Andreessen: New universities face network effects, upside-down economics, and cartels
Marc Andreessen · Fixing Higher Education & New Startup Opportunities · Jan 23, 2024 · at 1:08:52
Marc Andreessen, co-founder of venture firm Andreessen Horowitz (a16z), outlines the structural barriers facing new competitors in higher education.
“I'll just list the three reasons why this would be very difficult. Number one is existing institutions just have very powerful network effects, which is why they, you know, they, they're so, you know, which is why the big ones are like hundreds of years old. Two is it would take a lot of money for a long time because of the network of, you need to boot up a network effect and that would just be very expensive, right? In other words, like it's hard to get the great students until you have the great faculty. It's hard to get the great faculty and have the great Students. And so like, for example, you'd have to like really overpay faculty to get them to come over and you'd probably have to have a, you know, much cheaper student proposition. So you'd have like upside down economics for a while while you're booting it, which means you would need a lot of funding. And then third is you'd be trying to break into a cartel.”
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