We have spent a lot of time recently analyzing trends and data in education technology and have observed record quarters for both total funding and early-stage investments. And while looking at data is always important, many of the ideas we come up with are the result of perspectives we read on Ed Tech from smart venture capitalists, entrepreneurs and educators. Of course, there is an immense amounts of fluff about Ed Tech as well.
Below are 12 of the most insightful write-ups we’ve seen on ed tech organized by entrepreneur, investor, educators and others. If you know of others, definitely let us know or leave them in the comments.
[Tweet “Most entrepreneurs in education build the wrong type of business – entrepreneurs think of education as a quality problem”]
– Most entrepreneurs in education build the wrong type of business, because entrepreneurs think of education as a quality problem. The average person thinks of it as a cost problem.
– Building in education does not follow an Internet company’s growth curve. Do it because you want to fix problems in education for the next 20 years.
– There are opportunities in education in servicing the poor in the US and building a company in Asia — not in selling to the middle class in the US.
Education stories are mainstream. The challenges surrounding student debt, international competitiveness, unemployment and equality are problems that affect everyone, not just those in the education space. If you’re building a company to address these problems in an innovative way, the world wants to know about it and you will get noticed. Outside of Silicon Valley (maybe even inside), I’m willing to bet that more people have heard of Salman Khan than Peter Thiel.
Almost all of the additional learning that students normally are expected to do on their own — by studying a carefully curated textbook and other materials, with professionally created scope and sequence, instructional design, assessment items, and production values — is missing. Other supporting services that schools and universities provide — both academic services like libraries and tutors, as well as non-academic services — are also missing. All of these other essential elements that constitute a course cost money. MOOCs don’t give away these other components, so they don’t give away courses. They give away lectures.
For Education Entrepreneurs, Innovation Yields High Returns
Julie Petersen – EducationNext
Technologies with the greatest wide-scale success tend to sell to individuals rather than businesses (or, heaven forbid, public agencies). While many of K12’s revenues come from states and districts today, the company’s scale came through addressing the demand among home schoolers for a strong curriculum. Even Wireless Generation and SchoolNet credit some of their success to pursuing bigger fish than schools and districts, whether that’s the state-level contracts that SchoolNet secured via Race to the Top or the development contract that the Bill & Melinda Gates Foundation awarded Wireless Generation (now Amplify) for work on its inBloom student-data framework.
There Is No Bubble in Educational Technology: Not For Businesses That Actually Make Sense
Matt Greenfield – Stonework Capital/Rethink Education
My answer is that there is a bubble in ideas that won’t work and a dearth of capital for ideas that can work. Let’s start with the ideas that won’t work. What type of ed tech have venture capitalists approached with the greatest enthusiasm and the largest piles of cash? The answer is new textbook solutions
All the energy and enthusiasm for ed tech is translating into dollars. CB Insights recently reported that early stage edtech investing has grown substantially from a few years ago. As an investor, you never like to see a sector get overfunded. But this one is so large, and has so much room for further disruption, that we feel as if there still remain many exciting new opportunities.
1. We’re skeptical a business model that charges for content will work at scale and in the long run.
2. We expect education platforms that offer vertical content and/or specific education experiences will be more successful than horizontal platforms, though we think credentials and careers offer two opportunities for horizontal aggregation
3. Without credentialing or careers, online education seems aspirational and removed from the day-to-day of many people.
Why VC’s Almost Never Invest in K12 – Reflections from a Discussion with the Ed Tech Community
Rob Go – NextView Ventures
On one hand, investors get excited about “over the top” opportunities that bypass traditional sales channels in favor of a more direct-to-consumer approach. But Alex Grodd from Better Lesson brought us a bit back to earth, reminding that the only payers are consumers, teachers, and schools/districts. And it’s easier said than done to get consumers and teachers to pay for core educational programs on a broad scale.
The combination of the obsession with disruption and the phobia of institutions is a particularly bad one for the education markets. When I say that, I don’t mean that it is harmful to education (although that is probably also true). What I mean is that it leads to consistently unprofitable investment decisions.
Most formal learning, for most pupils, will still take place in a purpose-built room with 20-30 of their peers and an adult stood at the front. However, there is a chink in this model which I think will become increasingly apparent by 2017, and that’s the emergence of blended models of face to face and online study in the mainstream, especially at Key Stages 4 and 5.
This is a fundamental incentives mismatch: one party wants scale to “change the world”, the other to make a potential profit. And so far neither party is attaining their objective.
But if we can’t (or shouldn’t) pre-write the ending for this recent explosion in ed-tech entrepreneurship, I think we should take a hard look at the ed-tech ecosystem and gauge its health today — not just in terms of bubbles bursting and potential investor losses, not just in terms of the birth and death of startups, but frankly in terms of some of the disease that I fear is being cultivated therein.
This report was created with data from CB Insights’ emerging technology insights platform, which offers clarity into emerging tech and new business strategies through tools like:
- Earnings Transcripts Search Engine & Analytics to get an information edge on competitors’ and incumbents’ strategies
- Patent Analytics to see where innovation is happening next
- Company Mosaic Scores to evaluate startup health, based on our National Science Foundation-backed algorithm
- Business Relationships to quickly see a company’s competitors, partners, and more
- Market Sizing Tools to visualize market growth and spot the next big opportunity