In June of 2017, we began profiling innovative players in the higher education space and analyzing their business models through the lens of Disruption Theory. Using our six questions for identifying disruption, we made predictions about the disruptive potential of these companies.
We would be remiss not to revisit those predictions as these companies evolve, in particular the five companies we profiled in 2017. While an understanding of Disruption Theory will not make a fortune teller out of anyone, it can productively inform policy and business strategy.
The textbook examples of disruptive innovations start with a company serving the needs of non-consumers and overserved customers with a simpler and cheaper version of an existing technology. Cell-Ed enables low-literate adults to acquire basic literacy, language, and workforce skills through “micro-lessons,” using technology designed to work on all cell phones, without requiring internet access.
Since we last checked in on Cell-Ed, they have expanded beyond U.S. borders, extending their services into Chile, Ghana, Kenya, and Nigeria. As we predicted, they are using their technology to move upmarket, automating assessments that place students in the appropriate course given their level of learning, while functionality like nudges and reminders helps keep learners on track.
Our major question about Cell-Ed last year was whether it would adopt an innovative business model that allowed it to be sustainable. Since then, Cell-Ed has more definitively embraced a B2B2C model, especially targeting employers. The result? More scale and fewer marketing costs, allowing Cell-Ed to robustly and cost-effectively refine its offerings. Through its 30 or so partners, Cell-Ed is now helping to train over 14,000 students.
In a surprising turn of events, MissionU recently announced that it is winding down its academic offering, and that CEO Adam Braun will be joining WeWork’s WeGrow team. MissionU was one of the more attention-grabbing alternatives to the traditional college experience, claiming that after one year of a targeted, employment-oriented curriculum, it could help its graduates earn high-paying first jobs. These graduates would then pay back a portion of their income through an income-share agreement (ISA).
Instead, MissionU will finish teaching its inaugural cohorts over the next few months and waive all ISA obligations, discontinuing the program. No detailed explanation has been given for the move.
Our original analysis pointed out that MissionU’s disruptive potential relied on its graduates landing good jobs and honoring their ISA contracts. Without knowing the hiring rate for MissionU grads, or if demand was flagging, we can’t really tell if the model could have worked. A recent analysis points out that MissionU’s coffers were still full, so MissionU likely could have kept operating for a while.