Challenger Universities 🎓 Transcend Newsletter #39

New university models to include 200 million new students this decade.

Hello! Alberto here. Welcome to the Transcend Newsletter.

The Transcend Newsletter explores the intersection of the future of education and the future work, and the founders building it around the world.

Long time no see – I’ve had a busy month as we’ve started our Winter 21 Transcend Fellowship. Check out the amazing 20 fellows we are currently working with 🙌

I’m happy to get back into writing, this time with a topic that’s very close to my heart.


Challenger universities 🎓

Today we are looking at emerging models of higher education that have the potential to transform how we think about universities. We will look at: 

  • A system that is broken, and what this means

  • How challenger universities address the leverage points in higher ed

  • A map and state of challenger universities around the world

Enjoy! 🙌

Broken Education

"Education is broken. A thread 👇"

After completing a sophisticated research experiment on this meme, I can conclude that an aspiring thought leader tweets that "education is broken" every hour or so. I checked

This binary "broken-or-fixed” framework is helpful to pitch your startup, but not so useful when it comes to defining an action plan. One could argue education systems around the world have always been “broken”, but those reasons always change.

To me, a more useful framework is identifying the main challenges we can address today – we’ll call these leverage points: the areas where a small shift can have a big impact within the larger system.

Leverage points in higher education

In 1963, only about 5% of the adult British population had access to higher education. That year, the Robbins Report was published and recommended that the university system grow to increase access, social mobility and social integration in the UK. Many countries followed and massively grew their higher education populations. 

Today, around 40% of adults in the UK have a higher education degree. Deep reform and new models of higher education addressed its leverage point at the time: lack of access to education.

But the world has changed. The leverage points in higher education in most high and middle-income nations have shifted from access to outcomes (graduation rates, employment rates or learning outcomes) and cost.

We find ourselves in need of reform and new models of higher education to address these new leverage points. And the stakes for meaningful change are higher than ever, as we will have 200 million students join the higher education system in the coming decade.

I believe new models for higher education will emerge from the bottom-up, and that's why I believe in the potential of challenger universities.

Challenger universities are new universities that use technology to build an innovative student experience, new curriculum, or economic model. They challenge the value propositions of traditional universities, but mostly operate within the constraints of higher education accreditation systems. 

Let’s rethink university. 

Allow me to start with a personal story. 

When I was 19, I made one of the best decisions in my life. I transferred from a university that was 560 years old and a 20,000 student body (The University of Glasgow) to one that was 1 year old, and had two dozen students enrolled at the time (Minerva Schools).

Minerva was a new university without a campus – students move between seven world cities with their student cohort taking classes from their laptops (live seminars). A lot has been written about their curriculum, financial and admissions models, and other interesting parts of our model that I can talk more about another day.

This move changed my life. It allowed me to meet some of the kindest and smartest humans I know, travel the world, and to experiment with new models of learning. Minerva isn't for everyone, but I have a deep conviction that a world with 1 million Minervas, all catering to different niches and student personas, will be a much, much better world to live in.

As technology lowers the barrier to provide education, I hope to see a massive growth of lower cost, higher quality, challenger universities that can serve the millions of students who want an accredited, non-vocational experience and could be interested in challenger universities instead of attending undifferentiated universities.

Challenger Universities x Leverage Points

The two leverage points I see in higher education today are improving student outcomes and lowering the cost of providing a university experience. Here’s how I think challenger universities address these two: 

1/2 Challenger Universities x Better student outcomes

Challenger universities build better student outcomes through catering to the needs of diverse student niches. 

The needs of the 200 million new higher education students this decade will be vastly different. The large universities of today are unlikely to address their needs as well as challenger universities can  –  they rebuild the student experience, curricula, or career support from scratch around the needs of the student persona they are serving: the 18-year old undecided student, the working adult in need for upskilling, or the low-income student supporting a family. 

Defining a clear student persona is the first step to building a holistic experience around the needs of those students – across curriculum, experiences, or services. It requires leaders to ask “what does my average graduate look like in 10 years”?

2/2 Challenger Universities x Lower cost

Challenger universities lower costs for the student through leaner operating structures. These can include more online programming, separating teaching from research, or exploring new financing models outside of tuitions.

Traditional universities have added a long list of costs to the university experience that would eventually make their way into the student tuition bill – some of these were justified in improving student outcomes, but many were simply administrative overhead or student services that were not well executed at many institutions who had too broad of a student perspective. The United States or the United Kingdom serve as examples.

Challenger universities can be much more focused on providing only the necessary services that their students need – so much so that they can experiment with outcome-based models or other alternatives business models.

The State of Challenger Universities

Challenger universities have emerged in all regions and are growing. There are three factors I’ll be keeping a close eye on to determine the future success heading into the 2020s: student demand, accreditation, and financing. 

Student demand – COVID has caused a shakeup in the way we work and learn, and pushed for shorter-term pathways and more self-driven learning, which should both have a positive impact on challenger universities. 

Accreditation remains the strongest moat for the traditional university ecosystem, and one that would take a full newsletter on its own. It has been slow to change, but I expect the 2020s will bring some reform to make it more flexible and accessible for new entrants. 

Financing has historically been tricky for challenger universities: some have raised venture capital as for-profit entities, others have gone the non-profit route. Others like Minerva or Make School built both as sister organizations.

Let’s break down the players in the space:

👩‍🎓Full-time undergrad programs: target full-time students like most traditional universities. Minerva Schools, London Interdisciplinary School, African Leadership University, Fullbright University Vietnam, EDU, Exponential University (XU), Kibo School or Make School

📱Microlearning: mobile-first learning experiences that break down courses into daily content, such as Nexford, Quantic, Collective Academy, Tomorrow's Education, Tope or Unicaf.

🔑Competency-based: use learning mastery metrics over traditional hour credits. They are linked to high-demand skills and shorter-term degrees, like Rivet School, Peloton U, Duet, Kepler (all partnered with Southern New Hampshire University), or Foundry College

🏃‍♀️Flexible Degrees/Associate Degrees (1-2 year programs): shorter-term and more flexible degree options for students, like Degrees of Freedom, University of the People, The Myx.

🤝Enablers: allow new challenger universities to run through partnerships or services, like Woolflabs (accreditation), Minerva Project (courses and platform), Southern New Hampshire University or Western Governors University (school partnerships). 

Challenger universities are on the rise, and they could be our greatest chance to accommodate the 200 million students be joining university classrooms this decade. 

Let’s build one million of them.

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news roundup around the future of learning and work

💻 Tired of Zoom calls all day? Research show non-verbal overload may be the main reason why.

🚀 Transcend Fellows’ wins of March: Contra raised their Series A, Collective Academy’s Forbes feature, and Mission Collaborative launched their Job Search accelerator

🔑 The startup world is full of shiny founder stories – Trevor McKendrick writes about how founders should ignore the rosy stories and build their own!

📈 Just a few weeks after our edtech SPACs newsletter, we have our first one of 2021: Nerdy (tutoring) is going public.


exciting job opportunities we want to share with you!
  1. Community Architect – Transcend Network

  2. Associate / Senior Associate – Lumos Capital

  3. Head of Learning – Kibo School

For more job opportunities,  check out our full Job Board!.

Thanks to Rob Cobb, Kushaan Shah, Art Lapinsch from Compound Writing Jesse Silberberg, Ope Bukola and Mario Barosevcic for the wonderful feedback! Crediting the Emerge Education with coining the challenger universities term.

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