My business partner and I are products of the rural Nevada education system. We are proud Fallon and Elko, Nevada graduates. I was a terrible student based on institutional standards to the point my fifth grade teacher wanted to place me in special education. With that said, my Nevada education was more than adequate for my success because at the end of the day education is a much smaller aspect to what generates success than what we are told. In college I became a good student but still couldn’t get into the top schools and had to lobby the Dean to get into graduate school because of my test scores, this is when I first knew the system was broken. Since our high school graduation from our humble Alma Maters we have gone on to travel the world and work on $2 billion in transactions and currently running one of the fastest growing fintech companies in the country.
My point is that the way we are measuring and viewing Education is flawed and yet we continue to believe that it is a resource and testing problem. I do not believe that it is a resource or testing problem and the data indicates that more resources only extenuates the problem, what we need is real market driven innovation to change the way in which we fund, view, and measure education.
Watching the most recent Nevada legislation session unfold was more than painful as we witnessed Nevada leadership parade Education to drive their own political agendas. Lets be honest, it takes zero courage to fight for Education, it is the epitome of red meat and the ideas that unfolded from the legislature are old and tired and lack any form of innovation. I’m sorry, I’m not impressed and a politician standing in front of a school giving a speech that has no substance or real innovative solutions is a joke. The free market would crush me if that is how I ran my business. And even worse as tax payers we will have to pay for this lazy thinking and leadership.
As you can probably tell I do not agree with the Governor and the Nevada State Legislature that throwing more resources at something will fix the problem. In fact, I have seen it do the opposite in most cases, let’s look to African aid versus African micro-loans as a quick reference. Billions of dollars of aid wasted in Africa with no tangible results as small micro-loan companies create unprecedented economic impact. This education bill and tax on Nevada businesses was nothing more than political grand standing and I truly believe will make the education system worse. It will also continue to create a wealth and power concentration in Nevada that will drive our economy into the ground, I spoke about this extensively in my last blog: An economic & political overview of Northern Nevada: It’s time to ask the hard questions.
I am going to lay out why I believe our current leadership to be self interested and misleading in their campaign for education and explain what the data is really telling us about education and how it can be changed to a free market approach. And in closing I will make a big announcement on how our company, Bristlecone Holdings, plans to compete against education and the politicians misuse of policy.
I would first like to revisit a blog I wrote a few years ago on education to lay out the philosophical setting on why I believe the Education system is broken. At its essence, we have made it a given right to have an education rather than a right to pursue and in changing that perspective we have completely disrupted the free market in a very similar fashion to the 2008 housing crisis when home ownership was seen as a right rather than a privilege. When this perspective changes it impacts credit markets and ultimately supply and demand in such a way that it creates a bubble that will eventually fail. The data does not support the rhetoric and we have to look at this from a rational perspective and create innovative solutions to fix the problem. Furthermore, the way in which we are measuring education is flawed, thus, we are making decisions based off of faulty data which is why the problem continues to get worse even when more resources are given.
What if I told you that you could start a business and sell a product that a majority of society thought they “needed” but did not produce the results it stated and the customer could not return the product and the price increased every year more than inflation. I don’t know about you but I want to invest in that business. Welcome to the modern day education system. We now live in a society that pushes everyone to go to college as a fundamental right and that all of us should strive to be doctors, lawyers and accountants.
This mindset has diminished the value that is created by other careers, skills and trades that are paramount to our society. Yet we are constantly told that we have a fundamental right to get a college degree and nearly every counselor and advocate for education in our country pushes for this standard. The unintended consequences have definitely been in full force on this matter because this push for education has allowed for an education system to go unchecked for decades. In essence, we have created a monster. As a result, tuition has skyrocketed and tenureship has gone from prestigious distinction and responsibility to arrogance and selfish agendas. Many tenure professors have their own agendas that do not match up with that of the private and public sectors which has resulted in unprepared college graduates and higher unemployment rates. This is an issue that I could write about for days but in the essence of time I will keep my thoughts to three problems and three solutions for education.
Problems
The Numbers Don’t Lie: Job availability data does not support current college graduate data which has created a significant supply and demand issue in the job markets. On a regular basis I hear from companies that have a hard time finding qualified computer programmers and engineers for their business yet when a marketing position opens they will be flooded with applicants. This is also an issue with skilled labor and trade. A recent study came out that half of college graduates work jobs that do not require a degree. We have over-flooded the market with graduates that are all trained in the same disciplines, thus, creating career uniformity in our society.
The Career Uniformity Issue: Our culture has continued to put high paying white collar jobs on a pedestal as we look down on blue collar skill and trade careers as work beneath us. This is absolutely unintelligible at its core due to the fact that a functioning society is like a car that requires many parts working in unison to operate. Therefore, how can you put more value on one part over another when the elimination of any part will render the vehicle inoperable? I’m not saying that all jobs are equal in effort or pay scale but that each has a role in the overall healthy functioning of our economy. Some parts may have more monetary value and work load than others but it still requires every part for full operation. Any career that gives to the greater good of society and is done with excellence is what I would call honorable work and as a society we must take this view or risk failure of our society.
