Must Read Founder's Five July 5, 2022

Founder’s Five: Chip Paucek, 2U

Founder’s Five is a continuing series from Tyton Partners that invites education company founders to shed light on their own success and illuminate the landscape for other education entrepreneurs and investors by answering five basic questions.

Chip Paucek founded 2U with a mission to help colleges make high-quality online learning accessible, scalable, and sustainable.

Chip co-founded 2U in 2008 when the practice of traditional universities offering online degree programs was new and skepticism about program quality was high. The company’s founding mission was to help colleges make high-quality online learning accessible, scalable, and sustainable. From an initial foundation of supporting graduate programs, the company has expanded its offerings and today boasts the world’s most comprehensive, free-to-degree, online learning platform, offering a global customer base everything they need to power lifelong learning.

Following its acquisition of edX in 2021, today 2U partners with more than 230 universities, colleges, and companies to power more than 4,000 programs reaching more than 44 million learners around the world. 2U listed its shares to the public in 2014 under the ticker symbol TWOU.

What is your company’s origin story?

I’m a first-generation college student and getting my bachelor’s degree and MBA truly changed my life. Those experiences have been the driving forces in my career and in founding 2U: to help more students get that same transformational access to a high-quality education—no matter where they live or what odds might be stacked against them.

When I co-founded 2U, online education was still pretty new, and few believed it could match the rigor and experience of traditional on-campus programs. At the same time, many colleges and universities lacked the expertise or upfront capital needed to meet the fast pace of changing learner needs and dynamics.

We began with online master’s degrees, but over the years, we realized students need more and different options; so, with an ever-growing list of great university partners, we added bachelor’s degrees, technical boot camps, and executive education courses. Last year, we acquired edX, a pioneer of the Massive Open Online Course movement that has brought tens of millions of learners around the world affordable access to quality education from top academic and corporate institutions.

Fourteen years later, we’ve transformed 2U into something really incredible with programs like midwifery and physician assistant’s programs that challenge what’s possible in an online environment while delivering great results for students. And we’re just getting started.

How will the market be changed by your company’s success?

Today, high-quality online higher education is table stakes. Universities understand that digital transformation is imperative to ensure institutional sustainability and meet the changing needs of students. While only 2% of global higher education is online, more students are demanding that hybrid and online remain permanent education options. There’s also increasing demand for alternative credentials which give learners shorter paths to achieving career-relevant skills.

Consumers are becoming the dominant force in higher ed. They have more choice over what, when, where, and how they want to learn. They are seeking greater flexibility and personal relevance, placing a premium on convenience and affordability, and increasingly choosing online options.”

Chip paucek

The same trend is impacting the workplace—professionals are looking to their employers to create opportunities for learning that delivers real career outcomes.

And they’ll find those options on the edX marketplace. Take, for example, the MicroMasters programs on edX. These are short, online programs that offer 9-12 credits to the learner, stacking into the full master’s program if they want to move ahead with their studies. Right now, we have 30+ MicroMasters programs in the works, which gives you an indication of how excited and bought in our partners are.

Innovations like MicroMasters and MicroBachelors programs will create quality, career-focused options for learners—saving them tuition dollars in the process. That’s momentum. That’s filling a need. That’s driving real impact for learners. I believe the work we’re doing will help the whole education sector move in that direction.

What do you know now that you wish you had known when you began?

I recently gave a commencement speech to newly-minted business leaders graduating from UNC Chapel-Hill Kenan Flagler (one of 2U’s oldest partners, and also where I got my MBA) and I was very honest about the many ups and downs that come with building and leading a business. I knew starting 2U would be hard work, but I didn’t understand how critical it would be to stay relentlessly focused on goals and a mission that does good for the world.

That’s particularly true in startups. When new founders come and ask for my opinions, I tell them that I will give them my advice, but they have to process it through their own lens. Then, when they present the five parts of their plan, I tell them if they do all five they will fail, if they do four they will fail, if they do three they will fail, if they do two they might get lucky and not fail, but if they only do one but pick the wrong one they also will fail.

So, the lesson I wish I knew then that I know now is “keep going.” No matter how hard it gets. Keep going and celebrate all the big and little wins. Even celebrate the losses because those are the moments when you learn the power of resilience. All these moments matter equally.

What non-intuitive insight have you gained through this work?

As a country, we are facing a complex array of challenges, including a profound demand for upskilling and reskilling to meet the urgent needs of the workforce now and in the future. Whether that be the dearth of tech skills, shortage of nurses, or otherwise, the government and civil society can’t solve this problem alone. The private sector is a critical part of the solution—it’s uniquely capable of creating large-scale efficiencies in these areas that the government and civil society alone cannot.

Change has to be systemic. It cannot happen with one company or one product. That’s why public-private partnerships are so powerful—together, we can help solve the most critical problems facing our nation today, and that’s what society needs.

In cities across the globe, universities, businesses, nonprofits, and local government agencies all have a shared interest in creating skilled workforces that can help their regions thrive. With its Access Partnerships program, 2U has become the “glue” that connects these groups together to collectively drive impact. We match boot camp programs with workforce agencies and corporate/nonprofit/government funders in their region to secure financial resources needed to create career-igniting scholarships. These scholarships in turn offer adult learners affordable pathways to careers in technology that fill pressing workforce needs and improve the diversity of regional tech workforces.

What other education company besides your own do you wish you had started?

EVERFI. Tom Davidson and his team have built what I believe to be the epitome of a for-profit edtech company proving that it’s a force for good through the large-scale impact it has achieved. EVERFI is creating educational platforms that help organizations and educators tackle some of the most challenging social problems affecting our country today like financial literacy, healthcare literacy, mental health, bullying, and digital wellness. They also deliver insights to corporate partners so that they can amplify the impact of EVERFI’s educational programs. Tom’s team is making our world a better place and having a significant effect on kids’ long-term success because they meet kids where they are with mobile-based programs that are fun, engaging, and capture the imagination.

2U and EVERFI have a lot in common. We are both D.C.-area based companies focused on creating a better future, unlocking opportunities through increased access to quality education, and working with industry to further our impact. But what really stands out about EVERFI is the magnitude of the good they’re doing—certifying approximately 3.1 million K-12 students every year. It is just incredible. EVERFI has an important role to play in society, and they’re proving they’re capable of creating meaningful change day after day. That inspires me.