Peru

Ruins about 3 hours outside of Machu Pichu.



Temple where the Spaniards found a statue of Jesus Christ. BofM anyone?



The Sacred Valley. The Incas used these tiered planters to acclimate their potato plants to altitude.



Dead guy we found. Still wearing his tuque.



The guinea pig we ate for dinner.



The Shaman Priest giving an offering to Mother Earth.



Filming in the Andes.



The valley of the community we stayed with.



The NorthFace tents they put us up in.



Cuzco city center. This Catholic church is the biggest building in town.

Impact International Trip to Peru

I just returned from a trip to Peru and Bolivia with Impact International. Impact was founded by my younger brother Daniel with the purpose of involving students in support of other worthy, established non-profits that don't have a student arm. The purpose of the trip was to document and create marketing materials for the non-profit Deseret International, a medical non-profit that supports local third-world doctors in performing corrective surgeries on cleft lip, cataracts, and clubbed feet. We also shot footage for a piece that Impact will be doing on food and starvation.

The trip was awesome. We made stops in:

1. Cuzco, Peru
2. Puno, Peru
3. La Paz, Bolivia
4. Lima, Peru
   

I will post some pics of the sites and the cities, but first I wanted to drop a few of our pics of the children we saw that were being treated:







I grew up serving within the ranks of Operation Smile, another non-profit dedicated to fixing cleft lips in third world children, and though I have seen thousands of pictures just like these, it was incredible to actually get to see the children and hear the stories of pain told by the mothers when others treat their children so terribly. To see the surgeries was incredible, that in a few hours and at the cost of a few hundred dollars, a person's entire life can change so drastically.

It was an amazing experience and I am grateful for how lucky I am to be blessed with a healthy body, a beautiful and healthy family, for the ability and freedoms to work and provide for ourselves, for a brother who is so proactive in making the world a better place, and the many factors that facilitated and allowed me to participate in this trip.

Those interested in supporting Impact International can do so by making a donation here. For $20 a complete surgery can be performed, changing a child's entire life. This cost per surgery is the lowest I have found anywhere in the world, and is facilitated by a genius and well executed model used by Deseret International. Through the use of donated American medical supplies, supporting the local doctors, Deseret is able to support these doctors in doing the surgeries for just a few dollars.


Find more videos like this on Impact International

Hacking the EDU Trifecta

Education is already free. Certification and degrees are not.

Liberating knowledge is useful in that it brings convenience to education, but the nut that really needs cracking is how to make certification, courses, grading, textbooks, teaching, and degrees, scalable and cheap.

There are three main components that need to be hacked to make this happen:

1. The University
2. The Professor
3. The Textbook
   

There are efforts underway to hack each of these components and I just wanted to share some things I had found this week regarding each point:

1. The University. The advantage of the university is that there is power in proximity, communication, and interaction. But with technology, it will no longer be required that we are in the same room. Tech University of America is bringing college courses to Facebook. Now I honestly would not want to complete an entire degree over Facebook, but as someone in between my undergrad and grad schooling, I would be interested in taking a course or two. Just one example of a scalable solution driving The University to continue losing its relevancy.
2. The Professor. Read a great blog article by the VC, Fred Wilson. The article is titled Let the Student Teach. He references another post and quotes this great story:
   
   

   Then in Grade 12, something remarkable happened: My school decided to pilot a program called "independent study", that allowed any student maintaining at least an 80% average on term tests in any subject (that was an achievement in those days, when a C -- 60% -- really was the average grade given) to skip classes in that subject until/unless their grades fell below that threshold. There was a core group of 'brainy' students who enrolled immediately. Half of them were the usual boring group (the 'keeners') who did nothing but study to maintain high grades (usually at their parents' behest); but the other half were creative, curious, independent thinkers with a natural talent for learning. The chance to spend my days with this latter group, unrestricted by school walls and school schedules, was what I dreamed of, so I poured my energies into self-study.
   
