"To know and not to do is really not to know," says a Chinese proverb. Never was I more acutely aware of this than when I first became a father.

There I was, holding my daughter for the first time, and I had no idea what to do with her, despite having read books, taken classes, listened to advice from well-meaning family and friends, and watched hours of YouTube videos.

I had the literacy of parenting, but not the fluency. That would come slowly, after months, even years, of actual parenting.

"Literacy" refers to a limited degree of understanding a topic. We get it from consuming information in the form of books, lectures, and videos. On the other hand, "fluency" is the ability to function competently, to actually do something. That can only be gained from education.

Information and education are two business paradigms, and they're at war with each other.

The Difference Between the Information and Education Businesses

In an information publishing business, the entrepreneur's job is to produce something that customers want to buy, and their responsibility ends there. Once someone has bought a book from a bookstore, for example, nobody owes that customer anything-not the publisher, not the author, and not the bookstore owner.

But that's not how it works in the education business. Both educator and student have expectations and responsibilities: the student is responsible to dedicate the time and energy it takes to do the work, and the educator is responsible to facilitate learning through a combination of explanation, simulation, and coaching while doing the work under expert supervision.

Information and education serve different purposes and have different economics. Information aims to inform, inspire, and act as a reference. It can generally be created once and then sold many times with little marginal cost, so it's usually cheap.

Education, on the other hand, aims to empower and transform. This requires a partnership between student and teacher that involves hands-on guidance and support, so it usually comes at a premium.

And Then the Internet Broke the Publishing Business

And then the internet happened, and both information and education were never the same again.

Shortly after we figured out how to create digital information products, we expected the death of printed books, magazines, and even radio. After all, a Kindle book provides every bit as good a reading experience as a paper copy does (unless you're a die-hard printed book aficionado).

Entrepreneurs saw the instant-access and zero-cost fulfillment that made digital content more attractive than print, with no loss in experience and, if anything, an increase in quality (it can be updated more regularly, can contain links to other resources, etc.). It was good for consumers as well, since they could now get information more quickly and at a lower cost.

While traditional media didn't completely die, many media companies did fold up, except for the few who adapted to the new digital landscape.

Another problem arose when entrepreneurs assumed that digital publishing would work just as well with education as it did with information. So they did away with the classrooms, the textbooks, and the teachers, and replaced them with PDF downloads, membership sites, and video lessons.

But we all know that if you take away the learning environments and teachers, then you're left with nothing more than a glorified multi-media textbook. And yet they're being sold for far more than their outcomes could ever justify. In other words, information products are being masqueraded as education and sold at a premium.

It's an unsustainable situation. People are already realizing that "the emperor has no clothes." Overpriced information products (in the guise of education) are getting harder to sell, and customers who buy them are becoming difficult to retain.

For example, Udemy, one of the largest marketplaces for online courses, instituted new pricing policies that sharply constrain what price course creators can charge. More information product sellers will see prices drop significantly and the market will return to the same long tail distribution, where the few mega-hits rake in the vast majority of the profits.

On the other hand, those who embrace the paradigm of education and take ownership of their responsibility to partner with their students in pursuit of their learning goals will continue to command premium prices. And they'll do so with increasing ease, because the market is growing more sophisticated and phasing the peddlers of overpriced information out of the picture.

On which side of the divide will you be?

Published on: Jan 10, 2017