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.

  • The Starling: Pre-K Ed Tech

    The product I am going to tell you about here was created by two of my former seventh and eighth grade students. I love these guys. So yes, I am biased. But that knowledge also presents an opportunity. I am 100% confident that they have only the best of intentions. With that in mind, I can look at the genesis of an idea for pre-K ed tech—a particularly fraught corner of a fraught field—knowing that there is no scam or hidden agenda here and see some of the challenges that arise when trying to go from best of intentions to implemented product.

    I think Starling is a great idea that has the potential to do a lot of good in the world. But I also think it will raise some eyebrows.

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  • Why Is Blackboard Laying Off Staff Despite Improved Market Share Position?

    Over the past two weeks Blackboard had another round of layoffs, likely due to the company missing financial targets. While one estimate places the number at roughly 200, from what I have heard the number is closer to 90 – 100 people let go. I asked the company for commentary on the layoffs and associated reorganization. By email they declined to comment on the number of employees let go but added this comment:

    These changes included the elimination of select positions across the company. We deeply appreciate the contributions made by the affected employees and are supporting them in their transition.

    This is not the first layoff at Blackboard since they were taken private in 2011; rather this is the latest in a series of cuts that have gone well beyond “trimming the fat”. Posts on thelayoff.com and glassdoor paint a picture of high attrition due to routine layoffs and many staff leaving by their own choice. We have written on several of these events here at e-Literate. 90 here, 100 there, 74 . . . it adds up, especially when combined with staff departures.

    To get another view into the company downsizing, consider that Blackboard recently signed a lease that will trim its corporate headquarters by 37%:

    Founded in a Dupont Circle row house in 1997, Blackboard, which has occupied 111,895 square feet at 650 Massachusetts Ave. since 2008, will move into Ogilvy Public Relations Wordwide’s former space on the eighth through 10th floors [70,482 square feet] beginning in December 2015.

    This follows a recent move in its Reston, Virginia facility that cuts its office space there by over 50%.

    In an ironic turn of events, the new headquarters move will put the company into the same building it occupied before 2008, and their neighbors in the building will include former CEO Michael Chasen’s SocialRadar and CBE provider FlatWorld.

    Why More Layoffs When US Market Share Finally Stabilizes?

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  • Yes, I did say that Knewton is “selling snake oil”

    My comments in today’s NPR article about Knewton are getting some attention on Twitter. One comment in particular, actually. The one where I accused Knewton CEO Jose Ferriera of selling snake oil. To understand the basis of the comment, you have only to look at the quote from Jose earlier in that selfsame article:

    We think of it like a robot tutor in the sky that can semi-read your mind and figure out what your strengths and weaknesses are, down to the percentile.

    Can it read what I’m thinking now?

    And then there’s this:

    We can take the combined data power of millions of students — all the people who are just like you — [who] had to learn a particular concept before, that you have to learn today — to find the best pieces of content, proven most effective for people just like you, and give that to you every single time.

    Really? Every single time?

    Objectively speaking, I don’t know much about Knewton’s platform or the value that it adds. The only efficacy studies I have seen are for Pearson products, and those studies do not differentiate between Knewton features and Pearson-native features in terms of impact. If you dig deep enough on their site, you can find some information on the techniques that they use. For example, this overview paper, while not perfect, is a credible attempt to explain the techniques that the platform employs and the benefits to the users in layperson’s terms. If Knewton were doing more of this, I wouldn’t be as critical. There are still questions about the value of the product, but they are on the same level with many other products in the adaptive learning category. A company like Knewton should be working hard to demystify what their product does and providing hard, reproducible evidence that they add value.

    But much of what Jose says, at least to the media, is the opposite. No responsible educator or parent should adopt a product—even if it is free—from a company whose CEO describes it as a “robot tutor in the sky that can semi-read your mind” and give you content “proven most effective for people like you every single time.” I’m sorry, but this sort of quasi-mystical garbage debases the very notion of education and harms Knewton’s brand in the process.

