Rapid Response: How Campus won over Sam Altman & Shaq, with founder Tade Oyerinde

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Join us at masters of scale dot com slash apply twenty six. That's mastersofscom slash apply. Twenty six. With campus, everyone knows, like maybe we won't succeed. I don't know what the odds are. But

Why? But If we win and every American gets skills and knowledge with no debt. That's a completely different country. In most businesses, there's this sort of inverse relationship between what's good for the world and what's good for the company.

One of the things I love about this model is Students graduating is good for students. good for our country, it's good for society. and it's good for our bottom line.

That's Tade Oyarinde, founder of Campus, an online community college that's shaking up the world of higher education, with backers like OpenAI Sam Altman and NBA icon Shaquille O'Neal. I wanted to talk to Tade now because Higher Ed is facing all kinds of new pressures, cultural and financial, with student debt at record levels and the value of traditional education under assault. Tade shares with me the rapid responses he's gone through in scaling campus, including a recent conversation with a prospective student that dramatically shifted how he thinks about campus' mission. Kate also talks about his personal experiences with Sam Altman and the importance of looking decades ahead, even as we adjust to fast shifting dynamics right now. I'm Bob Safian.

And this is rapid response. I'm Bob Safian and I'm here with Tade Oirende. Of campus. Tane, thanks for joining us. Thanks for having me, Bob. Excited to be here.

So this time of year Students go back to school. You started campus in twenty twenty two, the US's first online community college. Tuition is only around seventy two hundred dollars, and it's taken off. attracting professors from places like Princeton and NYU. What's the goal, the the mission of campus? Sure. Look, I think you know, if you if you think about over the last thirty years as four year universities become so expensive.

Today almost half of all undergrads will start off at a community college. And community colleges, when they work, are awesome. You go there, you take two years. Typically they're a lot less expensive. And then you can still transfer into a four year university. You still get the degree and the prestige and the employment benefits that come from having, let's say, a Penn State degree, for example.

But with half the cost. Typically community college is so inexpensive that you can actually cover it completely with federal grants, uh particularly the the Pell Grant. Which is about seventy five hundred dollars a year. The problem is most kids who go to community college don't complete. about two thirds, sixty eight percent of uh students who go to community college will never graduate.

And unfortunately they will leave and an average of fifty seven hundred dollars in debt. Yeah, there is a lot of debt out there, right? Trillions of dollars in debt. Yeah, we're about to pass two trillion dollars next year. in in federal student loan debt. And so

It's a big problem. And um in twenty twenty I decided And hey, what would it look like to rebuild sort of the community college experience, but In a postcovid world with live online courses.

Taught by A distributed network of Professors who also teach at top schools like UCLA. Princeton, NYU, Morehouse, et cetera. So that was the big vision.

And we ended up You know, getting lucky in a lot of ways and and being able to bring it to life. I mean that as you mentioned like the cost of higher education just keeps going Up and up and up. And it it kind of seems like that's accepted and sort of the community college model is sort of a way around that, right? Like is that the way you think about it? Yeah, I mean w why would you pay

you know, sixty thousand dollars a year. Um to go to a a four year university for the first two years when you could pay nothing. um by starting off at a community college and then transfer, you still get the same credential, the same degree. And and the answer is because four university's awesome, right? It's It's a dating app. It's a social networking app. It's country club for like, you know, the upper middle class and wealthy.

And if you're in those categories, that's great. But it Is not logical for most Americans to spend that kind of dough. for those first two years just that freshman experience.

And the transferring from a two year to a four year school to get a degree. Like Is that easy? I mean that i is that something that campus is working on trying to make easier? Well, it's not. Um, students lose on average about a third of their credits when they transfer from an average community college to an average four year university.

And that's really annoying. 'Cause these kids are disproportionately likely to be the first in your family to go to college. Yeah. Typically middle to lower income.

And so To say hey, I know you took calculus one and you passed, you got an A. But we're not taking that. You got to redo it. It's just slap in the face. And it's not productive.

And so yeah, we're doing we're doing a lot of work to try and make that transfer process as efficient as possible. The first thing we do is we sign uh what are called guaranteed admissions agreements. We haven't actually announced these yet, but I guess I'll give you the scope here. Recently just

signed a deal with uh Arizona State University and Butler University. Any student comes to campus and gets a two point five GPA. Or a a three point oh GPA butler. They get automatically admitted into ASU and Butler.

as juniors with full junior standing, that's a game changer. That's what this is about. Students need to be able to know you know, when I'm coming to campus, I'm not even really going to get a campus degree. I am a pre ASU student. I am a pre- Butler student. That's kind of how they need to think about um what they're doing when they come here. But the main difference is our tuition is so inexpensive that the Pell Grant Completely covers it. And so eighty six percent of our students pay nothing out of pocket.

uh the federal government covers it completely. More than half of your students are Black or Hispanic, seventy percent are women. I think most are are as you mentioned are first generation uh college students. Yep. Your your graduation rates though are Are above

What the averages are. So You approach this population differently than other schools. How do you do that? Yeah. So if you look at the the landscape Up seventeen point four percent of kids who go to community college. We'll graduate on time.

