 My name is David Wiley and for some odd reason I have the opportunity to welcome you to the meeting today. Just a few words very quickly to contextualize myself. I'm a Shelterworth fellow with the Shelterworth Foundation out of Cape Town which some of you are familiar with. Currently on leave from Brigham Young University where I'm a faculty member in the instructional psychology and technology department I'm leading an organization called Lumen which helps colleges and universities adopt open educational resources. But the reason I'm standing here right now I think is because I'm also the senior fellow for strategy at the Sailor Foundation. And so it's my pleasure to welcome you to the conference and say a few words to set some context before introducing Michael who will be here shortly. I hope I don't have to argue this point with you. So it lived in pretty amazing times. I think that's true for a number of reasons but the reason I think that's most relevant to our meeting this morning is that I think if we as a group put our collective minds to it there's literally nothing that we can't do. Anybody want to argue that point? It's really just a matter of creativity and passion and commitment and political will now. There aren't technological barriers in our way for say. There aren't many barriers that have been on our way in the past. I think the state that we find ourselves in where it's possible for us to do essentially anything really creates a moral imperative for us to think about if we can do anything then what are the things that we should do? And I italicize this word should because it really is a pretty strong word. If we can do anything then what is it that we ought to be doing? How should we be spending our time? If you've been to the Sailor Foundation's website recently you've seen this kind of motto at the top of their page. To make education free. I think that's absolutely one of the things that we ought to be doing that we should be doing and that's what this meeting today is about. Now I don't have a monitor in front of me so forgive me as I turn occasionally to reference these slides behind me. I assume I don't have to spend a lot of time on this particular story either. Everybody knows what's happening with the cost particularly of post-secondary education up about 500% in the last 30 years compared to about 150% growth in median family income and we all saw this happen last year as well. Student loan debt crossing the trillion dollar mark for the first time surpassing both outstanding credit card debt and outstanding mortgage debt at least in the United States and everybody knows the important thing that's different between student loan debt and credit card or mortgage debt right? What is it? It never goes away. You can't get rid of bankruptcy, won't get rid of it. There's really no way to get rid of it. So it really is, I have 10 minutes so I'm not doing it the justice it deserves but it's really a significant problem that we're looking at. And education is more important to each of us than it ever has been before. Not just to us individually but to us as a society and to a planet as well. The kinds of problems that we're dealing with now, these naughty, thick, difficult problems don't have easy solutions but they need people who are well educated to solve and to work on them. So this meeting is important for a handful of reasons but the one that I want to focus on really has to do with getting people of a particular sort all into the same room at one time. Academics are not famous for being particularly business savvy. Can we all agree on that? Okay. Can we also all agree that business people are not particularly famous for having a deep understanding of education and the way that learning works? If you've ever seen somebody from a startup walk into a classroom and tell a teacher of 15 years that she's doing it wrong and let me show you how then you have a sense for this as well. So without both groups bringing a particular kind of expertise and both groups really need each other to make progress and the kinds of problems that we're facing and that's why it's important to have us all in the same room at one time. I think it is very much like. You remember those old commercials where the guy's roller skating down the street eating his chocolate bar? There's a girl with a jar of peanut butter inexplicably eating it with a spoon walking down the sidewalk and then he trips and his chocolate lands in her peanut butter. Great commercials. They're available on YouTube if you go look for them. Hard enough. I really think this is what we're trying to do over the next two days is to put the chocolate in the peanut butter and if you want education to be the chocolate and business to be the peanut butter the other way around you can choose however you want that to work but that's what we're trying to accomplish here. There are a number of key innovations that are enabling the things that we're trying to do. Some of them are really obvious. Some of them are less obvious. Obviously internet, broadband and mobile on the technology side are enabling what we're doing. Innovations and licensing particularly with the Creative Commons licenses around making it easier and more legal for us to share with each other in a way that can make education free in the way that we're thinking and hoping. And also innovations in financing like this resurgence of the idea of royalty capital that can provide investment funds to companies that really want to be mission driven like education startups primarily want to be without getting in the way of dragging them off course with this push push push for an exit that you get with traditional capital. There's a lot of things coming together that I think are very interesting that enable the types of work that we want to do. My own particular work, I just want to say three minutes about it and go very quickly just to give some context for the kinds of things that are possible not to say that my work is the best work and that you should all follow it but just to lay out some examples. And I'm looking forward over the next two days to hearing examples of the work that you're all doing in this same area. So open educational resources by show of hand if you're familiar with the term. Okay just about everybody awesome. There. If you're familiar with the four Rs, right? So open educational resources are materials you have free access to that come with licensed permissions to engage in the four R activities to reuse, revise, remix and redistribute them. So one of the things that I think particularly is interesting about the cost problem is that tuition and fees are highly political but textbook costs have been growing terrifically that second line down there as well and textbook costs are actually a fairly straightforward problem to attack. So three specific examples from my own work. First the Kaleidoscope Open Course Initiative which started a year ago and has gone into eight community colleges or open access four year schools. We've touched about 10,000 students so far. But interestingly we've taken open educational resources work together with faculty to pull those together into textbook replacements and then made the required cost of textbooks on the syllabus $0 for each of these courses and these are things like intro psych, intro to biology, developmental math driven the cost of textbooks to zero for these courses and seen on average across the 10 courses that we worked in last year better than a 10% increase in the percentage of students who were completing the course with a C or better. Saving money, improving outcomes. Another project I'm really excited about one we're launching this fall with Tidewater Community College not too far down the coast from where we are is an initiative to take an entire associate's degree and move it off of textbooks and onto OER. This is a two year degree program in business administration. It's about $3,000 a year in tuition. The cost of textbooks over the life of the program is $2,500, $3,000. So by