innovators

Innovators worth watching: 2017 Review


How did these five innovative companies fare?

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.

Cell-Ed
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.

MissionU
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.

StraighterLine
In contrast, StraighterLine is chugging along and appears to have just as much disruptive potential today as it did in 2017. In April, the Department of Education announced its final approval of the partnership between StraighterLine and Brookhaven College (a member of the Dallas County Community College District) through the EQUIP experiment. This is the first project to receive final approval. Through EQUIP, students that apply to Brookhaven can use federal financial aid for StraighterLine courses that help them complete their associate’s degree at Brookhaven, in either business or criminal justice.

StraighterLine’s disruptive potential in remedial and general education depends on the company plugging into degree programs as seamlessly, conveniently, and cost-effectively for students as possible. If students can begin using federal financial aid for StraighterLine courses on a larger scale, we believe StraighterLine will maintain its disruptive trajectory.

Degreed
When we last spoke with Degreed founder David Blake, the company had just launched its Skills Certification product, a potentially disruptive alternative credential that reflects skill attainment at a more granular level than the traditional college degree. As we discussed in last year’s profile of Degreed, the Skills Certification will only disrupt the traditional degree if employers see it as offering something of value.

Since then, Blake has taken off his CEO hat to better focus on the continued growth of the Skill Certification and “career pathing” segments of the Degreed platform, onboarding Fortune 200 clients and other major employers. “Degreed has an existing skills taxonomy,” explained Blake in a recent interview. “We are equipped to work with companies no matter how developed their competency framework is; or they can use our framework, often saving themselves years of work.”

Degreed also recently received another $42 million in funding, bringing its total funding to $75 million, and is seeing positive results in its expansion to Africa, southeast Asia, and Europe. With this kind of growth, including employer buy-in for the Skills Certification, Degreed remains on a potentially disruptive trajectory.

Minerva Schools
Rounding out our 2017 group is Minerva Schools, which enrolled its fourth full cohort of undergraduates this fall. For the first time, the university will have a full undergraduate student body, numbering roughly 600 students, as well as two Master’s cohorts. The undergraduate cohort is larger than anticipated, given a growing applicant pool and Minerva’s admissions policy of accepting all qualified applicants. “This is a major challenge,” observed founder Ben Nelson. “We will have to do more philanthropic fundraising than we are usually set up to do. But we wouldn’t have it any other way.”

Minerva also recently announced a scholars program in conjunction with Hong Kong University of Science and Technology (HKUST). Minerva will train HKUST faculty to teach its “cornerstone” courses in the active learning style, implementing Minerva’s online platform (the ALF). Select HKUST students will take these courses over two years as part of their degree program. Through the ALF, Minerva and HKUST can gather data on student progress and analyze the extent to which Minerva’s approach can succeed within other institutions. Further, Minerva students will get an opportunity to spend part of their fourth year doing research and completing coursework on the HKUST campus.

Minerva continues to be tremendously innovative—though not disruptive. Taking the first steps to disseminate its curriculum and teaching style among other institutions is nonetheless a compelling approach to reshaping higher education.

The Innovators Worth Watching series gives us the opportunity to accompany potentially disruptive companies in real time. Studying these companies through the lens of Disruption Theory helps to better understand their growth potential and the likelihood that they will supplant incumbents in the various sub-industries that exist in higher ed.

We look forward to seeing how Disruption Theory can help inform these innovators during their journeys, but also how these innovators can inform the theory, pushing it into an ever more robust and predictive plane.

[Editor’s Note: This article originally appeared on the Christensen Institute’s blog.]

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