Shai Reshef is a serial educational entrepreneur with an innovative background in bringing test-prep, tutoring, and university education online. Today he is founder and president of University of the People, perhaps the world’s first accredited, non-profit higher-ed institution offering tuition-free courses entirely online.
We hope you enjoy this interview with one of the most interesting college presidents we’ve ever met.
Rich Tatum, for TheBestSchools:
I wanted to let you know, first of all, I’m really grateful that you’re taking some time out, especially on a holiday, to talk with us. I really appreciate it — I know you must be extremely busy.
Well, we’re all busy, right? So, yeah.…
When you are the founder and president of a worldwide university that has thousands of students attending — and more every year, I can only imagine how busy you must be, so I appreciate it. And we’re excited to talk to you about your enterprise as well.
Thank you very much for giving me the time. You know, for us, it’s our way to spread the word — by having as many people, as many media outlets, talking about us. So, you know, it’s our interest as well.
Either you have been extremely fortunate in getting attention from media outlets, or you have a very savvy set of friends and associates who are helping you get the word out, because I found article-after-article, interviews with you, mentions of your press releases, and just a masterful example of how to get word-of-mouth and buzz surrounding what’s going on. Is that because of some intentional decisions and relationships you have, or are you just at the right time and the right place?
I think it’s the latter. I was in a conference in late January 2009 in Berlin — I announced the university. Now the second I announced the university — or the day after — The New York Times wrote a page about us. They wrote a page about us basically because it’s a good concept.
You know, literally, the rest was history. Because there was this article, the next day I already had hundreds of professors writing me emails, “We want to help.” Because what we are really addressing — the accessibility and the affordability of higher education — is an issue that so many people feel that they want to resolve. If someone showed that there is a way, they want to join and to become part of it.
Education Disruption on the Horizon
Do you think that too many universities are bureaucratically top-heavy and have lost their sense of mission and purpose to actually educate the masses and prepare them for improving the world?
It’s a good question because, first of all, I believe that there is room for many kinds of universities. There is room for Harvard, for Berkeley, for NYU, and for University of the People — but there must be a University of the People. And I think that the best research universities should stay there, have great quality, do their research, and be there for the few that can afford it and can be selected to be there.
But what about the rest of us? There must be an alternative. And I do think that a lot of universities should do it, and don’t do it. But they don’t do it partially because many universities forgot why they are there.
But many of them just are stuck in their financial structure. It’s very natural… every company, every organization, every initiative: you build a financial structure, the way you operate your business, you get used to it, you run it — and then you just can’t change it. It’s hard to change it. You need something disruptive to happen. In order either that other disruptive organizations will pop up and solve the issues; or you yourself will change, because if you don’t change you will disappear.
But you can see that in a lot of industries.
I’m glad you mentioned that because I wanted to ask you to compare and contrast what you meant by some of the quotes that I found. You had said previously that you see University of the People as being a “disruptive force” in education. Yet you’ve also said that there is a place for the Harvards and the Yales and the research universities — that they need to continue, and that there is an audience for all of you.
In what form does University of the People disrupt the world of education, and how do you see education changing as a result?
The first part is that we are basically showing that you can get a quality degree or a quality education almost free — or tuition-free. The disruption is for the simple reason of: why pay $30,000 when you can get as good or maybe better education for $4,000?
I will divide it into three. The disruption is by showing that you can do it, be accessible, and affordable — opening the gates wide with a very minimal cost — and showing universities that they can do it.
I think that we’re building a model. We’re building a model first for universities to tell them, “Listen, if I can do it, you can definitely do it, because what do I do? I take the resources that you have in-house and make out of them a tuition-free university. If I can do it, you can definitely do it!”
Moreover, or even more important from my perspective, to developing countries. Because right now they take the few millions that they have and try to build their Harvard, or Yale, or Oxford, or whatever it is. A few years go by and it’s stuck. You don’t build Oxford or Harvard in a few years and neither with a few millions, but the money is gone.
And we say, “Look at what we’re doing. You can educate every single person in your country. Give them a quality education at a fraction of the cost that you spend right now.” Think what a great leap forward it will be to any developing country if every single person in that country would have the opportunity for higher education!
I think that we want to put a mirror in front of universities. We want to create a social movement that will force governments to adopt our model — not ours, it’s not the University of the People per se — it’s the system, it’s the opportunity, it’s the method.