literally taking all the textbook costs out of the degree program we knock 25 to 30% off the cost of the program. It launches in the fall so I don't have outcome data for you yet but it's going to be very cool. And then the third one that I'll mention very quickly is our Utah Open Textbook Initiative which is a K-12 initiative where for the last four years starting in science we've been working with teachers to replace the typical textbooks that a school or a district would adopt and purchase with openly licensed textbooks. And you can see that these are free to use online. The print-on-demand service that we use this year the middle school science textbooks were $3.99 a piece. The high school science textbooks were $4.99 a piece. Over 90% of the districts in the state of Utah are on either or open math or open science and we're moving into open language arts with the Common Core Transition this coming fall. And we've just released some data showing statistically significant gains in learning outcomes for students that use open textbooks compared to students that are using the publisher-provided textbooks. And these growth, these changes in growth are on the state standardized test. So, you know, three very quick ways that I'm attacking the problem. I know you're all attacking it interesting ways too. Very excited to hear what you're working on and all these different ways that we're all kind of running up against Michael Saylor's vision of this idea that education should be free and should be available to everyone. And a final word, and I think this is where the chocolate really hits the peanut butter, is that these models can be financially self-sustainable. Right? Everybody knows Red Hat. Everybody knows that they work in a space around open-source software but still manage to add a lot of value and be a very profitable business. So, this is not an either or situation where we have to live on grant funding forever and ever. I think we can make this work very sustainable. We need more of these kinds of models. We need more experimentation. So, it's my opportunity to introduce Michael Saylor to you now. Two things you probably did know about Michael are that of course that he's the founder and CEO of MicroStrategy, the very impressive looking building that we were all just standing in. And also that he has this double major from MIT. Something you probably didn't know was that he actually attended MIT on a ROTC scholarship. I didn't know that until I started putting these notes together, which I thought was very cool. And of course, you all know that he's very committed and very passionate about this idea that education ought to be free. So, with that brief introduction, please join me in welcoming Michael Saylor. Okay. So, you know, it's really kind of exciting to have everybody here. The reason we're having the conference is there's just a palpable sense over the past 12 months that technology is shifting underneath us in a good way that awareness of the opportunities of digital education is growing and it's breaking into new areas. New institutions are embracing some of these ideas. Traditional conservative businessmen and conservative politicians who would have dismissed it or not give it a second thought are now starting to think about their digital education strategy and all these ideas that seemed a bit too forward-thinking five years ago or ten years ago now are looking to be, I wouldn't say mainstream, but they're looking to be mainstream interesting to the innovators in the society. So, if you're an innovator in this culture, you have to be considering digital learning and you have to be considering how you're going to take advantage of digital technologies to change the way that people learn. And at the same time, it's not like there's any institution that seems to have cracked the code. I don't see a state or a federal government or a corporation or an institution that's put together all the right pieces. The educational assets and the brand and the methodology and the vision such that they could go out and educate millions or tens of millions or hundreds of millions of people using digital technology. So, it seems like an ideal time to have a convocation because we're hoping to bring together people. We said this in our conference header. We said we're looking for people that have the content and people have the financing, people have the distribution, people are looking for the idea, people have the idea, people want some support for the idea. And my agenda for this conference is really just to bring all of you together because I figure someone needs a job and someone needs to hire somebody and somebody needs some money and someone else would like to make an investment in order to get a return and someone's got some content, they'd like to get distributed and someone else probably has a distribution channel they'd like some content for and maybe someone has a problem they'd like solved and someone has a solution and they wish somebody would listen to them. And that's a good time and a good space to be in the marketplace and that's a time to call a conference. I was saying to some of the employees of the Sailor Foundation just earlier today at the lunch, there's not much point in going to a conference on oil exploration today, you know, at our age because for 50 years everybody's decided what they think about that unless you have billions of dollars to bring to bear on the problem then no one really cares what your opinion is. And there are a lot of other mature industries where conferences aren't going to have that much meaningful effect but we're on the cusp of an industry where even one person, even like any two of you that might get together and have a conversation might actually change the world. You might create a company, you might create a new methodology, something might break here. So this seems like an opportunity worth pursuing and it's a reason to have a conference. I'm like you looking forward to seeing what comes out of this but I've got my eyes open and I don't have any other particular agenda. I thought I'd share with you just a few general thoughts, motivations and also expectations and opportunities that I see on the horizon and then I'll give the floor to people that actually have a lot more focus on this and information on this topic than I do. My own background story which you just heard a little bit of is I grew up in a middle class family, actually a lower middle class family. My father was enlisted man in the Air Force and I was really the first person in my family probably for many generations actually go to a four-year college and when I was a senior in high school I think my family's net assets were approximately $3,000. We didn't own a house, we probably didn't own a car free and outright. We had about enough money that after every Christmas vacation which generally consisted of driving a car stopping at a Holiday Inn and trying to get to wherever our relatives were in 16 hours of driving on highway, after each one of those vacations I remember seeing my father, he would sit and balance the checkbook and shake his head and sometimes snap it in my mother because we stopped and ate at a restaurant twice and we were always supposed to eat once and then complain about how long it was going to take to pay off the vacation which literally consisted of driving to a national park and walking around and looking at the trees. So it's not like there was any extra money rolling around and I know for sure, you know, I had this aspiration, I read all these science fiction novels and MIT was always prominently figured in it as a place where people win if they want to design spaceships and go to Mars and things like that. So I thought I wanted to go to MIT but MIT cost enough that I would have burned through my entire family's life savings in about the first four weeks. So that wasn't going to happen and it wasn't like it was a student loan burden. There was zero chance in my mind that it was going to give me a loan to go to MIT and if anybody