What Are Ed Tech Entrepreneurs Good For?

The recent ASU Education Innovation Summit, which brought together venture capitalists with aspiring ed tech entrepreneurs, created quite a stir in the edublogosphere and the edutwitterverse. A lot of the reaction came from people who were watching from a distance via video. Audrey Watters, for example, wrote an epic rant on her frustrations. There were many angry tweets from a number of quarters. First-hand reporting was relatively scarce, though. George Siemens, who attended the conference live, wrote a thoughtful and nuanced post on the topic. The question of how entrepreneurs can productively play a role in educational progress, innovation, and reform is a topic that I think about a lot. In fact, I already had a post planned in my backblog from an interview I did with the Instructure founders and CEO on this very topic. So now that e-Literate has successfully migrated to a new host, and before Blackboard buying somebody else forces me to write another post series, I’d like to take some time to lay out my thoughts on the topic.

Let me start by saying that I believe in a free market in roughly the same sense that I believe in gravity. Markets are powerful forces. They are neither inherently good nor inherently evil. Whether they are helpful or harmful depends on whether you are building a water wheel or falling off a cliff. Companies are machines that are designed to take advantage of the physics of markets. They are also neither inherently good nor inherently evil. They do what they are designed to do. The internal combustion engine can be used to rush a person to the hospital or run a person over. It generates great power, at the cost of producing exhaust that is harmful to the environment. If you want to do something big—like improving education globally, for example—then companies and markets are powerful tools. But there is a difference between power and magic. We can make a gun, but we can’t make a silver bullet.

ASU Summit As Petri Dish

If I were watching the ASU summit from a distance and mainly caught the tweets and the webcasts of the keynotes, I’m sure I would have felt the way Audrey did. Listening to Chris Whittle talk about how he plans to democratize exclusive prep school education for all the bond traders on Manhattan’s Upper West Side was a maddening experience. I think he had one throw-away line about how improvements in education for the rich will eventually make their way to reaching a broader range of people. Trickle-down education. Awesome. But the keynotes were really a side show. This was a working conference. The real action happened in the hallways. It was about finding and funding ed tech projects. Which meant that there were basically two types of people in attendance: potential funders and potential fundees.

A lot of the talk about the conference has focused on the funders. And frankly, there has been some charicaturing going on. I was there, and my experience of the crowd there was relatively…polychromatic. For example, I sat next to one gentleman who was an angel investor and did not fit the Twitter stereotype at all. He has a long history of making charitable donations to inner city school projects. But his expertise is in business, and he is excited at the possibility that he might finally be able to use that expertise to help those same children by funding companies that could have a positive impact. Yes, there certainly were plenty of funders at the conference who have money they need to invest and are just looking for good targets without regard to the net social good or ill of those investments. There were also funders who genuinely care about improving education but have politically conservative views of what that means. Some were almost completely and blithely ignorant of educational issues, while others were thoughtful and sophisticated. Famed venture capitalist Mitch Kapur talked about how important it was for entrepreneurs to partner with educators who have vital “lived experience,” and I’m pretty sure he made an approving reference to the Audrey Test of what every ed tech entrepreneur should know about education (although he couldn’t remember who wrote it). At the end of the day, regardless of their motivations, all of these funders are bound by the laws of market physics, and those laws are what matters. Some ed tech companies will make money. Others—most, in fact—will not.

So what really mattered at the ASU conference was not the funders, except for the fact that funders were there looking for things to fund. What mattered was the fundees. What ed tech ventures are being started? Which of those will make enough money to grow? And of the ones that can grow, what good and/or harm do to they do? Who are these people, and what are they trying to accomplish? As you might imagine, they are a diverse bunch. There certainly were a few Chris Whittles in the crowd. But doing a startup is usually really, really hard. Often, these folks are working 90 hours a week, maxing out their credit cards to get started, and living on a roller coaster, not knowing from day to day if they’re going to make it. Many tech folks who are willing to go through all of that pain are looking to create some better way of selling ads that they can sell off for billions of dollars. As Inigral founder Michael Staton told me, you generally have to have an irrational affinity for education in order to do an ed tech startup. There is a passion that is not entirely different from the passion of good teachers.

I’d like to tell you a little bit about one such entrepreneur that I met at the conference.