Less than one in five. That's crazy. Yeah. If you look at The one bright spot on the map that's way above The sort of the pack. CUNY's ASAP program.

here in New York City. They basically figured out there's several key components. But the first is Stop nickel and diming students. Hm. charging them exam fees or textbook ridiculous four hundred dollars for textbook. Cut all that out.

You cover your tuition, everything's included. No BS surprise fees. Two You gotta pair every student with a success coach. This is basically A professional Nigerian mother who's logging in to your classes. Checking your grades, making sure you're getting your assignments in, um, like my mom did when I was an undergrad. And uh and just making sure you stay on track. And we basically said,

Wow, why isn't every community college doing this? And the answer is it's too expensive. Now I you know, you tell me I can't do something, it's exactly what I want to go do. I opened up a spreadsheet back in twenty twenty, figured out how to make the math work. Um so that every student could actually get That's slightly better. I think offering so what we do

We give every student a laptop. And we pay their wifi bills. So it doesn't matter what your home internet situation is, you can take our classes to All of our classes are live online. So it's not like pre recorded. videos on Coursera or edX. This is like you're meeting this Princeton or UCLA professor face to face for three hours every single week. Right. And so that's super important.

for young people today t if you want accountability. to be a part of what motivates them to come to class. Like they Are both trying to impress the professor on the TAs and and not disappoint them. But then there's also like

social dynamics, oh my friends are gonna be in class. Oh, this girl I think is cute is gonna be in class. This guy I think is cool. Like, you know, all of that stuff is what motivates 18 year olds and 19 year olds to do things. We provide every student with mental health counseling. So the uh they have the off option of of actually setting up a a monthly call with uh mental health counselor, which is really important. And uh of course students don't have to pay anything out of pocket if they're Pell eligible, which eighty six percent of students are. So you offer all these additional services You also, as I understand it

Pay your professors, your adjuncts double the national average. How c how do you afford to do all of that? And still keep your tuition As low as everybody else's.

Yeah. So the average professor, a lot of people don't know this at a school like a a UCLA or a Princeton is probably gonna get about four to five thousand dollars per class that they teach. We we pay our professors eight thousand dollars per class. I discovered this in twenty eighteen. I was at UCLA meeting with professors and um I I got into this guy's office and he's got an air mattress next to his desk. And he explains to me. what it really means to be an adjunct.

Most adjuncts are recent. you know, PhD graduates who uh you know basically never gonna get a tenure track job and they're kind of the Uber drivers of higher education. They earn so little. In fact, a Berkeley study I came across. Found that about twenty five percent of

of all adjuncts in the country uh live on at least one welfare program. So we um we pay them double the national average wage. It's life changing for these faculty. But so how do we make the numbers work? The first is

You got to use software to do all of your back office operations. How can you be as efficient as possible so that you spend as little operating, doing all the stuff that doesn't actually affect students' experience directly. And then the second piece is average class size. You basically need to put About a hundred students in every class. to make this efficient. What a lot of community colleges do is

They offer way too many classes. They'll say things like If one student One student. Wants to study sexuality in the ancient Mayan Empire before the Spanish arrival.

Like Then they have to offer that class. And so you're losing money on that class. Right. You're losing a ton of money on a class because you stuff to pay the professor the same, whether or not there's one kid or a hundred. And so and so what you actually need to do is is basically say Hey, look. There's a lot of value to a lot of these electives.

But what are we here to do? Are we here to help you explore? the limits of human knowledge and history and go deep on those things. No, we are Here to help young people figure out their purpose. And then identify

And acquire the skills and knowledge. to turn their purpose into their career and then transfer into a four year school. or get a g uh place into a great job when they graduate. That's our purpose. And y you mentioned earlier uh Coursera and and edX that do these large asynchronous classes. That seems like that would have the most financial leverage because you just

have to pay the sort of teacher once and then you can keep using the class Over and over again. But y you feel like that doesn't work even for part of your model. Just go on YouTube if you just want an asynchronous experience. There's enough good content. Khan Academy, there's enough good content out there if you just want an asynchronous experience. Most people need, I think, more motivation, more accountability. Um more interactivity and engagement than that format affords. And so so live online, I think is is sort of the

the holy grail that n no one no one had really executed on. And the simple reason was that the technology just wasn't there. There weren't enough Americans with high bandwidth To support what we're doing right now. The cameras weren't good enough. The audio quality wasn't good enough. And obviously with COVID. All of the professors in the country, like overnight got Baptized in like this training for how to do live online. The students learn about it. Every you know, some students really want that format. as a sort of middle ground between going into campus and just watching pre-recorded videos. So yeah, that's we're kind of all in on on the sort of synchronous

For that. The investments that you make in services for your students. Well they can cost you something if you have a a lower dropout rate than other schools, a lower churn.

