This is an interview with Straighterline CEO Burck Smith. Straighterline created an innovative, new way for students to complete required college courses by building on the expertise of seasoned, respected, and proven educators and partners.
What is the biggest challenge that you are currently trying to tackle?
Generating awareness among consumers and widespread acceptance of our courses as equal to the courses offered by colleges themselves. Though Straighterline’s courses have been reviewed by the American Council on Education’s Credit Recommendation Service to whose recommendations about 1000 colleges say they adhere and we have direct articulation agreements with about 10 colleges (and rapidly growing), colleges make it very difficult for students to transfer credits to them. Colleges may say they award transfer credit for other provider’s credits, but policy or procedural barriers tend to dramatically limit the number of credits accepted. From a policy perspective, a college might say that it awards credit, but only as an elective. Another policy barrier is that the college will accept credit, but not award a grade. However a grade is required to complete various majors. Procedurally, many colleges make case-by-case decisions for credit transfers and can take weeks to make decisions. This has the effect of diminishing student ability to import credits. This is indicative of a larger “inter-operability” problem that afflicts higher education.
Just like a cell-phone with a proprietary battery charger for which it charges a premium if lost, a college wants to make it difficult to import credits.
What do you think education entrepreneurs need at this moment in the industry to be successful? Marketing? A good idea? A network?
For K-12, a network and enough money to survive the extremely long sales cycle. The biggest barrier to innovation in K-12 is not ideas, but the incredibly long and expensive sales cycle. Higher ed is a little bit easier, but selling to colleges is only a little easier than selling to K-12 schools. However, a good idea is more likely to take root in higher ed because there is a consumer choice mechanism, even if it is badly distorted.
How much of your company expenses are in marketing? Do you see that changing with any technology or with cultural changes at the university level? At the secondary level?
For institutional sales – either at the K-12 or higher ed level – sales and marketing is going to consume between 30% and 50% of your budget. For the higher ed consumer market, the best measure is the “cost per start” for for-profit colleges. The median is about $3,000. This might change, but only if the industry changes dramatically – which is very possible.
If you could create an extension of your company and do something else in the education sector with it, what would it be and what consumer would you be looking to find?
I’d like to extend the principles of StraighterLine into the K-12 space. However, the political and management parameters of K-12 are different than in higher ed, so it would look pretty different.
How much of your education influenced the way you operate your company now? Can you think of anything that sparked this idea for StraighterLine?
I was a Philosophy major with a degree in Public Policy, so I pretty much had to employ myself. Actually, and I swear this isn’t revisionist history (I can even prove it), I’ve wanted to start StraighterLine since the late ’90’s. I’ve always been interested in the transformative effects of technology on society. Prior to grad school I realized that education was and is almost completely unaffected by technology. I believe the reason lies with an outdated regulatory structure that keeps the sector from evolving.
Higher ed, unlike K-12, has a consumer choice mechanism where there is hope of market-based pressure to make disruptive changes. So, I guess philosophical interest with practical application of public policy principles led to the creation of two private-sector start-ups – SMARTHINKING and Straighterline.