Think Big
Start Small
Scale Fast


The Innovation Imperative

“Imagine a world in which the average company lasted just 12 years on the S&P 500. That’s the reality we could be living in by 2027, according to Innosight’s biennial corporate longevity forecast.”

“Imagine a world in which the average company lasted just 12 years on the S&P 500. That’s the reality we could be living in by 2027, according to Innosight’s biennial corporate longevity forecast.”

New technologies, new markets, new business models, a changing workforce, and global competition are creating exceeding pressures to adapt, change, and execute at ever-increasing speeds. 

How do we adapt, grow, and thrive in a world of constant change and disruption?

We believe that every company needs to develop a repeatable process for turning new ideas into profitable business models. A well-defined and executed Innovation Engine can help create an ambidextrous organization that invests and nurtures new business models while continuing to optimize and grow our existing core businesses.

Our goal at Nelnet is to build the competency of innovation - the tools, tactics, and mindset for individuals and the organization to be able to adapt to rapid change.


  1. Create a platform to enable Nelnet to increase its innovation efforts 

  2. Create a framework for managing and de-risking innovation efforts, and

  3. Create a hub of resources and a studio of influence for opportunities to grow and thrive.

The Innovation Studio


To accelerate our innovation culture and competencies we’ve launched the Innovation Studio to serve as a resource for innovation initiatives at Nelnet, from insights to information to investments.


The framework

Explore Nelnet’s innovation engine designed to seed, seek, and scale new business models and innovation initiatives.


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Tools & Resources

Access the latest tools, trends, and tactics in the world of innovation. Explore videos, books, and other resources designed to speed up your learning.


Nelnet VentureS

Nelnet also actively invests in startups outside the organization. Learn more about the technologies, markets, and transformational opportunities we’re exploring.

Have an Innovation Idea to Explore? Read About Our Framework Below, Then Apply Today…

Not All Innovation is the Same

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To execute on innovation we first need context. What do we mean when we say innovation? In its rawest form, innovation is the combination of creative new ideas for the purpose of new value creation. McKinsey’s Three Horizon’s framework helps to define innovation and how it fits into our existing and future business opportunities.


H1 (Core/Incremental) is innovation that is close to the core of the company serving the existing core products and markets. This “incremental” innovation is generally about creating value based on optimizing existing products and services to existing customers and markets. This type of innovation should be executed by the core business. The Studio will support H1 efforts through training, culture, and access to new tools, tactics, and insights from H2 and H3 initiatives.


H2 (Adjacent) innovation involves creating new value by changing one core aspect of the business. For example, selling a similar product to a new market or selling a new product to the existing market. H2 innovation is close to the core, but it is different from the traditional product and market offerings in the past.


H3 (Transformational) innovation is the value creation farthest from the core and is “transformational” to the existing business. Innovation in H3 is serving new products in new markets. H3 Innovation is the hardest for existing organizations to execute or deliver. This is where investing or building “outside” the organization with startups, partners or a separate team drives the value creation.

For a great overview of the Horizons model and what it means to our execution of innovation initiatives, take a look at David Binetti’s article The Quest, The Race, The Grind: Understanding the Three Horizons of Growth.

Our Framework

Innovation is messy. In the beginning, most ideas are small, untested, full of assumptions, and most of the time wrong. This uncertainty is a defining feature of innovation. 

At these earliest stages, the goal of an innovation team should be to seek out a repeatable, scalable business model rather than execute a predetermined or unproven plan. The goal should be rapid learning and discovery to find this model before money and time run out. 

In the “search” phase, it is virtually impossible to pick the winners at the beginning. More shots on goal are required. Since a large percentage (70-90%) of these new ideas typically “fail,” one has to accelerate the number of ideas tried. The key to capturing value at this stage is placing a large number of smaller bets that de-risk new models as they develop. This stage is the land of “startups.”

When in this “search” phase, the goal is to de-risk assumptions and build iteratively with data and feedback until we find a proven, scalable business model to execute and optimize. Most ideas fail from lack of discovery, not lack of execution. This startup discovery framework needs to be the primary method for developing new products under conditions of uncertainty.