The Next Bubble: There is currently $1.2 trillion in college debt among our citizens which has created a major liability to our countries financial stability. When societies start to change their thinking on rights it creates a domino effect. At one time each citizen in the United States had the right to “pursue” education and home ownership but over time as a society we dropped the word “pursuit” and decided it was everyone’s “given” right. Although this seems like a minor interpretation it has devastating results. You see, this change in thinking creates a dismissal in logic and decisions start to be based on emotion. Even if the emotions and intentions are good it does not make them right.
As we saw with the housing crisis we had to drop logic in order to give everyone their right to home ownership and it has had significant negative impacts on our society. We are on the same course with college education and it will be our next bubble and crisis. As I stated above, the higher education system is selling a product that is not wanted by the private and public sector and they are selling this product through leverage (college debt). This creates a significant issue considering that most students will not be getting the career or pay that they were promised and thus struggle to make payments on the product they were sold. Eventually this will lead to massive default and illiquidity in our markets…..AGAIN! I do not blame higher education for this for they are only delivering a product that the market demands and that would be shifting responsibility. I blame society as a whole for breaking away from pragmatic thinking in order to get what we want.
Solutions
Private Sector Education: The corporate world has been fighting with higher education for years to train their students in such a way that will make them valuable upon graduation. This battle has rendered useless for the private sector and resulted in outsourcing and off-shoring in order to meet their demands. There is a new trend happening in the private sector to deal with this issue in education that is specific to computer programming. Companies like Zappos and others are offering education programs before or after their college education to properly train students on the technical skills that students need for the private sector. Some of these private sector programs are even basing their tuition on the students ability to obtain a job and/or salary amount upon graduation. Imagine that, you actually get to take my education product back if it doesn’t work. What a novel idea.
Bring Back The Trade Schools: The trade schools have been greatly diminished in high schools and colleges over the decades as we have started to diminish their value in society. We have become a specialized and consumable based economy which only values the new and throws away what is broken. Most of us have a very specific set of skills for a particular niche and rely on the rest of society to fix and make whatever falls outside of that niche. The comedy behind this is that we are no longer training or educating certain trade and skills vital to our economy which in a specialized culture has left major supply and demand issues in on our work force. When all careers are looked upon as honorable this helps to alleviate the supply and demand of careers in our economy. Thus, we should respect trade schools along the same lines as higher education institutions. It should be just as prestigious to enter into a trade school as it is a liberal arts school. This will not only create pride in all honorable careers but also a higher standard of excellence in every field.
On The Job Degrees/Apprenticeships: The best education I ever received was by actually getting in and doing a job. I don’t think many would disagree with this statement. There was a point in time when all careers and trades were taught through apprenticeship. Someone with years of experience on the job handed down their knowledge and expertise to the apprentice. This was a great way to pass along knowledge and learn from the mistakes and successes of predecessors. As a result, this built up decades and eventually centuries of knowledge in a particular trade. I would be the first to admit that my education greatly impacted my critical thinking, strategic decision making and problem solving; however, none of that could teach me how to effectively run a manufacturing plant. Someone who has worked every job in that manufacturing line will always have the advantage of running that manufacturing line over any educated person with no experience in that field. Thus, my point is that we should strive for on the job training degrees and apprenticeships that are viewed with the same prestige as a bachelors degree. The problem we face is that a minimum requirement for most jobs is a bachelors degree which can automatically eliminate candidates who may have more qualified experience than those of their educated counter parts. To make a stronger point, individuals like BIll Gates and Mark Zukerberg could not apply for jobs with a bachelors degree as a minimum requirement. That really puts this requirement into perspective.
Conclusion
Problems and solutions are great but what are practical real market ways in which we can start to change this power structure created by the intellectual and political elite. First, I think we have to address what I believe to be the number one fear that the power structure is using to keep innovation from happening in education and training.
The Irrelevance of Test Scores: Maybe this is a bit strong but I do believe that testing significance is insignificant. We are relying entirely too much on test scores that do not and can not measure important behavioral indicators like creativity, ingenuity, and hard work ethic. All of which are components of entrepreneurship, innovation, and success. We might be behind in math and science scores in comparison to counties like China and India but they are light years behind us in technology, innovation, and entrepreneurship. In fact, they are studying our innovation and entrepreneurial cultures and still can’t execute. I am much more interested in the creatives, the rule breakers, and the eccentric than I am the spelling bee champ.