did give me a loan sufficient to cover the cost then I knew there was zero chance I would ever ask my father to cosign that loan and if I had got to the point where I was presumptuous enough to ask my father to cosign the loan, I don't think he would have done it or a guy that doesn't feel comfortable paying for holiday ends and driving through Gatlinburg, Tennessee on holiday probably isn't going to pay for the most expensive institution in the country at the time and so I wouldn't have gone I might have scraped my way through community college but I wasn't going to go to MIT unless somebody helped me and I got some help and it was actually the Reagan Cold War buildup Ronald Reagan started building the military back in 80 I graduated in 83 it was the height of that buildup the number of ROTC scholarships was probably at an all-time high I basically agreed to indenture myself to the military in return for a free education they paid my tuition they gave me a stipend so it was a lot of money in today's terms they'd be about $250,000 I suppose and the return was or the agreement was I'd say there for about four years as an engineer after the second year I decided I wanted to be a pilot and then the agreement was I'd be a pilot in the Air Force for ten years so I was basically ready to like work off an education for a decade and then as a fluke the Cold War ended and I graduated in 87 and there's just one year one year that I know of in the history of ROTC where all the ROTC graduates on full-ride scholarships were offered the chance to leave the military and go into the reserve and none of us served the day of active duty the year before if you tried to do that you would have got court-martialed and gone to jail we all lived in fear and the year after that they fixed all the staffing and so everybody went into the military just this one year it's like the cracking of a whip all these people basically got pushed through the educational establishment and then we got released so I was released with a pretty good education I mean a better education than any of my family had ever had and a world-class education for that time period and I had no debt and so as a result two years later when I was about to start my company and I started I had basically I secured a $250,000 contract with the DuPont Corporation and I went and I was so nervous about finances I borrowed $5,000 from the bank and later that's because I had $0 so at age 24 you have nothing so I borrowed $5,000 and you can't borrow it against a house I didn't have a house I told them I was going to buy furniture from my apartment and I got an unsecured furniture loan and then I didn't buy the furniture which I haven't really thought about whether that technically is loan fraud or not loan fraud because I don't it was unsecured I don't think they required that I give them a vehicle ID or some kind of lease hold so I guess it's probably legal but I ended up with I had $5,000 in debt and I remember that was still kind of burdening on me but I mollified myself by thinking you know I got this $250,000 contract and I got $100,000 in cash up front well at my current rate of cost that'll last me seven years so I said I can go ahead and start this company because I can probably live in a $1,000 a month apartment share it with another guy I had milk crates for bookshelves and I'll just scrimp my way through and if I don't like make it in the first year or two years I can squeeze the year three or year four and I got myself all worked up thinking that I could probably make it almost for seven years on that cash before I then had to declare defeat and so you could call me like a risk taking entrepreneur but the truth of the matter is I got incredibly lucky on two fronts one front I just got a gift from the United States military and even there it was like a flu it wasn't even a gift right if I'd done what everybody else in the military had done I wouldn't have been able to start a company I'd be flying you know for Delta Airlines or something right now and the second gift was I just happened to be in the right place at the right time doing a project a system dynamics computer simulation project and I was a specialist and I just happened to have learned that skill at MIT from guys in the Sun School of Management who would not have taught it to me if I was community college student back in Ohio and I couldn't learn any other way so I got just this very lucky access to a skill and I showed up with no debt and the combination of having a skill and having no debt you know emboldened me to take a risk and the result is today we have whatever 3,500 employees and it's a real business and we do business everywhere on earth and generate 700 million in revenue and I am by far not the most successful entrepreneur of my generation but the most important point is that building none of those jobs nothing we do would exist had I either not gotten extremely lucky or been in debt when I graduated from high school or from college and it didn't matter how motivated I was or how smart I was I look at stories today I just read a story on Bloomberg coming here I read it on my iPad and the story on Bloomberg was about the exploding cost of medical school debt and they make a note that the Ben Bernanke's son I think is going to graduate med school with $400,000 in debt they had a story about another guy he's got $180,000 in debt the third year in the medical school he's got $50,000 more to go they said the interest rate on this stuff is 6.8% to 7.9% on a government student loan they have to pay the interest on the debt for 3 to 7 years of residency by the way the United States charges money at 1.7% and so we charge people four times the US government rate for education that's going to be essential for them to make a contribution and I looked at that and I thought well see, whatever everybody thinks that ain't right what's the odds that you're going to go to medical school walk out with $350,000 in loans and then start a company I was afraid to start a company with zero debt $350,000 in debt the very people the responsible individuals that the society wants to carry their burden and we expect these people to contribute anybody that's got all of those societal virtues with that much debt is not going to quit their job take a massive risk and try to go do something and you would think or children or a husband or other obligations and you quit your job to go try something random you would say that's totally irresponsible and by the way the other dirty secret I'll tell you which everybody probably knows is is not just it's risky it's very unlikely to succeed you start a company one in a hundred times as a workout the way you want it and I went public our company went public in 1998 I rang the opening bell of NASDAQ ten years later and I got beat up a lot the company got beat up a lot we went back and forth up and down but we fought our way through and ten years later we were like three four times bigger and one of the investment bankers that took us public he looks at me and goes so Mike you've been a public company CEO for ten years what did you learn and I said I scratched my head and I thought about it and I said you know what occurs to me there were 100 companies competing against the 1998 and I'm the only CEO that still has his job 99% mortality rate and generally when you get public people consider that to be like success but the point really is there's a very high mortality rate when it comes to pursuing a new idea in science or in business or in politics and one of the things that holds us back is that debt and the inability to fail it's one thing to fail and have to live in an apartment for three years there's nothing to fail and not be able to pay for healthcare for your kids or not be able to pay for filling the blank there's a lot of things that are a lot more emotionally trying than living in a one bedroom apartment or splitting it with another 20 something guy so I look at that I read that article and I said well that's a data point there's something