Now, if you ask me about the future, I believe that there will be all range of universities in the future. One extreme will be Harvard; the other extreme will be University of the People. But every single university on Earth will have to find its location in this spectrum. Because, if you’re a university, you should come and tell the students why do I have to choose you? You are as expensive as University of the People. You are more expensive. What justified your cost structure? Is it because you’re a local university in North Dakota, and therefore the people who come from the region and want to find a job want to study with people from the region, their peers will be their friends, they want to end up working in a local company? Okay, so that’s the reason to study there. What’s the value of this proposition? How much would you charge for it?
So, another university would come and say, “We are the best university in the world for a program for firefighters.” Okay. That’s why people would go to this university, but like in every industry, and in every service, you will have to find what’s your unique proposition? I think that universities will be on this spectrum.
The other part will be you’re offering being online, being offline, being hybrid, what percentage will study on campus, and what part will study at home?
The Disrupter as Collaborator
Surprisingly, you have gotten a lot of collaboration from universities that are ostensibly your competitors. You’ve got so many people on your President’s Council and your Trustees who are involved in education and are, strictly speaking, your competitors. How have you managed to engender this collaborative spirit between you and universities that are competing.…? I mean, some of your collaborations and partnerships, you’ve got — is it Yale or Harvard with their research department coming in with the technology?
Yeah, Jack Balkin from ISP [Information Society Project]. I think that I can tell you the story of my introduction to John Sexton [President Emeritus, New York University], and I think it will explain it all.
I was invited to Aspen Institute Conference in Washington, and one-third of the invitees were media people, one-third Congressmen, and one-third university. I was invited as a university president, and they told me to sit on the panel on the future of the American middle-class — as if that’s my expertise!
So, I’m sitting there, then someone gets up, pointed at me and said, “This is my new hero.”
I leaned to the Congressmen next to me, which I didn’t know as well and said, “Who is this guy that I’m his hero?”
He said, “What do you mean? John Sexton from NYU?”
Okay. So, when we had a break, I came to John and said, “It’s a great privilege. I promise to quote you everywhere,” that’s what I’m doing right now. “But why? We don’t even know each other.”
He said, “Listen. Last week, I was at a Clinton Global Initiative and I saw you speaking.” (I announced then our project in Haiti.) He said, “And I realized that my future depends on you. My ability to continue charging $50,000 a year will only be there if there will be a cheaper alternative for those who cannot afford it.”
And that’s how it all started.
We started talking, and two things happened. John became the Chairman of the President’s Council, our three Deans are from NYU, our CFO is from NYU — so we have a lot of people from NYU. Also, we signed an agreement where our best students, after a year with us, can be accepted to NYU-Abu Dhabi.
He said, “Listen, I see you as a funnel because the people that you recruit are the very people I want to have in my university — but they would never dream of coming to NYU. So you can be the funnel for NYU.” So it’s a win-win!
When you look at the best universities, we are not competing with them. There is room for us and room for them. I think more than that, UNESCO stated that there are 100 million students that ten years from now will not have seats in the then-existing universities. Basically, they said you look at the rate of opening universities right now: If it will continue for the next ten years, there will be 100 million people — to be accurate, 89 million people — that will not have seats in the existing universities.
You know, there is room for everyone. Yes, you need to find your niche in this market as I said before. Some universities will have to deal with the fact that education becomes much less expensive.
Yes we are paving the way for this. And for those who cannot demonstrate that they are Harvard, or NYU, they will have to not only find what’s the relative advantage, but to find the right price point.
This is the hardest part for any company. To come and say, “I have 1,000 administrators, but I can do it with ten,” whoa! That’s something that is extremely hard, and some organizations will lose their business before maintaining it with less people.
Can Lightning Strike Twice?
You mentioned already, and I’ve seen many comments about how you are building a model that is replicable. And you want to be able to see the idea spread like a virus and to show other nations and non-profits how to start their own university, and you basically want to create this spectrum of tuition-free colleges and higher education institutions like what you’ve provided with University of the People.
But you don’t have enough history yet to show whether it can be replicated because you’ve been the fortunate recipient of really good timing and great relationships. I cannot imagine very many other people being able to announce the founding of a university at the United Nations and to get the initial press that you’ve gotten and to forge the relationships you have.
Malcolm Gladwell, when he’s written about genius and talent, he’s made it clear that so many of the giants of industry today are not just giants because they were brilliant, and smart, and had the right idea. They also were the beneficiary recipients of great timing and fortune.
In a sense, you’re kind of lucky — lightning has struck with you, but how often can this lightning flash strike with other potential founders?
