MasterClass, Outlier.org Founder On Higher Ed Access and Amazon Partnership

Welcome to the future of Education. I'm Michael Horn, delighted to be joined today by Aaron Rasmussen. He's the co founder of Masterclass, which I'm sure many of you know of. He's also the founder of Outlier.org, which we're going to spend a good deal of today talking about. He's founded some other ventures in there as well, which maybe will sneak into the various conversations. He's someone. In preparing for this conversation, I listened to a bunch of interviews that he's done and just a fascinating human being. So with that I'll bring Aaron up to the virtual stage. It's good to see you, Aaron and thanks for joining us here.

Thanks so much for having me, Michael.

Yeah. So where I want to start is something I heard you say and I might not get it quite right, so bear with me. But you basically said that you're passionate as a, as a person about a lot of different things. You don't have sort of one area that's grabbed you. You have a lot of interests and I can relate to that. Um, but then you said something else that was interesting also, which you said. You know, as, as you've looked over your life at all these different passions and how they've intersected, you sort of drew a more general principle that if you like a lot of different things, they tend to circle around something interesting. I think those were your words and I'm, I'm just sort of curious if you could give more context to what those passions are in your own life and, and what you mean by them circling around to maybe be bigger than the sum of the parts.

Yeah. Wow, you dove deep. I appreciate that. Yeah. I think that might have been from my, the convocation speech at Boston University about how code has consequences and sort of how did I fuse an advertising degree and a computer science degree. So yes, I have a lot of passions. I think it's easy to confuse that for having no passion at all when you're younger because you see these people that are hyper focused on something and I see this in undergrads I speak to pretty frequently. Is there they're concerned how do I choose what I want to do? I like a lot of different things and why can't I like just one thing, like that person over there. So I think it's, it's sort of a personality type. So I love art, I love technical things, I love learning and you know, I love learning because I can apply it to things that I make. But it's also just the Intrinsic value of learning, which is sort of a separate thing. You know, this is where friends and I sort of diverge. The friends that are very applied math versus theoretical math. I'm not a theoretical math person actually like that. Some friends just get so much joy out of that. I'm the second I learn some math, I want to apply it to something. So the question is like, how does this become a career? How do you. How do you be as I think everything Post said once about me, a magpie mind, which I think can be positive, but it's true. How do you have all these different passions and make it into something? And I think that is where, looking back on what you're interested in, it does circle some sort of focal point. And if you're lucky, you get to combine it all in many ways. I did feel like Masterclass was sort of a Slumdog Millionaire moment for me, which in. In that movie, you know, the guy realizes he knows the answer to every question on this show based on these disparate life experiences. And that's how it was for me. It's like I was able to direct these courses. At one point, we needed music for Werner Herzog and couldn't get the. The cello music we wanted. So I wrote some cello music and my friend Christine performed it on electric cello. And we were happy with. I mean, just everything the. The technical side, etc, but it takes a long time to get there. So my advice, usually for somebody who feels the way I do, is to keep going towards the things that interest you, but make sure you have output. It's not enough to just collect it all. That's where there is that divide between intrinsic value and sort of applied value. So, sorry, long. Bit of a long answer, but then again, is my.

No, I sort of wanted that because it's. I think it gives a window into who you are and it'll talk about the problems you've chosen to tackle in your career. But it's interesting that you divide. I mean, if I'm hearing you right, there's almost intrinsic learning extrinsic, but you're sort of almost drawing a distinction of something in between where you're intrinsically interested in the topic. But it's not enough to just sort of learn and cogitate on it. You need to apply it into something. If I understood that correctly.

Yes, absolutely. And it's. It's almost the way I think about learning when I talk to undergrads. I say that you've got to learn from crystallized knowledge, right? Textbooks and Lectures and these sorts of things, you've got to learn by word of mouth. You've got to learn to talk to people and get that knowledge that isn't crystallized. Then the third part is you have to learn by teaching. I mean, I think any of us that have taught know that that is the best way to figure out. You have no clue that what you're talking about. Right.

It's like, you know, you're trying to explain this moment.

