The failure of education is that during 16 years students live in a world in which every problem has an answer. Then they graduate to find out that the world is not a model. That reality is more complex than any one answer. As they become adults and formal education clashes with reality the result is frequently anxiety or fanaticism. None are good choices.
Education should embrace ambiguity. Teachers should stop pretending to know it all. My father was an astrophysicist. He had a PhD from Harvard. But his best contribution to my education was to explain to me that whatever I learned was but an approximation to an answer. He was a hopeful skeptic. He thought that through science humanity’s understanding of the world would increase. I am a hopeful skeptic as well. And what I teach my seven children is that what we now call knowledge is but a temporary stepping stone to deeper understanding.
Show me a school that teaches that, I have a few kids to send them.
Over the past academic year, I was a visiting professor at Columbia University’s SIPA and at NYU’s Stern teaching entrepreneurship. I love teaching; I have been doing it for over a decade. However, my teaching style is quite different from the traditional academic format of cases, essays and exams. Instead, my method consists of a role-playing game in which students play two simultaneous parts: entrepreneur and venture capitalist using a virtual currency. I have been using this method for several years now, previously at the Instituto de Empresa in Madrid, and more recently at Columbia University and NYU and students have consistently found it useful.
How does my method work?
Firstly, as entrepreneurs, each student must come up with a fictional business venture to present to his or her classmates, who act as VCs. The ventures are presented almost exactly as they would be presented in a real life situation – a three minute elevator pitch followed by an investor summary, financials and finally a less common YouTube commercial. The elevator pitches are presented in class and moderated by me, the professor, while the financials and investor summaries are posted online: either in a class Dropbox/Drive file or on the school’s student portal e.g. Blackboard or CourseWorks.
In this class I introduce a virtual currency, think of Bitcoin but instead of Bitcoin it is a “unicoin”. A currency that is backed by the issuance of grades that professors have at university. When I teach Columbia University, NYU, IE all give me the ability to grade students. What I do is to create a currency backed by the ability to grade and distribute it to students who frequently alternate between being investors (currency providers) and entrepreneurs (currency recipients)
These ventures need 5 million unicoins (sometimes I also use virtual dollars or virtual euros depending on where I am teaching) to break even while at the same time all of the students act as VCs and have 1 million in unicoins to invest. This generates a capital shortage that is similar to that existing in the real world, in which there are more ventures looking for funds than there are funds available. It also generates a shortage of good grades the currency of universities. The game basically translates the shortage of funds that exists in the world to the shortage of A’s that exist in a university.
Investments take place in two rounds over the course of the semester. The first round takes place after the students have presented and developed their elevator pitch, investor presentation and financials. The second round occurs after students have seen the “creative” side of their classmates through the presentation of the YouTube commercials. The choice to add a creative side to the process is that many students excel at one or the other – business or creative – but the best entrepreneurs will usually do both well. It is also important as an entrepreneur’s creative side dictates the look and feel of an early stage company: branding, marketing, etc.
These rounds are structured in a certain way so as to improve the experience of the game. Firstly, in each round a VC must invest $500,000 so as to consider first the business side and then the business side coupled with the creative side. Secondly, students must invest in at least ten companies per round. This forces the VCs to diversify their portfolio and has the added benefit of making sure every entrepreneur raises some money. The third rule is that VCs cannot invest less than 25K or more than 150K per company (this can be changed depending on class size). The reason for this is so the VCs cannot hedge their bets by investing in everyone. And finally, students may not invest in their own ventures. This rule also has the added benefit of equalizing the grading system somewhat as the best entrepreneur is at a very slight disadvantage when investing. To keep the game fair, I monitor the investment rounds and intervene only when I detect collusion. Though rare, if collusion is detected I act as a super investor with unlimited funds to restore the balance.
On top of this method, over the course of the semester I give talks and ask questions during class to find out where student knowledge is lacking. For example, I ask them about convertible notes and if there isn’t a good general understanding I will stop the class and give a tutorial. An example presentation that I give can be found here. So what in other classes would be called formal teaching in my class is a “commercial interruption” of the game that is constantly played throughout the course. Every time I teach, the class turns out to be different because I teach “on demand”. I give tutorials on angel investing, stock options, board compositions, and other key subjects as the need for these learnings arises in class.
The final grade is calculated based on how good students were as entrepreneurs and how good they were as VCs. The final grade will be the average of these two scenarios; but in life, if you are only good at one of them, you can still be very successful.
So how are the grades calculated?
The grade as an entrepreneur is calculated simply from how much money each student raised. However, the VC portion of the grade is a little more complicated. First a ranking of companies is established that is proportional to the amount of capital raised – this is calculated by dividing the amount raised by an entrepreneur by the amount raised by the best entrepreneur. This gives a proportional point value to every dollar invested in each entrepreneur. Then, the amounts invested by each student in each company are multiplied by the ranking of the companies and in this way the value of the investment portfolio is established. To better understand the concept, here is a spreadsheet we created last semester that automatically calculates all the rankings and portfolio values.
Ultimately this method of teaching takes a large amount of the critical review process out of the hands of the professor and puts it into the hands of each entrepreneur/venture-
This model is scalable and can be applied to any curve recommended by the school quite easily. Moreover, students love it, as the course is a simulation of what would happen in the real world and it is intrinsically fair – grading is essentially crowd sourced. They also make lasting connections through heavy interaction with their peers along with sharing knowledge through constructive criticism.
