online learning_Higher Education_ChristensenInstitute

Innovators Worth Watching: Minerva

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Dec 7, 2017

Welcome to our “Innovators Worth Watching” series, spotlighting interesting and potentially disruptive players across a spectrum of industries.

Slowly but surely, traditional higher education is wading into the waters of online learning. In one recent survey, a full 42% of faculty had given it a try, up from 30% just four years ago. The proportion of faculty that believe online courses can achieve outcomes as good as those in face-to-face courses also increased considerably—but is still only 33%. Many still view online courses as “not as good”—pretty typical for disruptive technologies.

While the industry sorts out its feelings about online courses, one institution has gone all-in. Minerva Schools at KGI, a degree program in collaboration with the Keck Graduate Institute, designed its curriculum so that all class time is entirely online, consisting of live, flipped classroom seminars, supplemented by location-based assignments in whichever city the cohort is based that semester. (Minerva rotates its students through seven major cities on five continents during the four years). In fact, Minerva considers its immersive online platform to be unambiguously superior to in-person classes. Online learning offers the ability to generate data on student learning in real time and to free students to learn from anywhere in the world. These are critical components of Minerva’s mission to “nurture critical wisdom for the sake of the world,” and of its aspiration to become the model university for everyone to emulate.

However, becoming the model university requires more than technological and curricular innovation. “In higher ed, everyone looks to the elites and follows the leader,” said Minerva founder Ben Nelson. In other words, it also requires prestige. The world’s elite institutions, such as the Ivy League universities, have accumulated their prestige over centuries. Minerva has been around for half a decade. But as Nelson went on to say, “If the elites follow us, and everyone else follows the elites, the whole system improves.”

With so much prestigious ground to make up, Minerva has focused on carefully cultivating its brand and on educating only the most academically elite. Given its extreme selectivity, Minerva is by definition not disruptive to higher education as a whole. Disruptive innovations radically increase access. But given that Minerva seeks to out-elite the elite, is Minerva disruptive relative to the Ivy League and other elite institutions? We put Minerva to the test with six questions for identifying disruption.

1. Does it target people whose only alternative is to buy nothing at all (nonconsumers) or who are overserved by existing offerings in the market?

Not necessarily. Minerva targets extremely academically elite students through a unique admissions process that is designed to admit all qualified students, but according to which only two percent of applicants are actually qualified so far. That is more selective than any Ivy League school, and does not explicitly target nonconsumers of an elite education or those overserved by existing offerings. That being said, Minerva has a no-quota admissions policy resulting in 80% of the student body coming from outside the U.S., compared to an international student presence of no more than 20% at other elite institutions in the U.S. This creates openings for international students who may be de facto excluded from these schools.

2. Is the offering not as good as existing offerings as judged by historical measures of performance?

Depends. Minerva aims to offer an unmatched education, and by some traditional metrics, Minerva’s educational experience is more elite than that of top schools: at Harvard, 74% of classes have fewer than 20 students; Minerva boasts 100%. Besides its extreme selectivity, the Minerva student body is also more international and socioeconomically diverse, attributes that elite universities tout in their brochures.

But by other measures Minerva’s prestige remains far below that of traditional Ivy League schools. All Minerva courses are delivered online, and Minerva does not subsidize research by its faculty. By comparison, all Harvard undergraduate courses are face to face, often with legendary professors who perform cutting edge research. Minerva also did not build an impressive physical campus, an attribute on which elite schools compete vigorously. Instead, Minerva opts to rent out living spaces in the various cities and encourages students to make those dynamic cities their campus.

3. Is the innovation simpler to use, more convenient, or more affordable than existing offerings?

Yes. Minerva’s offering does not seem obviously simpler or more convenient than that of an elite institution. Students are expected to relocate, but that is fairly typical for elite schools.

Regarding affordability, the sticker price of the cheapest Ivy League school was $61,105 for the 2016-17 school year. Minerva’s stated tuition plus room and board is less than half of that amount. But of course, the true cost of college is more complicated, especially given that 80% of Minerva students require financial aid. Minerva is eligible for federal financial aid programs but does not participate. Instead, it offers loans capped at $20,000 over the four years, facilitates work-study opportunities, and provides scholarships to cover remaining gaps. Minerva may end up being more expensive for some students, but it is the cheaper option for many others.

4. Does the offering have a technology that enables it to improve and move upmarket?

No. Minerva is trying to start at the top, already drawing students that had offers from Ivy League schools. There is no “upmarket.” That being said, Minerva does seek to continuously improve its pedagogical practices. To this end, Minerva created an immersive online learning environment, the Active Learning Forum (ALF), that puts into practice decades of academic research into active learning. The platform gathers detailed data on student participation and progress, allowing Minerva to assess and refine its methods.

5. Is the technology paired with a business model innovation that allows it to be sustainable?

TBD. Not unlike Ivy League schools, Minerva Schools relies on philanthropic donations for scholarships. However, the Minerva Project, a separate entity, houses the intellectual property, which includes the ALF, the curriculum, the brand, and more. This entity could build a sustainable business model if it is successful in its endeavors to license out different elements of the company’s IP.

6. Are existing providers motivated to ignore the new innovation and not feel threatened by it at the outset?

Mostly. Elite schools recognize the benefits of global education and small class sizes, and actively compete on those dimensions. However, given that online learning is still considered “not as good,” elite programs are unlikely to feel threatened by that component for now.

Based on the above analysis, Minerva is not a textbook disruption play, even relative to Ivy League schools. And that is just fine to Nelson. “We are implementing the best that learning science has to offer, with personalized attention at a fraction of the cost and with better outcomes. We offer these as tools for the survival of the old,” he said. “That’s different from the typical disruption idea of sweeping the old aside.”

But if Minerva succeeds in embedding itself at the top of the prestige food chain, elite incumbents will need to restructure themselves considerably to stay relevant. Minerva may not want to sweep them aside, but progress has an indiscriminate broom.

As a research assistant on the Christensen Institute's higher education team, Richard helps investigate novel business models in postsecondary education, professional development, and lifelong learning.