Unigo

When Jordan Goldman was a high school student in Staten Island, his parents, who are teachers, couldn’t afford to take him to visit colleges. So he started emailing students at the colleges he was considering and asking them what their schools were like. By the time he was done, he had 30,000 college reviews. He got into Wesleyan University. He also got a book deal, first with Simon and Schuster and later with Penguin Group, to take those reviews and turn them into a guide to colleges. It became the best-selling guide in America. But Jordan wasn’t satisfied with it. He decided that a book wasn’t the best format for what he was trying to do. He needed to do something on the web. He approached Penguin with his idea, but they weren’t interested. Furthermore, they said the noncompete they had with him prohibited from doing anything on his own. So, at the age of 22, Jordan killed his book deal and set about starting his own company. But he didn’t know anything about starting a company. So he contacted 1,500 people listed in the Wesleyan alumni database as having some relevant expertise in finance or business, and offered to take each one out to lunch if they would be willing to talk to him about his business plan. About 150 of them responded. Most of the time, they paid for lunch. Each time, he presented his plan and they helped him refine it. Somewhere near the end of the process, one of them offered to write him a check to get him started. And thus, Unigo was born.

The core problem Unigo addresses is this: In the United States, we have a polar system of college counseling. On one end, there are private consultants who can get paid $40,000 per student to help them get into college. On the other end, you have public school counselors, who are often responsible for counseling 1,000 kids in a year and who sometimes don’t even have any training. And there’s not much in the middle. Unigo starts with Jordan’s original idea of having students write reviews, but it also acts as a market for good college counselors from public and private schools, as well as college students, to get paid for counseling sessions with high school students. A session with a counselor costs $100 and a session with a college student costs $30. Unigo takes part of that fee. In order to attract clients, the counselors and college students contribute free content to the site and are rated by customers on how helpful they are.

There are a couple of important lessons in this story (beyond the fact that ed tech entrepreneurs are often both hard-working and a little crazy). First, Unigo addresses a real and serious problem in our education system. After telling our children how important it is for them to go to college throughout their K-12 educations, we have radically under-invested in the support they need to make decisions around actually going. Unigo tackles that problem by creating a market that helps high school students get the support they need while rewarding good but badly underpaid counselors. It uses market forces to solve an important educational problem and make money in the process. In fact, the ability of people to make money is the very force that makes the solution work. Second, while Unigo addresses a very important educational problem, it doesn’t address a learning problem. It doesn’t directly address a question of how people learn and how we can teach them more effectively. Jordan isn’t an expert in teaching or, for that matter, college counseling. He is thinking about hiring a college counselor as a Unigo employee, but it’s not entirely clear how that person would help. So it’s worth asking what sorts of educational problems can be solved well by entrepreneurs who aren’t educators and where educational expertise is important. What is entrepreneurship good for in education?

This brings me to the aforementioned conversation with the folks at Instructure.

Instructure

The founders of Instructure aren’t educators, and they think that’s a good thing. The way they see it, educators tend to build software that solves their own problems from their own perspective, and the results are often idiosyncratic. As technologists coming in with no strong opinions about how teaching “should” be done, the Instructure leadership feel they have an advantage of humility and open-mindedness when considering solutions. As CEO Josh Coates put it, educators “are experts in their context. But their context is one or two classes in a specific university in a specific part of the country. Software developers don’t even pretend to know the domain.” So they have to go out and do the research. Instructure co-founder Brian Whitmer added, “And we know that we have to do it. We know that we have to validate it against a bunch of different people.” And they do. Instructure, as a company, is extremely attentive to the conversations among educators, to the point where they have Twitter feeds from various ed tech folks sucked right into the IRC channel that all their developers use for internal communications. They do their homework.

Educators tend to get hung up on the profit motive and, ironically, miss the disciplinarity of starting a company. Co-founder Devlin Daley talked about a “new style of development” that was “not true in the ’90’s,” and all three of them talked a lot about Agile development. As they see it, a lot of companies that implement Agile miss the fundamental aspect of the methodology that is about getting closer to customer needs. I think that’s true, but I also think part of what they were getting at is not about Agile so much as it is about Lean. The Lean Startup movement  is about inventing a methodology for startups to identify real solutions to real problems that people are willing to pay for. Startups, because they have a limited amount of money and start with no income, have a limited amount of time to find a successful product before they run out of money and have to call it quits. So they have to develop a series of techniques to find out what problems people really care about that the entrepreneurs know how to solve in a scalable, cost-effective way. That’s a handy set of tools to have if you want to have global educational impact.

