify them because

I said, well, I got somebody as an engineer, but when we kind of, you know, look at their personality and so forth, they'd be way better in sales. And we reroute them, and their career goes much better. And so if you're like a genius, you know, psychologist, social networker, like, you know, these kinds of things, and we forced you into STEM, that's not good for you. It's not good for anybody. But that's what these ideas do, right? Like they force people into things that aren't their talent, their skill, their passion, their interest. And then, you know, they don't enjoy it. You know, they, you know, like I'd be resentful if somebody did that to me.

And then I'm not going to make much money. And I'm going to be like a low performer wherever I am. And there's no need for it because I'm a super talented person. Like, why are you doing this to me? And I think, you know, and it's these ideas of people who want to make the world fair that they impose this thing on people where like, look, life is not, it's not fair in that. Not everybody is exactly the same amount of good at everything, but there's so much variety that there's a place for everybody.

You know, like I do believe that. There's a place for everywhere where anybody can contribute, and we've got to find that for them. And that's what the university should be doing is finding people's contribution, not, you know, channeling them into something they don't want to do or like didn't test into or whatever. because, you know, oh, we need another person of your race doing this. So we're going to make you do that. Yeah, there's something in, if you need to get into the data on like representation,

different groups and different professions, there's something in the data, the social scientist has studied this referred to as a Scandinavian paradox, which is that it's very counterintuitive. It's consisted of what you're saying, but it's very counterintuitive, which is the societies that are most egalitarian have the greater dispersion. have the greater difference between representation of groups, but for example, by profession. Right. When more women go into STEM in, like, Kazakhstan than in Sweden.

Exactly. And so the true, like, for example, for STEM, the truly representative STEM systems at the educational level and at the professional level for, like, science and math and engineering, where the Soviet Union and then apparently even still today, Iran. Right. There are much fewer rights. Women have much fewer rights, yeah. Yeah, and then, by the way, everything else that women might want to do is much more dangerous, right?

Like, so, like, being a literature professor in Stalinist Russia was, like, super dangerous. Very good point. Right. But being a nuclear physicist was like, you know, a super privileged position. Yeah, yeah. Yeah. Right, exactly. I need you, right?

And so if you're like a highly capable person who happens to be a woman who would love to be a literature professor, but in that system, you can't do that. going to do that. And so you go do the thing that you'd rather not do because it's the safe thing to do. So, and then in contrast, if you do this rank ordering of societies by gender egalitarianism, you know, the Scandinavian countries are kind of top of the heap. And I think it's the case in the Scandinavian countries today that like engineers are like 85% men and nurses are like 85% women. And so it's a much more unequal outcome. And so the explanation for it turns out to be very subtle. It's in the statistics for what's happening, which is if you take out all of the societal bias or all the societal level determinism and you take out all, you know, whatever,

if you take out every possible restriction on what people can do and you let them fully express themselves, then what you're left with is pure choice. Right. Right. And so at that point, the differences in the outcomes that are based on pure choice maximize. They don't minimize. Yeah. They maximize. Right. And so the freer people are, the more you're going to have dispersion. and exactly the way that makes kind of prevailing morality just like completely freak out. But to your point, the reason we're going through all this, your point is you can imagine a university,

you can imagine a university that has this polar opposite view and would have these spectacular programs in things, music and many different areas of everything. Artes of performing arts. Poetry and then all these different psychology and all these different things and so forth and so on, and then have sort of equally good engineering programs or math programs or whatever,

and they have just like, and everybody in every program, is there because it's the thing that they really want to do in life and that they're the best at without the kind of trying to force fit everything to be equal representation across all fields. Sounds like that. Yeah, I mean, I think that's clearly the right approach. And look, I mean, I have to say, like, in business, like, you look, we're a technology venture capital firm. And we end up needing all those things, right?

Like, you know, part of our advantage is that, like, we're a firm that has some poetry to them that can tell a story, that can do these kinds of things. That's how we built the whole brand. It had nothing to do with math. And, you know, like, that's kind of one aspect. Then we're a network. And so we've got to make friends, like a lot of friends. And not just friends in Silicon Valley. We've got to make friends in Washington, D.C.

We've got to make friends in Hollywood. We've got to make friends on Wall Street. And like, this isn't a great job for an engineer. And so like, or like there may be engineers who are good at it, but I'll bet you I can find like somebody else who's way better at it. And we have. And so like, and that's my point about the world. Like the world is very diverse in terms of things that need doing.

And to kind of force people into a path because they're not your cousin. your customer is, you know, some, you know, buddy who's covering diversity at the Washington Post or the New York Times or whatever. And you're like, okay, the last thing I want to be doing is getting tagged with racism for their. And by the way, those organizations are not diverse in that way either. You know, like, so they're like, they're telling you how to run your business. They don't know how to run their fucking business. The whole thing is just stupid. But, you know, like it, you get into these, like, you.

abstract ideas that, you know, at the very surface level makes sense. You know, like, look, there's talent everywhere. Yes. People are different. You're like, not even people are different. Like, you know, people are there's racism out there. Yes. So therefore, every job, every category and every company has got to be exactly, you know, the percentage that are represented by the population. Well, how did you get all the way there?

Like, that's the dumbest thing I ever heard. Yeah. So if you want to just, something I have you for fun sometimes, if you just Google newsroom diversity crisis, there are these just absolutely hysterical reports just like excoriating the same news organizations to criticize everybody.

Of course. Of course, not. You know, of course not everybody wants to be a damn, you know, journalist. Anyway, so. An equal amount of their representation in the population. What are you talking about? Exactly.

So to go back to the credentialing, to go back to the, you know, why we're talking about this, go about the credentialing. So then I think what you're saying, see if this is right. What you're saying is you want to think, you want to think harder leading one of these institutions.

You want to think harder about the credentialing on the way in, in terms of how you're actually sourcing talent and how you're thinking about talent and how you're thinking about bringing in, you know, lots of different kinds of people. And then correspondingly, you also want to think about the credential out. So the value of the credential that you're then generating.

And they're related, right? Because to your point on the SAT, the incoming credential is actually part of the outgoing credential. Yeah. And so you want to think hard ultimately about how that all translates downstream to the potential employer. Yeah. And by the way, look, if you want to diversify what you're getting through that credentialing system, then widen it.

You know, widen the bar. Take more things. Have them do a poetry test. You know, like, see what their rhyming skills are like, actually. You know, add music to it. Like, these, this isn't, these are real tangible things, right? Like, you know, add, you know, like, I think it would be very helpful for us if they would say, like, how good are you at, like, human relationships? Right.

That would be something. I'll give you one. I would love to know that coming in. Nobody's testing that. Like, fine if you only want to test writing and math in history, but you're going to get people who are good at writing. and math and history and interested in it and whose culture puts them that way. And so, like, yes, if you kind of mix up the population, throw the cultures together, do a freaky Friday on everybody and then have them take a test maybe to work better. But, like, you're kind of dealing with what

you're dealing with. And so if you're going to go find talent, go find talent. But don't make talent being the color of your skin or your gender. Like, that's dumb. Yeah. So there's a psychologist. I read about one. There's a psychologist that has a psychologist that has a creativity test, a creativity assessment battery test. And the test, if I remember correctly, it works roughly as follows, which is, it's sort of two-dimensional. So it's 15 different kinds of creativity.

