Minerva’s Plan to Disrupt Universities: A Talk with CEO Ben Nelson

Xconomy National — 

[Updated, see below] Traditional four-year universities have always had to compete for students. They’re vying not only against each other, but against community colleges, the military, online institutions like University of Phoenix, and, in an age of increasing economic pressure on the middle class, the work world. (Some 34 percent of U.S. high school graduates in 2012 chose not to enter college, or could not afford to.)

But now universities have a new and potentially more worrisome rival: Silicon Valley.

I’m not just talking about the companies that are putting lectures online, such as Khan Academy, Coursera, and Udacity. These purveyors of massive open online courses (MOOCs) tend to portray their offerings as supplements to a classical undergraduate education, or as extensions designed for audiences who wouldn’t otherwise have access to university-level instruction. That’s an idea existing schools understand and are pursuing on their own, through efforts such as edX, the joint project at Harvard, MIT, the University of California, Berkeley, the University of Texas, and other schools to publish MOOCs and interactive learning materials.

No, these days universities also confront a much more direct challenge, from venture-backed companies using technology to reinvent the full undergraduate experience—from the structure of classwork to the composition of the faculty, the look and feel of the campus, the standards for evaluating students, and the way the whole package is priced in the market.

The best-funded and most-discussed of these challengers is the Minerva Project, founded three years ago by serial entrepreneur Ben Nelson, the former CEO of photo-sharing startup Snapfish, which was acquired by Hewlett-Packard in 2005 for a reported $300 million. Nelson, 38, has called Minerva a “perfect university” that will trade huge lecture courses for small faculty-led seminars, and physical classrooms for online video exchanges. The for-profit company won $25 million in seed funding from Benchmark in 2012, and three weeks ago it admitted 45 students to its first class; it expects roughly 19 of them to arrive in San Francisco in September for the beginning of their freshman year. [Update 4/23/14: Minerva said this week has decided to double the target size of its founding class, which will now include two sections of 15 to 19 students each.]

I had a long conversation with Nelson at Minerva’s downtown office on March 28, the same day the company was welcoming its first group of admitted students to San Francisco for a preview of the Minerva experience. Nelson has claimed that Minerva sets “the highest bar of any university in the world,” and he told me the first group of students were “spectacular talents.” Some 58 percent of them are women, and the same proportion, 58 percent, come from outside the United States. Three of the students have already started their own companies, and two hold patents.

When the students come back in September, they’ll be living together in a converted apartment building on Nob Hill. And that is perhaps Minerva’s only concession to the traditional paradigm of the four-year residential college.

The students won’t attend classes, exactly; instead they’ll use their laptops and webcams to log into Minerva’s Web-based platform for virtual seminars. [Update 4/23/14: Minerva has posted a video illustrating the seminar experience.] They won’t be graded through papers or tests, but instead by faculty reviewing recordings of seminar interactions to see whether they’re picking up key concepts and habits of mind. They won’t even stay in San Francisco: for their sophomore year the entire class will be transplanted to another world city, such as Mumbai. (The actual locations of Minerva’s second, third, and fourth campuses haven’t yet been announced. [Update 4/23/14: Nelson announced this week that Minerva’s first two international residence halls will be in Berlin and Buenos Aires.])

The big idea at Minerva is that an immersive, four-year undergraduate education is still the best way to prepare the next generation of leaders, but that today’s elite campus-based universities are doing almost everything wrong. In Nelson’s eyes, most U.S. universities value research over teaching. They charge excessive tuition. They waste money on sports programs, classroom and office space, and lavish facilities for students. They exclude top applicants from other countries, unless their parents are likely to become big donors. And perhaps most egregiously, in Nelson’s mind, they charge students for lecture-based knowledge that should be free to everyone, while neglecting the task of building a coherent curriculum or teaching critical thinking skills.

Nelson has all the bravado of the archetypal Silicon Valley CEO—a Mark Zuckerberg, a Jack Dorsey, or a Travis Kalanick—who’s out to disrupt an existing industry and break a few things in the process. Though he’s a product of the Ivy League (he attended the Wharton School of the University of Pennsylvania), he’s dismissive of traditional fixtures of university life such as fraternities and tenure. He has a fondness for grand pronouncements, and he speaks in present tense about plans and programs that have yet to be tested with enrolled students.