wrong with that I read another article on a sale or foundation blog the California assembly has taken up a bill to set up a division that would grant you accreditation or credit simply by taking a test and I thought maybe rooting for California hopefully there'll be a bellwether state but if California actually allowed you to walk into a room take a test and prove that you actually are as smart as a person that spent $250,000 why wouldn't you that's kind of an exciting thing I hope that passes and then I read the third thing this is in the article David Geffen gives $100 million scholarship to the UCLA medical school to endow 33 scholarships 33 people get to go to school if you have $100 million that's a pretty expensive way to buy education and you see both things massive wealth trying to solve this problem in a conventional way and then you see people dabbling with the unconventional way and then you see the consequences of our current extremely expensive system which is 130,000 physicians shortage and a bunch of impoverished students and this is just one but just about everybody I talk to that's been in college or going to college has the same fear and loathing and so I think of it all I've always had the opinion I had it back 13 years ago had the opinion education should be free and the opinion is based upon the fact that I sat in this lecture hall lecture hall three times as big as this was paying the highest tuition of any institution on earth MIT was the most expensive institution on earth in the mid-80s I don't know what it is now but it was then and I watched some guy down here and I didn't get to answer any questions and I could hardly see and I thought this is kind of silly you're going to impoverish your family and spend everything you made for the past 100 years to squint at a blackboard it turns out the guy scribbling on the blackboard was Walter Lewin he's one of the greatest physics teachers ever I think he's a brilliant guy in 1983 he taught me physics in 1999 he gave the same lecture the same lecture hall and it got recorded by someone and uploaded to YouTube today in the year 2013 if you go to like physics 101 on the sailor.org website you'll see Walter Lewin giving those lectures and a part of me takes a little bit of glee in the observation that today for free you could have what was the most expensive thing on earth when I was going to school and the other part of my sardonically notes that you know not much has changed in physics in a long long time right Isaac Newton wrote it all down right so it's not like the program goes out of date Apple still fall from the tree the way they fall from the tree and electromagnetic works the way it works and a fair day cage is a fair day cage and that just leads me to my next set of points more technical points the exciting things I wrote a book called the mobile wave and the mobile wave was really about about the conversion of the world from a world that revolves around software running on PCs to software running on mobile devices and I think the last time we had an exciting technology development in this world was you know 96 to 2000 you had the internet wave and you had about 350 million white color 20 to 40 year old fairly well to two western workers sitting behind their computers and offices in cubicles working on software that ran that interconnected over the web protocol and ran on PCs and now 10 years later 13 years later we're moving toward a world with 5 billion people they're gonna have software running on Android devices and iOS devices and perhaps perhaps a Microsoft operating system device but probably Google and Apple slogging it out and it'll be running on smartphones will be running on watches it'll be running on televisions on high definition displays it'll be running on tablet computers it will be run it'll be integrated into desktops but the significance of this this mobile wave is it's really creating a global wave innovation this is a geopolitical impact at the point that there's 7 billion people on the planet 1 billion of them can hardly read 3 or 4 billion of them are substantially impoverished there's 1 billion maybe 2 billion that have a decent amount of wealth well the global wave and the expansion of these mobile devices is bringing extremely rich powerful software to the fingertips of everybody on earth and you know it's your chances of mastering anything from a PC or next to 0 if you can read on the other hand a 3 year old can master all sorts of skills on a tablet computer 2 year olds 4 year olds you know the economist will read itself on a tablet computer the tablet computer is the best and the smartphone right this phone can teach you to read this phone by the way this phone when I whip it out of my pocket in an airplane environment I throw the image up on the screen and it'll give you a high definition image and it'll talk to you so we're going to see a world with 100 and 200 dollar devices from your pocket that are going to teach you to read they'll also teach you anatomy they'll probably teach you how many of you ever decipher dissected a cadaver right I never dissected a cadaver normally that's a med school thing it's pretty expensive to dissect cadavers but on the other hand when you see these these apple commercials in 6 year olds or 8 year olds are sitting in a classroom watching the human cadaver get bisected or rotated or enhanced on a 3 dimensional display it really is eye opening to you what happens to a world where you could actually get all the courses of medical school before you're 14 years old for free it might be a different world that we live in I think the consequences of the mobile wave is this global wave the global wave is a wave of mobile technology primarily western technology American technology rolling out a silicon valley that technology on mobile devices over networks and it's carrying a bunch of interesting things one thing it's carrying is western values it's the arab spring on the autumn rage a girl in pakistan who's 8 years old whose parents told her she's not allowed to go to college when she goes to wikipedia wikipedia doesn't tell her the same thing she might see girls that are actually educated on the web even though no one in her village or family has got that education so this global wave is a global wave of western values it's a global wave of western language one thing you would see if you start to do it short one of the most interesting trends is the trend of english speakers on the planet I would predict in our lifetime we're going to see 5 billion people speak english china english is a virus spreading through china it's spreading through all of the world because if you speak english everything is cheaper everything you sell you sell more of you can get a higher price if you can sell in english you can get a better job if you're a programmer and you speak english if you don't speak english one thing that I remember from MIT and it's indelibly inscribed on my mind is right around the time you're about to graduate everybody starts talking about which jobs going to pay you the most and the freshmen are sitting and listening to the seniors talking and when the seniors say well I'm going to go off to investment banking because it pays me an extra $8000 a year everybody decides investment banking is the coolest thing in the world and if computer science degrees get paid $3000 there's more than the other one then computer science becomes the coolest subject so people get excited about what they get paid for so the world right now is creating a market for people that can speak english that can tap into this mobile wave and as they speak english all of a sudden they slip the bounds or the boundaries that are created by their local cultural and political institutions I mean maybe the opinions of your local minister about whether or not you can and cannot do something matter less than the opinions that google or youtube or wikipedia have about whether you can do it or facebook or twitter and so I think there's a breakdown of local commerce and