Ok, so big news is kids are graduating from Harvard and they are not taking jobs in NYC at Morgan Stanley or Goldman Sachs. No, they are taking teaching jobs of all things.
Are these young people insane? Have they lost their minds? They've decided to bypass a life where they can make a fortune and retire at age 37 in favor of a life in which they spend their best years baby-sitting a bunch of Spliff-smoking teens?
"Why their sudden aversion to money?" you might ask.
I say these young people don't have any aversion to money, that's for sure. They are just a bit ahead of the curve when it comes to recognizing where the money's going to be in the future.
Yeah, believe it or not, you should look at Education.
Here's why:
1) Unlike the 90s when the Internet "concrete" was still wet and residential connection speeds were generally dial-up slow, today in 2009, fast broadband residential connections are ubiquitous in most mid to large sized urban locales. This very high speed broadband means one can watch high quality video on-line. It also means one can watch high quality video of live, remote academic lectures on-line. And one can also utilize high-quality video conferencing to engage in academic question/answer sessions on-line in said lectures. So effectively, the technology is in place to allow a student to attend graduate school or professional school or practically any type of academic course of study without ever leaving his/her residence.
2) Traditional go-to-Prep-School, go to Parochial-School, Go-to-Private-College. All of this has become extremely expensive in the last 20 years. The cost of post secondary education has, in fact, far out-paced cost of living adjustments. Frankly, I believe the market is going to be looking for alternatives to paying $50,000 for a year worth half-that at a private college.
3) On-line education is (theoretically) easily profitable without a lot of monumental technological breakthroughs. If students want to take a course of study on-line, they pay in advance -- and I'm talking thousands of dollars per credit hour, not "Ohh, I hope these students will be willing to pay $12.95 a month for our service?!" Also, the overhead involved with the service is surprisingly low; compensate the teachers and professors, make sure you have facilities to use or a bricks & mortar school or university to align with, make sure you have good camera gear and a crew who can do the shoot and start teaching once all your new students have the syllabus. Repeat!
Ok, so maybe there is some money in this new business of education. Maybe the Harvard youths are in early on something sizable.
In the next post I will talk about how these education companies will likely take on investment and expand and how they may never see a reason to go-public.
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