Disruptive Innovation in Christian Higher Education for ACCESS Ed 2015 by Andrew Sears

1. Dr. Andrew Sears
President, City Vision College
Disruptive Innovation in
Christian Higher Education

2. PCs
Mobile
Disruptive Innovation Theory
Mainframes

3. Traditional
Higher
Education
Community
College
For Profit
Higher Education
Disruptive Innovation Theory
High Price Online Ed
Radically Affordable & Accessible
Online Education

4. Disruptive Innovation Theory
Image Source: Wikimedia
Online education is here

5. Cell Phones in 1983

6. Smart Phones: Disruptive Technology
Diamandis, P. H., & Kotler, S. (2012). Abundance: The future is better than you think. New York: Free
Press. p. 289
“People with a smart phone today can access tools that would have cost thousands a few decades ago.”

7. 2. Christian
Mega-
Universities
3. For Profit
Universities
4. Shifts in
Demographics
5. Increasing
Costs
1. Economics
of Online
Education
5 Reasons for Limited Growth
for Most Christian Colleges
Christian
Colleges

8. 1. Economics of Online Education
1. Online marginal cost per student at scale
(10,000+ students) is likely between $500-
3,000
2. Online education opens up competition
independent of geography
3. Online education is a platform business
where you pay “rent” to be visible (20-30% of
revenue)
4. Dominant characteristic of online education is
consolidation
13% of students are online only
Sources: Disruptive Innovation in Christian Higher Education, Andrew Sears, Doctoral Dissertation, 2014, Bakke University
Ambient Insight

9. • Top 20 largest online schools account for one-third online market.
• Higher education overall, about 222 schools make up one-third of enrollment.
Source: Online Higher Education Market Update - Eduventures. (n.d.). Retrieved March 16, 2015, from
http://www.eduventures.com/insights/online-higher-education-market-update/
Online Education = Consolidation
Go Big or Go Home

10. 2. Christian Mega-universities & Growth
Liberty U
43%
Grand Canyon U
39%
All of CCCU
18%
Estimated Growth Since 2005
Total Growth:
175,808 students

11. 3. Growth of For Profits
Bennett, D. L., Lucchesi, A. R., & Vedder, R. K. (2010). For-Profit Higher Education: Growth, Innovation and
Regulation. Center for College Affordability and Productivity (NJ1).

12. 4. Demographic Shifts:
The End of the Good Times
Source: Hussar, W. J., & Bailey, T. M. (2014). Projections of Education Statistics to 2022. NCES
2014-051. National Center for Education Statistics.

13. 5. Cost: Increasing Cost of Higher Education

14. The Pell Institute for the Study of Opportunity in Higher Education. (2015, January). Indicators of Higher Education
Equity in the United States 45 Year Trend Report. http://www.pellinstitute.org/
Bachelor’s Attainment by Income Quartile
37 pt. growth
3 pt. growth
6 pt. growth
19 pt. growth
Increasing focus on
Top quartile
Increases Cost

15. Future of Higher Education 2035
 Tier 1: The Elite
◦ Serve top 5-10% students, tuition >$100k
◦ Analogy: New York Times, Economist
 Tier 2: High Quality, Moderate Cost
◦ 50% in bankruptcy, tuition $50-100k, high touch
◦ Analogy: Physical Retail, Cable TV
 Tier 3: Good Enough Quality, Low Cost
◦ 100k+ students or niche, tuition $100-$5,000/year
◦ Analogy: Huffington Post, niche ecommerce, Netflix
 Tier 4: Courseware Ecosystem Small Businesses
◦ Sell apps, courses, educational content, books, certificates, student services, videos, etc.
◦ Analogy: eBay/Amazon merchants, bloggers, self-publishers, app developers
 Tier 5: Courseware platforms
◦ 100’s of millions or billions of students
Source: Disruptive Innovation in Christian Higher Education, Andrew Sears, Doctoral Dissertation, 2014, Bakke University

