This For-Profit College Wants to Compete With the Ivies. And It’s a Brilliant Business Idea.

Moneybox
A blog about business and economics.
Aug. 15 2014 9:17 AM

This For-Profit College Wants to Compete With the Ivies. And It’s a Brilliant Business Idea.

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Minerva: Roman goddess of wisdom, namesake of a startup that academics will hate.

Courtesy of Wikimedia Commons

Here’s a rule of thumb about colleges: They’re only as good as the students they admit. While there’s certainly evidence that, all things being equal, some institutions of higher education are better investments than others, schools that admit smart, wealthy 18-year-olds tend to graduate smart and soon-to-be-successful 22-year-olds.

Jordan Weissmann Jordan Weissmann

Jordan Weissmann is Slate's senior business and economics correspondent.

That's partly why the Minerva Project, a startup profiled by Graeme Wood in this month’s Atlantic, is an intriguing business idea. Minerva is an accredited, for-profit college with stated ambitions to become the first elite American liberal arts institution founded in about a century. Of course, the words “for-profit” and “elite” are generally considered to be oil and water in education circles. But that’s partly because the corporate sector has preyed on students at the low end of the market. They made their money charging students exorbitant sums for mediocre educations they tend never to finish.

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Minerva, backed with a good hunk of Silicon Valley venture capital money, is different. Its CEO, Ben Nelson, is a brash tech-type who sold the photo-printing company Snapfish to Hewlett-Packard for $300 million some years ago and has zero experience in higher ed beyond his college days. But he’s poached some academic stars to help bring his concept to life. For instance, the first hire, and founding dean, was neuroscientist Stephen Kosslyn, a former Harvard University dean who has apparently scoured the academic literature on the psychology of education to design a curriculum.

Everything about Minerva is, according to its pitch, designed to deliver the maximum amount of learning for the minimum cost. So while it does have an office in downtown San Francisco, it doesn’t have a leafy campus. It doesn’t even really have classrooms. Instead, students take intensive seminars via an online platform. Introductory courses and lectures aren't part of the deal. Undergrads are expected to learn the basics of subjects on their own, possibly via the free, open courses offered on sites like Coursera and EdX. The startup works from the precept that content is free. Minerva is there to teach students how to think.

As for collegiate community, the first class of 33 students, which started class this month, are living in dorms in San Francisco. But in the coming years, as the student body theoretically grows, Minerva expects to open up locations in global metropolises like Berlin, Buenos Aires, Hong Kong, and New York, so that students will be able to hop from city to city and gain some cosmopolitan polish during the journey. If all goes right, they’ll be groomed for the Davos circuit by their early 20s. And for the privilege, they’ll pay just $28,000 per year, tuition, room, and board included.

All this may tickle your B.S. detector. Minerva’s plan raises all sorts of questions, which Wood ably explores in his Atlantic piece. On the one hand, most top-tier universities don’t put nearly the emphasis on teaching that they should, and it’s at least interesting to see someone attempting a radical alternative that tries to drag Ivy-style education into the Internet age (all without accepting any federal aid). On the other hand, you’re talking about a for-profit enterprise boasting a pretty untested pedagogical approach that will mostly appeal to students with a serious autodidactic streak. Who else is going to mind teaching themselves Psych 101 so they can enjoy plugging themselves into all those advanced, online seminars?

But then, that might be part of Minerva’s genius, at least as a business concept. Its entire design is geared toward a self-selecting group of students who are already probably predisposed to do well for themselves once they leave campus, just by virtue of their willingness to learn by their lonesome (not to mention their parents’ ability to pay tuition). No one can say for sure how gifted Minerva’s inaugural class is, in part because it doesn’t accept SAT scores. (Its rationale there is that rich students have a big SAT advantage.) However, Wood interviews a few of the students for his piece, and at the very least they come off as well-spoken and precocious.

Aside from self-selection, Minerva has something else important going for it: The school isn’t really catering to Americans, for the most part. As of now, about one-fifth of its class is from the United States. In the future, it expects that number to drop to one-tenth, even while the number of students enrolled grows exponentially. This was something that Nelson spent a great deal of time emphasizing to me when I interviewed him two years ago. Wealthy and well-to-do parents in China and India are desperate to send their children to American-style schools. But elite U.S. institutions aren’t expanding their class sizes to accommodate all of those well-schooled, multilingual international students. And so, as Nelson put it, the global education economy is suffering from “lockjaw.”

Whatever noise Minerva may make about changing education in the U.S., its real first order of business is to pick up bright students who are being shut out by the education establishment. Conceptually, it sounds like a clever exercise in brand-building: Its plan is to market itself on the strength of academics like Kosslyn and on its U.S. pedigree, while scouring the entire world for the handful of kids who are smart enough to make it look good.  

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