Fellow investors: Here is our business plan. The route to big profits is to find an industry that is oversized, inefficient, smug, and self-satisfied and then give it an injection of good old-fashioned business competition. Bring the power of business thinking and private sector efficiency to an outmoded industry. Cut costs and prices, downsize, consolidate, merge. Take advantage of new technologies and new markets. This is how entrepreneurs have taken over numerous other industries, and it is our road map to take over higher education and make big profits.

Privatizing and re-engineering higher education is an idea whose time has come. Most colleges and universities have out priced themselves in the market and do not realize they are vulnerable. They think because they have existed for a thousand years that they can continue another thousand. Like hundreds of hospitals that close every year, they think that, because they mean well, they will do well.

Yet there is evidence already that they are not doing well. For example, the Carnegie Foundation for the Advancement of Teaching recently stated flatly that “universities don’t deliver on what they advertise.” Many students graduate, they find, “without knowing how to think logically, write clearly or speak coherently.” They find many teaching assistants teaching lecture classes who can’t speak understandable English, and describe some university professors as “tenured drones who deliver set lectures from yellowed notes, making no effort to engage the bored minds of the students in front of them.” They go on: “Baccalaureate students are the second class citizens who are allowed to pay taxes but are barred from voting; the guests at a banquet who pay their share but are given leftovers.” This describes an industry ripe for takeover.

We specialize in taking over industries that look in rearview mirrors. That this industry is part private nonprofit and part public frightens some investors. Investors tend to overlook the potential in privatizing government and nonprofit functions. Privatization is on the march; it allows us to do much more for less money and with less bureaucracy. Our management team already has experience in privatizing K-12 schools, welfare, and prisons. Remember that Ross Perot became one of America’s richest men by privatizing governmental functions.

In our research department’s opinion, higher education is ready for a takeover by the private sector. Here is a plum just waiting to be picked. It is an investor’s dream. Where else can you find an industry that offers about half its customers discounts paid for by the other half; with vast unnecessary overhead expenses that can be slashed drastically; whose key employees often work less than 20 hours a week, resist examination of their productivity, and can’t be fired or forced to retire (yet aren’t unionized); and whose CEO has little power and authority. Add to this the fact that the market is overbuilt, even for the current customer base, and that the customer base is declining.

Peter Drucker, who has seen the future so clearly, recently predicted the end of universities as we know them. “Such totally uncontrollable expenditures, without any visible improvement in either the content or quality of education means that the system is rapidly becoming untenable,” he said, “. . . already we are beginning to deliver more lectures and classes off campus via satellite or two-way video at a fraction of the cost.” Those gloomy words are our route to big profits.

Colleges and universities have too many courses taught by overpaid professors, in an old-fashioned person-to-person way, to students who are becoming more price competitive. Phoenix University is able to hold its salaries and benefits cost per credit hour delivered to approximately 25 percent of normal university costs, and so can we. And we don’t intend to stop there. Why should a college be able to “tax” paying students to subsidize nonpaying students? Like cost-shifting in health care, we need to stop including social goals in the price of our products.

Remember, this industry is nonprofit. It has never felt the sting of real competition and has grown bloated, inefficient, bureaucratic, and oblivious. It is amazingly out of touch with current business practices and docs not recognize how vulnerable it is. Its vision is of the past, not the future. It stubbornly adheres to a tradition and model that is over 1,000 years old. It is a high-cost anachronism that is imposing staggering economic demands on middle-income parents.

The key concepts in business today are almost completely unknown on campus. Yet the ability to consolidate, merge, downsize, and outsource is as great in higher education as it is in other places where we have made large profits, such as banks, radio stations, television stations, and health care. We earn profits by rationalizing an irrational market.

We seek to reconceptualize higher education. It is our intention to do to higher education what Charles Schwab did to the securities industry and Sheraton did to hotels. We will gain control of some key institutions nationwide, fire most of the employees, and replace them with lower paid but equally competent workers. We will then hire some of the best known academies and have them telecommuting and/or teleconferencing to all our subsidiaries at the same hour on the same day. We feel that the information revolution has created a massive oversupply of professors. The Internet and telecommuting and/or teleconferencing can replace most of the teaching functions of colleges or universities. Students in much more comfortable classrooms will watch the world’s best professors on a giant screen. We will sell ads to be run before and after the lectures, and we have Seinfeld already under contract to promote our common curriculum. We will hire proctors to replace professors and cut out many unnecessary and superfluous functions. We will stop taxing half the students via higher tuition to support all or part of the other half of the students. We will rim education like a business. If government wants to subsidize poor students, let it do so directly instead of by cost shifting.

We figure that, with the Internet, we can cut the cost of libraries in half and save bundles just by discontinuing a bunch of journals that nobody reads anyway. We will stock the library with only the best books on every subject, which we estimate can cut our library acquisition costs in half.

We also have under contract some of the key entrepreneurs who took over and consolidated the mortuary business, builder’s supplies, barber shops, etc. They realize the power and efficiency of mass purchasing and common management. We estimate that we can cut the cost of tuition in half and still make gargantuan profits. In many areas we can buy three institutions and merge or close one (the business plan of Columbia HCA). We can discontinue discounts (called scholarships) and undercut the existing system. We feel that the political climate is ripe to privatize those institutions now under both private and public control.

We feel that we can produce as good or better products—called graduates—as the current system does for a fraction of the cost. After all, whoever has custody and jurisdiction over young people as they age from 18 to 22 is bound to see massive improvement in those customers. We have human maturity working for us, for which we can take partial or even full credit. Our research department hasn’t been this excited about an industry since computers. Market-driven higher education can yield a good, standard quality product for a fraction of the present price. For a prospectus, call . . . .