16. Possible Futures
1. Government
◦ Universal Community College, Nationalized Higher Education:
Obamacare for Higher Education
◦ Government mega universities: 1 million+ students
◦ Problem: increases secularizing influence of government education
2. Global Educational Conglomerate
◦ 50% of “degrees” globally by 2050 may come from 3-4 tech
companies offering free education with a small payment for the
credential
◦ Problem: Likely to follow same secularizing tendency as media
conglomerates
3. Disruptive Innovation in Christian Higher Education
◦ Innovators learn to build modularly on 1 & 2 to expand Christian
market share in post-secondary educationSource: Disruptive Innovation in Christian Higher Education, Andrew Sears, Doctoral Dissertation, 2014, Bakke University

17. University of Phoenix (2010)
Enrollment = 600,000

18. University of Phoenix (2015)
Enrollment = 215,000

19. Advice for Christian Colleges
1. Invest in marketing
◦ Facilities expense is replaced by marketing expense (rent paid to
tech ecosystems)
2. Create an independent skunkworks division
◦ “New wine in new wineskins”
◦ Conduct “lean startup” experiments to determine where to focus
◦ Fund an independent division to provide low-cost online
education. i.e. YourSchoolNameX
3. Develop plan to cut cost by 50%
◦ Quit building buildings. Sell or lease buildings. Repurpose
buildings as earned income through co-working spaces and
incubation.
◦ Online education should have independent finances, so it can
reinvest revenue in online programs.

20. Current Stage
of Online Education
LMS Stage Courseware Stage
Image Source: Wikimedia
Innovation Cycle of Online Education

21. Process for Modular Christian Education
Theology &
Christian Worldview
Audience, Pedagogy
& Goals
Christian Community
Christian
Courses
Theology
Courses
Secular
Courseware
Secular MOOCs
& Open
Education
Resources
Subjects

22. Comparing Business Models
 For Profit
◦ Revenue: $11,130 per student
◦ Instruction: 26%
 Private Nonprofit
◦ Revenue: $37,869 per student
◦ Instruction: 33%
◦ Research: 12.5%
 Public
◦ Revenue: $18,922 per student
◦ Instruction: 28%
◦ Research: 14%
Source: Bennett, D. L., Lucchesi, A. R., & Vedder, R. K. (2010). For-Profit Higher Education: Growth, Innovation and Regulation. Center for
College Affordability and Productivity (NJ1). Retrieved from http://heartland.org/sites/all/modules/custom/heartland_migration/files/pdfs/29010.pdf

23. Understanding the for Profit Business Model
Sources: Bennett, D. L., Lucchesi, A. R., & Vedder, R. K. (2010). For-Profit Higher Education: Growth, Innovation and Regulation. Center for
College Affordability and Productivity (NJ1). Retrieved from http://heartland.org/sites/all/modules/custom/heartland_migration/files/pdfs/29010.pdf
http://www.help.senate.gov/imo/media/for_profit_report/PartII/GrandCanyon.pdf
Marketing
$3,389 35%
Profit $1,848
19%
Instruction
$2,177
22%
Other $2,295
24%
For Profit Expenses (Grand Canyon)
Private Nonprofit: 32%

24. Modular Transformation of Computer Industry
Source: Only the Paranoid Survive, Andy Grove

25. U of A U of B
Virtually Integrated University
Univ.
Unbundled University
MOOCs
Open Ed
Resources
Study
Groups
Contracted
Courses
Adjunct
Faculty
Faculty
Networks
Churches
Internship
Univ.
Univ.
Univ.
Research
Lab
Corporations Individuals
Open
Content
Publishers
Self-
Publish
Univ.
Student
Community
Faculty
Community
Course
Materials
Written
Knowledge
Knowledge
Discovery
The Unbundled University
Churches
U of C U of D
Student
Community
Faculty
Community
Course
Materials
Written
Knowledge
Knowledge
Discovery

26. City Vision’s Re-bundled Online Ed Model
City Vision
Independent
Educational
Providers
(Straighterline)
Coursewar
e
(Pearson &
Mcgraw-Hill)
MOOCs
Open
Education
Resources
Internship Sites
(70+ sites)
Competency
Credit for
Unaccredited
Ministry &
Church Training
Church &
Ministry
Discipleship
Study Groups
Families &
Home Schools
Content
Partners
Community
Partners

27. Traditional Higher Education
Traditional Monastery
Higher Education Model
Local Christian
Community
Practical Work
ExperienceStudents “Close” to Instructor
Distant From
Students

28. Re-bundling Online Education with
Church Study Groups & Internships
Local Discipleship &
Study Groups
Practical Work
Experience
Distant From
Students
Instructor

