The rise and fall

Currently Playing: The rise and fall of Harvard

Special thanks to Mercury for partnering with me! Mercury gives founders powerful banking, cards, and financial tools built to help businesses operate smarter. Learn more and get started at http://mercury.com/ Learn more about Bedrock Quality of Earnings - head to https://www.girdley.com/bedrock This is the rise and fall of Harvard: how a college founded in 1636 became one of the most prestigious institutions in the world, built a massive investment operation, and eventually found itself fighting battles over admissions, governance, donors, federal funding, and its role in American society. More importantly, I look at Harvard as a business and what its story can teach operators about incentives, customer concentration, institutional capture, and what happens when an organization starts serving itself instead of its customers. Get the 2-minute cheat sheet for this video → https://girdley.com/youtube 👇 SUBSCRIBE for more business breakdowns https://www.youtube.com/@Michael-Girdley?sub_confirmation=1 ► Get my weekly letter to business owners: essential insights to run, grow, and stay ahead in your business → https://links.girdley.com/newsletter-yt ► For sponsorships or inquiries please reach out to: Contact@girdley.com ► Do you have a hat I should wear in a video? Send it to us: Contact@girdley.com ► Free events on all things small business: https://links.girdley.com/lectures-yt ► Deep dives on businesses for sale: https://www.youtube.com/@AcquisitionsAnonymousPodcast ► Follow me on Twitter/X: https://x.com/girdley Harvard started with a 400-pound allocation from the Massachusetts Bay Colony and eventually became one of the most powerful universities in the world. Along the way, it adopted the research-university model, built influential professional schools, maintained extraordinary admissions scarcity, and created an alumni network whose value extended far beyond what happened in the classroom. Then money changed the institution. Harvard professionalized the management of its endowment through Harvard Management Company, turning investment performance into an increasingly important part of the university’s economics. That created a useful business lesson: when an organization becomes dependent on a particular source of capital, the incentives surrounding that capital can begin shaping the organization itself. At the same time, this Harvard business breakdown looks at another force: institutional capture. From fights between faculty and university presidents to legacy admissions and the controversy surrounding Claudine Gay, Harvard became a case study in what can happen when different internal constituencies accumulate enough power to constrain the people supposedly running the organization. Those tensions eventually collided with politics and government funding. After the controversies of 2023 and Claudine Gay’s resignation, the Trump administration put billions of dollars in Harvard’s federal funding under review in 2025. Harvard refused the administration’s demands, federal grants were frozen, and Harvard sued. The university’s enormous endowment gave it something most organizations facing a powerful customer could only dream of: the financial ability to fight back. So what happened to Harvard? My argument is that this story is bigger than one president, one political fight, or one admissions controversy. The rise and fall of Harvard is ultimately a story about incentives. Institutions can become extraordinarily successful while gradually shifting from serving their customers and communities toward preserving the institution itself—and that’s a problem business owners should pay attention to.