And it's like poetry and literature and visual art and music. And by the way, it could be computer coding, you know, whatever. You could list all the different potential kinds of creativity. And then I think it's seven layers, seven degrees of sort of, sort of, you know, sort of aptitude or potential. And it's like, degree one is, you know,

like, let's take just take poetry as an example. I have written a poem on my own in my notebook that nobody else has ever seen. And then all the way up to I have won a National Poetry Award, right? Right, and the same thing, classical music. You know, I don't know, playing classical music instruments. You know, I like to practice rounds from time to time for fun. And I performed at Carnegie Hall, right?

sort of the scale from one to seven, right? And he said, if you apply this test to any kind of broad-based, you know, sort of grew up in the population, the average result, the mean result is, the average result overwhelmingly, the result is zero. Yeah, yeah, right, right, right, right. Yeah, so it's a real thing. Most people have never done any of those things, right?

Most people have no interest in doing any of those things. Or by the way, maybe most people haven't been encouraged to do those things because they're not valued highly enough, right? Or because they don't think that it translates to having a future path in life. But for people who have done those things or might want to do those things, you could have a completely different kind of criteria.

Yeah, absolutely. Yeah, and I guarantee it comes out very different across different populations. And I guarantee it's not the same populations that score high on the SAT, right? And so you get into these, you know, like, okay, and, you know, to me this is probably my greatest disappointment

about the lack of evolution of the universities is, you know, we kind of rely on them to help us, like, the idea of like, we're going to help you get to much more of the population and get to much more of the talent, and we're going to really help you kind of map our students to your needs. You know, rather than doing that, they just, like, wanted to pass this political litmus. And, you know, it's just a blown opportunity and really unfortunate because, look, I mean, you know, I, and I can tell you just like in my friend groups, you know, like they're just, the interests are just so different, right? Like people, like people in my white friend group or my Asian friend group or my are always surprised at how much I know about popular music. Nobody in my black friend group is even surprised at all about that. Because, like, that interest in music is just higher in the population. So, like, can we take it?

You know, these things are different. Cultures are different. Things that are important in the conversation are different. Yeah. So let me give you my other credential thing, which is, like, on the other side of this, which I think you'll find very entertaining. So one of the things that came out, you know, one of the, you know, there was this big Supreme Court case on admissions.

And so Harvard just happened to be the university that was the target of it, although I think, frankly, they were just representative of the entire category. But it just turned out we got just a tremendous amount of data, you know, from the inside of at least one of these places in terms of how they do all this. And a lot of that now is public record. And, you know, one of the things that became very clear,

you know, because universities are, these universities are constantly asked, you know, why don't you just basically admit on the basis purely of objective criteria? Why even do the rest of this? Why don't you just, like for example, why don't you just admit on the basis of, quote, academic merit, therefore, SAT score. And actually, one of the very interesting response is there are now too many kids who score 800 on the SAT. What they'll say is if we only recruit to the base of SAT, it still doesn't, it still doesn't help us all the way there,

because there are too many kids to score 800 on the SAT or 1600 on the SAT. And in particular, and then this gets to the Asian thing, and this is why this came out of Supreme Court case, which is there's specifically there are too many Asians who score 800 on the math SAT and do very well on the verbal SAT. And so it's no longer an effective testing method to even get to the cream of the crop for people in STEM. Now, here's what's interesting. There's no reason why, for example, the METH SAT has to cap out at 800. The test is designed and calibrated deliberately by professionals who do this for a living. They can make the test arbitrarily difficult.

They can make the scale arbitrarily high. You could have a math SAT test that just had harder and harder and harder and hard. and harder questions. And then all of a sudden... Yeah, exactly, right? Well, so this is almost the opposite to great inflation. This is like grade capping, right? Right, capping, yeah.

Cap it 800. Yeah, cap it 800. It's kind of like capping and saying, my students can only get a B plus in the class. So you just can't like, there's just, because I'm not presenting complex enough material where they would be able to, you know, validate getting an A, right? But you could have a version of the SAT

that basically has like much, much, much harder questions as the test, you know, goes on. And then basically you could have kids, you could just have a scale that goes from, you know, 800 to 2000. And you could basically, you could identify within the crop of people who are at the 800 level, you can identify the 10% that are like at like a much higher level. And so and then, you know, and then this gets in the question of like, why is it capped at 800? It's kept at 800 because there's just constant pressure on the SAT to equalize itself by demographic group. And so the overwhelming priority at the

company that does the SAT is to actually try to reduce group distinctiveness, right, as opposed to unearth talent. And so that, that they already get like just tremendous criticism for group dispersion of results. And if they let it, if they let it go further up, you know, it would be just, you know, it would be logical to expect, it's based everything we know that, for example,

you'd have incredibly high Asian representation, among the people who have higher than 800 MathSAT. But in the view of the world in which we're looking for special and different, right? You would say, wow, that's fantastic. In the world where we need everybody to be the same, you would say, oh, that's horrible, right? But that opportunity is there.

And then of course, there's nothing keeping a university from developing a test like that for itself, right? Like, or an employer, right? Diversity is our strength. Yes, exactly. This is a thing that's so, like, weird about the politics now is we want diversity, but we want everybody to be the same. And, like, we want to make up our minds.

And if we have diversity, then we've got to be able to measure diverse talents and degrees of diverse talent and distinguish and all. those kinds of things. If we don't want diversity, then, you know, like, why have education at all? Like, just keep us all, like, dumb as we ever were. You know, like, so we can all be the same. That's the goal. The goal isn't to, you know, invent new things or build new stuff or create new ideas or write new movies, the ideas that everybody's the same. And that being, and this is, This is where I think, like, the illogic gets really wacky. And I think that, you know, like, universities got caught in their own underwear because they weren't willing to have that conversation, which is crazy because the whole idea of the, or like a big idea in the university is, you know, free speech marketplace of ideas, these kinds of things.

But those ideas got shut down. Right. So let's keep going. Let's see. We already covered a fair amount on the fix-it thing. We could probably spend a lot more time on it. Let's go to another option, though, which is basically starting new competition. Yeah.

And so you could start, you could start in universities, and it is worth saying, of course, some people are trying to do this, right? And so our friend Joe Lodzdale and a bunch of our friends actually, Landisdale, very wise. Yield Ferguson, well, Lambda School is a for-profit, a for-profit version, Austin Allred is doing. And then there's a nonprofit version, University of Austin, which our friends, which are friends Joe Lonsdale and his colleagues are doing.

And then there's another one called a Minerva. And people do try to start new universities. And so let's talk about that for a second. So let me just kind of frame the thing. So the obvious pro for doing this is, you know, sort of the advantage of starting something new, which is sort of a clean sheet of paper. You can learn all the lessons from the people who have come before you.