We have great access to data and we need to start looking more at behavioral indicators as a measurement of our young minds. At Bristlecone, we leverage many different data points both leading and lagging indicators to assess whether people will pay their loans back or not. Our plan is to apply this same logic to choosing employee’s and measuring students. Currently, we are measuring Education improperly thus we are making decisions based on an insufficient data set which only lead to increased issues. With that said, I am fine with this because I can recruit overlooked talent due to the fact we are looking at a different more predictive data set. This is why I’m fine with Nevada being ranked last in education. Nearly 90 percent of our team is from Nevada education and we compete at the global level which leaves most of our counterparts scratching their heads.
Since I am a results driven thinker it is time to put my money where my mouth is and outline where we will be stepping up as a thought leader to start helping break the current broken pattern of education.
Bristlecone University: We are launching Bristlecone University which will include an apprenticeship and fellowship program that will seek out both high school and college students that want leave their full-time traditional education or bypass college to be educated and work within our innovative culture. Fellows and apprentices will not only learn about business but also philosophy, history, economics and many other subjects that we believe creates a well rounded mind. We aren’t looking for the best and brightest, in fact I want what society considers mediocre which is right where I was when I graduated high school. I am fine with Nevada’s Education system being ranked last because they are measuring students improperly, in fact it makes it that much easier for us to recruit great talent within that Education system that others are ignoring. This is human capital arbitrage for us and also why I have a problem with throwing resources (taxpayers resources) at a problem that has not been properly thought through and will be poorly executed. I know that we can prove that this political myth about education being driven by politicians and the intellectual elite can be found false through real market driven data.
It is our goal to prove that there is not correlation between current test core rankings and producing effective and skilled workers in the marketplace. This is our goal and commitment to the problem and hope that we can serve as leaders in the business world. Bristlecone University will focus on this very problem by utilizing technology and data to address the very frustrations I have discussed. We believe good education is a market problem and not a tax payer problem and the business world needs to step up to the challenge. At Bristlecone’s core we believe in utilizing technology and data to make better decisions regarding capital whether that be financial or human. We are in the early stages of evaluating education data sets in combination with behavioral and other data sets which will help us to build robust algorithm decision trees to more accurately measure students, education, and future behavior. We believe this has the opportunity to revolutionize how we measure and evaluate education and human capital which will make us a more productive and healthy society.
I can’t stress enough how bad this wealth and power concentration is in our society and how that is driving both businesses, institutions, and politicians to make self serving decisions with no regard for true change and innovation. As long as I am breathing I will be fighting and antagonizing this system with the misfits and rebels of society. I currently view most of our politicians and many business leaders in the country as adversaries only working to protect the power they have rather than pushing to disrupt the power structure with innovation and new ideas. Thus, we must wage war on this structure and never give into the status quo and current power structure. For me, Education is one of the core issues in our society and something that must be addressed now or will have to be addressed once the bubble bursts. So lets be proactive and realistic and start tackling this issue with logical and innovative solutions.
Thanks for your article. I live in NZ so perhaps it is not so bad as what you are talking about in the US. Here, University is not seen as a right, however, primary through to high-school is.
I think in general, people simply assume that a degree gives you the right to have a high-paying job. Moreover, I wonder at some people when they are choosing their courses. I have a friend who studied music, but then realized he needed to be able to get a job, and is now finishing up a computer science degree. He commented to me that when he came out of high-school, he did what he wanted, but then realized a music degree in percussion, is paramount to a degree in unemployment.
However, I do think that the different University departments are to blame, at least partially. They want the best students and therefore will flatter a student by telling them how amazing they are at a subject, without telling them that jobs with that qualification are rare. I, personally, was encouraged by my music teacher to study music, and encouraged by a business lecturer to study marketing. Another one of my friends, studying law and history, is considering giving up law and focusing on history, because some of her history tutors are telling her that the essays she is submitting (at 100 level) are at the level of an honors student.
At least in NZ the cost of education is not as high as in the US where you are. The NZ government subsidizes education for NZ residents. International students have to pay almost 3x the cost domestic students have to pay.
In my case, I would have gone in to University to study computer science by itself, which would have been a good choice anyway, however, my parents talked to a friend who had worked in the industry, and changed their minds. He commented, that the people who were paid well, were the engineers/programmers who also had business degrees. Thus, on his advice, we decided to wait a year, so I could study accounting and economics. At present I am in my second year of studying a Bachelor of Management and Bachelor of Computing and Mathematical sciences (I am doing a double degree). I quite enjoy Finance and Economics, and can see that computer science has many applications in those fields. If we had simply listened to the University however, I would never have had the joy of studying business.
Thank you very much for your article. I was so encouraged when I heard of your blog. To hear of other Christians giving it a go and succeeding, is a real encouragement. I hope that with what I am studying at the moment, I can have a real impact on the world. Your testimony and blog are a source of real encouragement to me. Please keep posting!!! All the best with Bristlecone University, I will keep your company and its’ new venture in my prayers.
I like what Moody said about education:
“If a man is stealing nuts and bolts from a railway track, and, in order to change him, you send him to college, at the end of his education, he will steal the whole railway track” (D. L. Moody).