Yeah, yeah, exactly, exactly. So you learn a topic really, really well. Well, I think it's the same way with applied and intrinsic value. You've got to sort of have this intrinsic. Intrinsic joy from it, but to really grok that you apply it. You know, I like to wrench on my motorcycle and, you know, my truck. That's really enjoyable for me. There's something about just bringing this dead piece of a machinery to life. Could just have a mechanic do it. But I really do get value out of this, you know, especially recently I've been working on a diesel truck, which I've never really worked on diesel before. I've driven diesel tractors and these sorts of things. It's different. You forgot that the engine keeps running unless you cut the fuel off. You can turn that. You can turn it off and it just keeps running because it's running off compression spark plugs. So, yeah, so little. Little digression there. But. But yes, I think there's a place between intrinsic or applied knowledge or learning or in sequence. First there's the intrinsic value, then there's the application. You get this flywheel of curiosity that is very hard to extinguish.

That's very cool. So I think this is a good segue to where I wanted to go, which is, I suspect people who watch this and listen to this, you know, will know Masterclass. Many of them, like me, will have consumed classes and content from it. And I'm curious, then the idea for Outlier.org where it grew out of that Masterclass experience. And specifically, if everything is a learning experience in some sense, what lessons did you learn from Masterclass that you could then take to outlier.org as you built it?

Great question. It's funny because they were in many ways very independent ideas. Masterclass fundamentally is about capturing this knowledge that otherwise would be lost. And if you can capture a couple pieces of this knowledge from extraordinary people, which can fundamentally change the trajectory of somebody else's career or the creative process, that's an amazing success. Outlier is about learning the introductory courses, the basics, scaffolded knowledge, you know, Bloom's taxonomy and learning outcomes. These things that are assessed very precisely and is essentially knowledge that's already out there, but is conveyed in an entertaining and engaging way. So what actually happened is, you know, after, after I left Masterclass and handed the reins over, I took a year off and traveled the world. I felt like I really needed to understand the world better. And I'd never been to India or China or East Africa or Eastern Europe. And those felt like real knowledge gaps. You know, everybody says, oh, I want to change the world. Well, maybe start with what the world is and then that will figure out what to change it rather than just sort of arbitrarily doing it. And I ended up going to 28 countries and just having an incredible time. It's very much a time of consumption rather than production. You know, you're consuming these experiences and these conversations. Tons of street food turns out parasites with those. Street food wasn't great, but like, you

know, but the experience during it is awesome.

100% worth it, by the way. I would, I would do it over and over again. I would get my five day sickness in Cambodia where I couldn't eat at, at all for five days. Wow, it. That's the longest I've gone in my life without eating. So anyway, so I, I go around and basically what I found was I'm from a small town, right? So, and not even from the town I'm from. 12 miles up a mountain outside a town of 600 people. My dad was middle school science teacher, my mom was a homemaker. I was very lucky to go to Boston University and then go to community colleges over the summer and transfer in credits. That's probably the original idea of outlier. So what happened is when I traveled, I found that a story like mine, getting an education and having it fundamentally change your position in the world was not actually that unusual. I heard these stories everywhere from, you know, a man from a fishing village in Cambodia getting a bicycle from an ngo, being able to ride into Siem Reap and learning English at the Buddhist temple and then being able to be a tour guide and literally like 10x what he's making every month and support a family of three and, you know, incredibly inspiring stuff. What was unusual was the access to that education. So when I came back from this trip, I started to think, why don't we have this like beautiful, super engaging online for credit courses, right? A lot of really smart, well funded people have tried to do this. Yeah, I mean you had.

It's certainly not an empty marketplace that you walked. I mean there's right. Sophia learning straighter line, things like that out there.

