The cost of an education is now less than your daily coffee fix … Surely it can’t be true?

– “The Most Crucial Scaling Skill? Linking Short-Term Realities to Long-Term Dreams”

– “What happens when philanthropy meets profit?”


Educating the world for $5 a month

Bridge International Academies is a chain of nursery and primary schools that delivers high-quality education for just $5 a month. They claim to be the world’s largest education innovation company. This kind of service is directed at the ~700 million families who live on less than $2 a day.

The first Bridge International Academy opened in the Mukuru slum in Kenya in 2009. The company’s mission is “Knowledge for all”, and plans to educate 10 million students, across 12 countries in Africa and Asia by 2025 (today they have a little over 100,000 students enrolled).

Lifecycle of Bridge

 

 

 

 

 

 

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There’s no way you can teach me to reed and right good for just $5 a day!!!

Bridge claims that their students gain an additional 0.34 standard deviation on core reading skills and an additional 0.51 standard deviation on mathematics compared to their peers in neighboring schools. This is based on USAID-designed exams administered by an independent monitoring and evaluation company and can be translated into over 250 additional days of learning. Three pupils from Bridge’s standard 8 class have been awarded full scholarships to complete secondary school at exclusive American private schools. These scholarships are valued at $216,000. Put that in perspective compared to living on $2 a day!

Why can’t I just go to the government funded schools for free?

700 million families translate into ~2.7 billion people living on less than $2 a day. Within these communities there is a huge gap between the education offered and the needs of the students. Teachers are absent from class as much as 47% of the time and 65% of teachers can’t pass exams based on the curriculum they teach. Furthermore, these schools can be expensive for these communities. Even “free” government schools can cost $2-12 a month after all the additional costs are factored in.

So how do they actually pull this off?

Bridge offers an “Academy-in-a-box” model and their success lies in their vertically integrated system. They have re-engineered the lifecycle of basic education, leveraging data, technology and scale.

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Using technology and data, Bridge drives enormous efficiencies both in terms of the overhead costs required to run an academy and in terms of increasing the quality of the output.  For example, a Bridge academy has only one employee involved in management, the Academy Manager.  The vast majority of non-instructional activities that an Academy Manager would normally have to deal with (billing, payments, expense management, payroll processing, prospective admissions, and more) are all automated and centralized through a combination of the Academy Manager’s smartphone application and the Teachers’ tablet application, all interconnected to a custom backend ERP.

This systemization frees the Academy Manager to focus on the critical work that must be executed locally, overseeing classroom instruction and building and managing relationships with parents and the local community. On the instructional side, Bridge invests in and employs world leaders in education to develop comprehensive teacher guidelines and training programs. Using their highly efficient delivery mechanism (marrying talented individuals from each community with technology, scripted instruction, rigorous training, and data-driven oversight), Bridge is able to bring some of the world’s greatest instruction and pedagogical thinking into every classroom in every village and slum in the world.

Bridge offers standardized, yet customizable, instruction with a focus on time-on-task, which has been proven to be the most important tenet in delivering basic education. The curriculum is developed and then scripted in-house. This takes the burden of planning countless new lessons away from teachers. The scripted curriculum includes step-by-step instructions explaining what teachers should do and say during any given moment of a class. Essentially, Bridge gives pupils access to the types of teachers they would never be able to afford.

Teacher scripts are delivered through data-enabled tablets, which sync with Bridge headquarters, giving them the ability to monitor lesson pacing, recording attendance and tracking assessments in real-time

Bridge also creates their own books, manipulatives, instructional songs and symbols for enforcing positive behavioral management which they are able to produce locally at an extremely low cost.

Okay I get it, there is demand for this, but there is no way you can be profitable by charging me $5 a month!

Let’s clear the air here. This company is definitely for profit. In an industry that has long been the domain of governments, churches and non-profits, Bridge takes an unabashedly capitalist approach. In our RC TOM class, the focus has been on creating and capturing value through the operating process, we have established that the operating model is innovative and has significant competitive advantages, so the big question you must be asking yourself is whether this company is actually profitable and can it be profitable?

To be honest, I have no idea. This is a private company where financials are not disclosed. A few years ago Bridge was looking for growth financing and I looked into the economics of the business. Completely back-of the envelope and “outside-in” analysis showed that Bridge would only break-even at approximately 1 million students and I felt that this number is unattainably high given all the other factors in play.

However, people much smarter and successful than myself have indeed invested in Bridge International Academies.

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So what do you think? Clearly the business model is innovative and the operating model sets this company apart from competitors but can this company achieve their goals of 10 million students by 2025? How many students do you think they need to breakeven? Would you invest in this company today?