Then from a Business standpoint That can kind of help pay for itself. I mean Is that part of the business model? Also, like, does that help you in that way?

Well, you just have the secret. Uh the quiet part out loud. But yes, that is the kind of genius thing that The business model that we discovered. If you actually have better graduation rates, better persistence and retention rates,

your lifetime revenue per student actually goes up. Right. So most community colleges will lose fifty of students Every single year That's lost revenue. Like now they're not oriented to really think this way because they don't think of themselves as a business offering a service to customers. They kind of think of themselves, you know, it's like, oh, you have to apply to come to our school, and we will decide whether or not we want to serve you and whether or not you graduate, sink or swim, it's all up to you. That's kind of the the whole posture of our higher education framework. Most schools are just

They should really. Flip the model like we have, and they say no. Students are our customers, helping them acquire skills, knowledge. And then giving them a credential that proves that they have those skills and that knowledge. That's the service. And when you think about it that way, yes.

If your customers are leaving out the door and they're not coming back, well, what are you gonna do? You're gonna try and do everything we can. to stop them. And then when you do that, your revenue per student goes up. Per customer goes up, and then you can actually spend more. To try and keep more customers. And by the way. It's

It's one of the things I love about this model is Students graduating is good for students. It's good for our country, it's good for society. And it's good for our bottom line.

Tate is a classic entrepreneur, looking at an existing model, in this case education, and rethinking it in fresh ways. I'm sure I'm not the only one, but it's mystified me that the cost of college has gotten so extreme and keeps going up. It's just not healthy for a business model to keep pricing yourself out of customers. Especially when what you deliver is so important individually and across society. After the break, Tale takes us through a specific rapid response that's forced him to think differently. Plus, he shares his experiences with Sam Altman of OpenAI and more. Stay with us. When you build substantial wealth through your business, it's often tied up in a single equity position. The upside is real, but so is the risk, and knowing when to act isn't always obvious.

Creative planning works with business owners to build a strategy around concentrated equity. When to diversify, how to manage tax risk, and how to protect what you've spent years building. Creative planning where wealth works together. Learn more at creative plating dot com slash masters of scale. Hey listeners, Bob here. If you listen to Rapid Response on Masters of Scale, you may be missing half the show.

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That is human centered. I'm Rana El Calyubi. And on my podcast Pioneers of AI, we answer that question and so many more. As an AI scientist, entrepreneur, and investor, I know what it takes to build AI that works for everyone. Every week, I sit down with the pioneers shaping our future. And we take you behind the scenes of the AI that's transforming our lives. Find pioneers of AI wherever you tune in.

Before the break, campuses Tade Oyerende explained how community college can help resolve America's education debt problem. Now he takes us through a new rapid response he's undergone, what he learned from his dealings with Sam Altman and OpenAI, and the one piece of advice he gives others about fundraising. Let's jump back in. Your title at campus isn't CEO, it's Chancellor. Wha w why is that? What what's the difference between a chancellor and a CEO? One of the challenges of of building campus has been Are we a tech company?

Or are we a college? And we're both. But man, if that's not hard to get across to people. You know, we've bought in people from some of the best tech companies and You know, maybe they come from Uber or DoorDash, for example. Let's say you have an Uber driver who gets bad ratings. Great, you just kick him off the platform. No big deal.

Right. It's a business, it's for profit, they're grown ups. That's how it works. If we have a student Who's disrupting class you know, being a little bit cheeky, maybe, you know, kinda sassy with professors and TAs and a little bit unpleasant and distracting with classmates.

You can't just kick them out like that. Like that's a that's a that's a student. That's a young person. Like we know, we have to serve them. We have to take this Thoughtful, methodical You know, ethical. nuanced approach to dealing with that student, but at the same time. You don't want to run like a typical college.

'Cause they're not efficient. You need to be both. And so I've I thought you know, I thought it was super important that we give folks in the company names and titles, certainly in leadership that reflects this duality. How much do you Personally interact with campus students.

Not As much as you might think. Like I'm an engineer. I'm not a social worker. I'm not a Teacher.

