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What do you make of this week’s 2U / OPM news?
For those who have not followed the events of the online program management world closely this week, there are two things you should read.
They are:
- Lindsay McKenzie’s article, A Reckoning for 2U, and OPMs?
- Phil Hill’s piece, July 30, 2019: The Day the OPM Market Changed
If you want to go deeper, I recommend investing some time in reading the transcript from the 7/30/19 2U earnings call.
After going through all these materials, and giving the matter some thought, I have three takeaways.
A quick note that 2U is not currently (or has been in the past) a partner at my institution, and that I don’t own any stock in the company.
Takeaway #1 - The Stock Market Story is the Wrong Story:
How much should those of us in higher ed care about the price of 2U stock?
Does the drop in 2U’s share prices say anything about the relative merits of universities entering into partnerships with companies to develop, market, or run online programs?
From what I can gather, the answer to both of these questions is “no.”
The fact that 2U is a public company seems to be both a blessing and a curse.
A blessing, because being public forces 2U to be more transparent.
A curse, because so much of the focus seems to be on the short-term bets of investors, rather than the long-term creation of value for students and universities.
If you were to ask me, I’d say that the long-term prospects of 2U as a company are strong. The higher education business is hugely challenging, competitive, and subject to a range of demographic and economic and regulatory forces. 2U as a company is learning, and I think that the leadership of the company is smart to recognize the need for greater restraint in growth and more flexibility in their relationships.
Today’s stock price of 2U is the wrong metric to focus on when trying to make sense of the long term impact that the company will have.
Nor should our evaluation of the impact on university/company partnerships in the online education space, both positive and negative, be much influenced by the financial news coming out of Wall Street. This is all more noise than signal.
Takeaway #2 -The Need for Some Nuance:
Our higher ed world seems to be dividing ourselves into two camps: those who are convinced that OPM’s are evil, and those who believe that OPM’s are beneficial.
The reality is more complicated, nuanced, and challenging.
There are good things that come when a school partners with a company to create a new online program. And there are some not so great things that occur as well. Often, these good results and bad results come together.
There is nothing inherently wrong, however, about non-profit universities collaborating with for-profit companies. Schools would not be able to run without entering into collaborations with companies. There is nothing magical about non-profit status.
We need to lay aside the academic reflex of suspicion of the profit motive, at least in the moments that we are trying to figure out if partnering with a company to create a new online program. It may very well be that it makes more sense to do online programs internally, or to only partner on a few things (like marketing). But these decisions need to be made for individual circumstances, not as an overall rule based on preconceived beliefs rather than analysis and data.
Just as we need a more nuanced view of the OPM market, we should adopt a more flexible understanding of 2U as a company. In my interactions with many 2U employees, I have found them to be dedicated educators and driven by a mission of creating new opportunities for learners and universities. All of this stock news must be a distraction for the 2U people who are working hard to create high-quality online programs.
Takeaway #3 - The Opportunity for a More Scholarly Conversation:
We are not in a good place if earnings and stock market valuations are driving our discussions of university/company partnerships in online education.
The real story we should be telling is to try to make sense of what it means for schools and students that universities are partnering with companies to create online programs.
In the absence of this research, we are left with news articles and blog posts and stock prices. The evolution of online and digital learning within higher education, including the unfolding story of OPM’s, deserves its own area of scholarship.
This story, however, has moved too fast for academia to catch-up. We have a scarcity of independent scholars devoting time to unpack and make sense of the changing dynamics of the postsecondary ecosystem. We have a lack of cross-sectional and longitudinal data to help tease out the outcomes for schools and learners.
The OPM companies have done little to support independent, critical, and scholarly research on the growth of their industry, and its impact on individuals and institutions.
Every company in this space should take the week that 2U has had as a warning of what happens when the views of financial analysts and short-term investors are allowed to dominate the conversation.
Companies in the online education space should take a long-term view of their businesses. They should be looking for ways to support independent, scholarly, and critical research.
What has been your experience working with companies on online learning programs?
What are your takeaways from the 2U / OPM news this week?
