e-Literate

Present is Prologue

Tag: Chegg

  • Why VCs Usually Get Ed Tech Wrong

    I don’t often get to write these words, but there is a new must-read blog post on educational technology by a venture capitalist. Rethink Education’s Matt Greenfield argues that there is no generalized bubble in ed tech investment; rather, the problem is that the venture community has a habit of systematically betting on the wrong horses.

    It’s worth noting that Matt is not your typical VC. For starters, he doesn’t live in the Valley echo chamber. Perhaps more importantly, he has a background as an academic. He has a PhD in English from Yale, taught at Bowdoin and CUNY, and taught graduate classes in literature to teachers from the New York City public schools. As such, he has an unusual perspective for an ed tech venture capitalist.

    Matt uses digital textbook platforms as his example of the problem he wants to highlight:

    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, including digital textbook platforms like Kno and renters of physical textbooks like Chegg, which just went public. Venture capitalists have put over $500 million into just the top ten companies in this sector….

    I talked to the CEO of an academic bookstore company recently. How many digital textbook platforms would you guess that his stores handle? Five? No, more than that. Ten? Nope, guess again. Twenty? Still too low. The answer is forty-two different digital textbook platforms. Forty-two. Now try to imagine each of those textbook platform companies pitching a book store. Or an author. Or a publisher. Or a venture capitalist. “Choose my platform, choose me! Our platform is totally different!” How many of those platforms does the world really need? How many of those platforms can make money? What do you think the meaningful differences between those forty-two platforms might be?…Meanwhile, even the century-old publishing incumbents are moving away from book-like things to adaptive courseware: learning objects that simply will not fit into the wrappers being built by companies like Kno.

    So there is a bubble in venture funding for education ventures that are obsolete at birth. Meanwhile, there are large opportunities in areas where few venture capitalists will invest.

    This is a fascinating case study. Why would VCs, with their much vaunted drive for innovation, be so taken with the idea of rebuilding an aging instructional modality (i.e., the textbook) on a digital platform—particularly when, as Matt spells out in detail in his blog post, it’s clearly a bad bet for a lot of reasons? It’s worth unpacking this a bit to get at the underlying pathology.

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  • Lessons from the Boundless Copyright Infringement Suit

    On December 17th, the Boundless OER-based textbook startup issued a press release describing the settlement they had reached with Pearson, Cengage, and Macmillan in the lawsuit those three companies had filed against the company. (Full disclosure: Pearson has been a client of MindWires Consulting.) Actually, a lot of the press release wasn’t really about the lawsuit, and the description of the settlement consisted of the following:

    Today, we’re excited to announce that we’ve settled the lawsuit. In agreeing to a confidential settlement agreement, along with a public judgment and injunction entered by the Court, the parties have resolved the dispute. The resolution allows the parties to move forward and focus on their mutually shared goal of helping students learn. Boundless now has a clear path for building and marketing its OER-driven textbook alternatives without treading upon the Plaintiffs’ rights, and it is confident that it is in compliance and will not have further legal issues with the Plaintiff publishers. In turn, Plaintiffs have reinforced the strong protection they have in and to their copyrighted works and the related goodwill that they and their authors have established, and look forward to Boundless operating its business within the agreed upon framework.

    This seemed like a strangely muted ending to a strange story. It’s hard to tell from the press release what actually happened. But having read the consent decree and injunction, I have come to two conclusions. First, Boundless lost. Second, the suit and its outcome tell us very little about the future of OER but rather more about business strategy for ed tech startups.

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