You can do what makes sense for today. You know, and then look, probably this would be that just given the issues in the world today, this is probably the best time in 100 years to try to do that, right? because you have, you know, a lot of people, you have actually quite a few donors at the moment, as well as, you know, quite a few parents and students, you know, including, by the way, students who, according to the current policies are actually very capable that can't get into top universities right now because of the, you know, sort of very radical changes in admission policies. So you have like, you know, this is probably like the biggest golden moment in probably in 100 years to think about doing this.

Some people are trying to do it. There's a bunch of reasons to think that, you know, this would also be very difficult. I'll just list three reasons why this would be very difficult. Well, number one is existing institutions just have very powerful network effects, which is why they're so, which is why the big ones are like hundreds of years old. Two is it would take a lot of money for a long time because of the network of, you need to boot up a network effect and that would just be very expensive. In other words, like, it's hard to get the great students until you have the great faculty.

It's hard to get the great faculty and have the great students. And so, like, for example, you'd have to like really overpay faculty to get them to come over over and you'd probably have to have a much cheaper student proposition. So you'd have like upside down economics for a while while you're booting it, which means you would need a lot of funding. And then third is you'd be trying to break into a cartel. And so, you know, we talked about the accreditation process last time. But, like, it's, you know, maybe you could get accredited.

You could get access to federal student loan funding and federal research funding. And maybe you couldn't. Maybe you just get boxed out, which, again, would just translate to you need, you would need a lot more money to get started. So, Ben, like, think about, yeah, so kind of with your entrepreneurial hat on and your venture capitalist hat on, like, is starting new universities in the shape and form and kind of equivalent bundle to the current universities? Is that an idea that we would encourage or that we would encourage or

we would warn people away from. I would probably warn people away from that idea, that it's the same bundle. Although, you know, like, today is probably the right time to come at that idea. I think from a venture capital standpoint, that is a very long shot. So it's kind of like, you know, it's a difference between like Tucker, Delorian and Tesla, right? By the way, to be clear, the reference

this to Tucker Automotive, not to any other Tucker. Yeah, no, not. But, you know, like I think it's really, and we talk about this a lot, is, you know, like taking on, you know, an existing incumbent at what they do is tough. Taking them on on something that they really don't do

like electric cars, tends to work better. And I think that with universities, there's such a huge opening for, you know, different lengths of degrees. So like the four-year degree is really something that doesn't make much sense to me. So to adopt that as like what your degree length is, given that people who aren't sky,

scholars need kind of skills and then new skills and new skills and new skills. I mean, could you imagine if we were trying to do our jobs based on just what we learned in college, right? Like it taught me to program in Pascal, you know, and see, like neither of which anyways, a few times you use see, but not often. You know, like said, oh, like these things don't last that long anymore, these kind of things that you're taught. Knowledge is evolving very fast, which is great.

So like the four-year degree, you know, like that's one thing you might bring into question. And then if you had a shorter degree where you could get just as high paying a job, and there's something Lambda School does, of course, then all of the sudden you have a value proposition that's starting to look really good. Oh, maybe like 10 grand, you know, you lend me 10 grand for a year. This is what Lambda School does. And then you pay me back if and only if you get a job. Well, okay, that starts to sound pretty good.

So, like, I think there's things that would be much more attractive to students, potentially, that weren't, like, a full frontal assault on Harvard. So just from a VC standpoint, I think that now, like, I think there's something very noble about building a new full-out four-year Ivy League of the Future type thing, because if you believe these schools have lost their way, then, you know, it's time to, build a new thing. But I'm not sure that, you know, first university was invented so long ago. Like, why don't we invent one for today? Let's take it out of, let's take it out of the realm of, you know, pure venture.

Let's take out of the realm of, you know, we think about generating a return and so far. Let's take it out in the realm of, you know, maybe, let's say, sort of philanthropy as an example, or just somebody who really wants to make this happen. So, you know, look, we just happened. You know, there's a donor strike at some institutions right now, and there's a very deep pocketed donors, you know, very deep pocketed donors that are on strike. You know, particularly Jewish ones. That's what I've read. So let's just hypothesize.

And I don't know whether, by the way, I don't know whether this is happening. It may be I don't know. But let's just suppose a group of them get together. And they're just like, look, we're going to put $2 billion or $5 billion or $10 billion. And we're going to build from scratch. And we're going to do the direct frontal thing. We're just going to like, we're going to build the parallel thing. And then the logic we're going to have for doing that is, number,

Number one, we have the money. We have the resources, assume we have the money and resources at the level of some number of billions of dollars to do that. You know, let's say up to the five or ten billion dollar level, just to swag it. And then let's say that, you know, look,

we actually want to go for a full frontal kind of assault because we don't want people to have to rethink their assumptions. Like we want to just be able to bring the faculty over, we want to bring the students over, we want the parents to be totally comfortable, right? We want the government to understand how to deal with us. Like, we just, we want to fit into the existing industry structure and we don't want to take the risk of innovating.

We just want to be like the others. And we're just going to be a new, we're just going to be a new and better version of the thing that already exists. Like how would we, how would we advise them, you know, given those goals and given that level of funding? Like, would we at that point say, you know, wow, that sounds like that might be a good idea. And here's how you might do it. Or would we still say? Yeah, no, like, I mean, I, like, as you know, our whole missing life is we're a dream builders, not dream killer.

So we would have for sure encourage them. And actually you got me thinking about like, what would I advise Joe Lonsdale to do? Like one thing I wish I should probably call him is he should wire University of Austin straightened to us and straighten to everybody in venture capital who's building new companies and kind of hiring lots of employees and all these kinds of things. And, you know, ask us what we're looking for. and then, you know, let's do a partnership and recruit straight out of there and so forth. And then that will really enhance the proposition to new students. So if I'm a new student, I'm going like, okay, I get a Harvard degree or I could get a University of Boston degree.

Why am I going to University of Boston? Well, what if, like, during the recruiting process, like, they come see us. And we go, like, we rather have you out of University of Austin than out of Harvard. That would open my eyes. I'd go like, okay, that's something. You know, I may take that seriously. So I probably like really lock in on how can I attract the best students and what does that take? And I think it's, you know, it's partly a function of faculty, but it's partly a function of like, who's paying,

who understands enough about that university that they go, I'm all in. And by the way, I can be as big a help to you when you come out. as anybody. So kind of artificially create what's like the alumni network, but better than an alumni network because you're doing it with people who 100% have jobs, like the top of the job market. You think that that's probably where I would start, and then I kind of designed the system to feed us and then to kind of feed the students in that way into all the most kind of interesting job to line up with the curriculum. Now, you know, like, and if you're doing, like, if university of Austin was, like, had a, whatever, a big focus on creativity, then I would, you know, want to, like,

wire them into some kind of creative output or whatever. Like, so what happens after the University of Austin? Like, I would start with that. Like, what's going to happen when we graduate? Is basically, when you go to school, you're like, what are you looking for? You're looking for, like, my life isn't going to be like, you know, for me, it was like my life's not going to be working at a fucking restaurant because I had been a busboy and I was like, I do not want to do that my whole life. I can't do it. I'll shoot myself in the head. Like, I can't take it.

