Innovators Worth Watching: MissionU

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Jul 11, 2017

Welcome to our “Innovators Worth Watching” series, spotlighting interesting and potentially disruptive players in higher education.

Earlier this year, MissionU revealed its much anticipated plan to provide postsecondary education and a debtless future. The announcement sent the higher education space into a frenzy. How could it not? This no-frills program, designed to teach job skills that are in high demand among tech employers, embodies every major buzzword in higher education innovation. Faster? Graduation in one year instead of four. Check. Online? Almost entirely, with live, synchronous classes and group projects. Check. Bridges the skills gap? Employer partners advise on the curriculum to maximize the employability of MissionU grads. Check. Debt free? Students pay a fraction of their post-graduation salary through Income Share Agreements (ISAs). Check. It’s all there.

And it seems to be more than just hype. Adam Braun, the founder of MissionU, has a track record of success and an inaugural enrolled cohort ready to start in the fall. Several higher education thought leaders are onboard as well. Ryan Craig, author of College Disrupted and founder of University Ventures (which has a small investment in MissionU), sees MissionU acting on sound theory.

“MissionU is the first disruptive bachelor’s [degree] replacement that understands last-mile training,” says Craig. “They began by establishing employer relationships and defining the technical training, then proceeded to add the cognitive and non-cognitive skills needed to get entry-level jobs.”

MissionU is clearly innovative, and strong initial demand shows that there is a market for its offering, but is it disruptive to the bachelor’s degree? We put MissionU 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?

Yes. The target audience for MissionU is 18-29 year old undergraduates who feel that the traditional four-year degree is too expensive and bloated—but who want to make sure they get a high-paying job. It’s unlikely that these students would otherwise be nonconsumers, but choosing MissionU is a clear signal they want something that is simpler, cheaper, and faster.

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

Yes. MissionU has minimal physical infrastructure, one major (Data Analytics + Business Intelligence), no research faculty, no degree, and no accreditation. For now, the program is only available to those willing to relocate to within 50 miles of San Francisco. Overall, the offering is significantly less comprehensive than that of traditional institutions, by design.

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

Depends. Unlike traditional colleges that charge a flat-fee tuition for enrollment, MissionU utilizes an ISA program whereby MissionU grads earning an annual salary of $50,000 or more pay 15 percent of their pretax income over the first three years of employment. This totals to at least $22,500— the costs rise as they make more. This compares favorably with the cost of some alternatives, and less favorably with others, as shown in the chart below.

While the cost of MissionU may or may not be lower, the risks that students are taking on definitely are. Students who earn low salaries or who aren’t able to find jobs will owe nothing—which is far from the case with student loans. Further, the average annual salary for an entry level data analyst is roughly $55k nationwide, and $69k in San Francisco, where the first cohort is based. If all goes well, MissionU grads start gaining work experience and a competitive salary years before debt-laden graduates of traditional institutions even join the workforce. After four years, graduates of traditional programs are just starting to pay off their debts, while MissionU grads are done paying tuition.

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

TBD. In disruption theory, “technology” means the processes that companies use to create value. MissionU generates value by getting its graduates hired. MissionU works closely with employer partners to calibrate its curriculum, keeping it cutting-edge and real-world problems-based. These partners then gain early preferred access to the MissionU talent pipeline for hiring. Further, 80 percent of the program is online, with live class sessions and group projects, and the remainder is spent in face-to-face meetups. This blended teaching model emphasizes teamwork and interpersonal interaction—skills that are highly prized by employers. Time will tell if enough employers find this preparation sufficiently compelling.

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

Yes. The employer-driven curriculum is paired with an ISA revenue model, which aligns the incentives of MissionU and its students. MissionU is motivated to ensure that students learn what they need to get into solid, high-paying jobs, and can scale efficiently with its lack of a physical campus.

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

Yes. MissionU cuts out several traditional elements of higher education that existing institutions cherish. Some may be distantly wary, but no colleges have shown signs of changing their game plan yet.

We won’t know if MissionU’s bold, new pathway from education to employment works until some of its students graduate and actually get hired, but signs point to MissionU having considerable disruptive potential. If MissionU succeeds, traditional higher education institutions will face a new, disruptive threat to their business model.

In the meantime, what is Braun most excited to see happen with his first batch of students? “The relationships and friendships that form,” he says. “It’s more than just the debt-free, skills-based learnings. Education is a very human-centered experience, and thrives when people form meaningful, lifelong relationships.” An ideal we can all get behind? Check.

Richard Price

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.