The bubble will eventually burst, but how can it burst?
Editor’s note: This article is from the micro-channel public number “brocade” (ID: jinduan006), of: animal husbandry.
This article is written based on publicly available information, and is only used for information exchange and does not constitute any investment advice.
In 2014, “Godfather of Silicon Valley Venture Capital” Peter Thiel (Peter Thiel) published the famous innovative methodology book “From 0 to 1”. In the book and related interviews during the same period, he pointed out bluntly: Technology has been stagnant since 1970.
In Peter Thiel’s view, fields where technological innovation is stagnant often have the same characteristics: people are paying more and more for certain services or products, but the effects are getting more and more. difference. With regard to this feature, he pointed out two examples, one of which is: American university education.
Tuition fees for private universities in the United States have tripled since 1980. American college students with college loans are heavily in debt and go to society, but more and more graduates are starting to find jobs.
Figure 2: University tuition all the way north, source USAtoday
Obviously, in the field of university education, American college students spend more money and get less rewards. This is what Thiel said: University education is one of the areas where innovation is stagnant.
Figure 3: Although students have extremely high debts, business school income has stopped growing. Source: Wall Street Journal
Similarly, in Beishangshen, the story of the stagnant innovation of spending more money and lower returns is being staged step by step in the school district.
01 Stagnation of school district rooms
In Beijing and Shanghai, there are thousands of school district mothers who are willing to pour their family’s 6 wallets and invest all their capital in the house in the Laopo Elementary School; whether it’s the same recruiting of citizens in Shanghai or the equilibrium of the school district in Beijing, The entry barriers for good schools like Desheng Wanliu are rising rapidly.
Picture 4: On March 8, 2021, the quotation of second-hand housing in the Hummingbird Home in Beijing Haidian School District. Source: Shells to find a house
Yes, you read that right, the school district has 170,000 houses per square meter and there may not be houses available yet.
The logic chain of Beijing-Shanghai School District’s housing becoming a core asset is extremely cold and clear:
If a child wants to find a good job, he needs to graduate from a prestigious school in Qingbei; if he wants to graduate from a prestigious school in Qingbei, he needs to get good grades in the college entrance examination; good schools and school districts can guarantee excellent results; good school degrees are relatively limited. Everyone wants to go.
After all, most families have only one child. Who would want the child to lose at the starting line?
The relatively limitless school district housing mother’s capital is competing for the limited school district housing. It’s not surprising that the school district’s housing prices are rising.
In addition, changes in newborn data have further exacerbated the high-yield and low-return school district housing path.
Beijing’s 2020 college entrance examination is based on the data of newborns around 2004. At that time, more than 40,000 people were born in Beijing.
In other words, the result of the unlimited spring of the Beijing college entrance examination is only the result of the decline in the fertility rate 17 years ago, and the next baby data facing Beijing parents is even more exaggerated;
Figure 5: Beijing birth rate data, source: Health Supervision Commission
After the introduction of the second child policy, the number of registered newborns in Beijing reached the highest peak in 2017, approaching 170,000.
If Beijing, where 40,000 Beijing children take the college entrance examination, used to be a blessed place to 985, then the road to school experienced by 170,000 Beijing children who are about to enter elementary school is the most brutal purgatory:
If the number of 985 students stays the same, the admission rate of Beijing’s 985 university may only continue to decline.
From “As long as you work hard, you can go to 985 and find a good job”; to “The threshold of 10 million donations to Desheng may not be saved, and you may not be able to find a good job in Qingbei”, more investment In exchange for less output, the result of the stagnation of innovation and technology in the traditional education system is cruel and clear.
02 Revolt of online education
Stagnation is the result of weak innovation, and it is also fertile ground for the budding of innovation. In recent years, online education has become one of the fiercest tracks in the primary market.
Compared with traditional education, the rapid growth of online education is not without reason.
First of all, online education is extremely convenient: students participating in online courses can plan their study time according to their own schedule. This is an amazing advantage for science students: the teacher’s courseware and content can be screened and revisited at any time, and they can learn at their own pace.
Secondly, the cost of online education is very low: if you want to study with students in Qingbei, online courses do not require dormitories, there is no difference between classes, and they are not subject to physical distance. Of course, they no longer need tens of millions of school district rooms. , You can learn the same amount of knowledge.
Thirdly, compared with the homogeneity of courses brought about by traditional education, online courses provide students with many choices. They can obtain several degrees online at the same time, and this is one of the reasons why many universities offer online courses.
Based on these advantages, the rapid growth of online education users is not surprising. In such a fast-growing market, it is understandable that many VCs risk losing money in online education regardless of cost.
Figure 6: China’s online education user scale curve in the past 5 years. Source: CNNIC
03The wonderful war between bubbles
However, since online education is so much better than traditional education, why are so many parents eager for housing in Desheng School District?
Peter Teal provided a unique observation: whether it is the Ivy League school in the United States or Desheng in China, online education provides more knowledge, while the school district room provides a circle of network effects.
The value of Ivy League schools and Desheng is not that teachers in excellent school districts far exceed the average level, nor is it that parents buy a house in the enrollment district once and for all, but a classic network effect cycle:
Students with good grades join prestigious schools to make prestigious schools better, thereby attracting more students with good grades, forming a positive cycle.
Peter Thiel once wanted to create a more efficient university like he founded (invested) Facebook. But after studying the history of many American universities, he came to a conclusion:
In the history of the United States, the attempts to establish universities in the past 100 years have failed: a good university is like a good social network, the value of the circle is extremely obvious, and the longer the circle is established, the longer the circle is established. The more difficult it is to surpass the moat.
On the issue of housing in Desheng School District, school education can provide social functions that online education cannot provide:
Watching football on a live broadcast website cannot provide the joy of watching football on the spot; after American universities switched to online education, students generally reported that it was difficult to find the sense of interaction on the university campus and hoped to return to campus as soon as possible.
The value of Ivy League students cannot be replaced by the unilateral knowledge acquisition of online education. The diligence and cleverness of the children in Desheng School District will also drive the academic performance of their classmates, which cannot be replaced by online education.
Just imagine the graduates of Harvard Business School, what knowledge can’t be replaced by online education? But the MBAs of Harvard Business School all successfully got extremely high graduation salaries. The anaphora and the Internet provided by the brothers and brothers on Wall Street and Silicon Valley are unmatched by online education.
In addition, school education also provides a kind of faction certification:
For example, a graduate of the University of Tokyo, Japan, rushed to the civil service system. Dongda graduation itself represents a brand, which means that entering the civil service system is easy and common, and this brand cannot be replaced by the knowledge transfer of online education.
From this perspective, Desheng and online education provide completely different services. This is a wonderful war. If you want online education to subvert Desheng and use one bubble to fill another bubble, I’m afraid it is wrong to pay.
The question is: the bubble will burst eventually, but how to burst it?