29. City Vision Educational Philosophy
Online Education
Local Discipleship
& Study Groups
Internships: Practical
Work Experience

30. What organization has the most locations in the USA?
14,146
25,900
Sources: http://hirr.hartsem.edu/research/fastfacts/fast_facts.html
http://www.usatoday.com/story/money/business/2014/05/04/24-7-wall-st-most-popular-stores/8614949/
314,000

31. Case Study Lessons for Christian Colleges
 Retail & ecommerce
◦ Operational effectiveness & scale
 Theater, Movies, Cable TV, Blockbuster, Netflix
◦ Offer high value both/and product
◦ Invest in digital growth not physical growth
 VoIP/Skype
◦ Domestic vs. Global Dominance
 Journalism & News
◦ Be more like innovators while retaining your strengths
 Farming
◦ Innovate & consolidate
 Christian response to radio & Hollywood
◦ Build culture/systems to outcompete rather than withdraw &
judgeSource: Disruptive Innovation in Christian Higher Education, Andrew Sears, Doctoral Dissertation, 2014, Bakke University

32. Possible Christian Models of Disruptive Innovation
 Christian Megauniversities
◦ Liberty, Grand Canyon
 Competency Based Education
◦ Lipscomb University, DePaul University, Antioch School of Church Planting
 Radically New Education Models
◦ Logos Mobile Ed, Right Now Media, City Vision
 Christian Open Education
◦ Open Biola, Covenant, Regent Luxvera, ChristianCourses.com, Christian Leaders
Institute, BiblicalTraining.org
◦ Aggregators of Christian Course Content: iTunes, Udacity, YouTube, Vimeo
 Investment and Outsourcing Companies
◦ Significant Systems, Capital Education Group, Bisk Education
 Global Innovators
◦ Global University
 Course Vendors & Clearinghouses
◦ Knowledge Elements, Bible Mesh, Learning House

33. For More Information
 Dissertation: “Disruptive Innovation in Christian Higher
Education and the Poor.” http://goo.gl/bKBt0x
◦ YouTube Playlist: http://goo.gl/6Wptak (will soon include this talk)
◦ Bibliography: https://www.zotero.org/andrewsears/items
 Slideshare for this talk: http://goo.gl/UOjpLK
 Website: www.cityvision.edu
 LinkedIn: www.linkedin.com/in/andrewsears
 Contact: andrew@cityvision.edu 617-282-9798 x101
 Would be glad to present to your school and am open to
consulting opportunities
 Coming Soon in 2015 Disruptive Innovation in Christian
Higher Education book and website

34. Suggested Reading
 Christensen, C., Johnson, C. W., & Horn, M. B. (2010). Disrupting Class, Expanded Edition: How
Disruptive Innovation Will Change the Way the World Learns (2nd ed.). McGraw-Hill.
 DeMillo, R. A. (2011). Abelard to Apple: the fate of American colleges and universities.
Cambridge, Mass.: MIT Press.
 Horn, M. B., Staker, H., & Christensen, C. M. (2014). Blended: Using Disruptive Innovation to
Improve Schools (1 edition). San Francisco: Jossey-Bass.
 Ries, E. (2011). The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to
Create Radically Successful Businesses (First Edition). Crown Business.
 Carey, K. (2015). The End of College: Creating the Future of Learning and the University of
Everywhere. New York: Riverhead Books.
 Christensen, C. M., & Raynor, M. E. (2003). The Innovator’s Solution: Creating and Sustaining
Successful Growth (1 edition). Boston, Mass: Harvard Business School Press.
 Craig, R. (2015). College Disrupted: The Great Unbundling of Higher Education. New York:
Palgrave Macmillan Trade.
 McCluskey, F. B., & Winter, M. L. (2012). The Idea of the Digital University: Ancient Traditions,
Disruptive Technologies and the Battle for the Soul of Higher Education. Policy Studies
Organization.
 Selingo, J. J. (2013). College (un)bound: the future of higher education and what it means for
students. Boston: Houghton Mifflin Harcourt.