And yet: bravado is probably a useful trait when you’re going up against a true behemoth. The U.S. higher education business collects hundreds of billions of dollars a year in tuition and state and federal grant money; has raised prices at a pace far exceeding the rate of inflation; and has been notoriously slow to adapt to new technological and economic realities. It’s clear that Nelson and the initial faculty leaders he has hired—including respected researchers and academicians like Eric Bonabeau, Diane Halpern, Daniel Levitin, and James Sterling—care deeply about the quality of higher education; so deeply, in fact, that they’ve gone outside what they see as a failed system in an effort to rescue it.

“In general, the best way to achieve success is to focus on absolute criteria, but to change the conditions around you,” Nelson says. At Minerva, that means discarding almost everything about traditional college life, except the Socratic ideal of the small group where a faculty questioner forces students to grapple with new ways of thinking. “If a student wants football and Greek life and not doing any work for class, they have every single Ivy League university to choose from. If you don’t want that, you can have Caltech, which is the only university that forces you to work, because they actually issue F’s and they don’t have football. But if you don’t want to live in Pasadena, you have nowhere except Minerva.”

According to Nelson, the whole Minerva experience will be tuned to do one thing: cultivate critical thinking and communication skills in future leaders, “the people who will create or invent or run the major institutions of society” in countries around the world. Nelson acknowledges the experience won’t be right for everyone. “There are a lot of students who want the campus life and the a cappella groups and the performing arts scene. That is not what we provide. Similarly, there are faculty who want to do research and get in front of a lecture hall and regurgitate the same lecture they’ve been giving for 20 years. We have a different model.”

When Minerva started to reveal its plans back in April 2012, observers naturally posed a slew of questions. What kinds of students would Minerva try to attract? How much would they be asked to pay? Who was going to teach them? Why conduct courses online, if the students are physically co-located? What would accrediting bodies have to say about the whole idea?

Today most of those questions have answers, or the beginnings of them. To win accreditation, Minerva has partnered with the Keck Graduate Institute, a Claremont, CA-based collection of biosciences degree programs. (KGI is itself a 1997 offshoot of the Claremont Colleges consortium, which also includes Pomona College, Claremont McKenna College, and Harvey Mudd College.) To run its online seminars, Minerva has developed a new cloud-based video conferencing system that, to hear Nelson describe it, sounds a little like Google Hangouts with a collection of extra tools for discussion and evaluation. Tuition will be set at $10,000, and Minerva has created a separate non-profit organization, the Minerva Institute for Research and Scholarship, to administer loans—but the founding class will attend at no cost.

In a broad-ranging conversation, I asked Nelson to elaborate on these and other matters, including Minerva’s technology, its prospects for an eventual exit or IPO, and its pedagogical model, which founding dean Stephen Kosslyn has called a “scaffolded curriculum” where professors impart key concepts and skills in one context and methodically revisit them in others. I’ve transcribed and slightly condensed our discussion below.

Xperience: You just admitted your first class of students. Who are they? What’s the profile of a Minerva student?

Ben Nelson: They are 45 students that are, to a one, really just spectacular talents. They are, in some regards, like the students you hear about that go to Harvard or Stanford; they are the ones at the top of their high school class. They are not the kind of average student that comes into a university. Not because they are doing PhD-level work in high school—even though some of them are—and not because they have some outrageous GPA—which, of course, most of them do. But because when you look at the totality of their accomplishments, academically and outside of school, and the leadership and initiative they have shown, and then when you analyze their minds—which we do, because we have these cognitive tests and we interview them—they are just off the charts.

X: Okay, they sound pretty stellar. But how do you square that with what you’ve said in the past about making Minerva a place that welcomes students who wouldn’t be admitted to Harvard or Stanford? How can you be elite and democratic at the same time?

BN: This is exactly what we are doing: both at the same time. To give you some perspective, I went to an Ivy League university 20 years ago. I went to Wharton as an undergrad, which is just as hard to get into as Harvard is. I was a Joseph Wharton Scholar, which is the top 7 percent of the incoming class at Wharton. This was at the very top of the top for American higher education. I just spent a week in China, and the students I met in China who were admitted to Minerva, each one of them would be considered not just a Joseph Wharton Scholar but they would be in the top half of the Joseph Wharton group.

But I don’t think any of them got into the top half of the Ivy League—Harvard, Yale, Princeton, Wharton. Maybe a couple of them. There were eight students—eight!—that got admitted into Harvard from all of China three years ago. Penn just released its statistics; it has an incoming class of 2,500 and less than 1 percent came from mainland China. And if you think all those students were admitted on merit, you are wrong. You can’t select the top 27 applicants from China; that’s not a possibility for … Next Page »

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7 responses to “Minerva’s Plan to Disrupt Universities: A Talk with CEO Ben Nelson”

  1. lump1 says:

    Wow, I teach at a university, but this one seems better. It would have been very easy for them to take shortcuts and charge thousands for access to lecture downloads and mercenary distributed test-graders, and call that an education. I’m impressed that they’re avoiding such shortcuts. To me, it sounds like they’re so ambitious that their money will inevitably run out and they will be forced into compromises. But maybe this wet blanket attitude of mine is the reason why I’m a college instructor and not an entrepreneur.

