e-Literate

Present is Prologue

Category: Business & Economics

The “Business & Economics” category covers the business aspects of ed tech, including the financial health and business models of individual companies, economic aspects of selling in education that shape the available offerings, and coverage of markets and investment.

  • TechCrunch: “EdTech – 2017’s big, untapped and safe investor opportunity”

    David Bainbridge, CEO of UK-based Knowledgemotion, wrote a post on Saturday in TechCrunch titled “Edtech is the next fintech” calling out the huge, untapped potential of EdTech. Thanks to Alan Levine for sharing this one. Spoiler alert:

    But this is just the tip of the iceberg. The opportunities edtech promises the world’s largest content providers, the biggest educational institutions and any investor looking for a “sure thing” are almost endless. While it might be slightly late to the “digital-first” party, edtech is poised to be the biggest and possibly most profitable digitalized sector yet.

    This is exciting! Not only could EdTech be the biggest market sector yet, it is also “also the safest bet for investors”. Oh my goodness, tell me more. (more…)

  • Instructurecon 2016: Why This Company is Still Formidable (and Misunderstood)

    When I talk to Instructure competitors or critics, I usually hear two complaints about them:

    1. They “open wash” or are “fauxpen.”
    2. They have no vision.

    Having attended Instructurecon 2016 a couple of weeks ago, my answer to the first complaint is that the critics don’t understand what Instructure and their customers mean by “openness.” In some respects, Canvas is the most open ed tech project I know of in ways that strongly differentiate it from its competitors. Full stop. The second complaint is more plausible. But if I were competing against Instructure, I wouldn’t take too much comfort in that.

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  • MarketsandMarkets: Getting the LMS market wrong

    New LMS market analysis with a leader list that includes a company that is retiring its LMS and ignores the company who has a 5x lead in new implementations for its core market? Sign me up.

    Over the next week or two, we plan several posts at e-Literate based on the various LMS users conferences we recently attended. We already covered Sakai and Blackboard, and we will have commentary on Moodle, Schoology, D2L, and Canvas soon. But before we do so, I wanted to call out the recent analysis by MarketsandMarkets, which requires some commentary as it is leading to some media coverage that could misinform those trying to understand the LMS market. The headline of their recent market report:

    Learning Management System (LMS) Market Worth 15.72 Billion USD by 2021

    According to a new market research report, “Learning Management System Market by Application, Delivery Mode (Distance Learning and Instructor-Led Training), Deployment (On-Premises and Cloud), User Type (Academic and Corporate), Vertical, and Region – Global Forecast to 2021”, published by MarketsandMarkets, the LMS market size is expected to grow from USD 5.22 Billion in 2016 to USD 15.72 Billion by 2021, at a CAGR of 24.7%.

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  • Reprise: How Much Do Community College Students Actually Pay For Textbooks?

    [ed. The basic arguments in this post were covered here at e-Literate in 2015 and in The Chronicle more recently. The data has been updated into a new post based on recent news events.]

    Last month the nonprofit advocacy group Achieving the Dream announced a new initiative to fund 38 community colleges who are willing to build entire programs with open educational resources. While this is a noble effort aimed at reducing financial barriers for students to get two-year degrees, the group perpetuated the same myth that has plagued higher education for years.

    The annual costs of textbooks are about $1,300 per year for a full-time community college student and amount to about a third of the cost of an Associate’s degree.

    In the Washington Post’s coverage, they add this description.

    A community college reform group has selected a handful of schools in Virginia and Maryland to develop degree programs using open-source materials in place of textbooks, an initiative that could save students as much as $1,300 a year.

    Are they right? Do community college textbooks cost “about $1,300 per year,” and is there a chance to help them save this amount? The short answer is no. Community college students actually spend just over half this amount — approximately $700 per year — despite the rising list prices of textbooks. (more…)

  • UC Davis, Sakai, and Open Source

    Phil has been a busy boy, putting out two pieces about some Blackboard research that had gotten some negative responses and two more on a horrifically bad LMS outage for UC Davis and other universities using support vendor Scriba.