35. Appendix

36. Essential Elements of Christian Education
1. Christian worldview
2. Christian community
3. Christian content
4. Christian care for stakeholders

37. Advice for Faculty
 Case Studies:
◦ Music industry, journalism, TED
 Find Research Funding or Find your “TED Talk”
◦ Start with your “Idea Worth Spreading”
 Read Platform, The Startup of You and The
Alliance
 Establish your platform across multi-format and
multi-channel revenue sources
◦ Spread ideas horizontally across different media and
markets
◦ Teaching, consulting, writing, blogging, etc.

38. What is Driving Increasing Cost in Higher
Education? Part 1
Increased
Productivity in Other
Sectors
Increased Cost of
High Skilled Labor =
Increase Costs of
Faculty & Senior
Administration
Increased
• standardized tests
• large lectures
• teaching assistants
• administrative staff
• adjuncts
Symptoms to CopeUnderlying Cause 1
Baumol’s Cost Disease
Economics of Superstars
Sources: Archibald, R. B., & Feldman, D. H. (2010). Why Does College Cost So Much? (First Edition edition). Oxford, U.K. ;
New York: Oxford University Press, USA.
Disruptive Innovation in Christian Higher Education, Andrew Sears, Doctoral Dissertation, 2014, Bakke University

39. Increasing Cost of High Skilled Labor
Source: Archibald, R. B., & Feldman, D. H. (2010). Why Does College Cost So Much? (First Edition edition). Oxford, U.K. ;
New York: Oxford University Press, USA.

40. What is Driving Increasing Cost in Higher
Education? Part 2
Decreasing Gov’t
Funding of Higher
Education
Sources: Archibald, R. B., & Feldman, D. H. (2010). Why Does College Cost So Much? (First Edition edition). Oxford, U.K. ;
New York: Oxford University Press, USA.
Disruptive Innovation in Christian Higher Education, Andrew Sears, Doctoral Dissertation, 2014, Bakke University

41. About City Vision College
 History: Started Rescue College in 1998 as a Program of AGRM,
DETC Accreditation in 2005, Transferred to TechMission in 2008
 Degrees
◦ Bachelor’s in Nonprofit Management, Addictions Studies, Missions
◦ Master’s in Technology and Ministry
 Statistics
◦ 79% of receive Pell grants
◦ 67% graduation rate in 2013
◦ Cumulative 91% job placement rate
◦ Tripled enrollment since 2008
 Goal is to be Radically Affordable
◦ Tuition $6,000/year undergrad and $10,800 grad, $3,500 for interns,
$3,000 in developing countries
◦ Cost is less than 95% of private nonprofit institutions (16th lowest Christian)
◦ CCCU Average Tuition: $24,355, Liberty University’s online tuition $12,882,
National average tuition $30,994

42. Image Source: Wikimedia
Stage in Adoption Cycle for
Post-Secondary Degrees
US
Average
Global
Average
Top
Quartile
3rd
Quartile
1st & 2nd
Quartile

43. How to Cross the Chasm for the Bottom Half
1. Radically Affordable
◦ Radically low cost and debt
◦ Options: Gov’t subsidy or disruptive innovation
2. Ease of Access
◦ Location, Time, Working Students, Mobile
3. Remedial education available if needed
◦ Adaptive for students at any level
4. Cultural fit
◦ Adult Friendly, No Assimilation

44. Why City Vision is Uniquely Positioned
for This Opportunity?
Jesus
(Christian)
Technology
(radically
affordable)
Justice
(Serves
bottom
half)

45. Ability of Institutional Models to Cross the
Chasm and Serve the Unreached Bottom Half
Radically
Accessib
le
Radically
Affordabl
e
Tech
Innovato
r
Cultura
l Match
Remedia
l
Educatio
n
Disruptive Christian
College
    
Community College
& Mega-universities
 Somewhat  
For Profit College   Varies
High Priced Online   Varies
Traditional Christian
College
State SchoolsCity vision serves the bottom half socioeconomically
(bottom 75% in graduate programs)

46. Christian
Social Services
Radically Affordable
Socially Responsible
Christian Education
City Vision Strategy
Rescue College
Urban Missions
1998-2007
City Vision 1.0
2008-14
City Vision 2.0
2015 -

47. 20th Century Challenge: High School Graduation
Goldin, C., & Katz, L. F. (2010). The Race between Education and Technology. Cambridge, Mass.: Belknap Press.

