As Education Strategy’s revenue-share business in higher education was winding down, I had an opportunity that would fundamentally change my perspective on the industry.
I joined the University of Maryland University College (now University of Maryland Global Campus) as Vice President for Strategic Initiatives and became part of the university’s cabinet. I worked extensively on non-degree programming and the National Leadership Institute.
At the time, UMUC had approximately 94,000 students globally.
That was a very different environment from the small, nonprofit liberal arts colleges I had primarily served throughout my career. Working at that scale became an important training ground for what came next: the rise of the Online Program Management company, or OPM.
Revenue Share 2.0
In 2014, I joined 2U, Inc.
The first half of my decade-plus at 2U was primarily focused on the United States. I was recruited by Rob Cohen as Senior Vice President for New Program Implementation.
My mandate was straightforward to describe but difficult to execute: build a program implementation model that could scale rapidly and keep pace with 2U’s extraordinary growth ambitions.
The challenge was balancing two very different operating cultures.
We needed to launch high-quality online programs quickly, while recognizing that higher education institutions move more deliberately. Academic governance, faculty engagement, accreditation, curriculum development, and institutional decision-making cannot simply be accelerated because a company has a quarterly growth target.
But speed mattered.
This was Revenue Share 2.0.
I eventually began using a phrase that captured what I believed was really happening:
Revenue sharing is actually risk sharing.
The difference between the model I had known since 1996 and the emerging OPM model was profound.
In Revenue Share 1.0, the institution generally carried most of the financial risk. The institution invested in marketing, infrastructure, and the initial launch. We provided curriculum, expertise, and implementation support and were compensated through a percentage of tuition revenue once students enrolled.
In the 2.0 model, the OPM assumed much more of the risk.
At 2U, we often invested heavily before a program generated meaningful revenue. Even after a program launched and revenue sharing began, it could take three to five years for 2U to recover its initial investment and reach break-even.
These economics drove the long-term contracts we negotiated—often seven to ten years.
It was a substantial gamble.
The bet was that 2U could successfully build and operate the program, and that the strength of the university’s brand would ultimately generate enough enrollment and revenue to justify the investment.
Learning to Scale
My first major implementation opportunity came quickly.
In 2015, I helped launch American University’s Master’s in Business Analytics.
At the time, we were launching approximately seven new master’s programs per year across different universities. But it quickly became apparent that the potential U.S. market was far larger than that.
Soon, we were being asked to support ten, twelve, fifteen, and eventually more new partnerships and programs each year.
That changed the nature of the business.
We could no longer think about business development simply as selling another program. We had to develop a repeatable process for identifying, evaluating, selling, designing, and launching partnerships at scale.
By 2016, Rob Cohen—then 2U’s COO and my boss—introduced me to Andrew Hermalyn, who then served as 2U’s General Manager of the Syracuse University partnership.
Rob charged Andrew and me with working together to expand 2U’s university partnership footprint.
Andrew and I quickly developed a new rhythm.
We recognized something that became fundamental to our approach:
There were two equally important sales in higher education.
There was the business sale, which Andrew championed.
And there was the academic sale, which I championed.
Both had to happen.
You could have a compelling financial proposition and still lose the deal if the faculty didn’t believe in it. Conversely, you could have faculty enthusiasm but no viable business model.
My title eventually changed from SVP of New Program Implementation to SVP of Program Strategy, reflecting that broader responsibility.
Winning the Academic Sale
Faculty at highly regarded universities appropriately had an outsized voice in whether an online partnership would succeed.
They needed to be convinced that the integrity of their instruction, the quality of their academic discipline, and the outcomes of their students would be preserved—or potentially enhanced—through an engagement with 2U.
That required a very different kind of conversation.
We weren’t simply selling technology.
We were talking about pedagogy.
We were talking about faculty roles, academic quality, assessment, student engagement, clinical education, and what it actually meant to translate a high-quality residential program into an online or blended environment.
Andrew and I became extremely successful with this approach, first at Syracuse and then across the country.
Based on that success, Andrew built a team of University Growth executives.
