Posted by: crudbasher | February 9, 2012

Direct Financing Will Change Education

This story shows the true power of the Internet. A game developer couldn’t get any publishers to fund his next game so he went directly to his fans via Kickstarter. In 24 hours they raised $700,000 dollars.

(cc) Lincolnian (Brian)

What if we applied the same model to education? Free lance instructors can offer to teach classes via some of the new online learning portals. However, they can say the class will launch once a certain amount of donations are met. What is interesting here, is because of the very low overhead associated with online education, the donations can go almost entirely to the teacher. This model of direct payment from student to teacher is actually an old one. In medieval times, students at a university paid their teacher directly.


Why will this be direct payment model be disruptive?

  1. Anyone can be a teacher.
  2. The cost of learning will drop nearly to zero.
  3. The whole huge bureaucracy will be gutted.
  4. Classes will be developed based on what the students want, not what the government wants.

I imagine a lot of people right now in higher education will dismiss this idea because it won’ t be accredited or official, or won’t be taught by “real teachers”. All of those things are blinders to disruptive innovation. As long as there is someone who thinks “amateur” education has value, then this will happen.

This won’t replace regular universities of course, not completely, but it will take a small chunk of their business. This is the nature of disruptive innovation.


    • San Francisco-based game studio Double Fine took to Kickstarter to fund its next adventure game, and so far, the studio has enjoyed unprecedented success through crowdsourcing. The project, which was announced by the studio’s founder Tim Schafer on Facebook and Twitter Wednesday night, has already raised more than $700,000 from 18,000 backers in less 24 hours, and both numbers continue to grow.
    • Despite achieving cult success and earning multiple awards for his games, Schafer has struggled with publishers because Double Fine games have not traditionally been money makers.
    • Schafer was frustrated. Publishers didn’t want his games, but fans did. That’s when a light went off in his head.


      “It occurred to me: Kickstarter,” Schafer said. “We could use Kickstarter to make a fan-funded old school adventure game. It’s perfect. We have the perfect team at Double Fine to make it, [and] we have the inventor of the genre here to make it, Ron Gilbert.”


      Furthermore, Schafer had an idea to close the gap between developers and fans.

    • Schafer’s crowdsourcing scheme shows how the Internet could make all middle men between creative types and their fans disappear. Publishers that have neglected and shot down Double Fine’s ideas over the years have had too much control over the creative process, but thanks to an impressive display from fans, middle men may soon be a thing of the past.
    • A similar event occurred in December, when comedian Louis C.K. decided to openly sell his latest stand-up special for only $5 through his website, cutting out the middle men needed to produce and distribute the film. In just four days, Louis C.K. made $500,000, reporting a profit of about $200,000.

Posted from Diigo. The rest of my favorite links are here.



  1. College fee for bachelor studies in The Netherlands is 2200 dollar annually. For this sum, a student gets about 400 hours of ‘contact time’ (mostly lectures, some group work and a negligible number of hours for individual tutoring). So each student pays about 5 dollars per contact hour, and contributes 200 bucks a year to ‘facilities’ (administration, library etc.).

    The average group size for academic social studies or arts is probably 40 (much higher for lectures, but smaller for group work). (Only in the ‘hard’ sciences the group size or staff-student ratio is much lower.) So for each contact hour, the students jointly pay 200 to 250 dollar. The teacher is paid only 30 to 40 dollar per hour, that is (with 1 hour preparation for 1 lecture hour) 60 to 80 dollar per contact hour. Full professors earn twice that sum, but many of them leave the teaching job up to their ‘assistants’..

    Besides, Dutch universities receive a government grant per student, and a bonus for each qualification earned by a student (bachelor’s or master’s degree). They are also exempted from particular company taxes. This effectively doubles the universities income per contact hour.

    College fees for Dutch master’s studies are way higher than bachelor’s, and will only increase in the near future.

    My conclusion is that it is certainly interesting for both students and teachers to develop new ways for better and cheaper education. Digital and/or ‘real’; by means of kickstart or by any other means. There is ample financial room. The challenge for private educational companies will be to offer sufficient quality so that they can get accredited along the same standards as traditional universities. One of the preconditions is that they work with qualified teachers/lecturers. But I think that a specialized private ‘bachelor school’ for laws, psychology, language or education is able to offer at least the same quality as the average Dutch university does.

    Yet I doubt whether the Dutch government and Dutch universities are sufficiently ‘free-market oriented’ to allow such a development. I suspect that they will invent ways to frustrate accreditation for private companies offering serious concurrency to the traditional alma mater.

    • Hi Hannes,

      Thank you so much for such a thoughtful comment! I think you hit on a really important point at the end of your text. Accreditation is a critical piece here. Not just a format accreditation, but how can we ascertain what a person actually knows? Right now we don’t do that on a granular level, we just take the school’s word for it. That’s why so many high school grads in the US can’t read. Eventually thought, alternative accrediting methods will be developed, then that will change a great many things.

      Great comment!!

  2. […] Everyone will be both a student and teacher. (see more here) […]

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