And I think that's a lot what people are looking for when they go to college. It's like, how can I have a life that kind of has more variety as interesting where I'm learning and, you know, a lifelong learner, all that kind of thing? And so if you can guarantee me that life or if you can give me a better product to get me that life, that's what I want. Right, right. So you sent me on the same topic building from scratch. You sent me a thing as we were prepping for this. I'll just read your own quote back to you.

Today's universities are built on industrial revolution technology and that are therefore completely outdated for the information age, both in how they run and the product they offer. And so, again, how would we advise this hypothetical new institution on how to, on what to do on that for? Yeah, what does that mean in practice? Yeah, so look, I think Industrial Revolution technology means you can build big buildings, right? You can drive there in your car or on a train. You don't have to ride a horse.

And it's got the indoor lighting at night. Indoor lighting at night. Yeah, yeah, yeah. It's not too hot, not too cold. Yeah, this is sort of the platform. So what do you get? You get classrooms with instructors. You get, you know, dorm that you can live in, you know, big cafeteria, you know, with a meal plan and all that kind of thing.

But, look, in the information age, and a giant library, of course, or multiple libraries, if you're an Ivy League school. You know, in the information age, you have like AI. You can ask it any question. You've got, you know, you have access to the Internet. You've got all these other things. And then, you know, your school experience, you know, right now in an industrial age world as you have instructors and you've got like administrators filling out forms. and you've got, you know, very little, you know,

I don't know about University of Illinois, but certainly at Columbia and at UCLA, it's very little kind of career guidance, you know, kinds of things help you find your highest and best use. The university didn't really do that. So I think that in a information age, AI university, all that form filling out, all that,

A lot of the kind of instruction is taken care of, but what you really need is the university to help you find your purpose and then guide you through your purpose with a team of other students who have a similar purpose and to help you study the right things, prove yourself in the right ways, get the credential and so forth, and using all the best tools to do that as opposed to, you know, waking you up at 8 in the morning, walk to class in your pajamas because you were drinking too much the last night, you know, sit in a class, very bored, not really, you know, kind of be integrated into the AI and the Internet to get the rest of the information.

So I just think there's like a whole rink thinking of the way your day would go. And, you know, like 45 minute or hour and a half lectures, are pretty hard. It's pretty hard to pay attention the whole time and retain everything. Whereas like smaller chunks of work, you know, I think have been proven out, you know, and like, and then a kind of test to go like, okay, did you retain the information that you got or like some interactive part every 10 minutes is a much better, you know, like just in terms of these things. And then, you know, like as you said, like one-to-one tutor or that kind of thing. But maybe the machine is the one-to-one tutor in some ways, because you can ask questions now in English or in, you know, Chinese or

whatever language you speak. So I think that I would definitely make it that and, you know, give the professors, the megatutors, the kind of tools to both identify the capabilities of the students and then, you know, help them maximize those abilities and then kind of then map it further into, you know, people like us or, you know, it could be us. It could be the NBA. It could be, you know, it could be Warner Music. It could be whatever part of society works. But like, you know, like I said, we take people with all kinds of talent.

You know, all kinds of different things is very valuable for, like extremely valuable for us at the firm. In fact, you know, I'd say I'd argue, you know, where 550 people, it's probably makes us the biggest venture capital firm in the world. Why? Because we do the most things. Why? Because we have the kind of people who can do lots of different things. And, you know, that's a heck of an advantage when, you know, as an employer, you have people who can do all kinds of different things because then you have more capability as an institution. Right. Right. And so, yeah. So when the topic of technology and education comes up,

a lot of people, you know, sort of reflexively assume that you must mean just like the whole whole thing moves online, everything's over the internet. Like, that's not what you're saying. No, no, no. You're saying it like, it would continue to be a real-world experience comparable to what people have today. I actually think it's good for most students. Maybe not for you, but for most students.

There are different personality types, too. But, like, I think there's something very motivating to be around peers, right? Like, here you are. Here's my cohort of people who are going to be in the world with me. And what are they doing? and what can I learn from them? You learn as much kind of from your classmates as you do kind of, I think, from the university,

and that's hard to do. They're like, it's much harder to do online. So I think that the college experience, which is, you know, to Joe and University of Austin's credit, is a real thing with real value, you know, particularly for a young person, for most young people. But I think you have to modernize it, you know,

like we're not in 1910 anymore. Yeah, yeah. And so with that in mind, let's go more radical from that. So let's talk about unbundling. So our old friend Jim Barsdale has his famous line. It's two ways to succeed in life in business. One is you can bundle, the others you can unbundle. And so let's talk about the unbundling.

So I'll just go through them in order. So we had our dozen functions of the major university. I stripped out three, which we can talk about the end. But that leaves nine, which seems to me at least there's a case. you could be great for unbundling. So let's walk through them. And let's think about these as like, you know, actual potential either startup ideas,

like actual for-profit startup ideas. Or by the way, maybe nonprofit or philanthropic ideas. So credentialing agency, like, yeah. So we've talked a lot about credentialing so far, but like all the different aspects of credentialing. And again, this concept of credentialing and credentialing out, like both the credential, the way that you're deciding who to credential

and then the actual credential that you're giving them. Like, is that, been in your view, is like, is that something that could be abstract it out and turn into its own thing. Oh, I think this may be the best startup idea of everything in education in that, look, if somebody had an organization that aptitude, personality tested, people in, you know, not just, you know, a general test, but like in very specific things as well, Like, you know, if you think about Silicon Valley, everybody gives every engineer some kind of test, you know, in their interview, right? Like write this piece of code, you know, figure out this algorithm, this kind of thing.

I think every job has, you know, some of that. So if you had a place that could reliably differentiate kind of people's capability and things you needed to hire for, that would be, you know, something that. that I think would be very attractive to employees. I mean, you know, like one of the, right, the SAT was invented because it used to be only like nobles, you know, the elite, the aristocrats, people from rich families got to go to college. And then you're saying, well, like, what if I'm like, you know, some poor kid from New Lisbon, Wisconsin?

How do I show I can go to University of Illinois? Well, like, take this test. That's a fucking miracle. And I think that, you know. To your point, like, that was a specific reform at a specific moment in time. Yeah, yeah, yeah, exactly. And then if you think about that, you know, among employers, people are worried about bias and this and that. Well, like, you know, like, you know, to have the ability to show your capability in any dimension

and then have an employer know about that and have it be, like, valid, you know, we'd be incredibly interested in that. And I think that, you know, people who didn't have college degrees who might have gone to a state school or something like that, that was a little cheaper that they could afford. All of a sun, and then that would actually help fix the university system in a way in that, now I can go to San Francisco State and I can go get credentialed here. And I'm actually more interesting to Andreessen Horowitz than the person from Harvard who's got this degrading credential. Like, how about that? And I spent a hell of a lot less money to go to San Francisco State.

That would be incredible. So I think to me this is such a great startup idea. I've been thinking about since we started a podcast like, how do we fund that one? Like that's awesome. You know, you'd have to do a great job on it. You know, it would have to be unfudgable. You know, you'd really like nobody's bringing chat GPT into the thing with them.

