Most for-profit education ventures fail, writes Jonathan Knee, a Columbia business professor, in The Atlantic. Moguls are thinking big — and losing their shirts, he writes.
Michael and Lowell Milken founded Knowledge Universe, with Oracle’s Larry Ellison “as a silent partner,” in 1996, writes Knee.
Milkin said it would be “the pre-eminent for-profit education and training company,” serving the world’s needs “from cradle to grave.”
Most Knowledge Universe businesses, which “included early-childhood learning centers, for-profit K–12 schools, online M.B.A. programs, IT-training services for working professionals, and more,” ended badly, writes Knee. “Education was not transformed.”
In 2012, the media mogul Rupert Murdoch and the former New York City schools chancellor Joel Klein established the Amplify division within News Corp. At the time of his initial investment, Murdoch described K–12 education as “a $500 billion sector in the U.S. alone that is waiting desperately to be transformed.”
Their idea was to overturn the way children were taught in public schools by integrating technology into the classroom. Although inspirational, the idea entailed competing with a series of multibillion-dollar global leaders in educational hardware, software, and curriculum development. After several years and more than $1 billion, with no serious prospect of ever turning a profit, Murdoch and Klein sold their venture for scrap value to Laurene Powell Jobs, Steve Jobs’s widow, last year.
Thinking small has worked for some educational businesses, writes Knee. “Recent examples include a business based on plagiarism detection; another that provides tools to high-school students and guidance counselors for college and career selection; and another that delivers day care and early-learning programs sponsored by employers.”
Laurene Powell Jobs is narrowing Amplify’s scope and spinning off marginal businesses, he writes. “Targeting middle-school reading” may be less visionary but more doable.
Knee is the author of Class Clowns, subtitled “how the smartest investors lost billions in education.”