The last thing I said to Ben Nelson at the close of our talk was, "So, this really is about education." He was not what I expected.
What does a Wharton MBA who steered his last company to a $300 million exit do next? Likely, he investigates market opportunities, sizes up what captures VC imagination, targets a project with big upside, and then starts telling a good story. Essentially, do what serial entrepreneurs do.
That's what Ben Nelson looked like he was doing—speaking the bold talk about a startup online Ivy League college called Minerva. But that misses the better story.
How did you go from SnapFish, a photo-sharing site, to the Minerva Project, a prestigious online college startup? Take me through your thinking.
Actually, Minerva pre-dated SnapFish. The idea goes all the way back to my freshman year at UPenn, though I didn't know the idea would be Minerva. Starting college I wasn't sure what major to pick but luckily I got advice from some savvy seniors. They advised me not to “pick a major” so much as to pick professors. They said, "College is about learning how to think, and the best professors are the best at teaching you how to think. Their subject expertise is just the vehicle. You can learn to think in any major--biology, or literature, or economics.”
I was impressed, so I did extensive research to find the best professors. This led me to an upper division course on the history of universities--not that I was deeply interested in the history of universities, but the professors (Lee Benson and Ira Harkavy) were renowned. Because I was a freshman, I had to talk my way into the class. It couldn't wait, because they didn't teach often.
During that semester I learned about the founding principles of the best universities--Harvard, MIT, University of Chicago, Cambridge, Oxford--and how their principles of education changed in response to the modernizing world. I wrote a paper about how UPenn should change, and actually tried to convince some administrators, but obviously I didn’t succeed.
In April 2010, after I'd left SnapFish, my earlier ideas about education resurrected. But it wasn't until September 2010 that I had the light bulb moment about Minerva, when I put the things together.
How in the world did you convince Benchmark to invest $25 million in seed money for Minerva?
In January 2012, I started the fund raiser. I'd spent 16 months on the plan and strategy. (I was lucky to be able to afford that kind of time.) Then, I selected the firms I thought would be interested. Maybe you know this or not, but when you make a pitch to VCs, often your first meeting is with one person. If they like your idea, they set up the second meeting with all the partners. That's what happened at a few firms with the Minerva pitch. I found lots of excitement speaking with one partner in the first meeting, but after my pitch to the group of partners, I got ‘that look.’ In a group, no one could suspend the strange notion that you could start up an Ivy League college, much less have it be an online proposition.
But at Benchmark, after I saw the first partner, he set me up to pitch another partner, not the group. I went through six meetings, each with just one or two partners. That made a difference. It was easier to convince the partners one-on-one, or one-on-two. Benchmark saw clearly there was an unmet market and saw Minerva as a service innovation.
What did Benchmark see as the exit strategy?
They never talked about the exit strategy. Not once while raising the funds. They said, "The average time for investment to liquidity is seven years. This investment will be above average." I liked the 'above average' part.
About Minerva's software: there are live online sessions, sensors monitoring student engagement, student intellectual progress tracking, and embedded motivational elements. Sounds complicated. And expensive. And valuable, if you can do it.
We have no intention of extracting value out of the technology. It's just for Minerva's use. The technology isn't what's valuable. It's the education that students will get from Minerva's professors overseeing their intellectual development that’s valuable. Our model is more like Oxford’s tutorial model where each student is guided by a professor who engages them in debate over the material they are learning. The technology just facilitates that progress.
About Minerva’s professors…You are offering 3 year contracts, no tenure, and pay based on student learning. You think that works?
There is an enormous pool of available talent in professors. Many brilliant, ivy-educated scholars and researchers are unable to get positions because there are so few openings at the great colleges and universities. Navigating the timing of job openings is incredibly challenging. And that's true for just one person. Couples who are both PhDs must find institutions with double openings that match their specialties.
Professors at Cambridge, and other great universities around the world, have contracts that force retirement at 65. These are top professors in their fields. They are not done. Sixty-five is no obstacle to them.
Everybody knows there are many more highly qualified students in the world than slots at top colleges. The same thing is true for highly qualified professors.
At Minerva, we will offer professors stock options, and they will own their IP. We want them to do great research and be excellent at teaching and mentoring students.
Research? Will Minerva build labs for professors, as well as urban dorms for students?
No, we aren’t going to build labs. There are many ways now for professors to access centralized services at facilities where big science is done. These labs offer the most expensive equipment used for cutting edge research. Like they do now, our professors will use their grant money and contract for access to the equipment they need. Much research is done this way because only a few universities can afford the equipment involved in leading research.
We have an idea of what it means to be educated at Harvard, at MIT, at Cal. What will it mean to have a Minerva education?
This is the best part. Minerva-educated students will be worldly. They will have lived in seven of the world's great cities, cities like Sao Paulo, Shanghai, Mumbai, and San Francisco. They will speak three languages and know how to thrive in different cultures.
Our graduates will have impeccable analytic skills. The core curriculum delivered in their freshman year, involving four skill areas (critical thinking, use of data, complex systems, effective communication) will give them a strong foundation in the following three years to dig deep into their subject area.
They will have a breadth of knowledge because their electives involve taking courses at the junior/senior level, not fluff level material.
Minerva graduates will know how to synthesize information because they will be required to complete a two year project that creates something novel.
And our students will have outstanding rhetorical skills, from debates to tweets to public speaking, what we call multi-modal communication skills.
Let’s see, before opening in 2015 you need to raise lots more money, attract great faculty, write groundbreaking software, secure beautiful dorm facilities around the world, get accreditation, create inspiring programs, and recruit the world’s best students. Am I forgetting anything? Of all this, what is the biggest hurdle to clear?
If you drill down on any of these items, none of them is that hard to do. The biggest obstacle is to get the whole package done at the highest levels that will be the Minerva experience. Getting all these things done on time--that's the biggest obstacle.
Let's say you've achieved that, you've got the whole thing done. You're looking past that, what do you worry about when you look out that far? Competition?
Oh no, that's not what I worry about. The really hard part is after we've got Minerva up, even if it's all perfectly executed. What concerns me is the care and feeding of 18 year olds who've entrusted us with their education, their futures, whose parents have put their money and their hopes in us. Getting that right is always on my mind.
This is not so much about the technology play, the market play, the exit?
Obviously that matters, but we are trying to innovate on an Ivy League education, because there’s a huge number of qualified people that the current system cannot serve. And it’s too expensive. So we have to figure ways to make getting a great education less expensive, and we have to educate the world’s most promising students for the times we live in, and the times ahead.
So this really is about education... He laughed.
During the entirety of our conversation, Ben Nelson never used the word ‘disruptive.’ Nor did I hear that revolutionary glee heard in the tone of voice of many ed tech entrepreneurs. His passion is for delivering the higher education principles suited to our times and for developing the world’s future leaders. Making college more affordable? Yes. Turning a profit? Sure, he’s a Wharton guy. But, what comes through most is his excitement that Benchmark agreed to pursue what UPenn declined years ago.
by Ava Arsaga, 6/14/2013 Ava Arsaga is the Founder and Editor of EdBizWatch as well as Parent Cortical Mass, a blog with the mission to help parents get more informed about learning and education.