Like whatever it is or maybe they are. Like I don't know how, you know, maybe you just have to know what to ask. But something that was like, you knew if they could do that, then they would have that capability. And then as an interview, you're just really going, understanding motivation, cultural fit, these kinds of things as opposed to can they do the job? Because you know they can do the job. Yeah.

There's also something in that I'm not a lawyer, but there's also something in the law. So as you pointed out earlier, like it's illegal. There's a famous Supreme Court case. It made it illegal. Companies used to do generalized aptitude testing in the old days. It's illegal through a general test and rule them out of a specific job on a general test. Right.

That's right. And that basically killed IQ testing at the employment level. And that was when the university degree took off because the SAT score was an implicit IQ test and it laundered through. So employers outsource the IQ test to the university

credential. But as we discussed, the 1,700 universities and colleges in the U.S. have stopped using standardized testing as an admission criteria. So the value of that is going to zero as an IQ test. And in fact, they're doing everything they can to get away from that. So, but the employer still can't do it.

What's interesting about this is a startup idea is that the thing that the Supreme Court is said specifically as illegal is an employer can't do this. But here you could have any kind of aptitude testing, IQ or otherwise. You could have a dozen or a hundred different ways of measuring, measuring aptitude in whatever domain you want, including creativity, everything else we talked about. And it would all be, it's all completely voluntary. It's completely illegal. You know, it's because it's not tied to employment, right? And so I, right? So you could do like a super version of even what the employers universities did in the past and actually have it be a fully full of legal thing.

And by the way, you know, we, it would really help get people into the right jobs as well. Because, you know, sometimes people get miscast. Like this is, you know, life is like that. Sometimes, you know, you get assigned one thing and you really should be something else. And these kinds of, this kind of rigorous assessment might identify that. And then, you know, like you can kind of find something. that you're better at and that you do better at in your career. And then, like, you know, we could use more, which would be great for us.

This is like, this is a definitely high on the, it would be great for us, great, Jerry. Yeah, yeah. Okay, good. Good. All right. Second is actual educational coursework itself. And of course, you know, again, here, there have been attempts. There was, you know, kind of the MOOC, you know, kind of online course movement a while ago,

Coursera, Udacity, and then, you know, use. UDEMI, or UDEMI, which is another startup. And then there's a Khan Academy, which is kind of like a different format of it. Yeah, exactly. And then I'll just give you a couple thoughts on this one. So number one, actually, this has already happened. Specifically, this is happening in Korea. And so there are actually like teaching superstars in Korea that actually, you know, makes big courses.

I've had this idea for a long time, which is, you know, if you figure you've got a million kids who are going to take Math 101 freshman year of college, you know, you get them, you get them each to, you know, do $100 for that. It's $100 million of revenue, you know, and then hire Stevens Spielberg to make Math 101 as a, you know, as a, as a video miniseries, right? For a hundred, most compelling courseware of all times. Yeah, like it literally gets Steven Spielberg, Christopher Nolan. Literally, yeah, the most, the most like mind-blowing, incredible, like, course, yeah, of course lectures you've ever seen with like full, you know, three effects and graphics and everything perfect. And so you could do that. And then, you know, we talked about the tutoring thing, but you could, you could potentially

have a thing where you have like the super high production value general courses and then you couple it with like AI tutoring. Or you couple it, by the way, with like in-person tutoring and, you know, matching grad students to undergrads or whatever. Like, and again, like people have been trying to do, you know, variations in this for quite a while. But, you know, how would we think about that as an entrepreneurial opportunity today, do you think? Yeah.

You know, it's interesting because of the ones we named, the one that has worked the best is probably Khan Academy, which had the least amount of money going to it and is in its own format, right? Like it's a, it's not a university course format thing. It's like these little lessons. You know, I couldn't even remember, you know, when AI started taking off, I had a hard time remembering, like, how to do linear algebra or how hard it was. And I did the Khan Academy. I was like, wow, I forgot how easy it was. You know, it's much easier than actual algebra. It sounds, it sounds harder, but it's easier. And so like it is kind of like a magical thing. And I think the challenge with the full college experience,

unless you get to the Christopher Nolan version, is that it's a very big thing to sign up and commit to without a well-known credential, right? Like, okay, I'm going to go learn, you know, whatever calculus. or I'm going to learn, you know, advanced, you know, like machine learning or something like that. If I'm really coming from outside the job market, even if I learn it, will anybody believe me? And how does that work? So I think completely decoupling that one from credentialing or jobs may be tough.

but if you could link it into, like, you take this class, you get a job, then I think that could definitely work. But otherwise, I just think it's a very small market of people who just really want to learn that much about a subject. Right. Right. So, yeah, when you talk to stat, we like a little bit about subjects. Right, right. Yeah, so when you talk to professors, to put on a cynical hat here from a moment, when you talk to professors at university administrators about this kind of thing, basically, what they tell you is like, look, like, you can't be naive about actual, actual real world students.

They say, look, like, in practice, it goes to your point of like the advantage of having a physical, physical presence, like an actual physical campus. But what I'll tell you is like, look, a lot of students actually like don't want to learn, like, or they're not motivated to or like it's not something they would naturally do and they're not driven to do it. And like, they're going through the motions. And to the extent that they're actually like showing up to class and doing the work, it's because they're in a specifically structured environment where the expectations are set high to do that. And they're going to get kicked out if they don't.

And, you know, their parents are paying for it. And it's like, they're basically pressured, basically pressured into doing it. And of course, you know, a lot. When I went to college and I went to Columbia, so like, and Columbia is like a pretty high end. So I imagine at like regular school, that's even more the case. So I think that, I guess my response to that would be,

I think there might just be two different kinds of students. There might be the ones that like are actually super strong, it's super intrinsically motivated, as the psychologist say, where they're just like, you know, and you, by the way, you talk about yourself as an example of this, which is like, I was a busboy. I didn't want to be a bus bus.

I was a dishwasher. I was a dishwasher. I didn't want to be a dishwasher. Yeah. And like, we're going to go do this because, like, we know we need to do this because we're doing it for intrinsic. We're doing it for ourselves. Like, we're doing it for intrinsic reasons.

And so those students exist. But then there is this other kind of student that arguably more populates, especially the upper ranks, ironically, of American education, which is like where they actually need to be like, and not even pressure it was maybe overstating it. But, you know, maybe it's, let's just say they need to be in a highly structured environment. Yeah. And I agree. And I agree.

Yeah. Yeah. And so, well, or it's this weird thing, which is it's almost like the more privilege, the more privilege the student, the more pressure needs to be put on them or something like that. Like it's a, it's a, you know, it's a, like, if your life is really fun. Right. You know, if you've got lots of money and, you know, look, when you're young, life is incredibly fun. Everything is new. You know, every movie is amazing. Every, like, every experience is incredible. So, like, I'm going to take those years and I'm going to fucking sit in a classroom listening to somebody, drone on about, you know, whatever, the Iliad. Like, I don't want to do that. So I think that's right. Whereas, on the other hand, if your life is kind of, you know it's misery without getting something out of this experience, then that's a little more motivating. Yeah. So I always wonder with these, these things, I always wonder if people should be more specifically, you know, sort of addressing that category. And I don't know, even, you know, I'd say that's not even that big of a category or something, but like, basically self-motivate, intrinsically motivated.

and just like not try to appeal to the people who need like more structure and more pressure. Yeah, yeah, yeah. I think that's a very specific market. Like you'd have to kind of identify those and get them through. Yeah, interesting. But again, to your point, if you then link that to the credential, then they would see the cause and effect and then, you know, that would be very clear. Like we mentioned Lambda School like this.

