The Coming Credentials War

As a long-overdue followup to my post about Reid Hoffman’s vision for a “networked diploma,” I’ve put together a landscape of the people fighting to create and own that credentialing platform. It has been a quiet, cold war up until now, but I believe 2014 is when it heats up.

Because this is a greenfield vision, there are not just competitors, but competing technologies and business models. The stakes are high because, as  Hoffman said in is post, a truly disruptive form of credentialing could upend both education and employment.

First you have to understand that this fight isn’t about MOOCs vs. traditional colleges, or whether a college dropout with good GitHub profile is a better hire than someone with a CS degree from MIT. What we’re talking about is how you discover, exchange, and verify credentials, not how you get them.

There are 5 main contenders:

Mozilla’s Open Badge Initiative is a “pure play” technology for moving credentials earned into a shareable, portable, online profile. It allows any organization to use the Open Badge framework to “badge” any type of credential. However, it’s a technology without a business model. While Open Badges represent a powerful way to move credentials online, a new credentialing system requires a standard-bearer to establish and promote a marketplace in which critical mass of participants are interacting on the same terms. Interestingly, Pearson has just announced that they’re building a badge service, Acclaim, that’s built on Open Badges but it’s not clear what the model behind it will be.

LinkedIn is a big, established player. They’re important because they have so much mindshare among professionals that they’re a natural place to showcase credentials. However they don’t have any special expertise for acquiring or verifying them, nor have they shown significant traction among students and learners. LinkedIn might be a natural place for credentials to live, but some other entity has to actually certify them as Reid Hoffman said in his post.

Blackboard just bought MyEdu, a course-planning startup that was attempting to pivot to a student-profile site. Adding student-driven profiles to Blackboard’s LMS platform could connect the dots between learning activity and their public outcomes, giving Blackboard a natural path from education to credentials. Blackboard also has deep and rich relationships with thousands of educational institutions. On the downside, Blackboard’s market penetration is almost exclusively in education, so finding a way to deploy their credentials infrastructure beyond that could be challenging.

Parchment doesn’t start with profiles; instead, it’s a secure document exchange technology that’s sold to schools for easily transferring transcripts among high schools, colleges, and other institutions that require a verified transcript. They build a viral distribution model that encourages adoption by schools and has driven broad penetration in K-12 and higher ed. Now, they are aiming to allow students to own and display their Parchment data as verified credentials. This model benefits from having the institution create data for the students based on their verified learning outcomes, so user acquisition isn’t an issue. However, they’ll have to move beyond the transcript-driven use case to be a true credentials-exchange platform.

Merit also starts with school data rather than with profiles, allowing schools to update and verify a public profile of every student automatically. Because it’s explicitly sold as a credentials-promotion and verification tool they don’t face the FERPA issues that Parchment may. While Merit’s adoption curve ramps slowly because of their B2B deployment model, once deployed there are no profile-acquisition costs because the institutions create and verify students’ profiles automatically. Now Merit is adding credential granters outside of higher ed–like national honor societies, scholarships, and even employers. Merit’s biggest hurdle is overcoming the mindshare and funding lead by its larger competitors.

Usefully, these players can be plotted in a  matrix:

credentialing landscape

Contrary to most consultants’ 2x2s, the upper-right quadrant isn’t Reid Hoffman’s Promised Land. His vision of a networked diploma lives in the lower-right quadrant: a verified, updated record created on behalf of every learner that complements LinkedIn (the company he founded).

What’s especially interesting is what would happen if any of these credentialing players not only realized Hoffman’s vision, but exceeded it: a verified credentialing platform that dominated that lower-right quadrant the way LinkedIn completely owns the upper-left one, but moving north into a networked, verified resume that supersedes LinkedIn or the traditional resume itself. That would be truly disruptive.

It’s worth mentioning a few other people who have done some positioning around credentials, but whose offerings don’t fit Hoffman’s model:

  • Chegg is attempting to own the “student graph” (comparable, in their terms, to Facebook’s social graph or LinkedIn’s professional one), by engaging students with textbook rentals, coursework support, and internship matching. However, they may not be able to deploy or afford an entry into credentialing itself.
  • HigherOne’s 2012 acquisition of CampusLabs gives it the ability to offer co-curricular transcripts and more traditional ePortfolio content to a consumer-facing student profile, but so far they seem focused on their B2B offerings to institutions.
  • Portfolio sites targeted at students–including Pathbrite, and, before it was acquired, MyEdu–aim to show the evidence of work completed as well as visually illustrate milestone accomplishments. These sites range from simple iterations on the “e-portfolio” academic fad to infographic-styled splash pages and have yet to show widespread acceptance.

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