Yeah, absolutely. So, so I went out and I tried to figure out why don't we, why don't we all know something off the top of our head? Like when, when you, you know, meet a high school student and they're like, wow, I'd really love to take a college course in psychology. You're like, oh, you should try it at. Right. So it's like, well, Coursera, you know, great resource, doesn't necessarily have credits at X. Same, same issue. Khan Academy, an extraordinary tutoring platform. Right. Like for example, at Outlier, if somebody's not prepared for one of our classes, we have them take a pretest, we send them Khan Academy. Like that, that, that's fantastic. So why don't we have that in our head? Why doesn't that exist? So it came down to four reasons. One is the prestige. Online education was looked down upon for a long time. A lot of these really great efforts were started 2005, 2007 at a time when like broadband Internet wasn't everywhere. You know, there's something sort of fake about online. And I think we've all realized that there's a whole part of the world, the sort of mimetic universe is online. But the second part of prestige was a lot of these places don't give real college credit. Right? They'll give credit recommendation. So we partnered with Pitt, which is a top 60 school. Our credits have transferred to Harvard, NYU, Georgetown, Penn. Now those aren't actually the places that we think that much about. We think about the other 4,300 schools where most students actually go. And that means that those credits transfer really well. So part of it was the prestige of the credit. That that association and oversight by Pitt is incredibly important to validating what we are doing both for the students and for future schools that take those students and understand these are well prepared students. The second part was the content. The content, Look, I used MIT OpenCourseWare in, in high school and it was extraordinary for me. I'd never seen the inside of an Ivy League classroom. Right. Like this was an amazing experience. That's not enough anymore, right? I also came from a generation where you go to the library, you check out a textbook and you stare at it for two months. You come out kind of bleary eyed being like, I guess I know a little bit about mechanical engineering now. That's, that's not something we expect of students anymore. So the content needed to Be crafted to where students are consuming it on a laptop, on a phone. Right. So I focus group with college students, with high school students, try to understand how do students learn today? What are their frustrations? Part of the reason we have three tracks in our calculus course, right? We have three whole separate versions of calculus you can take and you can switch between them at any time. Because I found that students listen to a lecture, then they go on YouTube and try to find an explanation that makes sense to them. The third part was social online education can be lonely. So it's about getting students together. And then the 4th part was price2u did actually a really cool semester online thing years ago, but it was upper level courses which don't transfer well. It was between top schools which have a hard time transferring to each other. They don't like talk to each other, so. And then they charged a lot. So we charge $400 for a three credit course and we align our incentives with the student incentives by saying if you do all the work and you, you don't pass, you get your money back. So that's the big. Yeah, that was the big idea with Outlier. Now, of course, the punchline is that this works, right? We have pass rates equivalent to in person courses. Now, what was I able to draw from masterclass? Okay, well, one is just people care about beauty. It's part of prestige. I gave a talk at south by Southwest where I talked about beauty is crystallized attention. We're social animals. We want to look where other people are looking. It could be danger, it could be food. We don't know what it is. But if you stand on the street and everybody's looking somewhere, you don't look the other way. You look where they're looking. Beauty is saying someone has spent time on this. So this is an ancillary thing to what we do. It's not a marketing thing. It's obviously extremely helpful to that. It differentiates us, but it shows the student that someone cared about. It's hard to look away from something beautiful. There's a difference between having a lecture in a hardwood beautiful Harvard hall or Hogwarts or wherever you want to be. And like, you know, I went to Blue Mountain Community College. It's, it's a good college. I had good classes. But you know, it's like linoleum and a banging air conditioner and it's really cold by the windows. You know, it's like granted, this tried 27 years ago, so they may have.

Sure, sure. No disparagement.

Yeah, no Disparagement. I love the mcc, but it's. It's a very different thing. Which do you pay more attention in? You know, so. So that's really what I brought from Masterclass, because fundamentally, we had to come up with a new filming style, a new style of color correction because we do 10 times the length of video content that we used to do at Masterclass. We have to get the information differently. The information density is completely different. And, yeah, I mean, like teaching math on screen. We flew down to North Carolina and just worked with Tim Chartier and tried a bunch of different setups. What's. What works, what doesn't, you know, how do I, as a student learn calculus?

