Pay It Forward

By SHLOMO MAITAL
July 3, 2011 13:42

The flat world, Internet and “pay it forward” entrepreneurs can indeed change our world for the better.

4 minute read.



Yoani Sanchez works on her laptop at her home

woman on laptop. (photo credit: REUTERS/Desmond Boylan)

“THE WORLD IS FLAT,” ASSERTED New York Times columnist Tom Friedman in his 2005 book by that name. But what does that mean? “It means you can create anything, anywhere, and distribute it anywhere, anytime, to anyone,” explained MIT Prof. Lester Thurow, the prophet of globalization, in a series of best-selling books, including “The Future of Capitalism” (1997).

In lecturing on globalization, I often use the example of 14-year-old Suhas Gopinath, who a decade ago launched a business called Globals Inc. with zero money, from an Internet café in Bangalore, India. His business built Internet portals, a skill he taught himself, for American retailers who sought to modernize their store-based sales. It is today thriving worldwide (www.globalsinc.com).

But there is a better example, closer to home. An Israeli entrepreneur started an Internet college that teaches business and computing to 1,000 students from 115 countries, including Haitians still living in tent cities, Chinese, Indonesians, Nigerians, and Vietnamese, all for free. And it took only two years. The entrepreneur is Shai Reshef. He exemplifies a growing trend – Israeli entrepreneurs who launch businesses and sell them for a fortune, then leverage that fortune and their creative savvy to change the flat world through social entrepreneurship.

Reshef is 55 years old. In 1989 he became CEO, and then Chair, of Kidum Group, a for-profit Israeli educational services company that helps students prepare for the dreaded psychometric (college entrance) exams.

When he joined Kidum, it had revenues of $100,000.

Through his leadership, Kidum grew to become a $25 m. company with 1,000 workers and 50,000 students yearly. In 2005 Kidum was sold to Stanley Kaplan Inc., an American firm. The price was not disclosed, but a typical rule-of-thumb is ten times revenue, which would make the price around $250 m. Reshef became an instant millionaire.

What happened next was remarkable. Reshef started the first on-line university outside North America, called KIT e-learning, in the Netherlands, in 2001. It was not successful, but was acquired in 2004 by Sylvan Learning Systems, now called Laureate Online Education, for an undisclosed sum. In 2009, using his own money Reshef launched University of the People, a not-for-profit tuition-free online academic institution that makes college- level courses available to students all over the world (www.uopeople.org). Its headquarters are in Pasadena, California. And this time, he got it right.

Reshef told the US business magazine Inc., “I want students that don’t have any other alternative. I’m going to the Third World to look for students who have graduated high school, who have 12 years of education, have the proper English, have access to a computer – however, they were unable to attend university because they don’t have the financial means or access to higher education institutions. I don’t have a huge marketing budget.

I believe that because we are tuition-free, people will find us.” And they have.

But who will teach the courses, he was asked? “I believe there are a lot of retired professors or even fulltime professors who would like the cause and be willing to devote even one to two hours per week to help students from the Third World or even students from their own countries who need help. Giving back to the community – people really want to help each other.” There are enough volunteers to enable Reshef to choose only the best teachers. I might try teaching a course or two for him myself.

Why is he doing this? “I’ve made enough money,” he said to Inc. “Now it’s time to give back.”

New York Times writer Tamar Lewin, who covers education, reported on June 10 that Reshef’s University of the People has now partnered with New York University, led by President John Sexton. With this collaboration, students who show exceptional promise can apply to NYU’s Abu Dhabi campus and be eligible for financial aid.

While University of the People is not yet accredited, NYU’s Abu Dhabi campus is. Tuition there is a staggering $53,000 a year. But Sexton says generous financial aid will be provided to University of the People candidates.

“Most of our students had no alternative for higher education before we opened the gates for them,” Reshef told Lewin, “and now the most successful may be able to further pursue their dreams by attending one of the best universities in the world.”

In the movie “Pay It Forward,” released in 2000, 11- year-old Trevor McKinney gets an assignment from his social studies teacher Mr. Simonet – devise and implement a scheme to change the world for the better.

Trevor’s plan is a charitable pyramid scheme. He does a favor for each of three people and asks them to “pay it forward” – do a favor for three other people instead of paying the favor back. Achain reaction ensues.

Let’s do the math. If three people do favors for three more, who do favors for…. etc., after 10 rounds, 60,000 people have been impacted. After 20 rounds, it’s half the population of the world. What are we waiting for? Increasingly, entrepreneurs who gain wealth, like Shai Reshef, are “paying it forward.” In the Mideast, where revenge – “pay it back” – usually dominates, this is a potential game-changer. The flat world, Internet and “pay it forward” entrepreneurs can indeed change our world for the better.

The writer is senior research fellow, S. Neaman Institute, Technion.


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