Most ideas fail from lack of discovery, not lack of execution.


On the opposite end of the spectrum are our core businesses. These business models are well known and are in “execution” mode. We have proven business processes, customers, and plans that can be executed and optimized. Too many corporate innovation efforts struggle because they apply the same “optimization” processes, metrics, and talent they utilize in the core to these two vastly different stages of business value creation. The results are often the suffocation of new opportunities, overbuilding, overspending, and frustration all around. Nelnet’s approach to innovation is meant to overcome these common obstacles.


Nelnet’s innovation engine will help foster an ambidextrous organization that invests and nurtures new business models outside the core while continuing to optimize our existing core businesses.

Growth Board + Metered Funding

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Two core components of our innovation engine are the Growth Board and Metered Funding. The Growth Board helps measure and hold new teams accountable (much like a startup) to iterate and gain traction. The Growth Board, consists of senior management and the Studio team that serves as an internal board to the new innovation startups chosen to be supported by the Studio. The Growth Board meets approximately every 60 days to invest, analyze, monitor, and advise the new “startup” projects and innovation initiatives working with the Studio.

The Growth Board serves as a de facto venture capital board that invests via metered funding for resource allocation. Unlike traditional budget funding, metered funding is limited in nature and requires the team to come back to the Growth Board with progress, data, and traction before receiving additional funding and resources. 

Sample Metered Funding Process - Source: Pivotal

Sample Metered Funding Process - Source: Pivotal

This mimics the process and cadence a startup would use for their Seed, Series A/B/C-type investments. At each learning and execution cycle the innovation team presents to the board and together they determine whether to continue along the path, pivot, or kill the idea. Teams do not receive further funding unless progress and validated learning is shown. Metered funding creates a sense of urgency and autonomy for teams as well as discipline for management.

New startup ideas inducted into the Studio are invested in by the growth board with resources and capital based on cycles and the teams have the authority and capability to execute their ideas as needed during the cycle. The initial investment in the idea/team is much like a Seed investment an outside startup would receive. Once "funded,” the innovation team would work in the Studio through the initial search phase of discovery, customer development, and market analysis. It is the goal of the innovation team to make progress to de-risk the business model along the way.

From Search to Scale

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Step 1: Idea Generation & Initial Filtering

Nelnet’s innovation engine only works when ideas are fed into it. Employees are encouraged to submit innovation opportunities to Core Business Units or to Nelnet’s Innovation Studio. These submission of ideas are filtered based on analysis from Nelnet’s Growth Board. The Growth Board is made up of senior management, and members on Nelnet’s Innovation Studio. The Growth Board develops and maintains Nelnet’s Innovation Thesis which is used as the initial filter to determine which bets get prioritized and funded. 

Nelnet’s Innovation Thesis

Ideas are presented to the Growth Board and then initially filtered through an Innovation Thesis. An innovation thesis sets out a company’s view of the future and the strategic objectives of innovation. A thesis identifies the markets, technologies, and general boundaries or guard rails for which innovation projects the company will or will not consider as investments of time, money, and resources. Here’s a summary of Nelnet’s Innovation Thesis:

Multiple technologies are converging that will severely interrupt and disrupt a variety of industries from education to insurance to banking and financial services. Consequently, Nelnet will look to invest in innovation opportunities inside and outside the organization in new technology solutions around AI/Machine Learning/Big Data, BlockChain and CryptoCurrency, IoT, and in markets such as FinTech, Education, SaaS, payments, consumer and commercial lending and servicing, real estate, and smart home/smart city infrastructure. 

Using a startup framework to search and uncover new innovation opportunities, Nelnet will utilize a portfolio approach to fostering and investing in new innovations. Nelnet will make investments in internal “startup” projects that are supported by Nelnet’s Innovation Studio and through angel and Series A/B investments in outside startups.

The Growth Board filters the initial ideas to determine where the idea is best executed and which ones to invest in via the Studio. Teams working on H2/H3 initiatives can be chosen by the Studio for initial investment and to begin the process of Idea Validation/Execution.

