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

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1:54That's Tade Oyerinde, founder of Campus, an online community college that's shaking up the world of higher education with backers like OpenAI's 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. Tade 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.

2:41I'm Bob Safian, and this is Rapid Response.

2:50I'm Bob Safian. I'm here with Tade Oirende of Campus. Tade, thanks for joining us. Thanks for having me, Bob. I'm excited to be here. So this time of year, students go back to school. You started Campus in 2022, the U.S.'s first online community college. Tuition is only around$7 ,200, and it's taken off attracting professors from places like Princeton and NYU. you. What's the goal, the mission of campus? Sure. Look, I think, you know, if you think about over the last 30 years, as four-year universities become so expensive, today almost half of all undergrads will start off at a community college.

3:31And 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, particularly the Pell Grant, which is about$7 ,500 a year. The problem is most kids who go to community college don't complete. About two-thirds, 68 % of students who go to community college will never graduate.

4:07And unfortunately, they will leave and an average of$5 ,700 in debt. Yeah, there is a lot of debt out there, right? Trillions of dollars in debt. Yeah, we're about to pass$2 trillion next year in federal student loan debt. And so it's a big problem. And in 2020, I decided, and hey, what would it look like to rebuild sort of the community college experience, but in a post-COVID 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 getting lucky in a lot of ways and being able to bring it to life.

4:48I mean, as you mentioned, like the cost of higher education just keeps going up and up and up. And 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. Yeah, I mean, why would you pay$60 ,000 a year to go to a four-year university for the first two years when you could pay nothing by starting off at a community college and then transfer? You still get the same credential, the same degree. And the answer is because four-year university is awesome, right? It's a dating app. It's a social networking app.

5:28It's country club for 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, is that something that campus is working on trying to make easier? Well, it's not. 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 because these kids are disproportionately likely to be the first in your family to go to college they're typically middle to lower income and so to say hey i know you took calculus one and you passed you got a a but we're not taking that you got to redo it it's a 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.

6:34We haven't actually announced these yet, but I guess I'll give you the scoop here. We actually recently just signed a deal with Arizona State University and Butler University. Any student comes to campus and gets a 2.5 GPA or a 3.0 GPA at 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 what they're doing when they come here.

7:10But the main difference is our tuition is so inexpensive that the Pell Grant completely covers it. And so 86 % of our students pay nothing out of pocket. The federal government covers it completely. More than half of your students are Black or Hispanic, 70 % are women. I think most are, are, as you mentioned, are first-generation college students. Your graduation rates, though, 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 landscape, 17.4 % of kids who go to community college will graduate on time.

7:49Less than one in five. That's crazy. If you look at the one bright spot on the map that's way above the sort of the pack. It's actually 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, charging them exam fees or textbook,$400 for a textbook, cut all that out. You cover your tuition, everything's included. No BS surprise fees. Two, you got to 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, like my mom did when I was an undergrad, and just making sure you stay on track.

8:35And we basically said, wow, why isn't every community college doing this? And the answer is, it's too expensive. Now, you tell me I can't do something, it's exactly what I want to go do. I opened up a spreadsheet back in 2020, figured out how to make the math work so that every student could actually get a slightly better, I think, offering. So what we do, we give every student a laptop and we pay their Wi-Fi bill. So it doesn't matter what your home internet situation is, you can take our classes. Two, all of our classes are live online. So it's not like pre-recorded videos on Coursera or edX.

9:08This 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 if you want accountability to be a part of what motivates them to come to class. They are both trying to impress the professor and the TAs and not disappoint them. But then there's also social dynamics. Oh, my friends are going to be in class. Oh, this girl I think is cute is going to be in class. This guy I think is cool. 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.

9:39So they have the option of actually setting up a monthly call with a mental health counselor, which is really important. And of course, students don't have to pay anything out of pocket if they're Pell eligible, which 86 % 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 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 UCLA or Princeton, it's probably going to get about$4 ,000 to$5 ,000 per class that they teach.

10:18We pay our professors$8 ,000 per class. I discovered this in 2018. I was at UCLA meeting with professors, and I get 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 PhD graduates who are basically never going to 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 25 % of all adjuncts in the country live on at least one welfare program. So we pay them double the national average wage.

10:58It'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 a lot of stuff that doesn't actually affect students' experience directly. And then the second piece is average class size. You basically need to put about 100 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 wants to study sexuality in the ancient Mayan empire before the Spanish arrival, then they have to offer that class.

11:41And so you're losing money on that class, right? You're losing a ton of money on that class because you still have to pay the professor the same, whether or not there's one kid or a hundred. And so what you actually need to do 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 placed into a great job when they graduate.