One of the reasons Latin America is doing better this decade is because a lot of its elite has been educated at the best universities in the world, mostly in the US. One example is Marcos Galperin who built Mercado Libre into a multibillion dollar market cap Nasdaq giant, something that I think would have been hard for him to do without a US education. And there are many, many others. For decades now the Latin American elites were educated in the US and now they are finally in charge of the most productive sectors of the local economies.
Maybe Spain should do the same. The Spanish education system kills the imagination of the best and brightest students. I know this because we have had to re educate many of these students at the companies I started in this country including Jazztel, Ya.com and Fon. We have companies that are also universities in a sense, whose graduates go and build other companies that are more in tune with the digital era. There are some exceptions, especially in business studies with IE and IESE ranking very well globally but the average education available to Spaniards is very mediocre with no Spanish Universities in global rankings.
Now it so happens that it is not that expensive to send Spanish students to study abroad. Some Spanish corporations already give grants for this. Indeed just today I signed a recommendation letter for a Fon employee to study at Stanford partly financed by Caja Madrid and I hope they take him. But this could happen at a much more massive scale if the focus was Northern Europe. Studying in the UK with a pound at 1.19 is not as expensive as it used to be. Tuition is low for the quality of education they give. Indeed you can get a whole education in the UK for the cost of a year of studying in the US. Sending thousands of Spanish students to study in the UK, in the Netherlands, Germany and other Northern European countries who are doing better than Spain, could be a way to leapfrog many of the antiquated and dated Spanish professor body who with some notable exception is destroying a generation of Spaniards. It is also a good investment since education runs a big deficit and an 18 year old who studies abroad gains this education. Yes, there is a risk that they may stay but if they do it is not brain drain which is what happens when a country invests in a university education, as India many times does, for the graduates to end up in the US or other nations.
We live in an era in which industrialization is being superseded by digitalization, and Spain is not ready to educate its population for this change. The result is the highest unemployment rate in the OECD: 22%. A structural unemployment that is based on a misfit between the skills of the population and the jobs available in the marketplace. There is no unemployment in the tech sector in Spain, but there are not enough highly educated candidates for those jobs. We have to fix that and fix it before this country falls apart. Sending our best and brightest abroad could be part of the solution. We can’t wait for the education system to be fixed. Not with the lifetime jobs that we have provided to the mostly incompetent and untrained professors who populate it. And this is not true of Spain alone but of a lot of Southern Europe.
I used to think Israel was different from its neighbors, but lately less and less so. My religion is better than yours is no formula for peace in the region. As a secular Jew I would feel so uncomfortable if I lived in Israel with a government who makes comments like this.
It is also understandable how Europe, which is mostly secular, feels alienated from Israel now and USA which is mostly religious, identifies with the country. Israelis like to say that Europe is just anti semitic but while some of that is true, especially Spain (google “es dificil ser judío en España”) what is also true is that in Europe no politician speaks about God in general and least of all as if God liked Jews and not Muslims. Personally I think there is a very low probability that God exists but even if it did there is a proportionate lower probability that it belonged to any religion. I think that God in itself is an extremely unlikely entity but it did exist what would be the link between God and one particular religion? To me God inside a religion is a flag that some carry to do good but most carry as a symbol of their own tribe against others. In many cases God inside a religion is used to justify murder and that makes religion alien to me.
Long are the days of Israel being led by agnostics or atheists like Golda Meir who when asked if she believed in God she said. I believe in the Jewish people and the Jewish people believe in God. Now Israel is being led by people who think God is on their side. Pretty dangerous.
-basic household management, how to live on your own.
-history of science.
-home medicine and disease prevention.
-digital photography/video both capture and editing.
-basic accounting and business law.
-entrepreneurship (business plans and so on)
-statistics and probability.
-home economics, how to file for taxes, basic macroeconomic principles.
-principles of logic, epistemology and ethics (Philosophy)
-public speaking (done in UK and US but not continental Europe)
-introduction to engineering, the basic technologies that surround us.
-modern geography/astronomy including all types of digital maps and mapping resources.
-conflict resolution, dispute resolution, introduction to law.I have been editing this post adding the the best suggestions. Thanks for the contributions!
Today I came accross the question of why aren’t many very smart people rich. And while blunt, I am sure many smart people who are not financially successful have asked themselves that question. Especially if smart is defined as having performed very well at school which is how most people find out they are very smart. But I can relate to that question in a different way. Not as to “why aren’t many smart people rich” but “why aren’t people who are not considered to be smart, rich”.
When I was at Columbia Business School I was in the bottom half of the class. I was not considered particularly smart or bright. All I got studying entrepreneurship was a B+ and that was supposed to be my best subject as I wanted to be an entrepreneur. But then, after graduation I built, 8 companies over 25 years, 3 of them worth over $700 million. My last start up, Fon, has become the largest WiFi network in the world. And it is not only me, I know quite a few entrepreneurs who were mediocre at school only to thrive in real life. Some did better than me. So school is not such a good predictor of real life performance after all.
While teaching entrepreneurship at Instituto de Empresa, I have given a lot of thought to this paradox. How can school performance be a better predictor of life performance? Especially in entrepreneurship. As a result one thing I stopped doing, is grading students. Now they grade each other. And from what I have seen, students who other students think are smart, tend to do better in life than students who professors think are smart. Especially many professors who teach but don’t practice entrepreneurship. Entrepreneurship is more an art than a science.
Having said all this, my comments refer exclusively to business studies. In business getting rich is a direct consequence of success. In other fields being smart needs not to equate with being rich and that is fine. People shouldn’t become judges, or military commanders, or legislators, or many other essential occupations with the aim of getting rich. And getting rich is not a great objective in itself. In general in life having objectives is more interesting than having achieved objectives. Success in business is no exception.