You’ve only had, the best I’ve seen so far, maybe anywhere from 14 to 50 actual graduates from your program including the associate degrees and bachelor degrees. You don’t have a lot of history to show people yet how to replicate this and what the results are in terms of graduates.
So, how does this replicate? Are you consulting with NGOs or state governments to help replicate this model, or is that down the road?
Well, it is down the road because when we announced the university, we got — as you said — amazing media coverage. We were very fortunate. I think it’s, as you said, it’s an idea that it was the right timing. I was lucky, so this is one thing. Yeah, I think I was. I mean, did I know that it’s the right timing and that it will come?
There was also a lot of skepticism, especially among academics. The first skepticism was, “Well, this kind of model can never be accredited. Peer-to-peer learning based on volunteers, no tuition — no way that it will be accredited.” There was a lot of skepticism.
Well, we are accredited, as you know.
Then the next milestone is our sustainability. People are standing there and looking at what we’re doing and waiting to see if indeed the financial model can work.
Well, next year, we are going to be financially sustainable. We did our business plan, every single year since we started in 2009, and next year when we’re 4,000 students, we will be financially sustainable. I guess that then others will start imitating.
I’m not consulting. We are working with other organizations. I am willing to help anyone. Nobody approached me! I mean, we get tons of emails, but I’m talking about serious initiatives. It will happen. It will happen.
You know, it’s funny. Maybe I don’t know if you saw it because I found it on one of our videos that I was in Haiti and I was talking to prospective students, and I said the same thing about building a model and I believe that others will imitate us. I think that as time goes by, we’ll continue to grow and others will start imitating us until one day we’ll wake up and see that all 100 million people are being served. At that point we don’t have any mission, and then we can go back to sleep and wake up with another dream.
Yes, I did. I actually transcribed that quote!
Success by Numbers
That was the last thing you said in that video in Haiti. I thought that was a beautiful line, and I really liked that.
One of the problems of the replicability of this model that I see so far is — I know some of these are just statistics and numbers, but just on paper — you’ve got more volunteers than you have students. You’ve got three to four thousand volunteers, based on numbers I’ve seen. And right now you’ve matriculated, at most, 3,018 students, total matriculation. You’ve got four volunteers for every student. Yet I know that a volunteer on paper is not necessarily someone who is actively involved on a daily eight-hour-a-day basis. You’ve got cohorts of 30–40 students at a time going through the classes with an instructor for each class. You’ve probably got at least 80–100 instructors involved in a daily basis with the cohorts.
A hundred and thirty.
A hundred and thirty, okay. So, what are the other 2,800 volunteers doing? Or are they just waiting in the wings for an assignment, maybe putting in an hour or two a semester of helping with something?
And if it takes 4,000 volunteers to matriculate 3,000 students, how do you scale that, much less replicate it?
Eh, wait. I need to put things in order!
Yeah, help clarify this for me because I’ve been trying to wrap my mind around it.
We have 4,000 volunteers. We have right now 2,500 enrolled students. And we have about 150 graduates — I’ll talk about it in a second.
About 130 of the 4,000 are instructors. All together we have about 200 volunteers that are active. Four thousand is the number of volunteers who came to our website and offered to help our students — we don’t use them. We can’t use them and we don’t need them, but they are a great pool for our growth.
We can grow twenty times just with the pool — it’s not exactly like this, because we use as I said 200 and we have 4,000 — so theoretically we can grow twenty times with the pool of volunteers. It’s not necessarily so because they are not spread according to our needs.
But to give you another example: a couple of months ago, we thought that we might have been short of a professor or instructor to one of the courses, so we put an ad in Inside Higher Ed. We got in a week 800 volunteers on our website, eighty of them were qualified to teach this course.
We are not doing anything — they’re coming by themselves. We can grow dramatically.
The pool of people that we can use: think about alumni organizations of universities. People who retired, professors, can you think of a better thing to do in their life than waking up in the morning, take your cup of coffee in your kitchen, open your laptop, and here you are with twenty amazing students from twenty amazing countries?
It’s a lot of fun, so I see how this model can work.
By the way, I think that talking about the replicability of this model, it’s clear that not everyone can use volunteers. I mean one, two, but not every organization.
We ran our business plan and we plugged numbers for every volunteer, market value, and what happened was that it delayed dramatically our sustainability point. Because we do pay our instructors honorarium, but it’s way, way, below — I don’t know — it’s 20% of their market value, or 30%. You know, it’s an honorarium. If we paid them full price, we would still be sustainable. You need much bigger numbers, but it still worked.