You know, our first cohort of students was like 14 kids or something like that. And so I met every single one of them to talk to them, understand, you know, why they came, wh why they responded to our marketing, you know, what their experience was like. We recently partnered with Forever Twenty One. to become their official education benefit provider. We also haven't announced this, but I'm Just uh breaking all the news. So if you're a Forever Twenty one employee, you get to

Go to campus and Yeah, take some classes for free. I went on a tour with my chief of staff, just went and visited a bunch of Forever Twenty One stores. me just walking up to these like twenty two year old uh employees like, Hey, wanna have some beer and coffee in the back room and talk about your future? Like it's like that's that's literally that's literally what I was uh what we were doing. We sat on one girl. She goes like

Really what I want to do is I I really want to open an animal shelter. I know I need to save up money for like forty years and then and then probably when I'm ready to retire, I'll open an animal shelter. I was like Huh. Did you know that there are people Who's Job it is to give away small business loans to people just like you.

She looked at me like I just told her aliens were real. Like, mine. Alone. That experience kinda changed my my my whole um My whole outlook on what we do and Really now.

I I see our work is as so much more around One. Helping students identify their purpose. You know, what did God or the universe or whatever you your preferred language is put you on this earth to go do? What are you naturally gifted in?

What are you naturally passionate about? And then What are the things at the intersection of those two things that the world is willing to pay you to do? So that's kind of how I I frame what we do now. It's very different from just oh go to college. Get the support you need to create the life that you've always dreamed of. That's what we do. Among your investors you've got

Open AI, Sam Altman, Shaquille O'Neal, just Sign those as an investor, like Do each of these characters give you advice? Do you rely on them for different things? Sam Altman. I mean this I mean this guy's

Crazy guy. He went to community college before Stanford. A lot of people don't know that. And so when I met him I mean it was like a shotgun wedding. I mean we met on like a Monday And then we just texted all week, did a couple of zooms, and like by Thursday, he r he he wrote the check. Like It was not like a typical investor process of meetings and meetings and meetings and meetings and meetings. He's like, Yeah, I've been looking for this exact you know concept. I think he's very thoughtful about

the disruption that AI is gonna bring to a lot of you know entry level knowledge work. And I don't I don't think anyone has any faith that traditional higher education is gonna be sufficiently dynamic and responsive. to the changing reality, you know, shifting the skills, the curriculum. To make sure students are prepared for a new world. You know, Sam's weird. Like he's got this like this

This world view. And I think he's like Investing in companies to like build all the different aspects of what he thinks the future looks like. I think the way he evaluates these deals is like okay.

He looks in his like Diary. And it's like it probably has something that says like the year twenty fifty. And he just like has every aspect of society and he goes okay, does this is this consistent with

My my future predictions on education in twenty fifty. Okay, cool. He'll cut the check. So um And then Shaq's awesome. Shaq's like he's helping us get the word out. He's got a real unique experience with education, unlike any other athlete. He won a championship with Kobe. And then immediately went back and finished his degree at L SU. That's unheard of. That's unheard of. Nobody does that. Nobody wins a ring. NBA champion.

You know, getting fifty million a year. When he's gonna go and finish a college. It's just bizarre. But um and then he went and got his master's, and then he went and got his a doctorate. Like he He loves education. He actually called me uh recently, yeah, with some new ideas on education. He so he's obsessed with education. I think he li's extremely competitive. He wants to win. He sees it as a game that he has to win. But in general with fundraising and with investors, I think

The one piece of advice I always give to founders now is Make your company So important. Even if it's high risk. Such that if it wins, the world is changed.

With campus, everyone knows like maybe we won't succeed. I don't know what the odds are. But But But If we win and every American gets to get skills and knowledge and make their purpose their career with no debt.

That's a completely different country. Right, that's like a whole different society where anyone can raise their hand and say, Hey, I want to learn something useful so I can contribute to society and in exchange earn enough to create a great life. That's a completely different world. Crime is lower, life expectancy is higher, you know, civic engagement is better. I think founders should should always think about. If I win, does this Is the world fundamentally different? And if not, then make your company more ambitious, make it more important, because it'll actually make fundraising easier.

Well, Tali, this has been great. Thank you so much for doing this. Of course. Kate is intent on flipping the model of higher ed and he's definitely been making waves. The question now is how much other schools will take note and extend the model. What I take away from our talk isn't just about education, though. It's about

Focusing on who your organization is trying to help and in what ways. It's so easy to get distracted by the tumult of the moment. And lose sight of your bigger goals and priorities, especially when the world is changing so fast and old ways of doing things don't work the way they used to. I hope this show helps you maintain focus on the things that matter most. I'm Bob Safian. Thanks for listening.

Rapid response is a Wait What original. I'm Bob Safian. Our executive producer is Eve Tro. Our producer is Alex Morris. Assistant producer is Masha Makutonina. Mixing and Mastering by Aaron Bastanelli. Theme music by Ryan Holiday.

My head of podcast is Letal Malad. For more, visit rapidresponsshow.com.

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