As the traditional MBA struggles, new players arise to take its place. We call them the Disruptors. This is the first in an ongoing series about who they are, what they have achieved, and what they are planning.
Calling themselves “Europe’s fastest-growing business school,” a Spanish startup is making waves in graduate business education — and planning an imminent expansion to the New World.
With an MBA curriculum and a sticker price of about $1,000, ThePowerMBA markets itself as a cost-friendly alternative to a degree that has become too pricey for many despite its proven ROI. Launched in 2017, the online venture aims “to provide the knowledge, the tools, and the inspiration to any single person in the world who really wants to improve in life,” says co-founder and co-CEO Rafael Gozalo. Access, Gozalo says, is what it’s all about.
“Our goal,” he explains, “is to become the largest business school in the world within the next two years. We offer students access to the highest level of education and a prestigious network at an affordable price for everyone. We are democratizing higher education.”
HEADY DAYS OF GROWTH & EXPANSION
Since its launch, ThePowerMBA has expanded to 40 cities in over 15 different countries, with more than 20,000 students entering the program and some 40% completing it — which works out to about 8,000 graduates in under three years. About 2,000 students sign up every month. That’s a rate that no B-school can match. Despite not offering an official university degree, ThePowerMBA has been integrated by many companies in Spain and elsewhere into their employee training; more than 300 — firms like EY, Bain & Company, and Google — now pay for ThePowerMBA courses for their employees.
The program structure involves replacing case studies — which Gozalo calls “traditionally outdated” — with updated scenarios geared toward a constantly changing workforce. ThePowerMBA has lesson participation agreements with major industry players including Waze, Tesla, Shazam, and Whole Foods. The lessons replace a traditional classroom setting with a “micro-learning” format, with highly focused, 15-minute-a-day online sessions throughout a three-month period. Recently the company expanded its offerings to include a digital marketing program.
The big expansion, however, is slated for late March, when ThePowerMBA comes to the United States, Gozalo says.
Poets&Quants talked by phone recently with Gozalo and learned more about the startup that is taking Spain and Europe by storm — and that hopes to soon be doing the same in the U.S.
What sparked your interest in affordable business education? What is ThePowerMBAs’ origin story?
Rafael Gozalo: I got my MBA here in Spain at IE business school (in 2009). It’s a good business school, but it’s a $70,000 business school. I identified that there would be many other ways to be trained in business.
We started ThePowerMBA to try to provide to all those white collars that don’t even consider going to a business school the business skills, the business knowledge, and the networking that comes with an MBA. And now with a second product here in Spain that it’s a digital marketing program.
We started with this two years ago with a no-brainer price of 500 bucks (€499, about $540). This is very difficult to explain to our potential customers: That low price is not a low value. Our content is top. And when I mean top, I know what I am talking about. We have seen all the content levels from the best top business schools.
We build the content from scratch looking for all the main frameworks. First of all, it is extremely updated because we don’t talk about the classical cases. We just talk about digital, new business models, platform models. I think that we have created a good product, here in Spanish, with topics that are relevant here in Spain. It’s a full MBA curriculum, and we started with the support of top people here in Spain. And we’re acquiring 2,000 students every month.
We are training people from Bain, people from Google, we are training people from (pharmaceutical giant) Bristol(-Myers Squibb), and (Spanish multinational bank) Banco Santander. And at the beginning we thought that because of the price, the community was going to be not very well-qualified community, but what we have discovered is that they are very interesting people who are building their community. Something’s happened here, we have created a kind of movement. And it’s not only an online course. We have done more than 110 events in the last year, with meetups of more than 6,000 students in Madrid, Barcelona, Valencia, and now in Colombia, Mexico, Argentina. ThePowerMBAs feels very proud to be part of our family.
I think that we have validated another approach to value: different, extremely efficient, with 70 core hours, 15 minutes a day. We’ve already involved the founder of YouTube, one of the founders of Tesla, one of the founders of Waze — all of these guys are attracted to ThePowerMBA, and not only because of the money. I think that they feel that we are democratizing something, that it’s very powerful, that it’s all the knowledge in business. For the moment only a very low percentage of the population can afford a good executive business training and that’s what we want to change. I think that we are doing something important and we are determined to create the largest and the best business school in the world.
We started one with one class every month with 100 people. Now in the different programs we are doing like 2,000 programs a month. In the last month the acceleration has been very big and very strong.
We think that after a few years people will take a look back and wonder why people used to spend such a big amount of money for being trained in these. Maybe the tier-one business schools are providing other things, partly knowledge, partly network. It’s totally different. But there are a lot of business schools that are not doing that great job. And we think that we are doing a good job. And I think that we feel very confident of growing abroad and worldwide.
Can you explain in detail how the “micro learning” approach works?