This is basically, we're basically describing Lambda School in a lot of ways. So this makes sense. Okay, third is the Research Bureau. So this one freaks people out because like anytime you bring up, is there a different way to like do research, fund research? Basically everybody in the sort of research complex, you know, generally they freak out because they're basically the steelman case against any change to how research is funded is basically you don't understand.

The whole point of like research, the whole point of basic research is that it doesn't have an end goal like in mind and identified and it can't because how do you know you're doing some research experimented physics or some new math theorem or whatever and like higher biology decoding the genome and how do you ever know? Like yeah, maybe there's a commercial use case

for this thing 30 years from now, but like you have no idea. And that's what makes research different than development, right? The reason that it's the term research and development is because development has a specific goal to like ship a product and make money. Research is like trying to come up with new knowledge. And so it's like, okay, any, and then, you know,

the argument, you know, the modern research university was constructed. The research part of it was constructed originally, by Vannevar Bush and his peers 70, 80 years ago to provide a kind of environment in which that kind of basic research can happen. And there you get into ideas like tenure, like why do professors have tenure?

A big reason for that is so that they're free to do whatever research they want. They're not risking getting fired if they quote unquote don't deliver something, let's say practically useful. And then the other is like government funding of research. It's like the government, companies won't fund basic research because it doesn't have an end commercial target.

but the government will because it presumably has this long-term perspective. And so you get like, in my experiences, you get like tremendous pushback out of the gate in this conversation. Having said that, I think there are a bunch of very interesting things that you could maybe explore as ways to do research outside of the university context. And by the way, some people are doing this and we can talk about them. So there's a couple of issues with the current research complex. We talked about last time.

So one is just there's a massive replication crisis. And so depending by field, up to 75% of the research and a lot of fields doesn't replicate. A massive incentive complex or a massive incentive problem. Yes. How do you get a grant? You publish a research result that seems to validate additional investigation. How do you get that result? Well, you get it legitimately or you do data mining.

How do you get tenure? How do you get tenure? You publish papers that you may or may not have written your written or whatever. yourself. So there's that. And then there's a friend of mine, and I won't name him, but he's a very experienced guy who's been in the sort of leadership positions across this entire spectrum.

And he always, whenever he and I talk about this, I'm always going on about the replication crisis because I think it's such a scandal. And he's like, look, it's not even the problem. He said the problem is 90% of the research is just useless. It's just like, it's just not helpful. And basically, and again, this is a guy just the matter, right? That's what he says. He says, look, whether it's right or not, it's actually secondary to whether

it would even matter if it was right. And this, by the way, is a guy who has run a major, he ran a major at one point major government research funder. And so this is a guy who was in a position to be able to hand out the money. And so this is not like some sort of anti-establishment guy. This is like somebody who's been on the inside seeing how all the sausage is made and running it himself.

And he said, look, he said, look, the practical reality, this is his argument. The practical reality is in any given field of research. And it's anything from quantum physics to, you know, any good psychology, anything else. computer science, whatever. He said, look, there are five institutions that are on the leading edge.

And everybody in each of those fields knows who those five institutions are, and those five institutions generate, you know, essentially all of the useful output that actually moves the field forward. But it's, and so it's just, it's five institutions, it's, you know, whatever number of, you know, therefore,

I don't know, depends on the field, 100 professors or something like that, 200 maybe by field. And then it's, you know, some number of grad students. and then it's the research budget for those people. And he said, look, and so I was like, well, why doesn't the government just fund that? Like, why fund the other? And he says, that's like 10% of the money.

And I was like, well, then why spend the other 90%? He's like, well, you know, because like, it's not enough. Like, it's this weird thing of like, it's not enough for the government because there's like too many, there's too many miles to feed. There's too many constituents. There's too many congressmen that have universities and their districts. You know, there's too many people who get tenure who expect this. There's too many incumbent colleges that have research programs, even if they're not productive.

They don't cancel them. And so he said the system is. kind of wired to overfund every category by like a factor of 10 and so he said look he said the thing the thing to do in his view is like the first thing you would do is he said you would just narrow it down to the 10 percent and so you would just figure out like what is the actual 10 percent of the useful work to be done what is the actual 10 percent of the people who can do that work and so he says look the aggregate dollar amount involved here is is literally a tenth of what everybody thinks it is to do the actual quality work and then he said and then he makes it further

made a further argument that he said look like you don't yeah you don't always know that there's going to be commercial applications for research but a lot of times there is And so if you have some material science breakthrough or something, like that patent is probably going to be super valuable. And by the way, universities are in the business of patents and patent licensing, and they get revenue streams from that, even though it's not their main thing. And so he's like, look, you could either have these new,

you could either have new nonprofit research institutes that would have to be funded with philanthropic dollars, but maybe it's not, you know, maybe that's actually tractable because it's just not that much money for the high quality work. Or he said, look, maybe it should be a venture capital model. It should be for profit. And you just basically make money. It's a long-dated, you know, of a new thing where you're making money in the long run

on commercial product development and a patent licensing coming out the other side. And you should actually just like apply, you should actually apply a VC mindset to that. So anyway, so it really, oh, and then I'll just mention, like, so our friend Patrick Collison has, you know, his funding philanthropically program, you know, to do independent medical research associated with Stanford

called ARC, but set up as a separate thing. We know well the folks at the Howard Hughes Medical Institute that does specific grant funding to individual young researchers in the biomedical field and has had outstanding results with that. So there are new cuts on this that people have. Yeah, Parker, I'm on the board of his institute, which is similar. Yeah, describe what he does. Yeah, so Sean's Institute, it's called PICI, or its initials,

Parker Institute, Cancer, something, I can't remember, but I'm on the board of it. But, you know, they so they fund researchers to do kind of breakthrough work on cancer. And, you know, they do have, they've got both, they spin the ideas out into, there's a venture model. So they spin them out into companies and the Institute invests in them. They do generate patents. So like it is, you know, it's originally, he, I mean, he made an incredibly generous $250 million, I think, donations to start. Maybe bigger than that. Probably bigger than that.

But anyway, some enormous amount of money. But his vision has always been that like it will become self-sustaining over time because these, you know, the tech, the things that it's doing are so incredibly important. And I think that's, I think that's probably right. Like I do think it's going to, you know, end up working. And they, you know, they've spent out some very, very interesting companies already, some of which we've invested in, by the way. And then there's a Chan Zuckerberg Institute, which is another one, right? our friend Mark Zuckerberg and his wife, Priscilla Chan, are, you know, trying to cure disease, like all disease, you know, which is an incredibly great ambition and not something you would necessarily do in a company, but something that will probably have a lot of commercial results coming out of it as well. So, yeah, look, I think we're definitely at a point where philanthropy can do it.