Step 2: Pre-Seed (Idea Brief Development)

Initial ideas chosen to be explored in more depth go through the Pre-Seed Stage to be further researched and filtered. This stage encourages a team of associates (ideally 2-3 people) to spend no more than two weeks at the Innovation Studio away from the core business analyzing the core market and technology opportunities while developing the initial business model assumptions around problem, solution, and market opportunities.

The outcome of the Pre-Seed Stage is the creation of an Idea Brief. An Idea Brief is a 4-5 page document outlining the initial assumptions around the product idea and market opportunity. It is designed to outline the following:

  • An elevator pitch to describe the opportunity in 240 characters or less.

  • Problem statement - What is the problem you are proposing to solve? Who has it? How often does it occur? How painful is the problem compared to other priorities?

  • Customer segment(s) - Who has the problem?  Demographics, psychographics

  • Market Opportunity - Potential market size, competitive landscape, leverage points within Nelnet?

  • Proposed solution?

  • Proposed team and resources required?

  • An outline of the initial riskiest assumptions to be tested.

  • Why is your team interested in tackling this idea? What special skills, background, talent, or insights do you bring to the space?

  • 1 page “press release” that would appear in 1 year after the launch and success of the proposed idea.

  • 1 page Business Model Canvas -

The Idea Brief should answer the initial assumptions around:

  • Who are the customers? 

  • What problem are we solving for them? 

  • Can we create a solution? (Do we have the skillset/expertise or do we have holes to fill?)

  • What is the cost of creating and delivering the solution? 

  • Are customers willing to pay? 

  • How much are they willing to pay? 

  • Have we found the right price point for profitability? 

  • How will we reach customers to scale our product?

  • Is the idea and team worthy of additional investment and exploration?

We realize that many of these answers in the brief will be unproven assumptions that will need to be validated and addressed, but it provides the initial baseline and the first go/no go decision for what is to be explored and pursued (until market evidence tells us otherwise).

Idea Briefs are reviewed by the Growth Board to determine which projects will receive initial funding, resourcing, and time in the Studio. 

Step 3: Idea Validation/Execution (Seed, Series A/B, Scale)

Once ideas have been generated and filtered during the Pre-Seed Stage, the Growth Board can decide to invest in the opportunity by giving it additional access to Nelnet’s Innovation Studio. H1 innovations are filtered to the core business for possible execution, while H2/H3 ideas are filtered for inside or outside execution through the Innovation Studio.

New projects chosen by the Growth Board team to be part for the Studio effectively enter as a “startup” would. Ideas enter the Studio with a cross-functional team initially doing customer discovery, initial market analysis, and testing and iterating on the initial business model developed in the Pre-Seed Stage. 

As the team begins to test assumptions, build prototypes, and de-risk business models, it has as opportunity to go back in stages to the Growth Board for additional investment. 

Along with the investment of capital/resources, new idea teams begin the process of discovery and validation. In effect, these teams are given the treated as if they were an outside startup. Teams have access to coaching and resources related to Lean Startup, Customer Discovery, Business Model Canvas, Design Thinking, and other methodologies and tools utilized by startups and new product development teams. 

The process through the Studio is run in similar fashion as a venture capital. Teams progress through funding rounds and present progress and milestones to the Growth Board. At each cycle the Growth Board determines if it wants to continue investing/funding the idea based on the traction and milestones hit by the team similar to what happens when a startup raises rounds of financing (Seed, Series A/B, etc.). Teams can utilize the capital and resources as needed to experiment and grow the business and are autonomous to show objective progress at each gate. 

These metered, incremental bets allow teams an ability to grow, pivot, or kill an idea at each stage based on facts and evidence gathered during discovery and execution in the marketplace. It allows teams to “fail fast” and to progress (or not) based on market feedback and execution. A team finding out in the seed stage that an idea is not worth pursuing is a win as it allows for resources that would have been deployed against a failing or stalled idea to be reallocated to other ideas.

Have an Idea to Explore? Apply Today!

Questions? We’re Here to Help.

The Innovation Studio Team: Chuck Norris (   ) / Brian Ardinger (   )

The Innovation Studio Team: Chuck Norris ( / Brian Ardinger (