local cultural affiliations the local textbook manufacturer in turkey is going away why would you ever manufacture a textbook in Turkish to teach physics that works the same in turkey as it works in the united states whoever wins the western market the western block with regard to software is going to win the rest of the world so what we have is we've got the EU that's come together with america with canada with austria with the english speaking south africans with all the english speaking indians and with all the global multinationals all of which we adopted english as a language that creates a billion person plus trading block of middle class consumers that billion person middle class trading block they have all the money they probably have 75-80% of the money to buy any software or to acquire any services nobody else is close the next best might be something in chinese language for the chinese middle class which maybe amounts to 200 million but creating software for 200 million chinese is not going to help you win over the billion people that want to learn in english and that being the case it's inevitable that networks of intelligence coming out of the western block are going to spill over to the entire world and you're going to see networks that first hit critical mass of a billion people and then they'll go to 5 billion people because the variable cost to do whatever they do for the next 4-5 billion people is just the cost of electricity and where do we see that now we see that with Facebook that's a billion person social network we see that with Google another billion person intelligence network we're seeing networks like LinkedIn Twitter YouTube all these things are forming they're all forming in the US you're not seeing chinese and japanese networks that are leaping here to invade the turf of the west how many of you really want to go to a japanese website to get an answer to a question in fact most other cultures are a bit handicapped just because of all the cultural conventions of the students as they're coming up through the educational system so what does that mean if I look at it commercially what I'm expecting is I'm expecting more Googles and more Facebooks but I expect global health networks what happens when someone can monitor your heartbeat monitor your oxygen level and your blood and use it to predict an incoming heart attack and they can do it off of a $20 device that wraps around your arm that links into an android and iphone when there's 5 billion smartphones on the planet for an extra $20 you're going to get health of course you're going to take that someone's going to run that network it's not going to be a japanese company it's probably not going to be a chinese company likely it's not going to be any company that isn't full of executives marketers and engineers that are fluent in english those companies are going to have a massive crushing advantage in selling the rest of the world you're not going to compete successfully with a company like that that's coming out of argentina or turkey or pakistan it's going to be very very challenging on the other hand you're going to want to buy that stuff or you're going to want to access it somehow so I think we'll see many many of these networks that form as part of the global wave and we're going to see an unprecedented era of global trade because all of this is trade by another word at the point that someone in china is going to get in line to wikipedia to get an answer that's a trade at the point that anybody puts an ad on a facebook page that gets accessed by someone outside the US there's another form of trade so I think we'll see that continue and what does that mean education I think we're going to see the formation of global education networks in a manner of speaking you could say that itunes university youtube are google and apples half completed global education network they're amorphous in many ways they're not very precise but I think they'll be more until somebody cracks that code and I don't know if it's a single company to become the network or I don't know if it's many many different organizations that create global networks but it seems to me that that there's a billion people on the planet can't read and we have not figured out how to be able to afford to teach them to read in 10,000 years so digital has got to be the answer and putting a piece of software onto a smart phone or a tablet computer that gets down to the $100 price point is probably going to be the answer and once you teach them to read some K through 12 and then you can teach them a college degree and then you can teach them a PhD and I've said before to other people, I mean I think we don't need another 100,000 algebra teachers algebra, Euclidean algebra is 2,500 years old the definition of insanity is you just continue to do the same thing over and over again without ever getting any better without ever achieving any result but algebra in the year 400 BC worked about as hard as the person that taught me algebra, you know geometry, these things are they're stuck in a rut we're much better off to have a piece of software that runs a billion times a day to do that and I think that's where we get the digital technology it seems pretty clear to me that there are going to be breakthroughs in the next 10 years and there are breakthroughs even now in software technology for education for authentication and for certification and for those in the industry I think they get this, for those not in the industry I think the elephant in the room that the people don't really want to come to grips with is we've reached an inflection point where there's a whole set of skills where you can probably prove scientifically that software running on a smartphone or software running on a tablet does a better job than a human being dedicated to your child especially in areas of science and technology and engineering so the irony is that all these people talk about STEM we need more science, technology and engineering students and things like teachers, etc. they're totally missing the boat we don't really need to create more technology and engineering teachers what we need to do is create programs that run on computer devices that do all those tasks if there's anything that you ought to be able to teach with a computer program it ought to be math there's no subjectivity to math there's a right answer, there's a wrong answer you might be able to convince me that whether or not I dance the ballet well is a subjective thing and maybe synchronized swimming might be subjective maybe even composing a symphony or playing the saxophone or even maybe surgery might be subjective a bit but there's nothing subjective about geometry and calculus and differential equations there's just a better way to teach it maybe and a worse way to teach it but in the day the proof is in the certification if the student can spend 37 minutes and master all of the techniques using my computer program 37 days with the teacher then I can prove that my computer program worked better and of course my computer program worked for zero I think I think many people's eyes are going to open as they start to see some of the more creative things you can do with a smartphone I mean for example I can give you a test where I ask you things about art history and with the goal of determining whether or not you've gone and looked at every single piece of art in Europe with your own eyes but I could tell you take the smartphone and go look at every single piece of art in Europe with your own eyes and snap a photo of it and geotag it and then you could prove it if I can tie you to the phone if I can give you a test to see whether or not you have mastered certain physical skills I could also put a piece of software on a phone that could monitor your heart rate every minute of the day for the last eight years and I can see whether or not you know how to drive your heart rate to 70% of max, 80% of max 90% of max, 95% of max exactly people are using these things to look at people's golf swings at