Okay. It’s on a structure, very focused in business strategy and go-to-market. This is like a puzzle with 300 pieces and we recommend to do just a lesson every day. It’s a 15-lesson video where you will receive the theory about, I don’t know, the network ethics for example. And in the next lesson what we try is to bring someone, an entrepreneur or someone experienced in these areas, with a theoretical topic that had been developed before.
And we try to link — at least as much as we can — every theoretical concept that it’s very important to have with a practical knowledge or a practical action and context by top entrepreneurs. We tried to bring top entrepreneurs but also local entrepreneurs who are doing a good job in something. And it’s just learning by doing. This is like a bustle — after three lessons you may think that you have learned not so much. But at the end of the program or at the end of the day, after 20, 25 lessons, you start having a structure in your mind and things start working in your mind.
After two years, one of the more important things we have achieved is that people feel that they have a lot of tools and they have much more opportunity to be successful on whatever they want to do than before doing ThePowerMBA.
Of course it’s a non-accredited program. We don’t want to be that. I mean there are many, many options, but the world is growing so fast that any certification isn’t going to be easily updated. And we change the lessons every 15 days. Then the lessons with the lowest rates of our students are changed. We don’t have to give any explanation to anyone. So we believe that. We try to provide our students with real-time content.
It takes how long to complete? Is there a flexibility there — can it be longer or shorter?
It’s a 15-minute lesson. Our recommendation is to go one lesson per day. So take the lesson after the first coffee in the morning or whatever. We recommend to do one 15 minutes a day from Monday to Friday, and in that scenario it takes about 10 months.
We have people from Spain, for example, who have done it very focused and they took one month and a half, because it’s a 70-hour program. But our recommendation is to do just one lesson a day. But if you can do it like a Netflix show, you can see as many chapters as you want.
And now expansion. What is the plan?
We are going to start setting the program at the end of March. At the end of the year we will have local communities in more than 120 cities in the world. For the moment we are in 40. What I mean with a local community: it’s a community with more than 50 students.
Our mission is to be worldwide. I don’t know how fast are we going to achieve this, but we are going to be very focused. We want to learn about the U.S. market. I think that in the U.S. there is something very interesting: that is the depth of the college debt, the business school debt, all the money that you have to spend to have a good education. I think that it’s a very complicated and extremely competitive market, but I also think that there is a big problem over there. So we feel confident about our value proposition.
I don’t know what’s going to happen. We are going to start selling in other countries as well. We are going to try to understand their behavior and the customer personas in other countries like the UK, Canada, Australia, and Israel. And we are going to start selling in the U.S. at the end of March and see what happens. The price over there, we are not sure at all. We want to keep a very democratic price and a no-brainer price. I don’t know that we will move from 1,000 bucks to 1,300 or something like that. It’s going to depend a lot on the acquisition costs. The channels over there are more expensive. The CPO is going to be three, four times the cost here in Europe.
We feel confident about the value proposition because here in Spain it became something huge. It became something huge, more than 300 companies. We are a B to C company and more than 300 companies are selling or buying ThePowerMBA. Eighty-nine people from Google, people from Bain. Now we are finalizing the U.S. adaptation of the product because we are creating the print over there from scratch with local cases, with local people of course. And I don’t know. We have very big expectations and we feel nervous about this.
A lot has been written by us and by others about the struggles of the traditional two-year residential MBA program and a lot of that is self-inflicted with the cost, as you mentioned. But do you think that what you’re doing is the future of the MBA? Do you think this is really the next step in the evolution of the MBA?
I really don’t know. What I feel, I’m just going to tell you my opinion. I think that it’s impossible to keep education in the same way as 30 years ago, or 20 or 50, because the world is totally different. And the journals and their methodology have provided a lot of opportunities. I think that this is not only about MBA and education. I think that the education is going to change radically in the next few years.
Why? I’m just going to use a stupid example because I know nothing about that, but what should you learn from a strategy professor from the University of Minnesota? Is that the best guy to teach you, or should we find someone who is the best guy on each topic and teach you online from any side of the wall? I don’t know.
I mean, there are thousands of teachers and most of them are not great. They are not great, with all respect. But why don’t you try to learn from the best on each topic online on an extremely efficient and an extremely convenient way? I don’t know, but it’s not about only business education. Why should you read a 25-sheet case study instead of receiving the theoretical topic? And then go straight to a CEO who had done exactly the same thing that had been taught on that 10-minute video, with a very big effort of wrap-up of the main concepts? And so I think that the education is going to change a lot in the future and it’s already changing.
We are only trying to do the things better and in a very efficient way, because of all that money that you can save. I know what we teach in ThePowerMBA and I know what I received when I did my MBA. And personally, it’s much better what we do in ThePowerMBA. So all of this money, you can use it on other things in your life.
Maybe if you go to a very good university it’s different because there are other assets, but between you and me, most of the business schools are not doing a great job.