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Disrupting Class. Michael B. Horn | mhorn@christenseninstitute.org | Twitter: @christenseninst . How Disruptive Innovation Will Change the Way the World Learns . Review of disruptive innovation. Disruption = affordability, accessibility. Past and present examples. Yesterday GM

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disrupting class
Disrupting Class

Michael B. Horn | mhorn@christenseninstitute.org | Twitter: @christenseninst

How Disruptive Innovation Will Change the Way the World Learns

slide3
Disruption = affordability, accessibility

Past and present examples

Yesterday

GM

Dept. Stores

State universities

Digital Equipment

Delta

JP Morgan

Xerox

IBM

Cullinet

AT&T

Sony DiskMan

Today

Toyota

Wal-Mart

Community colleges

Dell

Southwest Airlines

Fidelity

Canon

Microsoft

Oracle

Cingular

Apple iPod

disruption of toyota
Disruption of Toyota

From hyundaiusa.com May 5, 2013

disruption affordability accessibility
Disruption = affordability, accessibility

Past, present, and future examples

Yesterday

GM

Dept. Stores

State universities

Digital Equipment

Delta

JP Morgan

Xerox

IBM

Cullinet

AT&T

Sony DiskMan

Today

Toyota

Wal-Mart

Community colleges

Dell

Southwest Airlines

Fidelity

Canon

Microsoft

Oracle

Cingular

Apple iPod

Tomorrow

Chery

Internet retail

Online universities

Smart phones

Air taxis

ETFs

Zink

Linux

Salesforce.com

Skype

Smart phones

online learning is gaining adoption
Online learning is gaining adoption

Substitution calculation indicates online learning is growing disruptively

50% of all high school courses online by 2019

the rise of k 12 blended l earning
The rise of K-12 blended learning

Definition of blended learning

A formal education program in which a student learns at least in part through online learning, with some element of student control over time, place, path and/or pace

at least in part in a supervised brick-and-mortar location away from home (such as school).

The modalities along each student’s learning path within a course or subject are connected to provide an integrated learning experience.

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slide10
Companies appear to have 3 options

Sell to educators in existing system

Sell to educators in sustaining innovation blended-learning models

Sell to educators in disruptive innovation blended-learning models

disruption is not a technology problem

Pocket radios

Hearing aids

Tabletop Radios, Floor-standing TVs

Portable TVs

Path taken by

vacuum tube manufacturers

Disruption is not a technology problem

Performance

Different Measure

of Performance

Time

Time

systems disrupt systems
Systems disrupt systems

Appliance Stores

RCA, Zenith

Component suppliers

Performance

Discount retailers

Different Measure

of Performance

Time

Sony, Panasonic

Component suppliers

Time

slide16

Performance that customers

can utilize or absorb

Sustaining the chalkboard

There has been a long history of selling technology to enhance the current classroom

Performance

Time

disruption isn t so straightforward

Pocket radios

Hearing aids

Tabletop Radios, Floor-standing TVs

Portable TVs

Path taken by

vacuum tube manufacturers

Disruption isn’t so straightforward

Performance

Different Measure

of Performance

Time

Time

the theory of hybrids

Disruptive Innovations

Time

The theory of hybrids

Competing on design, reliability, and performance on the California Freeway

Tesla $100,000

Pace of performance improvement

Prius Hybrid

Ability to use improvements

Performance

Time

Performance

Peapod: Are there customers that would love a car that won’t go far, and won’t go fast?

the theory of hybrids1

Disruptive Innovations

Time

The theory of hybrids

Pace of performance improvement

Ability to use improvements

Performance

The metric of performance changes

Time

Performance

The disruptive technology

doesn’t invade and reform

the existing system.