the point that you can take a photo how do you know whether someone knows how to sail a boat if I actually took a mobile device out and it was keeping track of elevations and wind and temperature and sunlight and trajectory and course over ground and the speed it's a very interesting opportunity to certify that you actually can do something or certify that you did something or right now I can authenticate that you showed up if you take a test, an SAT test the joke is I have some rich friends you know and some of them are rich New Yorkers and they kind of laugh about the SAT because they joke well if you have enough money you just go hire someone to take it for you it never occurred to me to hire someone to take it for me of course I never have money to hire anybody to take it for me but there's a whole generation of people that grew up rich kids and they just hired someone to go take the test for them now if you put someone student ID on their phone you could walk into the testing center take a photo of your test and seal it digitally and then it's not possible for someone to actually go take that test for you so there's a lot of new opportunities to prove that you did what you were supposed to do you guys ever use cut the rope? anybody? I studied mechanical engineering at MIT cut the rope it has rotational physics in it and it's got tension and torque and it's got energy exchange and it teaches you a lot of mechanical engineering and physics concepts 6 year olds start playing with this game on the iPad and they make you go through different levels and by the time you get through the 197th level you understand all those mechanical engineering concepts better than any professor at MIT could certify you understand them there's no written test I could give you that would certify you understand those concepts as well as an interactive test that forces you to do this and this and this 300 millisecond delay just like how do you give someone a written test to see if they can play the saxophone there's no way to do that you've got to play the saxophone well computers are allowing us to play things and to draw things and as the computers get smarter I think they get smarter at certifying so I think at some point we'll see a number of tipping points or inflection points where the general public politician and the general adult and general parent says this is not like a fattish goofy interesting thing to do for my kid it turns out the digital software running on mobile devices may in fact or probably teaches better and if it doesn't I can create a piece of software that'll do a better job of teaching you than the teacher given a choice between Aristotle dedicated to my kid for 18 years or a tablet computer dedicated to dedicated to my child I think that sometime in the next decade we'll get to the point where the tablet computer would do a better job than the smartest man in the world did for Alexander the Great right that's an inflection point so software is going to teach better and it's going to certify better there when you have to prove that you know something you can certify that someone can program a computer using a piece of software to get you give them a task to program they have to program and it works or doesn't work now what gets interesting is okay so you're the top one of 50 people in your class who cares you're maybe top 2% you know we all know if you want to actually make a meaningful contribution at at Google or at Apple or at Microsoft you got to be better than the top 2% you're probably going to be the top 0.02% and there's a point if you look at some of these things look at Apple Maps and Google Earth the two best programs are so much better than every other thing ever created in the history of man that you're just not going to bother with programs 3, 4, 5, 6, 7, 8, 9, 10 it's really a winner take on thing the guy that figures out the best is going to get 987 million users at which point the guy that figures out the second best or the third best probably isn't in business so we don't really need people just to be top 2% we need them to be ultra, ultra, ultra skilled at what they do and here's where the MOOCs come in right I mean if you can train a million people in a course and a million people take a test you can actually select out the one in a million with a computer no human being can do that there's no institution on earth that knows how to pick the one out of a million but a computer can find the one out of a million and I think that creates a new type of credential right if you could actually show that you were the smartest person in all of China this year in a given area that would be an interesting credential you could monetize that right and that's why I think I think education really is destined to be free it ought to be free the only real debate here is and by the way the reason it ought to be free from the philosophical underpinning is is education is only a benefit to the rest of the society right if you're educated and you can make a contribution to civilization that's good for everybody so it's foolish for us to deprive the people that are growing up of education because they're going to become a liability if they're not educated what we need is a hundred thousand people with a hundred thousand different PhDs hopefully each one of them an expert in solving a disease that might kill me I don't want a hundred thousand algebra teachers I want a hundred thousand people to solve a hundred thousand diseases each one of which is vying to kill me that's how I'm going to live forever I need to solve the hundred thousand healthcare problems algebra is not going to kill me and algebra is not going to save me either when I'm 72 years old and I have the brain tumor algebra is not going to save me it's not helpful that's not what I need that's not what anybody needs so it comes back to this primary point education is destined to be free it ought to be free the government could finance it and that's one reasonable approach the Chinese and the Indian governments have every reason to want to finance it you look at this thing so David Geffen gives a hundred million dollars for 33 people to go to medical school well why not the state of California give a hundred million dollars to give everybody that wants to go to medical school a free medical school education is a much better idea that hundred million dollars will buy you a lot more software than it will buy you conventional medical education so if not California giving away for free then China or India the Indians have one billion 982 million people with a mobile phone you got a billion people that need an education you got 800 million of them that are not in the middle class and they have no hope of getting in the middle class without an education so it could be a government it may not be Lord knows the government spends enough money on education but it's all pretty much a jobs program being funneled to expensive institutions expensive teachers expensive conventional techniques some of which by the way is valuable I'm not disputing the value of conventional education I had a conventional education but the real point is the great majority of it 95% of all this money the government spending is being poured down a drain because it's being inefficiently used and we're at the beginning of a new curve where you can make a difference and the other possibility is advertising I think Google or Apple or Facebook any of those are in a perfect situation why not just give away complete free education on every subject to anybody and add finance it what's the cost to hire 400 professors put everything they have or they know into software and give it away to a billion people I mean if you spent a billion dollars a year on it well a billion dollars is what Apple makes every week or something if Apple diverted two weeks worth of earnings they could spend a billion dollars and they could provide a comprehensive focused education how about with every single iPhone you get a free college degree and a PhD or how about with every