Accreditation and Validation
Congratulations on earning accreditation. I saw that it cost you at least a million dollars to transform the way you were doing things, to tighten your belts, to raise the bar in some sense so that you had to be more selective and requiring students to have mastery of English, requiring students to have a recognized high school diploma in hand, and also reforming some of your textbooks and being really selective about which textbooks and how your curriculum is created. I know that had to be a lot of work, but it improved your product. And now you’re able to really promote what’s going on, and I see that there’s been tremendous growth, like 2–3 times the number of students matriculating, so congratulations.
Do you see other kinds of accreditation coming down the road for you, or you’re going to put that on hold for now and focus on short-term growth?
We are focusing on short-term growth. Our next milestone is to become financially sustainable.
You’ve also got another degree — a healthcare degree?
Exactly. Yeah, healthcare and MBA. That’s the two degrees. We are there in order to serve the students.
The question is what do the students need and want, so accreditation came from the students’ needs — not from my need. If your degree’s not accredited, it’s not good enough for the students, so we did it. We feel that we are there.
The next thing is to become financially sustainable. We believe that it’s extremely important for any NGO to sustain itself, and then offer other degrees.
Then come to make sure that what we teach our students is exactly the right things they need to study in order to both enrich them and have well-rounded students, but at the same time to prepare them for the job market.
Global and Local Education
Why did you pick IT/computer science, and business management as your first two degrees to offer? Did they seem the most practical to you? Because it seems to me that a computer science degree seems to be pretty global and pretty applicable, no matter what culture you’re in — but it would seem to me that a business degree is going to have more cultural baggage associated with where you are an administrator.
How do you design a global curriculum for business administration?
It’s a good question. I think that, and you know, it can go also with computer science because in many developing countries that we have students from, the computer literacy of the countries is quite needed.
In many countries, our decision to go with health science is realizing among other things that computer science is great, but in some countries, the health needs is much more acute than the computer science need.
I think that business administration — that’s what students wanted. They wanted an American degree and American business practice. We are actually teaching regular American business administration curriculum.
Health science — we’re trying to adapt our courses according to the needs in different countries. Because what you realize is that, just as an example, the diseases that Saudi Arabia deal with, with all the people who come every year, is very different than the diseases in East Asia. There are as much as we can do being tuition-free.
We’re trying to find what will be the best we can offer for everyone.
Right, right. You’ve got six minutes to get ready for your next meeting. I wanted to thank you for taking the time out for this conversation. I really do appreciate it. If the offer is open, we may want to give you another call for follow-up, maybe get your perspective on some other issues down the road as we get more of our audio and video interviews up and running.
First of all, thank you so much. As I told you, it’s important for me as much as it is important for you. It was great talking to you. Sorry for the video.
It was a pleasure, and talk to you soon.
We explored some of Shai Reshef’s history and background before we spent the remainder of our interview discussing University of the People. While we cut the following material from the audio interview, we are leaving it here because we think that Reshef’s path to leading this innovative university is an important part of his backstory.
Either you have been extremely fortunate in getting attention from media outlets, or you have a very savvy set of friends and associates who are helping you get the word out, because I found article after article, interviews with you, mentions of your press releases, and just a masterful example of how to get word-of-mouth and buzz surrounding what’s going on. Is that because of some intentional decisions and relationships you have, or are you just at the right time and the right place?
I think it’s the latter. You know my history and you read it, but I ran the first for-profit online university in Europe, which was through a partnership with the University of Liverpool. Basically, the partnership was that we were white-labeling their education. So we recruited people, the students, we charged money, collected the money, we recruited the professor.
This was when you were chairman of the Kidum Group, right?
And you founded KIT eLearning, which eventually you sold to Kaplan, and it became Laureate University or Laureate Online?
No — Sylvan Learning System used to be a shareholder in Kidum. Then they bought KIT eLearning, the subsidiary of Kidum. And a year later, Kaplan bought the entire group of Kidum, without the KIT.
I was trying to figure out — it was a little tangled in my mind with all the different news releases that I found.
It was, because Sylvan changed its name to Laureate.
So, basically I was building the first online university in Europe. I saw it, I loved it. It was a great success with students in Singapore, for example: keeping their jobs, staying with their families, at the same time having this European education. And we knew that it’s a quality education.