Rather, new measures of

Performance entice customers

into the new system

Smartphones

how to spot a hybrid
How to spot a hybrid

It includes both the old and new technology; pure disruption doesn’t offer old in full form

It targets existing users, not nonconsumers

It tries to do the job of existing technology

It is less foolproof than a disruptive innovation; does not reduce level of wealth and/or expertise to purchase and operate it

how to spot a hybrid1
How to spot a hybrid

Measuring itself against traditional value proposition

Core subjects, mainstream students

Requires expertise in both

Traditional PLUS online

prime examples of n onconsumption
Prime examples of nonconsumption

Credit recovery

Drop outs

AP/advanced courses

Scheduling conflicts

Home-schooled and homebound students

Small, rural, urban schools

Unit recovery

Disaster preparedness

Tutoring

Developing countries

Professional development

Pre-K

After school

In the home

Incarcerated youth

In-school suspension

School bus commute

Summer school

Teacher absenteeism

Migrant worker families

Foreign languages

Budget cuts and teacher shortages are an opportunity, not a threat.

slide38
The markets appear either saturated or small

Districts

Disruptive

C

C

Districts

Sustaining

Trad’l quality metrics

Core academics

Nonconsumption

Charters

“No Excuses”

new value propositions
New value propositions

Like all disruptions, disruptive blended-learning models deliver different value

Individualization

Productivity

Traditional

Classroom

Disrupted

Classroom

Access, Equity

slide40

Disrupting Class

How Disruptive Innovation Will Change the Way the World Learns

Michael B. Horn

mhorn@christenseninstitute.org

Twitter: @christenseninst

slide42
High-level conclusions

For-profits not inherently good or evil

Far fewer inherent differences between for-profits and non-profits than many assume

Differences between for-profits stem from corporate structure, where for-profits have owners and non-profits don’t

  • Easier for for-profits to attract capital, scale, and possibly talent
  • Easier for for-profits to focus
  • Non-profits can remain rooted in a community in absence of market

Incentives matter. Policies must encourage smart demand

sustaining vs disruptive innovation
Sustaining vs. Disruptive Innovation

Disruptive Innovations

Time

Incumbents dominate sustaining battles

Pace of technological improvement

Sustaining innovations

60% margin on

$500,000

Customer ability to use improvements

Performance

45% margin on

$250,000

Time

Performance

40% margin  20% margin

on $2,000

Entrants typically win at disruption

understanding h ow u sers e xperience l ife
Understanding how users experience life

“The customer rarely buys what the company thinks it is selling him.” Peter Drucker

If a customer won’t pay them to do something, over time they won’t do it.Will chase their incentives and do what they are paid to do—not much more and not much less

what is a business model

RESOURCES:

People, technology, products, facilities, equipment, brands, and cash that are required to deliver this value proposition to the targeted customers

PROCESSES:

Ways of working together to address recurrent tasks in a consistent way: training, development, manufacturing, budgeting, planning, etc.

THE VALUE PROPOSITION:

A product that helps customers do more effectively, conveniently & affordably a job they’ve been trying to do

REVENUE FORMULA:

Assets & fixed cost structure, and the margins & velocity required to cover them

What is a business model?

And why does it lock us in?

what is a business model1

RESOURCES:

People, technology, products, facilities, equipment, brands, and cash that are required to deliver this value proposition to the targeted customers

PROCESSES:

Ways of working together to address recurrent tasks in a consistent way: training, development, manufacturing, budgeting, planning, etc.

THE VALUE PROPOSITION:

A product that helps customers do more effectively, conveniently & affordably a job they’ve been trying to do

REVENUE FORMULA:

Assets & fixed cost structure, and the margins & velocity required to cover them

Business units don’t change. Will fight

a new order that fundamentally challenges

how they make money

What is a business model?

And why does it lock us in?

But non-profits have business models, too, and will do the same

slide49
High-level conclusions

For-profits not inherently good or evil

Far fewer inherent differences between for-profits and non-profits than many assume

  • Non-profits aren’t always virtuous
  • Non-profits have business models, too
  • For-profits won’t cut corners if customers will punish them for doing so
  • In public education, historically, neither for-profits nor non-profits have actually saved the taxpayer much money because of policy  There is some sense in which they are all public entities because publicly funded
slide50
High-level conclusions

For-profits not inherently good or evil

Far fewer inherent differences between for-profits and non-profits than many assume

Differences between for-profits stem from corporate structure, where for-profits have owners and non-profits don’t

  • Easier for for-profits to attract capital, scale, and possibly talent
  • Easier for for-profits to focus
  • Non-profits can remain rooted in a community in absence of market

Incentives matter. Policies must encourage smart demand