    If you want to sell me a product that helps students to learn, then don’t insult my intelligence. Explain what the damned thing does in clear, concrete, and straightforward language, with real-world examples when possible. I may not be a data scientist, but I’m not an idiot either. If you can translate the technical mumbo jumbo into sensible teaching insights for me, then you just might make a sale. But most people wouldn’t buy a used car from somebody who describes their product using language as hyperbolic as “robot tutors in the sky.” The same principle should hold for educational technology.

  • Instructure Files for IPO

    This doesn’t exactly come as a shock, but Instructure has filed for an IPO, and is expecting a post-IPO valuation of somewhere between $500 million and $800 million. Whenever a private company does this, they have to file a form called an S-1 with the SEC, which contains all kinds of financial and strategic information. You can find Instructure’s here.

    Also not a big surprise, but the numbers in the report show big growth. Subscription revenue rose 72% from 2013 to 2014. Coincidentally, Edutechinica just published its 3rd annual LMS Data Update. As you can see, Canvas went through the roof in US higher ed while the other major LMS players were either flat or close to it:

    But in order to achieve that growth, they have been running at a loss. The problem seems to be in high expenses rather than low revenues, which suggests that the losses are coming from the company bulking up rather than from them undercutting the competition on price. Also, most of those revenues still come from the US. Instructure has offices in London, Hong Kong, and Sydney. That’s not a huge international presence. And as it happens, Eductechnica has data for the UK and Australia:

    You can see that Instructure has not made a major dent yet in either country. (You can also see that their biggest competitor by far in those two countries is Blackboard, particularly when you consider that Blackboard now owns major Moodle hosting operations in both countries.)

    One last bit that jumped out at me after a quick scan of the S-1 wasn’t financial. Their characterization of analytics was interesting. Throughout the document, they try to make the case that high user engagement and utilization lead to better learning analytics. For example,

    Strong User Engagement Leads to Robust Data Analytics

    Given today’s focus on accountability and performance, both academic institutions and companies are striving to improve learning outcomes. To do so, an organization must first understand the variables that impact results, such as attendance metrics, user engagement, and the efficacy of various learning content and technologies for individual learners. A learning management system has the potential to provide significant insight to educators and administrators on their students’ and employees’ progress toward meeting learning objectives and the factors impacting performance. In addition, such learning management systems can facilitate insightful benchmarking to allow organizations to explore other drivers of learning outcomes.

    Strong user engagement with learning management systems is critical to maximize the potential of data analytics. High utilization enables the learning management system to capture more data, and leads to more insightful analyses on user behavior, quality of individual courses and effectiveness of digital content. Better analytics enables instructors and administrators to make more informed decisions about instruction and materials that in turn drive improved learning outcomes and performance for individuals and companies. This virtuous cycle among user engagement, data analytics and learning outcomes represents the evolution of learning technology. We believe that the market increasingly is demanding learning management software that delivers both robust analytics and strong user engagement.

    They later go on to say,

    Over eight million instructors, students and employees have used our software over the 12 months ended June 30, 2015. According to self-reported data in an ECAR 2014 survey, 58% of faculty in higher education use a learning management system to share content with students, while our internal analysis of higher education institutions using Canvas shows that 71% of faculty use Canvas to share content with students.

    But their claim in terms of what they actually have for data analytics is fairly weak:

    Our platform provides users with open API access to data analytics. We deliver the analytics in an easy to understand and consumable way, that is optimized for independent analysis. This open visibility allows learners to view their own progress in real-time, educators to adjust programs and personalize curricula for maximum effectiveness and organizations to benchmark user data internally and respond to patterns observed.

    They are not arguing that they have good analytics, but rather that the high utilization of the software plus open APIs will enable customers to build good analytics themselves.

  • The University As Ed Tech Startup: UMUC, Global Campus, Texas, and SNHU roll their own

    Today the University of Maryland University Campus (UMUC) announced its plans to spin off their Office of Analytics into a separate for-profit ed tech company.

