Tuesday, 23rd January 2018

2U Breaks The (Online) Mold of Business as Unusual

Posted on 06. Jun, 2013 by in Blogs

Chip Paucek, CEO and Founder of online education platform 2U, began this afternoon’s program at MAVA’s Capital Connection 2013. His presentation captured my attention because unlike many businesses, 2U has not simply replicated a conventional business model and put it online. Nor did they copy the 500 lb. gorilla (aka University of Phoenix). Instead, when 2U launched in 2008, they began with a clear vision to change people’s lives through online education. Looking at the business through this particular lens has resulted in what Paucek thinks of as a high-touch business.

Creating A High-touch Online Business

While the idea of high-touch seems to be at odds with an online business, it really isn’t if the company puts people at the core its priorities. Amazon provides a prime example. At Amazon, the customer experience rules. My perception is that the student experience rules at 2U. The company uses the following four pillars to break the mold of online business as usual:

  1. Great asynchronous content
  2. Live classes
  3. Social, peer-to-peer networking
  4. Work local with every student

Okay, so everyone in this space probably offers asynchronous content. The point Paucek makes about content hinges on quality. 2U offers the same content online that each sponsoring university offers on campus. Reading between the lines, the company does not offer red-headed step-sister type programming. Students pay the same tuition for online education as for a degree earned on campus and get an experience that equals or exceeds a sheepskin earned in the conventional manner.

You Still Have to Show up for Class

In addition, students are required to attend live classes. The nearly 8,000 students currently enrolled in 2U programs enjoy an average class size of 12.3. The profs say this venue creates more intimacy because there is no back row. Students have to prepare for class.

Feet on The Street

While the social networking aspect of the program seems self-explanatory, the concept of working locally with each student does not. Consider this. Georgetown University offers a nursing program through 2U. As part of the program, the company will find preceptors (trained by Georgetown) and I’m assuming externships so that the nursing students get the same experience as those who get their degrees on the main campus. One hundred people directly support students in a similar manner at this time.


In fact, 84% of students are either still enrolled or have graduated from the first three programs offered by 2U—two of which are degrees from the University of Southern California. The company currently boasts 1,000 graduates, a higher percentage of job placements than other higher ed programs, and 1,146 live classes delivered each week. Paucek forecasts that 10,000 students will be enrolled in the program next year. Considering the business model (including revenue share with partner universities), these outcomes provide a number of reasons for other startups to break the mold when it comes to market entry.

How Does Your Company Rate?

On a separate note, when Kadoo participated in CapCon a few years ago, we manned our station and gave product demos throughout the event. Today, only a couple of companies held their stations. While I recognize that the format for CapCon has changed, if you’re not manning your booth, then it’s hard for attendees to assess the true nature of your company. Sure. Your six minute presentations tease the audience to ask more questions. That said, we shouldn’t have to work to find you in the crowd.

Frankly, I want to observe your team in action. Watching you interact with other people offers insights into your companies that your presentations gloss over. And if you read last week’s article, you know what criteria I’m seeking to evaluate the likelihood of your long-term success.

Post By Marcia Moran (314 Posts)

Marcia Moran

Marcia Moran

Marcia Moran helps organizations reimagine what’s possible and provides the framework for clients to achieve stellar, long-term results.

As a Performance Architect, Marcia uses the principles discovered through neuroleadership and positive psychology to deliberately design the employee experience and corporate culture. Blended with pragmatic systems design, these elements free people to play to their strengths while reducing strife in the workplace. As a result, people can push beyond their known limits as individuals, as teams, and as companies.

Marcia is also the Vice President of Marketing for Intelishift, a colocation company with operations in Ashburn, VA and Silicon Valley. Prior to moving to the Metro DC area, she worked as a business consultant for Up ‘N Running and advised startups and small businesses in the areas of management, operations, and marketing.

Marcia earned an MBA from Chapman University. She loves to travel, speaks Norwegian, and unwinds by kayaking and painting landscapes. Marcia recently co-founded Positive Business DC with Shannon Polly and Donna Hemmert. Positive Business DC provides resources to help people increase the levels of well-being in the workplace and at home.

Website: → Performance Architect


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