Academia: Incubating the Therani

Thursday's Child Has Far to Go

I hadn’t heard of Charlie Javice or the company Frank until a series of articles in the past month detailed how J.P. Morgan closed down the company two years after acquiring it.

Frank’s business plan was to somehow simplify or demystify the process of applying for financial aid in college, in particular targeting the FAFSA, the Free Application for Federal Student Aid, that is not just used by the federal government but by many universities and colleges to assess the financial need of admitted students.

That was a pretty perceptive business plan inasmuch as the FAFSA and financial aid are genuinely a complex hassle to the point that they are a barrier to some applicants or lead to applicant need being mis-assessed.

On the other hand, simplifying the process is not easy. It would take high levels of technical knowledge in several different domains and it would take building a cooperative relationship with many different colleges and universities who guard the process of assessing financial need very carefully. It would take getting people to trust the company involved with very sensitive personal data and it would also take being careful to work in partnership with the federal government.

Or, you know, you could just fake it all. Make up accounts or sign people up without their knowledge. Try to rip people off by convincing them you’re an agent for FAFSA completion when you aren’t. Build shitty, bogus tools relating to financial aid that just increase the confusion. Build fake websites implying cooperative relationships that you don’t actually have. Which is apparently what Javice and other Frank employees did, according to the New York Times.

That is nothing new, I fear. The idea of making lending or financial support for higher education more accessible, more streamlined, more targeted at first-generation low-income families, has been a perennial favorite among college students who are trying to make pitches to centers for social entrepreneurship at elite institutions. I’ve witnessed at least four such pitches myself, at my own institution and elsewhere. When the pitching teams are asked how they are going to establish trust with potential clients, or what makes them think they’re even vaguely qualified to handle sensitive financial information of that kind or be responsible for something as vitally important to a client as the money that pays for a college degree, they usually punt. That will come later! They’ll find a partner! Their first-generation low-income roommate totally trusts them, so that just shows that it’s ok. Our team has a great app that will take care of all that, don’t worry.

Nor is that the only kind of proposal that has those problems. There was a big wave of teams and one-shot-wonder companies across the Ivy Leagues and other elite selectives trying to build the next YikYak or the next Cameo or the next TikTok or the next Snapchat a few years back. Not infrequently using seed money that they were given by their campuses for some other more socially responsible projects like building apps for Quechua-speaking peasants to more accurately calculate the market prices on alpaca wool for fair trade exchange or microlending to middle-aged women making artisanal jewelry in Gabon. (I am barely exaggerating here.) Go back a few years before that and there were groups of student/recent alum entrepreneurs trying to start new course management systems or online course companies.

You could just shrug and say, “Hey, it’s harmless, this is just Junior Achievement on steroids, it’s how they learn”. There’s something to that. Whether you’re looking for an investor or writing a grant proposal, you’re always trying to hit that sweet spot between seeming like you already have done all the work and have as much money as you need and looking like you’re on a fishing expedition and haven’t a clue of what you’ll do if someone funds you. If you hit the sweet spot, there’s almost certainly something underbaked or underthought in what you’re proposing that you’re trying to hide or paper over, and often the money is exactly what lets you move from the half-baked, half-developed idea to something of real value.

Except, you know, what’s not harmless is lying, cheating, faking, aggressively misrepresenting—and creating false data, information or material to back up the lies. What Javice did is what more than a few of those less successful, less public, less known attempts to cash in quick have also done. Many years ago I ran into a group of students and recent alums at an Ivy League institution who were pushing a new CMS/online course product where they had a bunch of alleged adoptions by institutions on their pages. If you poked around in the adoptions, you found that some of the professor names were fake, other professors were real but not actually involved, and some of the professors were actually students posing as professors. The institutions weren’t officially affiliated and hadn’t given permission for their logos to be on-site. The courses, if you went deep enough to look, were either rough drafts created by the staff of the company or were just shell courses that didn’t exist at all. None of them were actually taught anywhere in a real curriculum. My conclusion at the time is that the founders were just hoping to unnerve an existing online course provider or CMS enough that they’d get paid off to go away. (The company’s name is still in use by what look like two separate sketchy/barely-real start-ups now, only one of which has any connection to the initial company.)

Chasing the next new thing is what successful Silicon Valley people all tell as the story of their success. It’s also the story of a bunch of hanger-ons, wannabees, get-rich-quick hucksters and no-fooling aggressive fraudsters. For every Theranos or Frank or Alameda Research, there’s a hundred small-change operators who have taken seed money meant for a paper-thin painfully trendy business plan and used it to buy some computers to mine cryptocurrency or who have just worked the bullshit over and over at every opportunity in hopes of having somebody invite them into a real start-up or hire them at a real established company.

And in the world of higher education, not all those folks are Stanford and Wharton graduates/drop-outs. Everybody’s got entrepreneurship centers, business incubators, innovation programs. Which, actually, I think is great. I am, in all seriousness, convinced that dreaming up new businesses—and actually creating them—is a very very liberal arts thing to do, and a great test of creativity, critical thinking, skills development and much more. There are useful businesses and great business ideas coming into being all the time. Barring some astonishing transformation in the world, renewable energy start-ups are going to make a bigger positive impact on climate change than conventional climate activism might, for just one example.

My beef really is this: I think most of those centers and incubators and institutes and programs in higher education are being carefully protected from critical thinking, from hard questions, from people who might know enough to realize that the shark tank competitors who are proposing to give grants to help poor families in the Mississippi Delta buy well-designed tiny houses actually know nothing about the Mississippi Delta or tiny houses or dispersing grants but they do know about investing in NFTs and buying dogecoin. In effect, a lot of those kinds of programs have become (or were always intended to be) safe spaces for students who identify themselves as entrepreneurs, a group that includes more than a few Gen-Z versions of Harold Hill who are just sizing up the institute’s budget to see how much they can take it for and hoping to meet a few like-minded folks who will help them set up some digital Potemkin Villages here and there. A lot of them train the current generation how to say complete nonsense about having a positive social impact (and even maybe to ever-so slightly believe it), the kind of sentiments that Anand Giridharadas has been critiquing very ably for a while, while also showing many of their regulars how to dodge the questions they can’t answer and fake their way through seeking investors.

You might say: well, everybody else gets a safe space, why not them? Except for the students who walk in those doors really hoping to learn about how to start a business—or with a genuinely good idea for one—aren’t going to get the support they actually need, the usefully critical questions and meaningfully factual information. And the students who need to have someone see through the con now before they end up the next Javice or Holmes aren’t getting that either.

Some of those spaces aren’t safe at all, and not just for the students or the institution. Some of them are helping to sharpen and justify a mindset—and a skillset—that makes all of us less safe. You only have to look at Javice’s resume to get that point: admitted to Wharton in first semester of freshman year after having interned in a microfinance company in Argentina, started a company while at Wharton to alleviate poverty, appointed a special advisor to social impact programs while still a student, and associated with Wharton all through the founding of Frank. You cannot tell me that no one there noticed the mismatch between the claims and the reality—or that no one in charge at Wharton has ever noticed the numbers of Wharton students who are learning how to create fake information and overblown promises. But no one ever really calls Wharton or Stanford or all those lesser-known centers to account, and no one ever points out that they are in fact leaving a ton of money on the table in terms of all the advice, scrutiny and training those students could be getting from faculty and staff who aren’t their devoted enablers and protectors, to their benefit and ours.

Image credit: "MUSIC MAN Junior Company, Music Circus 2012 at the Wells Fargo Pavilion. Photo by Charr Crail." by CaliforniaMusicalTheatre is licensed under CC BY-NC-ND 2.0.