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Recruited around the world, members of Minerva’s debut class can spend free time together in San Francisco but communicating with their professors is done online only.Shaul Schwarz/Getty Images

Is a university that has no tenured faculty, no sports teams and no real classrooms – not even a building of its own – still a university?

If you're Ben Nelson, the answer is yes. He considers such things unnecessary, frills that detract from the fundamental mission of higher education.

In fact, the multimillionaire tech entrepreneur is so unhappy with the status quo that he has launched the Minerva Project with no less a goal than to topple Harvard from its perch as the world's leading brand in postsecondary education. It is a university modelled on Silicon Valley start-ups and, like so many tech-based "disruptors," is driven by venture capital and is out to profit at the expense of its tradition-bound elders.

Higher learning is ripe for a radical rethink, Mr. Nelson says from his office in San Francisco. "The role of the university to disseminate information, especially in a format like a lecture, has vastly diminished …" he contends. "But because there is so much greater demand for seats at these institutions than there is supply, there is no incentive for reform."

The centuries-old model of the university is clearly wobbling. Costs are rising, classes are crowded (especially at public institutions) and professors are often too busy with research to devote enough time to students. When they're all done, graduates often discover that good jobs are hard to find.

Venture capitalists see rewards in overcoming these obstacles. In recent years, Silicon Valley has poured millions into "massive open online courses," or MOOCs, which promise education for the masses delivered by top-ranked professors, either for free or at a fraction of the traditional cost.

With dropout rates as high as 90 per cent, the "killer app" status of MOOCs is fading fast – yet, the belief persists that educational innovation can yield a hefty return.

Financing for Minerva, whose inaugural class came together last fall, has been provided by Benchmark, a high-profile venture-capital firm, and three education companies in China. The investors are represented on the university's board of directors, but Mr. Nelson maintains that there is a church-state divide between them and the people responsible for academic programming.

Ivory Tower recruits

Ironically, the people behind Minerva are themselves Ivy Leaguers. Lawrence Summers, who chairs the advisory board, is a former president of Harvard; Minerva's founding dean of arts and sciences, Stephen Kosslyn, was a dean of social science at Harvard; Mr. Nelson has a degree in economics from the University of Pennsylvania's Wharton School.

Now 39, Mr. Nelson spent a decade with Snapfish, the San Francisco-based photo-sharing site, leaving as chief executive officer in 2010 (five years after a $300-million buyout by Hewlett Packard). He has travelled as far as Bangalore, India's tech capital, to promote his budding university – which draws its name from the past (Minerva was the Roman goddess of wisdom) but claims to have a completely new approach to education.

For example, as well as being recruited from around the world, students will study around it, too. The first cohort of more than two dozen freshmen is spending its first year in San Francisco, but will move to Berlin and Buenos Aires later on.

Rather than deliver lectures, professors – there are 12 so far, some part-time – lead seminars that are driven by the latest research in cognitive science, but based on ancient pedagogical principles. That means there is lots of interaction, although teacher and students are not in the same room: They connect online via an interactive platform. The end result is "the most classically oriented, liberal-arts education in the world," Mr. Nelson says. Such an education, he adds, should be "for people who run the major institutions of society" and should ensure that they know "how to think, how to process information," rather spend their time "studying random things for fun."

However, Minerva's approach does not resemble the "great books" curriculum employed by many universities, which Mr. Nelson says took shape "when we didn't know anything about the brain or the mind." He argues that having students read Shakespeare or Machiavelli in the hope of gaining insight amounts to "a proxy, an approximation of ways to think."

Neuroscience, he adds, has found that students learn best when encouraged to apply concepts across disciplines, so Minerva has developed "habits of mind" to help them put that into practice. (He tries to illustrate one such habit by having me ask a series of questions about a drug prescription. The attempt fails.)

The bottom line

Profit may be a motive, but just how Minerva will make money remains unclear. At about $28,000 a year, including living costs, its fees are about half those of Harvard, and tuition for the inaugural class was free. Yet, ads for teaching positions (Minerva expects to hire 30 to 40) list such incentives as "a generous equity stake, ensuring you share in the success of the organization," and "unlimited vacation time."

Tenure, however, is not an option. According to Mr. Nelson, it is, like real estate, a legacy cost that weighs down innovation. For most universities, teaching salaries are a huge expenditure. They are also graduating far more young academics than they can subsequently employ.

"The good news is that the tenure system has created a huge supply-and-demand imbalance in the world of higher education," he says. "You have a very small cadre of tenured professors, many of whom should not have tenure; they should frankly be fired because they haven't had a productive day in a decade or two. And then you have a lot of tremendously deserving professors that are incredible teachers who do wonderful research," but are left "in limbo land." So many academics are looking for work that, even without tenure, Minerva received 700 résumés before it had started to hire.

Minerva's approach to financial assistance is also novel. Those who need money can borrow from the school, a welcome financial tap for international students who don't qualify for U.S. assistance. But altruism may not be the only motivation – the loans provide another revenue stream.

Does all this innovation add up to a revolutionary new brand of education? Perhaps, at least in one respect. Minerva may not change the face of higher learning and put Harvard out of business, but it could make liberal education profitable. Whether that makes it better, for students or the world, remains to be seen.