The other thing is right, like there was research before the current complex. and, you know, got us some pretty interesting results like, say, the theory of relativity, you know, kind of came out of that. I think, where was Alan Turing when he did his proof? That's a good question. And, of course, Claude Channon was a master's student, which isn't, I mean, a master's thesis, which is considered like of nothing in academia, which is probably, more important than almost any PhD thesis in the last 100 years where he mapped Boolean logic.

It was the first time anybody did anything with bullying and logic, which is the algebra of zeros and ones, onto a circuit. And that is the beginning of computers. For those you don't follow, that kind of thing. And so there's real research that can obviously happen outside of the way the current university system works, that's been very powerful. So, yeah, no, I think, look, I think that it would be great if there were, you know, a couple hundred of these in different categories.

And there would be certainly something that, you know, I would love to, you know, put more money into. So, I think that's quite a good idea. Whether they make money or not, like, I think they're very kind of philanthropically fundable. Yeah, that's right. Yeah, that's right. Yeah, so I think, yeah, I think agreeing with you, I think, but yeah, I think the, I think there may just be a, I mean, look, there may be certain areas like, you know, particle physics or whatever where you're still in government money, but like I think a lot of the current complex actually might be fundable, the quality work happening and it might be fundable separately. Let's see, policy think tank, you know, that's, you know, there are policy think tanks that are not associated with universities. And so, you know, it's certainly, you know, a viable thing to do separately. People doing that today.

moral instructor is my favorite one to think about breaking out separately, which is, you know, look, there are many social movements that are not associated with the university. There are many social organizations, activist groups, you know, churches, right, like, you know, new religions, you know, like old religions, right, exactly, which are maybe coming back a little bit right now. And so, yeah, like, I don't know, it seems like society has a lot of different to organize moral instruction that's not necessarily having it take place in a in a in a in a in a in a in a in a in a in a in a in a in a a in a in a context yeah and I think that the I think the university one is very very tricky because it is counter to a lot of its other goals potentially particularly you know marketplace of ideas

freedom of speech freedom of thought and you know I I just think it's not the right people to be doing it. You know, look, they, you know, pastors and priests and so forth have come under fire, but in a lot of ways, they're much more the right people to be giving moral instruction because they actually spend time with their congregation. They deal with the, you know, their actual trials and tribulations of kind of going off the moral path and how to get people back on it. And they're, they're like hands-on. It's a tangible thing. Whereas, you know, a university, a professor can spout off whatever the F. He wants or she wants and then has no tie to that down the road. They don't live in their community, they don't have parents who go to

the church and donate and so forth. So I think in some ways, the university is a worst place to do moral instruction now that it's no longer like a religious institution. And if there's one thing I would take out of a university, it would probably be that. And look, I'm a lot. I'm I think, like, I'm a big believer in kind of an intellectual kind of discussion and instruction about ethics and morality. Like, I actually believe in that a lot. And I mean, look, I do it at work, right? Like, one of the things we talk to employees about is, like, you know, we're in this situation. What are we going to do?

Are we going to do, like, what's transactional? Are we going to do what's long term? or we can do what's right or we do what makes us money in the short term. And like, that's like real moral instruction. And with real consequence, that's going to have real impact. And like, I've got to live with the consequence. They've got to live with the consequence. And in a way, it's a better context to do it than a university

where you don't have any accountability, any moral accountability. So I think you're better off doing it almost anywhere than in a university. Or you could, and or, you could also, you could reconstitute the original religious university, the original idea of religious university. You could go back to the future. You could go back to the original idea, right? The original Harvard business plan. Right, you know, it's original idea.

Shut Galilei's ass down, you know, do that kind of thing. Well, no, no, no, no, like, not even, that's even further back. I'm not suggesting going that far back. But no, like the original Harvard business plan, which was like to instruct moral leaders, right? instruct pastors and moral leaders. And you can imagine an institution that just does that and just doesn't do all the other things that have been added on for the last 400 years.

Look, I think that would be very good in the sense that, look, in my lifetime, our society is degenerated no place more than, you know, what's right, than right and wrong. Like, there's no agreement on right and wrong anymore. You know, is stealing right? Well, it's right if you're hungry. okay, you know, there's certainly no right and wrong about marriage or these kinds of things. And I think that's caused a real degeneration of society, quality of life, you know, outcomes of the world.

And so like fixing that would be great. But I think the way we do it now is bananas. It doesn't fit into the current bundle, I would just say. So having an independent moral university would be fantastic. There are certainly overtly religious ones. The ones that we've lost, yeah, the ones that we've lost, I think, are maybe the ones that are kind of moral and ethical without being overtly religious, which is a real challenge,

a real challenge in general. But anyway, so I'll keep going. So sports league, I think you'd probably argue that the sports function could just be its own thing. Yeah, I think that like the sports league is immoral. Just like fundamentally, I think in retro-spouse. The university, you mean the university-based sports? We talked about that last time.

Big-time college sports, I think, has gotten to a point where it's clearly immoral on that. It's very clearly professional sports where they don't pay the employees, and that generates a colossal amount of money. And so I think you've got to fix that. And I don't know that you can pay kind of, like, probably the right way to fix it is to spin it out and have it continue to be affiliated with the university, but not run by the university, but run, you know, kind of by owners of the various teams or something, you know, more akin to the NFL or the NBA, because that's what it is. And, you know, then the athletes need to get paid. It's just in crazy, it's really wild that they don't. South Park did the very hilarious episode on this called the National Crack Baby Association.

And they went, but the funniest part was Cartman went to go see one of the kind of presidents of the universities. And he goes, and he's dressed like an old Southern slave master. And he goes, how do you get away with not paying your slaves? And he goes, slaves, you mean are student athletes? And he goes, oh, yes, student athletes. And you're watching it. And you're going, yep, that's exactly what's going on. Now, like I said, it's not all, like not all school's athletic teams make that kind of money and not all athletic teams, but the ones that do, I think need to be reformed.

Like, in retrospect, this is one of those things where, like, people 20 years from now are going to go, like, I can't believe you guys did that, you know. That's going to be bad. Yeah. That's right. And then the two other ones, these are serious topics, but also a little bit, a little bit fun. So adult daycare and dating site, right? And so, you know, like the adult daycare is, so let me look, a lot of people just like graduate high school and go get a job, right? And so, you know, maybe that's, maybe that's overblown. Or maybe you can imagine like new like design communities, contacts, maybe even entire buildings where you have a, you know, sort of social, cultural, you know, kind of matrix that people can plug into. Yeah, like, I mean, some degree like the armed services have a, you know, or that function in a way, you know, where you, okay, you get to be 18, what are you going to do with your life? You go to the Army, you go to college, you know, like it's kind of this community that you step into that's not your family, but, you know, you can't stay here kind of thing. I or, you know, the corporate campus, you know, for a lot of, for a lot of, you know, even post-college, a lot of corporate campuses are kind of designed to prepare. adult daycare.