   To the astonishment of everyone, including myself, I did very well at this. By the end of the first month of school my average was almost 90%, and I was exempted from attending classes in all my subjects. I'd become friends with some members of the 'clique' I had aspired to join, and discovered that, together, we could easily cover the curriculum in less than an hour a day, leaving the rest of the day to discuss philosophy, politics, anthropology, history and geography of the third world, contemporary European literature, art, the philosophy of science, and other subjects not on the school curriculum at all. We went to museums, attended seminars, wrote stories and poetry together (and critiqued each others' work).
   
   As the year progressed, the 'keeners', to my amazement, found they were struggling with this independence and opted back into the regular structured classroom program. Now our independent study group was a remarkable group of non-conformists, whose marks -- on tests we didn't attend classes for or study for -- were so high that some wondered aloud if we were somehow cheating. My grades had climbed into the low 90% range, and this included English where such marks were rare -- especially for someone whose grades had soared almost 30 points in a few months of 'independent' study. The fact is that my peers had done what no English teacher had been able to do -- inspire me to read and write voraciously, and show me how my writing could be improved. My writing, at best marginal six months earlier, was being published in the school literary journal. On one occasion, a poem of mine I read aloud in class (one of the few occasions I actually attended a class that year) produced a spontaneous ovation from my classmates.
   
   The Grade 12 final examinations in those days were set and marked by a province-wide board, so universities could judge who the best students were without having to consider differences between schools. Our independent study group, a handful of students from just one high school, won most of the province-wide scholarships that year. I received the award for the highest combined score in English and Mathematics in the province -- an almost unheard-of 94%.
   
   

   Another great way to make great teaching scalable is to open access. This can mean larger classrooms or as is the case in Korea, letting the best teachers speak in sports arenas. Let the teachers become super stars.
   
3. The Textbooks. Found an interesting company this week whose goal is to make etextbooks free to students. FlatWorldKnowledge is bringing great texts digital and think they have a model to make it sustainable. While the ebooks are free, their revenues come from students paying to print the book, softcover versions, quiz banks, flash cards, and other study aids. They are venture funded, having raised $8M from Greenhill SAVP, High Peaks Venture Partners and Valhalla Partners. Here is a their clip explaining the product.
   

A Little Sunday Treat

Jon Schmidt is a local Utah talent. I live like 5 minutes away from this guy. Great talent and an awesome entertainer. Enjoy. (Embedded video stopped working - here is a link).

Feeding the EDU Monster

Our education system is problematic.

Now, I believe in education. I work in education. I, like most of you, believe that education, more than any other factor, is the force that can raise a man from ignorance and poverty to empowerment and opportunity.

Because of this belief, I (personally) work to get students access to scholarships, we (Zinch) donate to create scholarship funds, and the government donates millions a year to higher education.

But that is all part of the problem.

There are forces at work that are squeezing the economic value from higher education. From my observations, we are feeding the problem--a problem that is becoming a monster. Here is what's happening:

Education has historically had a high return on investment. Competitive forces always incentivizes schools (or anyone else) to capture as much value out of a product as possible. Because students are willing to pay up to the point that their marginal return from attending school equals the marginal benefit that they will get from attending, this has allowed schools to eat into the returns of their students by raising tuition year after year.

Said another way (simplified example ignoring opportunity costs), if you knew by investing $100 (NPV) you would receive back $120 (NPV) you would do the deal. If you knew that by investing $110 (NPV) you would receive back $120 (NPV) you would do the deal. If you knew that by investing $119 (NPV) you would receive back $120 (NPV) you would do the deal.

People are willing to invest up until the marginal costs (MC) equals your marginal benefit (MB), i.e. where investing $120 (NPV) gets you back $120 (NPV). While I have heard different figures, I recently read that a college grad can expect to earn approximately $300,000 more than a non-college grad over their lifetime.

This means that colleges can and will continue to raise the cost of tuition. Because as long as there is still a positive return to the experience, people will continue to line up at the door.

But the hikes in tuition do not affect us all equally. There are those of us who, while knowing that the return on education is still positive, don't have the capital to start, or to finish, the process of a 4-year degree. It is not that the economics don't work, it is that they don't work for all of us. With each hike in tuition, some of us get left behind.

But we are a nation that believes and supports higher education. There are a lot of good people and foundations at work donating scholarships and grants to help students pay for an education.