    The University System of Maryland Board of Regents today approved a University of Maryland University College (UMUC) plan to spin off its Office of Analytics into a new company, HelioCampus, that will provide business intelligence products and services to universities nationwide. [snip]

    The new company will provide a foundational analytics platform and data analysis services. This comprehensive offering will include all the tools needed to support or jumpstart an analytics program. HelioCampus will host a secure platform in the cloud that will include flexible data models and best-in-class visual analytics to accelerate analysis.

    The technology will be complemented by a team of higher-education and business-intelligence experts. Each institution will be assigned a dedicated analyst that will partner with key stakeholders to interpret the data and highlight key trends.

    The Chronicle quotes two UMUC execs – CIO Pete Young (staying at UMUC) and VP for Analytics Darren Catalano (leaving UMUC to become HelioCampus’ chief executive). It is worth noting, as Stephen deFilipo did on Twitter, that both Pete Young and Darren Catalano come from Rosetta Stone. (more…)

  • Breaking: Totara LMS Forks From Moodle And Changes Relationship

    What interesting timing. Just as I published my interview with Martin Dougiamas, I was notified that Totara LMS, a Moodle derivative aimed at the corporate learning market, has forked from Moodle and is changing its relationship with the Moodle Community. From their newsletter released today (Sept 3 Australia time):

    The relationship between Totara and Moodle is changing

    We have made the carefully considered decision that from 2016 Totara LMS will no longer be in lockstep with Moodle. This will free the team at Totara Learning to focus on big leaps forward in usability and modernising the framework for our enterprise customers.

    Further down, Richard Wyles wrote an additional post explaining the fork, starting with his long-term relationship with Moodle. He then explains:

    Why are we forking?

    From 2016 onwards we will no longer be in lockstep. Totara LMS will progressively diverge from its Moodle foundations. (more…)

  • Interview With Martin Dougiamas On Changes To Moodle Community This Year

    In my post last week on Blackboard’s Moodle strategy in Latin America, I made the following observation:

    At the same time, this strategy and growth comes at a time where the Moodle community at large appears to be at an inflection point. This inflection point I see comes from a variety of triggers:

    • Blackboard acquisitions causing Moodle HQ, other Moodle Partners, and some subset of users’ concerns about commercialization;
    • Creation of the Moodle Association as well as Moodle Cloud services as alternate paths to Moodle Partners for revenue and setup; and
    • Remote-Learner leaving the Moodle Partner program and planning to join the Moodle Association, with its associated lost revenue and public questioning value.

    I’m working on a follow-up post that looks more deeply at these changes to the Moodle community, and as part of the research I’ve interviewed Martin Dougiamas, Moodle Founder and CEO, by email. Given Martin’s role, I wanted to avoid the risk of having his answers get buried within my upcoming analysis post; therefore, I’ve decided to publish the interview in full. The only changes I have made are for clarity: showing and correcting ((Changing references to “Remote Learner” to follow the proper “Remote-Learner” usage)) full names instead of acronyms ((For example, replacing “BB” with “Blackboard”, “NS” with “Nivel Siete”, etc)), correcting grammar, and reordering questions to show follow-up discussions in context.

    Phil: Given Blackboard’s trend in acquisitions for Moodle (Remote-Learner UK, X-Ray Analytics, Nivel Siete), and assuming these are not the last, how do these moves affect the Moodle community and future (including roadmap, Moodle HQ funding, whatever)? What are the biggest benefits and / or what are the risks and downsides?

    Martin: In any community there’s always going to be some concern about any one organisation trying to gain dominance. Our certified Moodle Partner program was designed specifically to avoid these kind of risks by building a large global network of different companies (currently 68 and growing, including Moonami and Elearning Experts recently in the US) who are committed to supporting Moodle HQ. The recent Blackboard acquisitions don’t bring any benefits to Moodle as a whole.
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