I want to dig into a couple of different strands that you just mentioned, and I'm sort of torn where I want to go, but let's go down the sort of. You started to paint some of the differences between Masterclass and what you're now building, outlier.org and it occurs to me the beauty part and engagement, like, that's obvious when you look at a class that you've created in Outlier.org it has that same compelling storyline, like the. The, you know, the cinematography is gorgeous. Right. The same. Same setup. I've heard you say that you're a big fan of Stephen Kosselin active learning. So am I. I love, love, love, love, Stephen. It's interesting that, you know, Masterclass, you would call it, though, a passive learning platform, I think. Right. It sounds like you've tried to do something very different as you've created Outlier.org, you mentioned social engagement. You mentioned actually having, you know, measuring learning and things of that nature. That. That implies that you've done things pretty different in terms of trying to create a more active experience. I'd love you to illuminate that because I think sometimes engagement and learning are intention with each other as opposed to using them to reinforce one and the other.

Yes. No, this is a great point. I mean, Masterclass, very intentionally is a passive learning experience, and that's what we intended it for it to be. So when I started down this path of initially very stand and deliver Jaime Escalante, how do you teach calculus? Well, calculus, it just turns people off of careers. It limits their options. How do you do this? Great. So I actually initially read Make It Stick and reached out to one of the authors there, because what I found was I thought I might have to come in with some new ideas about how people can learn. I found there's all this incredible research already. That people like Stephen Kosland have done. Yeah, there's a ton and it just needs to be adopted. So I literally said, you know, hey, what's, what's the top five things? And it was like, you've got guesswork. Like we do pre questions. We, we have a whole interactive textbook that uses active learning. Now this is not exactly the same as what Stephen's talking about in that book, but. But it's a similar idea. Right. So we do spaced repetition. We're asking you questions, we're getting you engaged in the material and we have a whole team. It's funny because, like people think of our video side, but that's actually about 25 to 30% of the total course.

That's interesting.

Okay, yeah, so it's. For example, we created dynamically generated problem sets for calculus so you can have infinite questions, step by step solutions. We do competency based quizzes. I'm a huge Benjamin Bloom fan. Obviously research is from a while back, but we really believe on that two sigma improvement from one on one tutoring. So we offer one on one tutoring. And it's like, this is an expensive, difficult proposition. We draw a lot from video games. I'm a big fan of peer based learning. So Mike Lastolfi, who's our VP of product, he and I made a video game called Blindsided. Actually had no graphics about the time I was blind in high school.

Right, you went through that experience.

Yeah, yeah. And he's this great game designer. So when I thought of who do I want to work with? And he's like a fellow very curious person. Right. Like he's got an evo psych background and this sort of thing. So we, you know, I spent long times discussing these things. Who do you want to build the future of education? Well, video games inherently educate. When we were making Blindside, we actually ran focus groups on the various control schemes because nobody had really cracked. How do you navigate a space blind in a video game? Some of our initial ideas, turns out they were great for Mike and I, but are completely impossible for anyone else to use. That's really good to learn. Then we also had a tutorial section. We thought a lot about education together. When it comes to the outlier experience, it is very much the lecture is this great, engaging on ramp and overview to an engaging interactive textbook replete with quizzes and personality tests and then ultimately midterms and a final. Our college writing course obviously has essays. How do you correct essays at scale? Right. Everybody wondered, why don't you do college writing? First, that is the biggest course in undergrad. Well, we've got a couple rules, right? We have two missions, increase access to high quality education and reduce student debt. But we think about it all from a student centric perspective. So there is no point in us doing something that's not good, Right? Like what are we doing if we're not making something that's fantastic. And we didn't know how to correct essays at scale. So actually part of, part of the reason we launched philosophy, besides that I'm a nerd and I love it, is that it's got an essay in it. So we learned to correct essays better at scale before doing college writing. And then we were confident in going out and creating that college writing course and knowing we could give good prescriptive feedback to the students.

