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Harvard, by many measures the most prestigious college in the U.S., has been at it for nearly 400 years. Ben Nelson, founder of an online education startup called the Minerva Project, says he can do equally well in just three.

Minerva is one of the least-publicized but also most well-funded and audacious of the current crop of online education startups. Funded with $25 million from Benchmark Capital—one of the well-known venture-capital firm’s largest-ever investments—Minerva says it will begin accepting applicants in 2015 for an entirely Web-based college program. The resulting undergraduate degree, it promises, will have all the prestige of anything the Ivy League can offer, but at half the cost.

Many people would dismiss Minerva’s notion of some sort of instant online Harvard as the fever dream of someone who had sat through one too many TED talks. But the for-profit company’s assumptions about how the Internet will change education can be found, to varying degrees, in most of the scores of startups now getting venture money to do instruction online.

The level of venture-capital investments in education has nearly doubled in 2011, and now rivals figures last seen during the dot-com boom. Representative of the crop is Coursera—formed by two Stanford computer scientists—which offers a growing list of free online classes (see “The Technology of Massive Open Online Courses”). Even though Coursera has no clear plans for how to make money, an investor involved in its initial $16 million financing said other top VCs pleaded by phone and e-mail to get in on the deal, regardless of the price. It’s the sort of enthusiasm that often signals a tech investing bubble.

Some of the new online startups are offering free “massive open online courses,” or MOOCs, that lead not to a traditional college degree but to a “certification” in a specialized field like computer programming. Minerva, though, is an entirely different pedagogical species. The San Francisco-based company aims at a soup-to-nuts undergraduate education, resulting in a traditional bachelor’s degree, but all via the Web, and with all of the social cachet of the country’s priciest sheepskin.

It’s that last claim that raises the most questions, especially since Nelson, its 36-year-old founder, has no experience in education; his previous gig was with Snapfish, a photo-sharing site bought in 2005 by Hewlett-Packard. But Nelson managed to not only score a huge investment from Benchmark—the same VC firm that backed the likes of eBay, Yelp, and Mint—but also persuaded a group of A-list luminaries, including former Harvard president Larry Summers, to be on its board of advisors.

They no doubt responded to Nelson’s high-energy personality, fully on display in a recent interview in a San Francisco coffee shop. (Minerva not only lacks an ivy-coated administration building; it doesn’t even yet have a permanent office.)

Nelson’s aim is nothing less than to remake higher education, in part via technology, but also by rethinking the college experience. For example, freshmen won’t take traditional introductory classes, but instead will be trained in how to think. Topics will include the likes of complex systems analysis and “multi-modal communications,” the latter, says Nelson, being a 21st century update on the ancient art of rhetoric.

After that, students will branch out, much as they do in a traditional liberal arts college, with a few differences. For one, Minerva won’t offer anything resembling a lecture or introductory class; if students want to learn the history of philosophy, they will need to learn it themselves, perhaps by taking a class via Coursera.

Everything Minerva does, says Nelson, will be along the lines of the specialized seminars that seniors or graduate students now attend at traditional universities. So while there won’t be any Econ 101, says Nelson, there might be a seminar on “Advanced Topics in Monetary Policy.”

All online, of course. “Classes” will be akin to group chat sessions, with a camera on the instructor and on each student. Students will be anywhere in the world they want to be; while Minerva plans on having dorms in a few big cities, there won’t be any requirement to live in them.

Nelson predicts that Minerva will eventually have 10,000 undergraduates—the same size student body as his alma mater, the University of Pennsylvania—paying roughly $25,000 a year each in tuition. It’s not totally implausible. The for-profit University of Phoenix, a mostly online college, derives more than $4 billion a year in revenues from around 325,000 students (or around $12,000 each). True, Phoenix doesn’t have a reputation anything like Harvard’s—in fact, it’s faced accusations of being a diploma mill.

Minerva plans something better. Nelson says classes will be designed by A-list faculty from other universities, acting as consultants. But once the lesson plan is on paper, they will be presented to Minerva students by newly minted PhDs; Nelson says academic jobs are so hard to find that he should have no problem attracting instructors.

An abiding faith in the power of technology is central to Nelson’s vision. Special software the startup is developing will be crucial in guiding faculty members as they work with students. “You can assess students not just on subject matter, but on how they are progressing on their skills. And then you can feed that data back to the professor in real time,” says Nelson. He says the system, still under construction, will be able to say, “ ‘Look, Suzy is exceptional at ill-structured data analysis, but she has real problems with complex systems analysis. If you are exploring complex systems, call on Suzy next.’”

The possibility of that sort of perfectly calibrated computerized student feedback is cited by many in online education. But others believe those expectations far exceed what software is currently capable of. Alix Guerrier, cofounder of LearnZillion, which provides online systems for elementary schools, says that a computer that can perfectly personalize individual instruction is still years off, “even though people are talking about it as though it is right around the corner.”

The part of Nelson’s pitch that usually elicits the most questioning involves his belief that Minerva can be as prestigious as the best schools in the country. He says he would happily send his daughter, now an infant, to Minerva when she’s 18. And he rejects the idea that it takes time for an institution to attain social status. “Look at the best high schools,” he says. “They are all the new ones.”

Nelson’s venture could very well be remembered as the Pets.com of the online learning bubble; misconceived and overfunded. But he is entirely serious about creating an academic experience that not only equals the best the country has to offer, but actually improves upon it. “If we don’t up the level of education,” he says, “then we will have failed.”

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Tagged: Business, Business Impact, Business Report, Coursera

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