Higher education is one of the few big markets that technology entrepreneurs have yet to comprehensively disrupt. No start-up has grown to rewrite the rules and become, in the lexicon of venture capitalists, “an Uber for education”.
The opportunity is great: the global higher education market will be worth $105.7bn by 2025 — double what it was in 2016 — according to market analyst Kenneth Research, partly due to technological advances in teaching.
While Moocs (massive open online courses) were much hyped early last decade, they failed to revolutionise education, with most students dropping out before completing their studies. However, business education entrepreneurs are now experimenting with a variety of approaches to exploit technology’s educational possibilities.
James Wise, a partner at Balderton Capital, a London-based venture capital firm, says that the tech ventures most likely to be successful are those that spot niches, and will include many that co-operate rather than compete with business school brands.
“There is plenty of room for new entrants,” says Mr Wise. “My sense is that there will be partnerships with business schools but also with businesses that need to retrain their staff.”
Balderton has backed Jolt, an Israeli-based tech venture that provides bite-sized courses from purpose-built teaching rooms in flexible workspaces, where small groups of students are taught by on-screen tutors in real time.
Jolt has set itself apart from the traditional world of campus education, creating what it calls the Not An MBA (Namba) for customers completing a set group of its courses costing £4,500. It has about 2,000 registered students, more than the 1,415 who graduated from London Business School last year, where the MBA tuition fee is £87,900.
“We are not all autodidactic, we need human exposure to learn,” says Mr Wise. “There is something important about having a live class with small groups.”
Technology is also enabling entrepreneurship to disrupt the business school world from within, as established business school professors distribute their teaching online to extend their brand presence.
Mark Ritson describes himself as an “ex-marketing professor gone rogue”. For 23 years he taught the marketing tracks of MBA programmes, moving from the University of Minnesota, via London Business School and MIT Sloan School of Management to an associate professorship at Melbourne Business School.
In 2017, Mr Ritson founded a company to sell an online version of his teaching, branded as a “Mini MBA” and aimed at people in the marketing industry who want to develop their skills in that specific area. More than 8,000 people from 39 countries have taken one of the two courses he teaches.
Students pay £1,470 for the core 12-week Mini MBA in marketing, a fraction of the cost of a full-time degree at any of the schools where he once worked. Last September he quit full-time teaching in Melbourne to expand his role as an online professor. “It is very profitable,” he notes.
Half of his revenues are from corporate clients that pay for senior executives to complete the programme, including Google, Adidas and Lloyds Banking Group. The cost makes sense for these clients because they get better-trained staff without losing them to full-time study, according to Mr Ritson.
“I don’t believe the MBA is dead but I think there is a bigger market for the teaching that I now do,” he says. “I am barely scraping 0.01 per cent of my target market.”
Quantic School of Business takes a different approach. While it may sound like a campus-based institution, it is a tech start-up based in Washington DC, with a permanent staff of just 40 people. Its MBAs mirror the curriculums of full-time and executive programmes, last 12 months and set a high bar for entry in terms of tests and acceptance levels — but they are completed entirely online.
Quantic’s classes are devised with the support of tenured faculty from leading business schools, but the teaching is completely automated, with students guided through the programme by clicking on tabs to answer questions. By minimising the need for human involvement, Quantic has been able to grow rapidly, with 2,000 students graduating since it launched in 2016.
“We teach in a manner that is much more interactive, creating a richer learning experience than traditional online programmes,” says Tom Adams, Quantic’s president. “Students describe it as sticky learning, as they retain what we teach, and they can apply it in their day to day.”
Quantic is reaching new markets for the MBA, according to Mr Adams — mainly people with backgrounds in engineering. He contrasts this with the core audience for campus-based schools of people eager to accelerate their promotion in consulting and financial services jobs.
Yet the company is “not a disrupter”, Mr Adams says. “Our students are high achievers academically and professionally, and they have similar GMAT [Graduate Management Admission Test] and quantitative aptitudes to students at the very top schools in the world. But they are three times more likely to have a product, R&D or engineering management background than typical MBAs.”