Android device we also give you a PhD that's a pretty good business model if you want to give away other things why not give away that so that's another possibility I met with Mikesh Ambani rolling out reliance industries reliance network you could bottle it into the telephone network that's an idea he had you could justify and run the entire thing just as a recruiting network if you actually gave away education who wants it the 7 billion people on the planet between the ages of 0 and 18 0 and 22 they want education if the average person lives to age 75 that means at any given time 2 billion people want education so there's an obvious built in demand for a network that runs for 2 billion people simultaneously so in that case what if you actually were able to certify and rank sort all 2 billion people across a thousand different disciplines you know let people opt into what they want to be certified for their golf swing their English skills their whatever skills their heart rate skills their physical fitness their math skills their programming skills all the things you could certify if you actually ran that network and just kept that database if you could authenticate the people then you could make the money back just on headhunter fees I spent $150,000 this week in the last 7 days on headhunter fees me running a small little company I have 3,500 employees I spend $100,000 a week on headhunter fees we hire someone we pay $25,000 to a headhunter you know what I paid the guy for he gave me an uncertified resume and I gave him $25,000 statistically 20% of the stuff on the resume is all a lie anyway so how do you think I'd feel if somebody showed up and they said I got a list of like 800,000 computer scientists from India and I can give you the top 1% the top .1% or the top .01% now you could securitize that market in a different way I mean really literally securitize the market at the point that you can certify someone can speak English and program and then the top .1% and by the way if they can go through a course of 537 difficult business problems and complete that in one hour 37 minutes and you can certify that for me then I would pay for that I'd pay money for that and by the time you calculate the amount of money people spend on headhunter fees I bet the revenues of the headhunting industry would probably pay the cost of providing a free digital education for everybody on the planet I bet so I don't say all the stuff to criticize anybody because the truth of the matter is we're all in this together I mean I don't know whether I'm supposed to blame the state or the college or the city or the government or myself or the non-profit establishment or Google or Apple or Facebook or the headhunters or the newspapers whoever it is or the traditional institutions of higher education or community colleges any one of them might with some inspired focus solve the problem especially the bigger ones anyone on the top 30 countries on earth could solve the problem by themselves anyone on the top 30 companies could solve the problem and maybe I'm being too simplistic when I say solve the problem I don't mean solve all problems I mean get us to the point where the civilization agrees that is now technically feasible to educate someone for a variable cost of electricity that's what I mean at that point the dam will break and will move from traditional conventional technique which is put 30 people in a room with one person and let the one person talk to the 30 people and give them whatever we give them to a new technique which is let's give every single person on the planet a $300 mobile device plugged into information which is free to them and let's let them all go as fast as they want to go as far as they want to go to achieve whatever is their intellectual potential it turned out I never got a PhD and I'll never know whether I could have got a PhD but I didn't have the money to get a PhD I mean I couldn't afford to get the undergraduate degree how am I going to find out whether I'm qualified to have a PhD in physics right when it's there are a lot of classes at MIT you know what they say they say you're not allowed to register for this class if you're an undergraduate right we live in a world of even if the government of the United States gave infinite money to MIT they were still going to ration my access to graduate classes and rightfully so because they can't have 300 people for the class where you need a pupil-teacher ratio of 10 to 1 right I couldn't walk into a medical school at Harvard and cross-register to take any class just because I thought it was a good idea and the conventional regime but what might happen right what happens in a world where anybody can go as fast as they want I use the analogy of the Golden Gate Bridge you know how many people have been in San Francisco they've seen those bridges they're like are they not awesome wonders of the world you look at that you're like you couldn't make that yourself you couldn't make that with everybody in the room you couldn't make that with everybody you know in your school you look at it and you know you think different things as you get older but here's what I think when I look at that bridge I think that was an awesome probably the most awesome undertaking you know in that city's history and an integral essential to the development of that region of the country and you couldn't do it without the right architect and they did it 100 years ago now how many people on the face of the earth were qualified to architect that bridge or run that engineering project 100 years ago well you gotta wonder what was their design selection pool how big was it I mean when they were recruiting for or selecting architects they have five choices do they have 50 do you think there were 500 people on earth that could have done that job 100 years ago I doubt it right it's very unlikely you would have had to come from a rich family and a privileged upbringing you would have had to be sent at extreme cost but it's hard to make that bridge right most of us still can't make that bridge correct very hard to make a bridge like that you would have had to go to the best school on earth and had the best teaching and then you would have had to have incredible amounts of assets thrown at you and you would have had to have been nurtured over time until you understood how this all worked and then you're probably one of seven people and they probably had seven choices or five choices and they picked one and they succeeded and you know everywhere else on earth they didn't have those choices well they didn't get their bridge and here's what I think I think what if we actually simulated a bridge building and a program put it on an iPad and gave it away to a million people and what if it turns out that the best designer of bridges on earth is a 11 year old girl in Pakistan who it doesn't even get to go to high school who's been told by her parents she's not going to go to college right who certainly doesn't have the money to go off to MIT or stand for anywhere else and learn civil engineering what if that's the best person on earth because it's possible right I mean genetics is this role of a dice you don't know where the geniuses are they could be anywhere you know they tell stories about the great you know what Mozart did when he was four years old and when Gauss did what he was four years old right it's possible that we've actually given some genetic incredible fortune to some kid in the middle of a peasant village in China or in the middle of India or maybe they're sitting in a middle class family anywhere and they're being deprived of that opportunity I was offered a chance to learn a language when I was 14 years old and my choice was French or German or Latin those are my choices I came from probably one of the 3% most affluent places on earth so if you're in the top 3 or 4% and you got a choice of two languages at age 14 by the way at an age of which it made no difference which I chose because I wouldn't master either right I was going to get taught in a class