Let me know your thoughts in the comments section below …

References:

  1. People Daily: http://www.mediamaxnetwork.co.ke/people-daily/184821/bridges-top-three-win-us-secondary-school-scholarships/
  2. NPR: http://www.npr.org/sections/parallels/2013/11/12/243730652/do-for-profit-schools-give-poor-kenyans-a-real-choice
  3. Euronews: http://www.euronews.com/2015/10/30/innovative-education-ideas-reap-rewards-and-awards-in-kenya-and-ghana/
  4. Bridge International Academies: http://www.bridgeinternationalacademies.com
  5. BBC: http://www.bbc.co.uk/programmes/p032sj0r#play
  6. Harvard Business Review: https://hbr.org/2015/08/to-really-help-the-global-poor-create-technology-theyll-pay-for?utm_source=Socialflow&utm_medium=Tweet&utm_campaign=Socialflow
  7. Wall Street Journal: http://blogs.wsj.com/frontiers/2015/07/29/east-africa-emerges-as-global-hub-for-impact-investing/
  8. Entrepreneur: http://www.entrepreneur.com/article/240341
  9. Forbes: http://www.forbes.com/sites/singularity/2014/06/02/an-ideas-exchange-for-solving-humanitys-grand-challenges/
  10. Next Billion: http://nextbillion.net/cashless-education/

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6 thoughts on “The cost of an education is now less than your daily coffee fix … Surely it can’t be true?

  1. Thanks so much for this overview of Bridge, Ziyaad. I’m super fascinated in the ability for improved operations (+technology) to impact the education delivery model. I’m sure you’re already familiar with AltSchool based in San Francisco, but if not I recommend you check them out – they’re implementing a model similar to Bridge.

    I’m super excited about the potential for Bridge – I think barriers to innovation are lower in the developing world which will make it easier for them to scale. However my big question for Bridge relates to consistent access to high quality teachers. Much of the Gates Foundation recent research posits that the number one most important factor in a child’s education is the quality of their teacher. I understand that technology can help high quality teachers teach more students and that automation and data-driven decision making can make teachers lives easier. However, you can only automate this very critical job to a certain extent. Thus, given that people are such a critical component of this operating model I do think Bridge’s big challenge will be accessing enough excellent teachers as they scale.

    Thanks again for a fascinating post!

  2. Great Post Ziyaad!

    I am personally very interested in education and it is a great reading to learn a best practice that actually serves a very good cause.

    I also served to Ministry of Education in a developing country and I can totally understand how low the teacher quality is and how teaching is not considered as a prestigious occupation. This model would actually work very well in other countries as well. However, I am pretty sure a big source of revenue for them is donations/subsidies from other institutions.

    I have to admit that reading through the post, the question I also had in my mind was “are they really profitable?”, but I guess a more important and relevant question is “How can we spread the model to other developing countries?”.

    Thank you again!

  3. Z! I think this is a fascinating model and I think it has huge potential in providing quality access to education for the people at the bottom of the pyramid. But I fundamentally have a problem with a for-profit institution using education for short term profits. I see value in a partnership with the government in order to facilitate scaling this model and participate in teacher education.

    One way would be to use this as a pilot and then bring the government on board and have a phased roll-out. Education should be the duty and responsibility of the government and it should be used by for-profits to benefit from the unfortunate situation of the citizens it seeks to serve. I always favor government as a key stakeholder in this space and public-private partnerships are the way to go to scale and continue to do good

  4. You hit the nail on the head about the questions that surround the revenue-side of the business model.
    Do they charge fees for value-added activities, like after-school classes/ materials? Do they have revenue-share partnerships with downstream institutions/ employers or referral income with partners such as children product companies? Or are they in effect subsidised/ contracted by local governments to serve as an alternative to the public school system, e.g. charter schools – funded by tax dollars but with independent management?

  5. Great post, Z. I’ve also been eagerly following Bridge Academies for a while (you can guess why, based on the list of investors). As you say, they’re targeting 10m students by 2025 and currently have around 100k, and I think this target is based on necessity as much as ambition. So there is still a long way to go to benefit from the kind of economies of scale they need to make operations profitable at such low fee rates, and in the meantime they’re relying on a lot of development financing.

    What’s interesting here is that their business model is to compete with universal public schooling, rather than targeting middle-income families where value might be more straightforward to capture. But the existing public system has a wide range of inefficiencies that a more dynamic, streamlined private institution can save costs on. As a result they can potentially provide a better service at current or expanded enrolment rates for the same cost (close to zero) due to the operational innovations you mentioned – particularly standardization and vertical integration. I’m less concerned with KylaWilkes’ above point, because Bridge Academies’ business plan is to marry such innovations with the existing pool of teachers, rather than creating or finding a new pool of highly skilled ones (which would indeed by hard).

    So my question is this – is there a case for international donors to be diverting money away from governments and towards private social sector providers if they can offer such inclusive access? Could governments save resources by focusing on regulating these private providers, and handing over service provision itself? In which case, should Bridge Academies continue to support growth through development finance and worry less about turning a “true” profit in the near term?

  6. Love it, Z! Awesome post, thanks for a great read.

    Really interesting idea on how to address a huge social issue. The idea of using technology to mass produce optimized teaching plans – coupled with paying human capital in (cheap) local wages – seems to provide a viable solution to an otherwise daunting task. Standardizing education plans and delivering them real-time to teachers is a genius use of technology to address a very basic but previously unstandardized/unaddressed(?) issue. Want to know how successful the model has been to date!

    From your research – curious if there was anything that stuck out as inefficient from your perspective? Anything in particular that you would change?

    Thanks for introducing.

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