The relationship was that we did everything, but we built a department in Liverpool to supervise our work. Call it quality assurance or whatever. So, we actually recruited the students, but we could not accept them before Liverpool said, “Yeah, they can be accepted.” We recruited them and hired the instructors, but they couldn’t start working before they got nomination by Liverpool. Eventually, the degree was Liverpool’s degree, not ours.
It was very interesting, and I sold it, and then I sold the rest of my business. I went to New York and the idea was maybe to start test prep in New York. But then Kaplan came with an offer to buy Kidum, and I decided to sell it.
And I looked around to see what I want to do —
During this time you had started Cramster while you were at Kaplan.
Exactly, but I didn’t start Cramster. I joined Cramster.
You invested something like 3 million or something in it.
I think two.
Two: Okay, yeah.
I’m not sure.
Pivot to University of the People
Cramster was a test-prep service that Chegg eventually bought and incorporated into their offerings.
And so you went from building an online university and growing increasingly frustrated with your inability to help students actually get admitted — you were evaluating them and helping administer it and do quality assurance, but the university had all the power of admission. Then you turned your attention to the stuff that comes before that and after that, which is the test preparation and maybe even test administration.
Then you went from that, Cramster, you pivoted and went right into University of the People. Around 2009 is when you announced it, but there had to be a run-up to that. You must have had a year or two laying the groundwork before your announcement.
First of all, I think that Cramster was a very important milestone for me in the sense that when I met them — and I don’t know if I talked about it anywhere, but when I first met Rob Angarita, he was one of the two founders, and I asked him, “What is Cramster?”
He said, “You know, it’s like homework help for students.”
So I said, “How does it work?”
He said, “It’s like hundreds of professors wake up every morning and go online and help students with their homework.”
And I said, “Wait a second. I’m not a kid. I understand the world, and I definitely understand education. If you can help students with their homework, you’re a tutor. Why would you do it for free?”
So, he said, “Well, you know what? I guess you don’t understand the internet culture.”
So I said, “You know what? I’m willing to learn.”
I went into their website, he gave me a tour, and I realized that it is true. Hundreds of professors, every day go online, students ask questions, and they help them with answers. I ask him, “What do they get in return?”
The answer was, “They get karma points.”
Karma points was a way to measure how you good you helped a student. Any time professor helped a student, the student gave him between one to five karma points. Five was “life saver,” one was something like, “I could have done better without you.”
And professors actually compete with each other over the karma points! If a student didn’t give karma points, the next time he went online with a question, professor would come and say, “Don’t help this guy. He doesn’t give karma points!” Now there was a competition between them, but the competition was for the sake of recognition because each karma point valued about 25 cents, so you work for a month and you can get a t-shirt, right? So it’s not really the money, it’s the recognition.
It’s the gamification of the interactions. That’s what’s happening.
You get those similar kinds of recognition points on Quora.com, Reddit, and various other forum interactions with the thumbs-up and thumbs-down on comments. So, when you start gamifying that, you create a social currency that doesn’t have to be tied to real world currency.
Yeah, exactly that. So, I got really excited and I became involved, and I loved it. I thought it’s an amazing concept, an amazing company, and amazing people; Rob [Angarita] and Aaron [Hawkey], they became two of my best friends.
It was a lot of fun, but it took me a while and then I realized. I said, “Wait a second.” I was looking because I realized also after selling all of my business, that I’m not the investment-type of person. I want to do something, I want to continue, I want to do more. But I also felt that “You know, I have enough. It’s my turn to give back.” So I was in New York at the time, feeling that I’m looking for something to continue doing. It should be something that will give me the feeling that I’m giving back to the world but also something that will have impact on the world, because that’s me. I want to do something that will have an impact.
For me, obviously it’s, education because that’s what I know best. Knowing Cramster, it one day came to me: wait a second, all the issues that we had with KIT — how it’s a great concept, but most people cannot afford it, it was nothing but wishful thinking — can be done for free!
By then, there was already open source technology, open educational resources, content that people put on the Net for others to use for free. If you have professors that are willing to volunteer their time, well that’s a university!
So I started thinking about it, and two months later I was in a conference in late January 2009 in Berlin — I announced the university. Now the thing is, the second I announced the university — or the day after — The New York Times wrote a page about us. They wrote a page about us basically because it’s a good concept.
You know, literally, the rest was history. Because there was this article, he next day I already had hundreds of professors writing me emails, “We want to help.” What we are really addressing — the accessibility and the affordability of higher education — is an issue that so many people feel that they want to resolve. If someone showed that there is a way, they want to join and to become part of it.