On a recent visit to New York City I had a chance encounter with a very interesting co-founder who has helped create a business he prefers not to call socially oriented but definitely has the potential to be a game changer in the education and employment generation space. General Assembly is a new education and networking medium for young people looking to get a practical education or knowledge boost for today’s job market needs in the areas of technology, business and design. Started in New York City, it is now operating in eight cities around the globe including the recently opened campus in London – which was strongly endorsed by Prime Minister David Cameron.
WHAT IS THE BUSINESS ABOUT?
General Assembly is a for-profit education provider. It is a global network of campuses for individuals seeking opportunity and education in technology, business, and design. It is not degree granting, it is not a community college and it is not a vocational training center. It is essentially a modern education intermediary designed to meet the needs of companies and individuals who are living in an ever more technology driven economy. It offers short 12-16 week intensive courses in topics like Data Science, Product Management and User Experience Design. It also offers shorter workshops and classes on more specific skill needs that need less time. Almost all of the courses are done in person – peer-to-peer. Central to the concept is that the course offering focus is very much on the skill gaps it identified by talking with companies and job-seekers. So the curriculum is constantly changing to meet the demands of an ever-changing market place. It does this at a much faster pace that traditional educational providers can – making it much more relevant.
HOW DID IT START?
General Assembly was started in early 2011 in New York’s Flatiron District by a group of friends with different backgrounds and skills – some were serial entrepreneurs others from the corporate world, some more tech geeks other classic sales types. All had a vision to create a new institution in NYC for technology, design and entrepreneurship. That vision came to fruition after the group won a $200K grant from NYC’s Economic Development Corporation (NYCEDC). What originally started as just a hub for likeminded entrepreneurial tech and design people could meet quickly transformed into a learning center after the founders realized that most of the users were asking how could they improve their skills and learn from each other instead of just a place to work. So they did some market testing and came up with an initial list of short courses and it was a wild hit. Two years and various rounds of VC financing later – including from the likes of Jeff Bezos and Yuri Milner and the company has grown rapidly to what it is today. The company continues to grow.
WHAT IS THE SOCIAL NEED IT ADDRESSES?
Essentially General Assembly is providing one possible solution to the education – employment opportunity gaps I mentioned in a previous post. It is helping young people who may have a formal education but don’t see the connection between what they learned and what job listings and employers are asking of them. To deliver a path or a means for young people to take back control of their own career paths and build the skills they need to be successful. Filling the gap left by traditional education providers.
WHAT IS THE BUSINESS MODEL?
GA is a for-profit education provider so it makes money through a fee for services model. Students are screened via an admission process like any elite school and then charged market tested prices. No discounts. They also provide some membership services, but essentially the real value proposition to customers are the classes or the job market ready skills that they learn through the courses. The primary customers are well-educated youth in large developed metropolitan centers who are seeking to upgrade their skills to land that next job. The customers come to them and take the classes at their campuses. The costs are basically the overhead and web development costs, plus the costs for instructors and the physical space and technology to provide the classes. There are no long-term contracts so everything is very light architecture and costs are meant to be kept to the minimum so as to keep high profit margins and allow the company to grow.
WHAT ARE SOME CONCERNS I SEE WITH THE MODEL?
- Competition – As it is a non-accredited institution and there is little regulation in the space – as of yet – there are very low barriers to entry. It would be fairly easy for a better funded competitor to come in and pay higher salaries and wipe the business out.
- Online education – While it still remains to be seen if the online education model can work. This would be another source of strong competition for such a model. Online education providers could easily do something very similar and thus it would make sense for GA to try to move into this space as they are currently trying to do.
- Scaling – Moving outside of developed markets might be difficult. I am not sure how much synergies there would be between the type of course offerings as such a system would grow. E.g. do the course offering demands in New Delhi, Istanbul and Cape Town match the needs of those in Hong Kong, NYC and London? Would GA be able to meet those demands. I feel much of the attractiveness of this system is that the creators are very much in touch with market needs and the cutting edge of course demands. What happens when this is no longer the case?
- Pressure from the VCs – The fact that it is VC funded builds pressure for the company to grow and grow quickly to be able to meet the huge payoff that a VC firm would like to see by investing in such a company. Related to my previous point, can the GA model be rapidly expanded while staying in touch with market needs? This may make life very difficult and may reduce content of the platform to things which make money instead of those which create value for students.
WHAT DO YOU THINK?