So you might be thinking to yourself, depending on where you live, that what I'm describing is much different from your country or society. And I hope that you can understand the example that I'm using. If you're not familiar, I invite you to take some time and to maybe to do a little bit of research online. The fact that you're taking a course from Coursera indicates that you have some awareness of new offerings. But I want you to think for a minute about consumption of higher education, the product, and what it is that those traditional students over the last four decades. Those 18 to 22 year old students who live on campus, what it is they're hiring, the higher education product, what job they're hiring them to fulfill, or complete in their lives. And you could probably make an argument, and lots of researchers have, that the product that they're paying for, that they're hiring to complete a job or task for them is multifaceted or complex. Some would say that they're hiring the universe deed to provide in entertainment, task to their lives. Some would say it's part of a social growing up process, a coming of age, we say in English. You go and have this experience away from home and you learn to have fun, a lot of people do, or you learn to learn. And so there are a lot of things that are involved beyond just what you might think of the classroom that you're hiring for. You're hiring an identity to be part of an organization that you can identify with the rest of your life as a graduate or as an alumnus. You're hiring it to improve your opportunities for employment. You certainly want the degree to have some value, or most people would be doing that, you would expect. And so there are a lot of reasons that the traditional student buys the product or hires the product in the first place. Think to yourself, though, about what we say in English as the nontraditional student. What about students who don't live on campus, that can't live on campus due to life circumstance or other financial limitations? What about students who didn't go to college when they were 18 to 22? What about students who work full time? Now in your country, it may be the case that there are lots of product offerings that have already existed, or for a longer time, to meet the demands of those types of customers, if you will, or students. But in the United States, if you look at the 1970's, most institutions of higher education, public ones for sure, were not focused on non-traditional students. They were not focused on helping a 35 year old parent who needed to get a college education to do so. It wasn't structured at all in a manner that would help them achieve their goals. The 35 year old parent, the non traditional student, probably is not going to school for social reasons. Probably doesn't need the identity as much. Doesn't need all the parties and the entertainment and the sports. They probably are being over served by the existing products out there in the higher education market and they're being underserved in other aspects. Think about the schedule. What time are most of the classes offered in the traditional campus? Think back to the 1970's. Probably most of the classes are during the day. Students come in the morning, they live on campus or near campus, they take classes and then they have the rest of the day to do other things. Spend time on campus engaged in social activities, study, grow in other ways or just have fun. And so there are a lot of factors to consider when you look at why the nontraditional student really couldn’t consume the product that was being offered. They were being underserved on that part of the offering. So if a 35 year old, who’s a parent and worked nine to five during the day wanted to go to school, that person probably couldn't do so. They probably didn't want to navigate a complex campus that's very large and the parking. They probably didn't have a lot of time to spend, trying to figure out the best schedule. They might not have the same need for job employment help. They might be trying to move forward in their existing job by gaining a college education. And so it was in that context in the 1970s that a company called the University of Phoenix was developed. Now some of you may not be from the United States, may not know that the University of Phoenix is not the university of the City of Phoenix. Is a private university that happens to have the same name as the City of Phoenix. And it is a for profit company, or owned by a for profit company that has grown and developed in an amazing way since its beginnings in the 1970s. It started out with a simple goal to help the non-traditional student who was being overserved in some ways and underserved in other ways, student. And so it emerged basically as a night school. It emerged as a campus that was very simple, that was very convenient to working adults. In fact, for a very long period of time, you had to be, as a requirement, at least 25 years old to apply to the University of Phoenix. Think about that, why they did that, think about this green line and the red line. If you say that you will only accept people who are 25 years or older, you are basically showing the traditional university, your competitor let's say, that they're not a competitor. That you want to be ignored. You're going after customers that the 18 to 22 year old segment, the traditional higher education institutions aren't going after. In fact, the traditional state university in the 1970s would love to have someone fill that gap or meet that need. Because you probably can imagine, they got some calls from time to time from non-traditional students saying, hey, can I take a class just at night? Do you have classes that are more specific to my immediate career needs, things that I need to know