That's fascinating. I'm glad you've dove deeper in that because I suspect a lot of people just see the trailers and those who think about the learning side have not realized how much infrastructure you've built around. Goes to the other part of the question that I'm curious about, which is sort of twofold. One is I'd love to hear a little bit more of the conversation with the University of Pittsburgh of how you got them to give this blessing, frankly, that allowed you to create these partnerships with all these schools. And then the other side of it is how you kept it affordable as you give that one on one tutoring at the right time or, you know, these student support structures that you've put in place given the high production value and engagement around. Around what you're building. So those are two questions crammed in. One, you get to choose which one first.

Got it. Well, I'll start with University of Pittsburgh. I mean, so I actually met the provost there and cud through being on the advisory board for her when she was a dean at Boston University. Because I realized I need to understand academia better. I need to understand how a university works. Will a university even work with a company like this? So I met her early on. Her commitment to access to education and equity in education is just so clear when you meet her. So she ended up getting poached to be provost at University of Pittsburgh. So that's where the original relationship came from. And what I found, there was a whole group of people that were committed to access to education. In fact, Jim Spector, the president of Pitt Johnstown, has been a huge proponent and ally in this. He took it to his faculty and said, hey, you know, what do you guys think of this? You know, and they said this is, this is great. Right. Like there's a few different reasons people get into teaching. And when you hit the right group that they got into teaching because they want to see as many students as possible, sort of enlightened, then you're in the right place. So that's, that's how that relationship happened. I mean, not without its, its bumps in the road. Right. It's not a monolithic place over there, but it has been. I mean, I, I'm just so thankful to the University of Pittsburgh for making this possible.

You know, it's interesting because the University of Pittsburgh, I mean it occurs to me as you're talking about it, but they have a pretty rich history of a lot of those learning sciences that you were talking about earlier being developed there. Carnegie Mellon adjacent. Right. Like there's sort of this little confab, if you will, of Ken Kotager and other people who've just had these great breakthroughs on the learning science is more broadly, I'm curious, did that help? Has that played in at all?

I think, I mean the biggest kind of history that I really feel there, that plays in a lot is their commitment to things like they do this inside out program where they teach incarcerated people and give them college credits. That's something we would love to do in the future. They have some great, you know, high school dual enrollment style programs. So like that's, that's part of that sort of innovative access side that you really feel. But you do get that sense of learning science through the whole university. And I, I wonder. It's funny now that you mention it, I'm, I'm wondering if they seem like

R1 sort of tier one institutions. They seem more committed to, to teaching and learning perhaps than just research is applied. I guess. So it's that intrinsic and applied.

Right? That's.

Yeah. I mean that they bridge it. Right. I think in, in some, in some neat ways that a lot of institutions don't. It occurs to me as you're talking, but let's, let's tackle the affordability and then you're not doing prison. So I, I'll tease it, but I want to make sure we end on the Amazon announcement. Oh yes, that came down a few months ago. But, but first talk about the affordability and given, like what if I need one on one tutoring? I can get it from your, you know, during a course. Like, how do you keep that affordable?

It's difficult. It's. It's very difficult what we're doing. I mean, in many ways we Started with the affordability and then figured out how to make that happen. So, for example, we made our own lms, which is a crazy thing to do, but I have a background in, you know, the technical field, so I was actually really lucky to have a friend who became available that that could run that whole thing. And you know that that right there cuts down your cost because you can make every part of content creation. Like our platform is made for our style of content creation. It also allows for the active learning methodologies that we need students to have access to that we could not do in other LMSs. Like, I'm a big fan of don't reinvent the Wheel. When I looked at everything that was out there, I said, look, we cannot make the experience that when I look at all the learning research out there says that it's effective for students. So let's do this the hardest way possible. Which was sort of a running joke at Masterclass.

That turns out to be the easiest way when you. Because jumping through the hoops and adapting the other platforms probably would have been torturous.

Exactly. And it would drive up the cost of production. Now it is extremely expensive to make these courses. They need to last quite some time. We continue improve them and update them. Now, as far as one on one tutoring goes, here's what's interesting. We found. I thought way more of our revenue would be devoted to it, but it turns out if you get the social part of it right, students will help each other with the subject matter expertise. So you still have a percentage of students that'll consume quite a lot of hours of one on one tutoring. And we just bake that in. But it's a small percentage. What students more frequently need is sort of your classic coaching stuff, right? Time management. Hey, you missed that quiz. Is there something we can do to help? It's a lot of that side of it. And that, that was, by the way, a huge surprise. We did not expect kind of the peer to peer help to be as prevalent as it is. It does make me rather inspired for the new generation.

