I, For One, Welcome our New Admissions Overlords

*To paraphrase Kent Brockman

Once upon a time, there was a yellow brick road that led to college. You would submit your SAT scores, your GPA, your activities, you would write your essay – and you would submit all of this on paper! And all was good and just in the land, and all of the right students gained admission.

Utter nonsense of course! The college admissions process was a mess then, it’s more of a mess now, and it’s about to get hit by one neutron bomb everyone’s talking about (SCOTUS case which likely ends affirmative action), and another that may be even bigger.

But first, a blast from the past – I was among the last classes of students to apply on paper (Dec 1994) – perhaps one good thing about that era was that students applied to fewer colleges, since they couldn’t shotgun their application to 20 schools via the Common App or the internet. I applied to 6 schools, and had the good fortune to get into all but one. My safety school at the time even had programmatic admissions – if you had a GPA above X and an SAT above Y, you were essentially guaranteed admission, not just to the university but to the honors program!

Admissions have gotten harder since then, although the numbers are a bit of a lie, as elite schools try to lower their acceptance rates as part of the college rankings game – they use the ease of the internet to lure unsuspecting students to submit applications that have no chance of success. Admissions have also become less structured, as more and more schools have eliminated or de-emphasized testing requirements – with the occasional retrench, as my alma mater reinstated the SAT as a requirement (going to great lengths to explain that it IS actually correlated to success at an engineering school). But all of these changes pale in comparison to 2023…

College admissions will be impacted by the end of affirmative action. But they will also be deeply impacted by the rise of generative AI! I’m willing to bet that numerous high school students used ChatGPT to help write their essays this past December. And even with the new paywall, ChatGPT and its competitors are far cheaper than the pricey consultants that wealthy families use for essay ghostwriting (let’s just acknowledge that this happens). While colleges will attempt to deploy tools to stop the practice, students aren’t that dumb – they’ll add their own touch to the essays, making it hard to tell where the robot dropped the pen and where the student picked it up. So what happens to college admissions in an environment where affirmative action is dead, standardized testing is diminished, and essays are written by ML bots?

In the spirit of my days at HiddenLevers, here are a few potential scenario outcomes:

Back to Basics: Schools (in collaboration with SAT/ACT) will reemphasize controlled measures like standardized tests, GPA, class rank, and similar, since they can’t trust much else. This will dismay some and delight others, but it’s easy ground to tread since this was the norm not so long ago.

Human Interviews: Zoom eliminates a lot of the costs of the traditional college interview – but instead of using it as a “positive” tool, schools may begin to use it as employers do – as a primary filter mechanism. This approach will lead to a wide variance in outcomes just as it does with corporations (some are good at using interview-based recruitment to acquire talent, and some simply suck at it).

Welcome Robot Overlords? Here’s a guess for a post-affirmative action AI-enhanced world: admissions decisions will themselves will be handed over to machine learning. By placing a black-box trained algorithm as an intermediary between themselves and admissions decisions, colleges will achieve several goals:

1) Algorithms will likely achieve a higher fit toward whatever class composition the administration wants than human admissions officers. Simply feed in past classes or “idealized” classes and let the algorithm build such a class from the applicants. Colleges will take this approach because…

2) This decreases perceptions of bias by offloading human biases into the algorithm’s training (which leaves a lot more plausible deniability, regardless of the goals!)

3) The overall cost of running admissions, even with human oversight, will be substantially lower. And since we all know elite universities are just hedge funds with educational arms anyway…!

It’s an unsettled time for colleges and prospective students, and this post hasn’t even touched on issues like falling birth rates or the rise of alternative career pathways! But post-secondary institutions are going to have to wrestle with the impacts of ML just like the rest of us. In some situations there are clear right or wrong answers, but that’s not the case here. Would it hurt to put a robot in charge?

Business Ideas VII: GuideMe

Idea: GuideMe – an automated guidance counselor that helps students make better college and career choices

MVP: Too many students in the US leave college with too much debt and no realistic career path – in part because guidance counseling is a luxury at many American high schools. GuideMe will help fill this void, using students’ interests and strengths to show each student the college or vocational programs that will help them achieve their goals. GuideMe will also help students evaluate admissions offers to determine the best choice in terms of career ROI, taking into account both costs and future income.

Market: US high schools average one guidance counselor per 500 students, leaving most students with no career guidance except what’s available via friends, family, and the internet. In this vacuum there’s a tremendous opportunity to help students and families make better choices, with better careers and less debt the end results.

From a business model perspective, students and high schools have limited resources, but employers have a substantial recruiting need, and a successful app could funnel qualified candidates into positions at a far lower cost than traditional means of recruiting. There are over 150M working Americans, 100M of whom lack a college degree. The vast majority of that 100M employees might benefit from vocational training and placement services – almost 50% of employees change jobs annually. If the value of placing an employee is conservatively estimated at $1000 (versus the 20-25% of salary typically paid in white-collar recruitment), this leads to a total addressable market as large as $50B. [1]

Idea Score (0-10 scale): 8 points

Feasibility of MVP / Market Entry (out of 2): 2

The GuideMe MVP would leverage data on salaries and tuition published by college programs in order to determine career ROI, adjusting each career path for projected future changes. Much of this data is either publicly available or can be licensed, but it may need to be refined newer or non-traditional careers.

GuideMe would then determine the highest ROI programs for a student, based on their GPA, test scores, and interests. Virtually all of the data needed for the MVP is publicly available, though career ROI estimation algorithms vary – given my experience building HiddenLevers, this should be a competitive advantage.

Revenue Market Size (out of 4): 4

As noted above, the total market opportunity in the HR recruitment space, taking into account only the under-served vocational market, is conservatively estimated at $50B  per year.

GuideMe’s principal issue is that the initial platform rollout is devoid of any revenue generation plan – users in the cost-conscious student market are unlikely to adopt a paid guidance product. GuideMe instead intends to roll out a full-featured free product, while developing a placement product for employers requiring specific skillsets. GuideMe will be well positioned to match capable students with employers, enabling higher volume placement at a lower cost to businesses.

The challenge in building a two-sided marketplace style product is well known, but the returns to success can also be extraordinary.

Difficulty, Barriers to Entry, and Competition  (out of 2): 1

Many sites and apps exist to provide guidance in aspects of the college decision process, but none  provide comprehensive career guidance, and none utilize the concept of career ROI.

Existing competitors like MyKlovr are attempting to solve aspects of this problem, but appear to be focused on paid software approaches, which will limit growth potential. There is substantial risk involved in building  a free guidance product, and then working to link it to employment placement, but this approach is likely to capture the largest number of users in a space where massive scale is possible.

Riding Hype or a Trend (out of 2): 1

At present there seems to be little focus on this market – but if scale can be achieved among the 20M students in US high schools, then building a funnel to employers should become relatively straightforward. Very little has been done to improve the functioning of the middle of the US job market in particular – the rewards are too small for traditional HR firms to work hard at placing a plumber. Automation is the key to unlocking the scale potential in this market – and early career guidance is the key to bringing large numbers of candidates to market.

 

[1] Public companies like Randstad, Adecco, Robert Half, and Manpower show that valuations in the $5-10B range are possible in this sector.