48. 21st Century Challenge: College Graduation

49. Change High School Graduate by State
Source: Hussar, W. J., & Bailey, T. M. (2014). Projections of Education Statistics to 2022. NCES
2014-051. National Center for Education Statistics.

50. Demographic Shifts: Race/Ethnicity
Source: Hussar, W. J., & Bailey, T. M. (2014). Projections of Education Statistics to 2022. NCES
2014-051. National Center for Education Statistics.

51. Source: (US. Bureau of Labor Statistics, 2014)
47% of employment in America is at high risk of being automated
away over the next decade or two (Frey & Osborne, 2013)

52. Debt: Distribution of Total Student Debt by
Level of Household Net Worth

53. Changing our Educational Trajectory
(Lumina Foundation Vision)

54. 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2025 2050 2075 2100
Straight Line Projection Growth Degree Attainment
21st Century

55. 0%
20%
40%
60%
80%
100%
120%
2025 2050 2075 2100
Straight Line Projection By Income Quartile
Top Quartile 3nd Quartile 2nd Quartile Bottom Quartile
21st Century
Disruptive
Innovation
Opportunity
City Vision’s
Focus
Focus of
Traditional
Christian
Higher
Education

56. 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2025 2050 2075 2100
Difference in Projected Educational Attainment
Straight Line No Change in Growth Rate of Bottom 3 Quartiles

57. The Problem with Only Credentialing
The 25th percentile for male college graduates has been about $4,000 to $5,000 more
than the median male high school graduate in recent years, whereas among women, the
gap has recently been around $2,000.
Source: http://libertystreeteconomics.newyorkfed.org/2014/09/college-may-not-pay-off-for-everyone.html#.VUJT69LF8ep

58. College Entrance, Completion & Persistence by Income Quartile
http://www.russellsage.org/research/chartbook/percentage-students-entering-and-completing-college-and-college-persistence-incom

59. Growth of For Profit Education
Bennett, D. L., Lucchesi, A. R., & Vedder, R. K. (2010). For-Profit Higher Education: Growth, Innovation and
Regulation. Center for College Affordability and Productivity (NJ1).

60. For Profits Dominate Age 22 and above
Bennett, D. L., Lucchesi, A. R., & Vedder, R. K. (2010). For-Profit Higher Education: Growth, Innovation and
Regulation. Center for College Affordability and Productivity (NJ1).

61. For Profits Dominate Black & Latino Students
Bennett, D. L., Lucchesi, A. R., & Vedder, R. K. (2010). For-Profit Higher Education: Growth, Innovation and
Regulation. Center for College Affordability and Productivity (NJ1).

62. For Profits Serve Disproportionately Female Students
Bennett, D. L., Lucchesi, A. R., & Vedder, R. K. (2010). For-Profit Higher Education: Growth, Innovation and
Regulation. Center for College Affordability and Productivity (NJ1).

63. Average Revenue per Student
Bennett, D. L., Lucchesi, A. R., & Vedder, R. K. (2010). For-Profit Higher Education: Growth, Innovation and
Regulation. Center for College Affordability and Productivity (NJ1).

64. Average Spending Per Student
Bennett, D. L., Lucchesi, A. R., & Vedder, R. K. (2010). For-Profit Higher Education: Growth, Innovation and
Regulation. Center for College Affordability and Productivity (NJ1).

65. Instructional Spending by Type
Bennett, D. L., Lucchesi, A. R., & Vedder, R. K. (2010). For-Profit Higher Education: Growth, Innovation and
Regulation. Center for College Affordability and Productivity (NJ1).

66. For Profits Get Disproportionally High Federal Aid
Bennett, D. L., Lucchesi, A. R., & Vedder, R. K. (2010). For-Profit Higher Education: Growth, Innovation and
Regulation. Center for College Affordability and Productivity (NJ1).

67. For Profits Highest Load Debt Per Student
Bennett, D. L., Lucchesi, A. R., & Vedder, R. K. (2010). For-Profit Higher Education: Growth, Innovation and
Regulation. Center for College Affordability and Productivity (NJ1).

68. Online Education = Consolidation
• Top 20 largest online schools account for one-third online market.
• Higher education overall, about 222 schools make up one-third of enrollment.
Online Higher Education Market Update - Eduventures. (n.d.). Retrieved March 16, 2015, from
http://www.eduventures.com/insights/online-higher-education-market-update/