So, yeah, so that's exciting, right?

That's how we do it. And then the other part is really acquisition of students. We happen like that's a huge cost for universities. Like the marketing budget blows people's minds every time. You understand how much of that tuition you paid went to finding you and convincing you to go to that school. We have incredibly talented people on our team, like our VP of marketing, Reed Benson. He was, you know, one of our very early Employees at Masterclass. So we've worked together for years. We know how to make stuff that grips people and gets them in, gets them excited. Right. Because we're essentially motivating somebody to, hey, let's learn sometimes a pretty hard topic, calculus. So we can do that much more affordably than, as far as I can tell, almost anyone else. So that is a huge part of why we can make it affordable to students.

That's incredibly helpful to understand. And then obviously your Amazon partnership that you just announced, which I'll let you tell more about in a moment, I suspect that also further drives down the cost. Cause you're not, you know, blaring Google Ads to reach anonymous masses, but you have a company that is paying the cost for, for their employees, in this case to get access to the first two years of college. So talk about that partnership and sort of what's exciting about it, what maybe isn't well understood about it.

Yeah, so, so the Amazon partnership, in short, is they are essentially offering to 750,000 of their workers. You can take an outlier certificate. So these are four courses and it's well designed as a college on ramp for free, or I would say, I should say fully funded. So it's fully funded by Amazon for their employees. What an amazing thing. I mean, this is the dream that corporations step in and see this great benefit in paying for the education of their employees. Where I grew up, the options to get a degree were pretty slim. So one of them was to enlist in the army, you know, go fight for four years, come back and use the GI Bill. That is one way to do it. I had a number of friends go through it that way. It can be tough also, because when you get back, you've had a very different life experience. You're a bit older, you know, a lot of ptsd. And this sort of thing also can, can really inhibit your learning. So the idea that you can go to Amazon and get a job and have your college paid for, I mean, this is something phenomenal that is happening in the US right now. And you know, there's, there's these big players like Guild and Edison, et cetera, that are helping promote this and enact it in all of these companies. So that's the, the gist of this whole thing is how do you pay for college? How do we reduce student debt? Well, one, you make an affordably priced thing that somebody can pay for out of pocket. Two, you get their employer to pay for it. And it's amazing for an employer, especially because we're so efficient. Right? Like, getting three high quality credits for $400 is bonkers. And again, super thankful to the University of Pittsburgh for making that possible. But for employers, that's incredible because you're essentially giving a $5,000, $6,000 value with each course to your, your employees. My hope is, and I know this is being piloted in some places is Hannah would be great for this to be a benefit for the families of the employees, employees, for their kids to be able to take these things. So, yeah. So I'm, we are just absolutely over the moon. It does help with affordability a lot because you're not just out there with your YouTube ads and your, your Facebook ads. You're getting this, this great audience that you can say, hey, you know, we made a specific video for, for Amazon and their, their employees. And you know, hey, this is, this is why we think this is a great thing to do in your life. And then we also really like to push, do this with a friend. Right. I'm such a big fan of learning together with someone else, sharing that intrinsic value of learning and sharing the hardship of trying to apply it to tests.

I love it. I've learned a lot here today, Aaron and I just would say, as we wrap up, love the commitment not to basically subsidizing something that's expensive, but making it fundamentally affordable and good. Like.

Right. Hard to do.

There's a lot of hard to do. But if you do it, that's where real value is created for you, for the learner, for this broader mission that you're tackling. So super appreciative of you joining us on the Future of Education today to break down some of the components. I suspect I said we'd go like 20 minutes. We went 10 minutes over. We could have gone longer, but I appreciate the time.

Awesome. Thanks so much for having me, Michael.

Yeah, you bet. And thanks for joining us on the Future of Education and tune in next time as well.