Sperling's critics, of course, question whether the Intels and Motorolas of the world are getting their money's worth from the University of Phoenix. "Many CEOs and hiring partners report that these newly minted business majors aren't as literate and as broadly educated as they need to be," says Carole Fungaroli Sargent, an English professor at Georgetown University and author of Traditional Degrees for Nontraditional Students: How to Earn a Top Diploma From America's Great Colleges at Any Age (Farrar, Straus, and Giroux, 2000). "When places like the University of Phoenix strip the arts and humanities out of a degree because those studies are deemed unnecessary, they don't serve the business world, and they certainly don't serve the student."
Sperling dismisses such talk, countering that if the school were failing to educate, it wouldn't be attracting students by the tens of thousands. Then he scribbles two numbers onto a piece of paper: "160,000" and "30%." I ask what he means. "We have a student enrollment of 160,000, which is growing at 30% per annum. At that rate, in five years we will have nearly 600,000 students. That would make us the largest higher-education system in the world."
Sperling is a restless soul. He likes to say that his whole life has been a flight from boredom. Twice he nearly bankrupted the Apollo Group when he pushed the company into new markets before it was ready. But when the Internet arrived in the mid-1990s and dotcoms rushed to launch virtual universities, they soon found that Sperling had gotten there first.
In 1989, he purchased a defunct distance-learning company and assigned a team of techies a task that no one had ever accomplished: Create a viable and profitable electronic education system. It took five years to translate a classroom education experience into bits and bytes. But in 2000, just as the Internet wave was cresting, the university's online enrollment jumped 81%. Phoenix Online now generates $327 million in revenue. Analysts at William Blair & Co. call it one of the best-performing tracking stocks of all time.
These days, Sperling can barely contain his excitement over a new high-tech experiment that could turn out to be as revolutionary as the university's distance-learning effort. Eighteen months ago, at a dinner party for San Francisco venture capitalists, Sperling saw his first demo of an electronic textbook: "I was fascinated by it, although I didn't know what the hell to do with it." He brought the e-book idea to Adam Honea, the university's dean of information systems and technology, and used it to issue a challenge: Brainstorm a way to eliminate all of the system's textbooks and replace them with customized learning materials that exist entirely in digital form.
"At first, it doesn't seem that revolutionary. But think about it: We become publishing's version of a general contractor," says Honea. "We contract authors and experts to create course materials exactly to our specs. That lets us bypass textbook publishers. It eliminates the fixed costs of moving 140,000 books every five to six weeks. John Sperling reinvented the traditional model of the student, the instructor, and the classroom. And now he's reinventing the textbook."
Even if he fails in this latest adventure, you can't help but marvel at the man's audacity -- and energy. Sperling may be an octogenarian, but he still gets up at 5:30 every morning to work out, he still puts in a 12-hour day, and he still lives by that 1999 mantra: Change or die. "We'll put the textbook publishers out of business if they don't adapt," he exclaims. Then his eyebrows rise in mock wonder: "Isn't this what you guys call a 'disruptive technology'? "
John Sperling, the billionaire entrepreneur who pioneered for-profit higher education, has one piece of advice when it comes to lessons on business: Ignore them. Sperling, who holds a PhD from Cambridge University, says that he has learned far more about how to conduct his business affairs from such novels as Tom Jones and The Great Gatsby than he has from business books. More to the point, he believes that the strategies that worked for him probably won't work for others. With that caveat, here are four lessons from Sperling's school of hard knocks. He urges you to strenuously avoid them.
Ignore your detractors. "It doesn't make a goddamn bit of difference what people think of me," says Sperling. "If I weren't immune to criticism, it would have been impossible to create and protect the University of Phoenix from hostility and legal assaults. But that's a unique characteristic that was positive for me. If someone in an organization is indifferent to the feelings of others, he won't function well."
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