But subsidies, in any market or industry, create inefficiencies in the market. In education, it is important to understand what these "subsidies" of scholarships are doing to the market. (My undergraduate degree is in economics, and using the tools of the trade, I will attempt to explain this the best that I can using my handy dandy supply and demand curves.)

This first chart depicts a market, such as our education market, in equilibrium. We have a price (p1) of tuition and a quantity of education (think the number of chairs in all universities) given the equilibrium between supply and demand:

This second chart depicts a market where a college is given a subsidy (such as grants and scholarships for enrollment--note there is a technical difference in scholarships which are provided to individual students and grants that are provided directly to colleges, but the basic concept is the same). These subsidies potentially create a new lower price (p2) of tuition and a new higher quantity (q2) of education (still thinking the number of chairs in all universities):

Chart number two is what we fool ourselves into thinking with every scholarship cheque that we write. We like to think that every dollar donated and gifted away is making education cheaper for students. We like to think we are helping keep tuition costs down while allowing more students the opportunity of higher education.

This third chart depicts what is really happening in the market when colleges are given subsidies. The thing is, colleges have constraints, both physical (buildings, class rooms, and chairs) and non-physical (exclusivity, keeping acceptance rates low). Quantity is constrained while the effective price is being driven lower by the subsidies.

Chart four depicts the impact of the prices being held down by subsidies while constrained by the inability to increase quantity. This effect is an over-demand for the product of education at that given price. At the subsidized price, more people want the product than universities can supply. Universities continue to provide at some quantity less than Q2, leaving unfulfilled demand for the product.

This over demand means a lot of people want a college education. The historically high ROI continues to drive demand. We are a nation that loves education. And increasingly, we are a nation that demands education. Every middle-manager, gray-collar worker in America is expected to have a degree. It has become a base-line hurdle and pre-qualifying filter.

That is the concept of degree inflation. The value and expectations that we once held of a high school diploma we now hold of a bachelors degree. This occurs for a number of reasons, one of which is the over-demand for education. As we award more and more degrees, the exclusivity and ability of that degree to differentiate a person diminish.

The combination of over-demand for the product of education created by the subsidization of scholarship and grants continues to allow for creep. As mentioned above, students will purchase up to the point that their marginal benefit of education equals the marginal costs of receiving the education.

The subsidization causes over demand. Over demand does not leave pressure on universities to remain competitive on costs. If you know that their is a line of people waiting to fill any open seats at the price, there leaves little pressure to try and drive costs down. Additionally, it drives little pressure to keep the product of education competitive and innovative. Same logic, when there is a line of people waiting to fill any chair, innovation is not required. Over time this has led to universities shifting funds away from teaching and into institutional research and fringe activities while allowing costs to continue to creep.

The marginal costs of education has been allowed to creep. While degree inflation has allowed the marginal benefit to decrease.

This leaves us in danger of a few things:

1. Subsidies create over-demand. Over-demand eliminates the need to be competitive and innovative.
2. These forces are allowing the marginal cost of education to rise while the marginal benefit to drop.
3. As marginal costs rise and the marginal benefit falls we will see many left behind, with diminished ROIs for those who do make it through the system.

Given this analysis, there are a few things that I predict will break the cycle or hack the system.

First. One of the major constraints is constrained ability of universities to educate more people. There are the physical and non-physical constraints to how many people they allow into their university each year--regardless of the costs. The system was not built to scale.

But in today's world of technology, where information is free and fluid, this wall, this constraint will be torn down. Allowing the quantity to adjust with prices, subsidies, and demand will create equilibrium in the market that will eliminate our mentioned problems.

Second. As new models of education are introduced that allow for equilibrium in the market, competitive forces will return to education. (Don't get me wrong, there is competition today, between Harvard and Yale, but it is competition that is all within this model.) The competitive forces will come to be between models of education. This will drive innovation and cost effectiveness amongst all to win the business of the student.

And in the meantime, don't be fooled. With every scholarship, we are helping the one, but hurting the all. We are feeding the monster and enabling the creep. The solution is not to continue to pour money into our education system.

The solution is to drive a change. I believe that the change is coming that will tear down the walls of education. I believe that technology has given us the opportunity to better educate at a fraction of the costs.

And I intend to help bring about this change.