The Edupreneur and the Teacherpreneur

Instructure’s philosophy is in direct opposition to the Eric Raymond “scratch your own itch” open source formulation that is implicit in the aforementioned Audrey Test as well as many educational software projects, both open source and private source. Kirsten Winkler (another edublogger you should be reading) writes about “teacherpreneurs,” who are educators that start up companies, as opposed to “edupreneurs,” who are entrepreneurs that get into education. Which approach is likely to be more educationally impactful? Which one is more likely to find successful adoption (and profit, if it is a for-profit effort)? Which one is more likely to produce a “better” product? I don’t think there is any one right answer. Moodle, founded by teacherpreneur Martin Dougiamas, has been enormously successful as measured by adoption. Instructure Canvas, started by edupreneurs, has had unprecedented early growth in the United States. (As of the interview on March 12th, they had 120 customers and 102 employees.) Each of these successes can be at least partly attributed to their characteristics in one category or the other. Moodle has thrived in large part because it succeeded in building an enormous community of educators who were attracted to Martin’s vision as an educator. Instructure has taken off like a rocket in part because they created a clean architecture and user experience that solve real problems for a broad range of educators. On the whole, I think the disciplinarity of the edupreneur tends to be grossly undervalued by educators, but both have their place. The more interesting question, to me, is when is it important to have education experts inside the company?

First of all, it is important whenever your solution is directly involved in cognitive processes. For example, Memrise produces a solution that helps people…well…memorize things. They claim that their solution is designed around a theory of cognitive science about how memory works. Likewise, I think deep and effective learning analytics solutions are going to require educators to make sense of the data that comes in. Learning is a complex series of heavily mediated cognitive processes. Figuring out why people tend to perform the way they do in certain educational situations involves a lot more than correlating events. Machine learning is a gun without a silver bullet. And of course, there is the long tail of solutions to teach specific disciplines, skills or concepts. I often tell the story of when Beth Harris and Steven Zucker (formerly of FIT but now of Khan Academy) took me to see an image annotation tool developed by Columbia University that they were excited about. They were looking for a tool for teaching art history online. Columbia’s tool was really cool, but it was developed for a histology professor. It turns out that the way histology professors want to use and annotate images in the classroom is completely different than the way art history professors do. Some of these may not be sustainable as commercial applications and may work better as non-commercial open source. But, for example, teaching good writing is a pretty large niche application spanning multiple disciplines and should support significant commercial efforts.

These may seem like they are edge cases, but that’s because up until now, LMSs have really been focused on educational access rather than educational effectiveness. I believe that is going to change. In general, educational spending is going to be more and more focused on some variation of David Wiley’s formulation of educational impact: standard deviations per dollar. One way to address this challenge is build learning platforms (to borrow Phil Hill’s formulation) that enable educators to crowd-source the development of specific teaching and learning solutions. But I think there will also be a need for companies that have in-house expertise on teaching and learning.

We Are the Market

I want to get back to the analogy of the physics of the market and, specifically, to where that analogy goes awry. People often think about The Market in stark, 19th-century, social Darwinistic terms. But there is no Market. There are only markets. Markets, like companies, are human creations, and while they have their own rules, they can be shaped. The LMS market is a good case in point. Want to know why the LMS industry has a reputation for building crappy, expensive products? Here are a few clues:

1. College LMS procurement processes are long and complex, which means that they are expensive for vendors to participate in.
2. Procurement decision-making processes also tend to be relatively opaque and political, which means that in addition to being expensive for LMS vendors, they are high-risk and the risk in each case is not easy to evaluate.
3. Historically, the processes have tended to emphasize long check lists of functionality, which means that quantity of features has been valued over quality.
4. Until recently, colleges have tended to go with companies that they perceive to be “safe,” which generally means large.

All of these factors have heavily determined the characteristics of companies that can succeed at selling LMSs. I believe that the recent evolution toward learning platforms is partly a direct consequence of the fact colleges are getting more sophisticated in their approach to the product category and therefore are changing the success criteria in the market.

Rob Reynolds’ astute observations about the limitations of startups as engines for educational reform are spot-on, but we can help ensure their focus is on the right things by hacking the markets themselves. The Obama administration’s Race to the Top initiative’s single most important effect was to provide financial incentive to schools and the vendors who serve them to provide real, measurable improvements. But you don’t need a Federal initiative to change the markets. Schools, teachers and students, as customers, can change the ways they make purchasing decisions. They can become better consumers. And companies can hack the markets too. Unigo hacked the market for college counseling, which was dominated by high-end players. To me, the most interesting ed tech challenges involve changing the market dynamics for the better. How can we create an environment in which companies can sell solutions that add educational value based on the premise that high-quality educational content is cheap and plentiful rather than expensive and scarce? How can we get employers to look beyond the degree and evaluate students based on more granular and authentic measures of achievement? These are the areas where entrepreneurship can have the most impact. But in order to make sure that gravity is driving the water wheel rather than just pulling us down, we have to accept that forces of nature exist and actively work to harness them. Whether or not educators are working inside and driving ed tech companies, they need to be full and sophisticated participants in the educational markets.

 Update: Just after I published this post, I got a pointer (thanks, Audrey) to teacherpreneur Michael Staton’s great post about the state of K-12 ed tech start-ups. It is highly relevant. All I can say in reply is, “Dude, why didn’t you publish this on e-Literate?”