Disrupting Class

1. Disrupting Class Michael B. Horn | mhorn@christenseninstitute.org | Twitter: @christenseninst How Disruptive Innovation Will Change the Way the World Learns

2. Review of disruptive innovation

3. 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

4. Disruption of Toyota From hyundaiusa.com May 5, 2013

5. 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

6. How does disruptive innovation relate to K12 education?

7. Online learning is gaining adoption Substitution calculation indicates online learning is growing disruptively 50% of all high school courses online by 2019

8. 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. 100010001111010101000 100010001111010101000

9. Emerging blended-learning models

10. 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

11. The decision matters

12. 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

13. Systems disrupt systems Appliance Stores RCA, Zenith Component suppliers Performance Discount retailers Different Measure of Performance Time Sony, Panasonic Component suppliers Time

14. Option 1: Selling to educators in existing system

15. Blended Learning is not…

16. 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

17. Option 2: Selling to educators in sustaining innovation blended-learning models

18. 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

19. 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?

20. 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

21. The theory of hybrids

22. 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

23. Emerging blended-learning models

24. Station Rotation Model

25. How to spot a hybrid Measuring itself against traditional value proposition Core subjects, mainstream students Requires expertise in both Traditional PLUS online

26. Station Rotation Model

27. Lab Rotation Model

28. Flipped Classroom Model

29. Option 3: Selling to educators in disruptive innovation blended-learning models

30. 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.

31. Individual Rotation Model: Carpe Diem

32. Carpe Diem

33. Carpe Diem

34. Flex Model

35. A La Carte Model

36. Enriched Virtual model

37. The pluses and minuses of targeting disruption

38. The markets appear either saturated or small Districts Disruptive C C Districts Sustaining Trad’l quality metrics Core academics Nonconsumption Charters “No Excuses”

39. New value propositions Like all disruptions, disruptive blended-learning models deliver different value Individualization Productivity Traditional Classroom Disrupted Classroom Access, Equity

40. Disrupting Class How Disruptive Innovation Will Change the Way the World Learns Michael B. Horn mhorn@christenseninstitute.org Twitter: @christenseninst

41. Private enterprise & public education

42. 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

43. For-profits not inherently good or evil

44. 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

45. 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

46. Far fewer differences

47. 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?

48. 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

49. 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

50. 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