of mediocre learners by a mediocre teacher no offense to them but that's just the way it is I think about that and I say what is the chance that I was going to excel in that discipline and I think digital education offers us it offers us an extraordinary extraordinary opportunity it's all coming very very fast right now and if I had to summarize it down it's if it doesn't exist somewhere on earth today we can create software that will educate most subjects better than the way it's being done with conventional technique we can create software to authenticate someone's identity and to certify both their skill and their participation if we haven't done it now we will do it some things are simple and brainless and obvious like algebra and geometry and calculus some things require some thinking you know medical techniques engineering techniques but it's obvious it's clear the writing is on the wall that we should be investing in the software technology to do this and not investing in the conventional techniques that we've been used for the past 2000 years to do these things I was in with one more observation I went to MIT because I wanted to design spaceships and I was fascinated by aerospace and the reason why was from 1903 to 1969 you had an incredible extreme explosion in technology capability that S curve that went from not being able to fly to the right brothers flying at a few miles an hour to us walking on the moon that was an incredible achievement and then you know what happened next right about then when I'm coming of age in the 70s everybody's like high on the euphoria of breakthroughs in aerospace technology and that momentum carried over and my thinking was formed in the 70s and I decided I had to go to MIT I had to get an aerospace degree I had to design spaceships I had to go to Mars that was my thinking you know and I went to MIT and I studied aerospace engineering and I went from 83 to 87 and 86 and the space shuttle blew up right the entire industry stalled out but that was just a symptom of the problem the big problem is we hit a technology wall in aerospace engineering around the mid 70s the space shuttle was designed in the 70s it's 70s type equipment if you look at the design of a Gulfstream 5 it's the same as a Gulfstream 4 the same as a Gulfstream 2 which is designed in the 70s based on the fuselage of the Gulfstream 1 for the most part a Boeing business jet is a 737 was designed in the 70s all that technology it hit a plateau in the 70s for the last 40 years the way that airplanes work the way that rockets work the way that most of these aerospace technologies work hasn't materially changed that much you could put a trillion dollars into this problem you're not going to change the way it works you could put a trillion dollars in the problem you're not going to change the way it works until we come up with some breakthrough in propulsion something which is 10 times or 100 times faster there isn't any exciting future for the human race based upon an investment in aerospace and a career in aerospace and on the other hand if you look at the smartphone it's a thousand times more compact computing power than the Apple computer that we used 12 years ago it's a thousand times better and we all thought the computer revolution was dead and buried over it 12 years ago my point is this stuff is where the opportunity is if you have to decide where you're going to spend your life energy and your capital put it at a place where there's leverage and there's leverage right now in digital education primarily because nobody is bothered to exploit the opportunity yet with serious amounts of capital everybody's been waiting and now you've got all these things coming together you've got the fast networks you've got the light computational devices you've got mobile devices you've got mobile operating systems that are extraordinary there are 10x better than anything we had 10 years ago there's a combination of all those things with the massive networks of content like the books that Google has scanned and the video that's now stored online on YouTube all those things are creating an opportunity but it really is just that it's an opportunity it's not a realized benefit to society yet not a result yet it's like we're just knocking at the door and you can see little sparks little sparks of success you see the Khan Academies you see the big MOOCs you see people relying upon Wikipedia you see the spark that is YouTube so you see where the world wants to go but no organization no institutions put it all together yet at the point that they have then I think you'll unleash a virus an education virus there's some group of things that start to spin up to 100,000 people in the network then a million people in the network then 10 million people in the network then 100 million people in the network and then it'll become a self-sufficient living creature because it'll generate revenues from advertising or from government or from sponsorship or from usage or from commerce or something and it'll start to grow the way Google has grown or the way Apple has grown again maybe it will be Apple maybe it will be Google there is no future but that which we make for ourselves in this area anything could happen it's possible to have the best assets on earth and screw it up there's a whole litany of companies the most successful company in all of Europe in the year 2000 was Nokia and they've driven themselves to zero so you can take a great set of assets and take them to zero you can take a non-set of assets I mean who would have believed that Wikipedia you know the non-fictional body of reference for the entire world right you can start with nothing and you can go to something huge and there's everything in the middle I have a healthy respect for the complexity of the problem so I I don't think there's a simple solution I'm sure that it's not going to come about without lots of different organizations interacting in lots of sophisticated fashion and maybe there's a dozen winners there's a thousand winners in this market I don't know but what I do know what I'm quite sure of is it's pregnant right now 12 years ago 13 years ago we were missing a lot of a lot of key technologies but right now if you look at the look at the reaction of politicians and you look at the reaction of the people that run these institutions and you look at the reaction of the people in the education establishment and if you look at the reaction of you know 30 years ago students were told it's going to be expensive to go to college whatever and they put their head down and they shook it and they disagreed in a resigned fashion they just weren't going to go to college or they're going to go to community college or they're going to take 8 years or they weren't going to get a medical degree or they weren't going to get a grad degree and they accepted it today there's a lot of indignation like why the hell do I have to pay that much money parents saying why do I have to write a $200,000 check why do I have to do that students saying why do I leave school with so much debt so I think you're at a point where the customer realizes there's a better way the industry realizes there's a better way politicians, governors I talked to they realize there's a better way everybody can see that technology is going to change this there's enough light in the tunnel they can't stretch and take a risk and yet everybody's still looking for the map through the tunnel everybody wants someone to help them through it and I think the people in this room are uniquely suited to do that you can help provide some guide path to the people with either power or need or opportunity so as to make a better world with that I'd like to thank you for all coming I hope everybody gets what they're looking for at the conference I hope when we leave there are a lot of very constructive relationships that have been formed and partnerships and the ideal world we're all more effective and more successful because of each other and that's what this is all about so thank you