    Just one comment about tenure, though. A lot of people have this misconception that tenure is somehow economically unsustainable at universities. I suspect it’s actually a huge money-saver. It’s because universities offer tenure that they can afford to pay much smaller salaries and still hire top research talent. For sure, a faculty member choosing between a tenure-track and non-tenure-track job might take the latter, but only if it paid *a lot* more. The figure I’ve seen is around $25,000, but I suspect that’s actually an underestimate. But even it it’s right, offering tenure basically means that universities can hire professors for $25,000/year less than their market value. That’s nothing to scoff at, even for people trying to start something educationally “disruptive”.

    • Wade Roush says:

      Hey lump1, thanks for your comment. I agree that Minerva’s plan sounds costly: they may have to go back for several more rounds of venture funding before they get anywhere close to breaking even based on tuition alone, and in that case the question the investors will ask is how fast are they growing? VCs are often willing to re-up based on rapid growth. So my bet is that scaling rapidly, rather than budgeting per se, is going to be their greatest challenge. Thanks for your observation about tenure: I didn’t think to ask them whether they plan to pay faculty more or less than the market rates.

  2. Bill Ghormley says:

    Ah, Minerva! Experiential learning in a new package — powerful concepts intermingled to produce an approach that should achieve Minerva’s goal: to give the world critical thinkers who can communicate. The Brand “Minerva” is a bit regal, and obscure — the goddess of Truth and Wisdom (aka Athena) sits on the Xconomy HQ building in Cambridge — but is she built into the semiotics of this new business? I feel they should drive much harder to depict the graphical and philosophical dimensions of their enterprise — reaching for Minerva/Athena! The gravitas of tying into ancient empires for the deepest wells of knowledge is not exploited to build Brand tools from what I’ve seen — Ben needs to go get those and embrace them!

    • Wade Roush says:

      I have a feeling they’re trying to avoid all the trappings of traditional academia right now, including things like a fancy Latin or Greek motto or symbol. The Minerva sites are utilitarian to the point of severity. The logo is a ring or Mobius strip with the inverted/shadow image of an (empty) shield in the middle. Or is it an acorn? I can’t tell.

  3. ezrabiggins says:

    My assessment of for-profit colleges is that they are organized crime operating within the law. They cold call as desperately as the salesmen in Glengarry Glenross; they bring in anyone with a pulse–a pulse and financial aid. And that’s the scam. As with privatized prisons, the destruction of public sector unions and the fraudulent ‘bankruptcy’ of Detroit, the euphemistically titled ‘venture capitalists’ have seen that we have entered a post-consumerist capitalism. Why go after public funds? For the same reason the bank robber gave: That’s where the money is.
    So here is a venture capitalist–another venture capitalist–with a sudden passion for education. But this one seems to have pitched a new twist on the edudollar racket to his (mysteriously anonymous) backers. An upscale for-profit college company–er, project. The students have come for the faculty names (but he’s not interested in prestige). The faculty names, it is alluded, are making very big bucks (they are a speculative investment). You raised the pertinent question, but didn’t press it when he double-talked you. What return do these heavy investors foresee? What is the game here? It doesn’t look like it’s the tuition, no profit in that at current scale. And it won’t be the familiar public money grab via financial aid. There are no Ivy Leaguers coming out of neighborhood public schools. The most electric word in his vocabulary as far as he is concerned seems to be China. He knows something, or sees something, that his backers see too but, I think, most of us don’t see yet.
    I’ve cast a lot of aspersions to conclude with nothing more than ‘Something smells fishy.’ But I will claim as justification several centuries’ history of venture capitalism.

  4. Tran Khanh says:

    I do aggree that online education will be very important in the future. However, in low-developing country (the ones who need education the most), it’ very likely that they’re lack support for online education.


  5. Zhan Hui Hoe says:

    Nothing can ever happen if no one is willing to take the first step. His mission resonates with the younger generation. Kudos! The hardest part in doing anything, in my opinion, is initiating and then sustaining. I definitely believe that Minerva Project will spearhead the revolution in education.