12:21That's our purpose. And you mentioned earlier Coursera and edX that do these large asynchronous classes. That seems like that would have the most financial leverage because you just have to pay that sort of teacher once and then you can keep using the class over and over again. But 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, more interactivity and engagement than that format affords.

12:57And so live online, I think, is sort of the holy grail that 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 learned about it. Some students really want that format as a sort of middle ground between going into campus and just watching pre-recorded videos.

13:31So yeah, we're kind of all in on the sort of synchronous format. The investments that you make in services for your students, while they can cost you something, if you have 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, 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?

14:16So most community colleges will lose 50 % of students every single year, and 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 whole posture of our higher education framework. Most schools are just, they should really flip the model like we have.

14:48And 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 going to do? You're going to 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 one of the things I love about this model is students graduating is good for students.

15:23It's good for our country. It's good for society. And it's good for our bottom line. Tade 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, Tade 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.

16:02Stay with us.

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17:01And here's the best part. Join AWS Activate today and you could score up to$100 ,000 in AWS credits tailored to your stage and network. Go to aws.amazon.com slash activate and start building. Expanding your business in the US can feel like a maze. Every state has its own payroll, benefits, and compliance rules, which can pull your focus away from growth. That's why founders use Deal. Deal is the professional employer organization, or PEO, that gives you a dedicated HR expert plus Fortune 500 level benefits for your team. The National Association of PEOs says businesses can grow twice as fast if they use one.

17:44So if you're scaling, make it simple with Deal. Go to deel.com slash MOS and get up to three months free. Before the break, Campus's 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 at OpenAI, and the one piece of advice he gives others about fundraising. Let's jump back in.

18:19Your title at Campus isn't CEO, it's Chancellor. Why is that? What's the difference between a chancellor and a CEO? One of the challenges 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. We've bought in people from some of the best tech companies. And 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 them off the platform. No big deal. It's a business. It's for-profit. They're grownups. That's how it works. If we have a student who's disrupting class, being a little bit cheeky, maybe kind of sassy with professors and TAs and a little bit unpleasant and distracting with classmates, you can't just kick them out like that.

19:08That's a student. That's a young person. We have to serve them. We have to take this thoughtful, methodical, ethical, nuanced approach to dealing with that student. But at the same time, you don't want to run like a typical college because they're not efficient. You need to be both. And so 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. I'm an engineer. I'm not a social worker. I'm not a teacher. Our first cohort of students was like 14 kids or something like that.

19:52And so I met every single one of them to talk to them, understand why they came, why they responded to our marketing, what their experience was like. who recently partnered with Forever 21 to become their official education benefit provider. We also haven't announced this, but I'm just breaking all the news. So if you're a Forever 21 employee, you get to go to campus and take some classes for free. And so I went on a tour with my chief of staff, just went and visited a bunch of Forever 21 stores. Me just walking up to these like 22-year-old employees like, hey, want to have some beer and coffee in the back room and talk about your future?

20:27Like, it's like, that's literally what I was, you know, what we were doing. We sat down with this one girl. She goes like, really what I want to do is I really want to open an animal shelter. I know I need to save up money for like 40 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 whose 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. It's like, mind blown. That experience kind of changed my whole outlook on what we do. And really now, I see our work as so much more around, one, helping students identify their purpose.

21:10You know, what did God or the universe or whatever 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 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 OpenAI, Sam Altman, Shaquille O 'Neal, just signed on as an investor. Like, do each of these characters give you advice?

21:46Do you rely on them for different things? Sam Altman, I mean, this guy's a 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 Zooms. And like by Thursday, he wrote the check. Like it was not like a typical investor process with meetings and meetings and meetings and meetings and meetings. He's like, yeah, I've been looking for this exact concept. I think he's very thoughtful about the disruption that AI is going to bring to a lot of entry level knowledge work.

22:25And I don't think anyone has any faith that traditional higher education is going to be sufficiently dynamic and responsive to the changing reality, shifting the skills, the curriculum, to make sure students are prepared for a new world. Sam's weird. He's got this worldview. And I think he's investing in companies to 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, he probably has something that says like the year 2050. 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 2050?

23:07Okay, cool. He'll cut the check. So, and then Shaq's awesome. Shaq's like, he's helping us get the word out. He's got a really unique experience with education. I'm like any other athlete. He won a championship with Kobe. and then immediately went back and finished his degree at LSU. That's unheard of. That's unheard of. Nobody does that. Nobody wins a ring, NBA champion, getting 50 million a year when he's going to go and finish at college. It's just bizarre. But then he went and got his master's and then he went and got his doctorate. Like he loves education. He actually called me recently with some new ideas on education.

23:41So he's obsessed with education. I think he'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?

24:20That'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 in an 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 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, Tade, this has been great. Thank you so much for doing this.

24:53Of course. Tade 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.

25:32I'm Bob Safian. Thanks for listening.