I built a corresponding team of Program Strategy professionals.
I selected those people very carefully and often affectionately referred to them as “recovering academics.”
I was looking for people who understood the Academy from the inside but also possessed strong business acumen.
They were difficult to find.
But when we found them, they were exceptional.
The Academic Conversation
Every conversation with faculty was different, but several stand out in my memory.
One of the most memorable was our first Doctor of Physical Therapy partnership, with the University of Southern California.
I remember sitting with Dr. Jim Gordon, the chair of the program. At the time, USC’s DPT program was tied for the #1 ranking in the country.
He explained why he was even willing to consider an online or blended model.
He wanted the program to still be #1 ten years later.
And he understood that remaining at the top would require the program to evolve.
That conversation led to countless hours of work deconstructing the curriculum.
We examined every course and separated what was fundamentally didactic from what required hands-on instruction. We explored emerging technologies and asked a deceptively simple question:
What can actually be taught online?
And perhaps more importantly:
What can’t?
At one point, Dr. Gordon said something that has stayed with me:
“You can now demonstrate how to help someone move an elbow online, but you can’t show them how much pressure to apply.”
That observation became a design principle.
We developed on-ground clinical and practical experiences so that online students could return to campus to master the hands-on components of the degree.
It was a fascinating moment in the evolution of online pedagogy.
And it worked.
The lesson wasn’t that everything could be moved online.
The lesson was that the right combination of online learning, technology, faculty expertise, and in-person experiences could create a different—and potentially very effective—educational model.
The OPM Takes Off
2U’s presence grew rapidly.
The company became one of the largest and most successful OPMs in the country.
We acquired GetSmarter, based in Cape Town, South Africa, which expanded our capabilities in short-course and non-credit education. We subsequently acquired Trilogy Education, which became the foundation of our technical bootcamp business.
The portfolio expanded.
The university partnerships expanded.
The organization expanded.
It was quite a ride.
And underneath all of that growth was a fundamental shift in the economics of the partnership.
Revenue Share 1.0 vs. 2.0
In the Revenue Share 1.0 model I had known since 1996, the institution generally provided the marketing capital and carried most of the upfront financial risk.
We brought the expertise, curriculum, and implementation capabilities.
It was very much a consultative relationship.
And we often didn’t get paid until the first term of successful, tuition-paying students had been completed.
Revenue Share 2.0 fundamentally changed that equation.
The OPM assumed the bulk of the risk.
At 2U, we could provide the capital required to launch and operate the program, admissions counselors, marketing teams, student success coaches, custom content development, clinical placement teams, and much of the infrastructure required to build a successful online program.
The university, meanwhile, brought what the OPM could not—and should not—replace:
- The university’s brand and reputation
- Accreditation and institutional authority
- Faculty and academic expertise
- Curriculum ownership and academic governance
- Financial aid and registrar functions
- Program leadership
- The academic mission and institutional values
The evolution from Revenue Share 1.0 to Revenue Share 2.0 was nothing short of a sea change.
It required capital.
And lots of it.
Taking the Model Global
My role shifted again during the final half of my time at 2U.
I was appointed Senior Vice President of Global Business Development.
That meant that, in addition to continuing to expand our university partnerships in the United States, we were about to take the model global.
That opened an entirely new set of questions.
Would the U.S. OPM model work in other countries?
How would different regulatory environments affect the economics?
Would universities in other parts of the world embrace the same partnership structure?
And perhaps most importantly, what would we learn by taking what had worked in the United States and applying it globally?
I’ll explore that in my next post.
The Lesson
The most important lesson I learned during this period was simple:
Understand what your prospective partner values.
Higher education institutions don’t necessarily measure success the same way a publicly traded company does. Their motivations, incentives, governance structures, and definitions of value can be fundamentally different.
If you don’t understand those differences, you may have a great business proposition and still fail to create a great partnership.
Listen first.
Understand what matters to your partner.
Then build your strategy around helping them achieve it.
Don’t start with what you want to sell. Start with what your partner needs to accomplish.