now? Perhaps less philosophical or general education based. And if the University of Phoenix exists and grows those phone calls stop. Or are decreased to a large degree, because now there's a place for those non-traditional students to go. And the University of Phoenix is by no means the only offering that exist to serve non-traditional students and I would be the first to recognize that many traditional higher education institutions are also doing that now. I'm referring to the 1970s when I point to this graph. So as University of Phoenix begins, it really has no brand name. It has no real accreditation or legitimacy in the marketplace. No one really knows who they are. And so the customer who is going there has a very specific reason to hire it. It must not be for accreditation of the degree, it must not be for the extensive opportunities available for other activities on campus. These are people who want to gain knowledge, who perhaps want a degree. And again, it doesn't matter what the name of the university is or the reputation of it. As time went on since the 1970s though, the University of Phoenix has really done a good job, in my observation, of moving up this green line and improving its offering. It's gotten better and better at understanding its target market, it was much faster than a lot of other schools at developing online programs. It's focused a lot on very specific career paths, with pathways, it still does not have the same brand value as many other institutions. It does have some accreditations, but not the same reputation accreditations as other schools. It's criticized for charging students for a product which doesn't lead in some ways to a degree or to a job which would say that it's still not good enough in some observers eyes as the traditional universities. But overtime it's done more and more to mimic that offering. For example, it has lowered the age. It's no longer necessary to be 25, it's had a recent media campaign to brand itself and help individuals identify and say, I am a Phoenix. Which is to show that you have this relationship with this entity like many people identified with where they graduated if they went to a traditional school. In their marketing you hear them say, we don't have a big parking lot, we don't have an athletic team. We've stripped it all out and we're giving you what you are seeking out of this product. We're taking non consumers of the traditional higher education market and adding in what was missing, which is convenience, schedule, simplicity, career focus. We have instructors who are practical, skills oriented, who are working professionals, so they're going to give you knowledge that you can apply today. And so, that's been their focus. The question you should ask yourself is, is an offering like this truly disruptive? Will traditional universities go away one day and will University of Phoenix, and other competitors take over? Perhaps in your country, you are seeing private universities, such as these, playing a much larger role. Non-profit, excuse me, for-profit private universities. I don't know, that in the United States, that the University of Phoenix will overtake, so it's Probably not a pure example of disruption but it's a multi billion dollar company so its clearly very successful. The point that I'm trying to make in raising this issue is that you can learn a lot from disruptive ideas. A company doesn't necessarily need to be a pure disruptor and succeed in the marketplace and take over and destroy other companies. What you want to understand are these concepts such as being over or under served non consumers. Try to think, for example in the industry that you work, what a non consumer might look like. Are you a non-consumer of some industry because it's not accessible to you, perhaps because of price, perhaps because of usability? And there are all types of products or services that emerge over time that allow us to do things that we previously couldn't do at home. Let me give you a few to think about. Think about the mobile phone you may have. It has a camera. Does it allow people to take pictures that previously were non-consumers because it was too complex? Probably. Better quality pictures than they previously could take. What about 3D printers? If you don't know what a 3D printer is, look that up. 3D printers, will that allow people who previously couldn't have made products or service to do so in their home? Think about this idea, I often have students suggest this to me. Are you able, if you're a person who's very focused on your health and eating very healthy food, perhaps you're a vegan or a vegetarian, or you prefer organic foods for whatever reason. Are you able to purchase that food in a fast food setting? Does that food taste the way that you'd love it to taste? Does it taste as good as perhaps less healthy food that's processed? Would there be room for a fast food, a very healthy alternative for vegans or vegetarians, or those who are focused on organic foods? And when I mean fast food, I mean as fast as McDonald's. That doesn't exist today, so you probably would say that vegans are non-consumers of the fast food product offering. If you could come up with an idea that would bring in vegans to the fast food market, you might end up being a pretty successful entrepreneur. And I'm talking about just one store. So what you want to do in your area of interest is to try to apply the principles of disruption, and not necessarily be the next transistor inventor or to come up with a multi billion dollar company. You can apply these principals in very important ways in a lot of different settings. So this will end our attempt to try to understand the disruption model. And we will continue with module six and finish this course in the next part.