Yeah. Right. I'm just trying to think of the proposition to the parents who are paying for it, you know, at that point. Yeah. Like that seems hard. Well, we have a company. There was something else that came out of it, you know, like that you to adult daycare and then you got a job. Yeah.

Well, we have a company where, you know, he would certainly not pitch it as adult daycare, but we have a company that's intended to provide a much more, you know, pleasant and interesting and enjoyable experience for, you know, especially people new in their lives and careers as adults. from a housing and community standpoint. Yes. Yes. Yeah, that, yes. That's a very good idea on it. Yeah, yeah, yeah.

We can't pre-announce it, but yeah, there is a new idea in the portfolio that creates a place that is like a college dorm, you know, from a living perspective and has a community and so forth and so on. You pay rent there, but, you know, rent similar that you would, you know, in any apartment.

but it kind of is a nice bridge from, you know, kind of coming out of high school or college or whatnot and into the world in a way where you're not just living by yourself somewhere lonely. Yeah. And then a dating site, you know, I'm just absolutely furious that the dating apps took off after I was dating, after I was finished dating. I would so much. Yeah, like this is a hard one for me to count on. I haven't been on a date in over 35 years. Exactly.

So I would just observe there are new ways for people to date today that are much easier than we were when we were in college. And so the dating site part of it might already be solved. Yeah, there are certainly tools, although, you know, that physical proximity is not something you can simulate online. And my understanding is there's a lot of fake photos and whatnot. People look better in their photos, perhaps. Well, there's also credentialing. So then it's also a factor credentialing, which is one of the reasons why college campuses are, I mean, one of the reasons of college campus is a hot house for dating is just a lot of young people who are together physically.

But another reason is because they all, they all have a shared sense of identity, right? They all have a shared credential, which is they're all, you know, they're all at X, you know, X college, right? And so they've all been validated, you know, at least to some extent. And then by the way, that's also true later on in life, you know, a lot of people, you know, look for a lot of people who are college graduates want, you know, who only want to date other college graduates or only want to date people who, went to, you know, certain kinds of schools or whatever. So, so the credentialing, the credentialing thing actually, like, reflects itself into this other sort of area of actual real life, which is dating, you know, dating and then ultimately marriage and offspring. And so, you know, we should

probably both not underestimate the actual utility of an existing college environment for that, but also think about, like, well, yeah, for example, the credit, you know, could your credentialing agency, could your independent credentialing agency also credential you as a potential? It has a viable marriage prospect or dating. Exactly. So I love that part of the thing. Okay, and then we'll close. We're at two hours. And so we'll close here quickly. But I think there's basically the fifth thing that could happen is just basically just the existing system could just devolve. It just unwind. And the way that it unwind is so the credentialing agency, credentialing function shifts to the employers, the education courses shift to, you know,

a la carte, internet options, research bureau shifts to the function shifts to the kinds of things. We were just talking about policy think tank on wines, shifts to the independent think tanks. You know, moral instructor part loses credibility and just withers over time. Social reformer withers, it's arguably happening already. Immigration agency, maybe that continues. Maybe that's the ultimate business model is just get to have high-paying immigrants. Sports leagues, you know, break out, go independent, become professional sports. You know, as you're saying, at all daycare dating site, people just find other ways to live and date.

So it just may be that, you know, it just simply may be that just things just like unwind. And, you know, in the scenario sitting here 50 years from now, these institutions still exist in some form, but they look increasingly just like, you know, kind of archaic and, you know, kind of, you know, kind of just like, I don't know, just like not. You know, they're just, I don't know, it's like, you know, there's lots of institutions in life where it's just like, wow, you know, you drive down the street and there's a, you know, I won't pick on anybody, but there's a, you know, whatever. And you're just like, wow, that thing still exists. You know, that's interesting. And they're just like much less important because they kind of, they sort of isolate themselves sort of socially and economically, sort of walled themselves off from the general progress of society. And so is that, yeah, how would you think about that?

Yeah, look, I mean, I think that it's pretty fragile now, you know, in terms of the value proposition and that it's so expensive and got, you know, the cost relative to the value is so precarious. And just like, as an example, like if the U.S. government said we're not going to guarantee college loans anymore, that would be, you know, cataclysmic. And then if employers were like, we're not going to, you know, there's no SAT score, there's no grades that mean anything, there's no rigor. we're just going to not value college degrees anymore that would collapse. So there's things that are actually reasonably close to happening that could collapse a system, or at least really alter it irrevocably. So I think that the universities very much have to think hard about like shoring themselves up on the value proposition in particular. I just think it's getting very weak for students.

and that's a dangerous place to be in if you're in university. Yeah. And then the other thing I nominate is like I, you know, and this sounds a little bit crazy right now, but like I, you know, I don't think we're necessarily that far away from a full-fledged political revolt, which is the, you know, the constituency of these places

is just it's not a majority of society. It's a small minority in terms of the people who actually benefit from the system today in the popular, in the voter base. And then, you know, a lot of these places become so politicized, so, you know, they inject themselves so directly into national politics, right? And so they sort of declared themselves. And you see, you see this in every metric and every number of distribution

of professors' ideology and then all the social activism that happens and so forth. It's just like, you know, overwhelming indications. And then increasingly public, right? And like, you know, just a, since we're at the two hour mark, I'll just, you know, kind of be blunt. It's like, I mean, look, like right-wing media, for better, for worse, it's just consumed with story after story after story of just like crazy bananas, you know, crazy hostile things that universities are doing. And so, you know, like, you can imagine, it hasn't happened, but you can imagine a point where just basically like, you know, the, you know, half or more of the country just at some point puts its foot down and its elective representatives put their foot down and they're just like,

we're just not doing this anymore. We're not paying for it anymore. Yeah, right. If the country took a sharp or maybe even a not so sharp right turn, than you could imagine an administration and a Congress going, why are we going to this? Yeah. Yeah. Yeah. And it's just, it's a small number of programs.

The really cautionary note here would be, it's a small number of programs that pay for the whole thing, right? So it's federal student loans. It's federal research funding. And it's a couple of things in tax law and a few other things. And so it's not like it would take, it would not take two years to figure out how to kill these things. Yeah, yeah, yeah.

From a legislative standpoint, it would take a, about two minutes. And so it feels like that. And look, maybe that never materializes because maybe these things just are so important and they have such existing credibility and, you know, they have so much political stroke and, you know, their graduates have so much power and so forth. And so maybe that never happens. Or maybe it's one of those things where there's a tipping point. And at some point, people are just like, I'm not going to, I'm not going to tolerate this anymore. Yep. I would register, register that for anybody still listening as a, hmm. Good. All right, good.

We, I think, covered it. As predicted in the beginning, we did not get to the Q&A. So, Ben, if you're up for it, we will continue collecting questions. And if there's popular demand, we will do one more. We'll do part three, maybe next week, and we'll do Q&A. And then we will, that'll be six hours of content from us on this topic, and that'll probably be enough for a while. But we have enjoyed talking about it, and hopefully you've enjoyed listening to it.

Yes. Thank you. Thank you, everyone.