    Our main schtick here at e-Literate is to get beyond the headlines. We try to explain what is actually happening and why it is important. Often, this involves puncturing hype like “robot tutors in the sky,” not by heaping them with scorn but by showing the gap between the hype and reality. But there are also times when we do the same for anti-hype. For example, there is a popular narrative that Blackboard is evil and bad and stupid, partly based on the massive brand damage the company did to itself a decade ago (and two CEOs ago). As a result, when they do…well…anything, it tends to be interpreted in the worst possible light. Personally, I’m glad that Blackboard is sharing the findings of their product research. I don’t know of many ed tech companies that are doing that. This is different than putting out a white paper about some study the company did showing how awesome their product is. Rather, it shows us how they are trying to understand their customers’ needs. Sharing that back with the world helps us, in turn, understand how Blackboard thinks. It is an important kind of transparency. As Phil’s second post on the topic highlights, we do have to understand that this kind of study is different than an academic study in order to draw the right conclusions from it. But that’s fine.

    Likewise, the Scriba outage story plays into a “Sakai is dying” narrative. As it happens, I was at conference for the foundation that hosts Sakai last week and got something of a rundown on what was going on, including a preview of the release scheduled to come out this summer. (Oddly, nobody mentioned the outage, which must have been in its early stages at that point.) The Sakai sustainability story is complicated enough to merit a separate post, which I will get to later this week. In the meantime, I’d like to put the Scriba outage in context of how open source works in general and how the Sakai ecosystem works in particular. Because it is very easy for this story to reinforce preconceptions rather than looking at it carefully on its own merits.

    Phil wrote,

    There is an interesting angle here in that Sakai is open source yet data is not easily recoverable.

    Right. Open source can help with problems like the Scriba outage. As far as I can tell, it did help UC Davis. But it’s not that simple. There is a lesson to be learned here for all LMS-using schools, but it’s not “open source doesn’t provide the flexibility that it is supposed to provide”; nor is it “Sakai is dying.”

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  • Pop Quiz

    Which CEO has recently said or done all of the following:

    • Suggested to an audience of VCs and ed tech entrepreneurs at the GSV conference that the importance of big data in education has been overstated
    • Told that same audience that the biggest gains from adaptive learning come when it is wrapped in good pedagogy delivered by good teachers
    • Asked former CIOs from Harvard and MIT, both of whom are senior company employees, to develop collaborations with the academic learning science community
    • Accurately described Benjamin Bloom’s two-sigma research, with special attention to the implications for the bottom half of the bell curve
    • When asked a question by an audience member about an IMS technical interoperability standard in development, correctly described both the goals of the standard and its value to educators in plain English

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  • A Big Reason That Digital Textbooks Are Misunderstood

    Chegg, which is in the midst of a dramatic change in their business model by moving from textbook rentals to digital student services, got slammed last week in the stock market. After reporting mixed results of better-than-expected earnings yet worse-than-expected revenues, their stock price lost 35% in one day (Feb 22). But this is not a story about Chegg or stock prices. What I find fascinating is an explanation that Chegg CEO Dan Rosensweig provided about e-textbooks in his discussion with analysts.

    Far too often people assume that digital equals low costs, even for textbooks. Then we get reports and surveys looking at digital textbooks as a method to “save money”, where it is almost assumed that digital textbooks do save money; it’s just a question of whether faculty take this fact into consideration. Or stock market analysts make the same assumption, which was the topic of Rosenweig’s discussion on Mad Money. In this conversation, as described at Seeking Alpha, Rosenweig made a very interesting observation.

    Another misunderstanding is how e-textbooks affect Chegg’s revenue. Chegg has historically recognized 100% of the revenue from e-textbook sales. Interestingly, Rosensweig claims that e-textbooks used to be growing at 60% a year but have since slowed to 0%. In his Mad Money interview, Rosensweig explained that this decrease does not actually stem from volume, rather it is due to an unforeseen imbalance in the price of textbooks.

    Students are choosing to rent textbooks in print rather than e-textbooks because the former are far cheaper. Rosensweig exemplifies this with Chegg’s most popular textbook, Campbell’s Biology. The price to rent this book in print is $20, compared to $107 for the e-book version. Who would purchase an e-book when he or she could rent the paper version for one-fifth the price?

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