I taught entrepreneurship at the American University in Bulgaria last year. In my opening lecture, I discussed how rapid advancements in technology were quickly making many industries obsolete. Newspapers are dying. Traditional brick and mortar retailers are being decimated. Digitization + high-speed bandwidth has killed off Kodak, MCI, and Blockbuster. Sears appears next to fall. 

Universities have somehow escaped this “second industrial revolution” but it won’t last. Universities must change or die. Sadly, most are ignorant of the impending threat and incapable of change due to their bureaucratic leadership structure.

Evolve your value proposition or become obsolete.

People ask me if you can really teach entrepreneurship to which I answer, no and yes. While you can’t teach people the character traits of being an entrepreneur (passion, resilience, perseverance), you can teach a process that significantly reduces the risk of failure. It’s called customer development and it’s the basis of Bill Aulet’s teachings at MIT’s famed entrepreneurial program and Steve Blank/Eric Ries’ lean startup methodology.

The theory is built on the common-sense concept that in order for a startup to reduce the risk of failure, it should be addressing an identified customer need; there should be a common customer problem that the startup can solve with its proprietary solution or innovative approach. When a company launches a product that meets an identified market need, this is called product/market fit.

For example, Compaq Computers was founded by innovative entrepreneurs who saw a customer need for computers to be portable. Southwest Airlines was founded on the premise that airline passengers really only cared about cost and consistent service. In more recent times, Warby Parker was founded because it saw an opportunity to provide customers with high-quality eyewear at reasonable prices.

For some companies, there is no obvious product/market fit at launch. Airbnb, for example, was not solving an identified customer need when it launched. Travelers could already book places to stay online as they moved around the country and the world. What Airbnb had to do was create its own category and move it into mainstream acceptance. This wasn’t an easy task as most of their early feedback was along the lines of “WTF? Strangers staying in your house? Eww, that’s creepy!”

10 years since inception, Airbnb is arguably the largest company in the hospitality industry. 

The world is changing rapidly. Ask most entrepreneurs in Silicon Valley if they give a shit about a 4 years degree and I think you already know the answer. Most founders dropped out of university. No one needs to finish a degree program at your university to start a business, and these new economy company founders don’t care if their hires have degrees.

New tech companies care about skills not degrees.

Universities currently have product/market fit but it relies solely on corporations continuing to value an accredited degree. If corporations were to no longer value an accredited degree, universities are in a lot of trouble because that product/market fit is gone. You are complacent. You are Kodak, and it’s only a matter of time before an Airbnb type company figures out product/market fit in higher education and destroys your business.

You may argue that your university is giving its students a well-rounded education that along with extra-curricular activities will help them become better leaders but in the new tech world, this doesn’t fly. If you don’t want to evolve to the new reality, then you become a school that trains people for a career in politics because that’s the only industry less innovative than higher education.

Compounding this problem and worsening the problems, university administrators only talk to each other. It’s a closed community of people shielding each other from the stark reality of a rapidly changing world.

We all wear masks, and the time comes when we cannot remove them without removing some of our own skin. – André Berthiaume

Universities, through their resistance to change and refusal to accept a changing market, are destined to become the Blockbuster to the Netflix, the Kodak to the Apple. Only the elite universities will survive and they will do so not on the basis of better academic training, but because they are a country club – a network to which people will pay top dollar to belong. 

Your product no longer fits the market. You are doomed to failure.