
Why Education Startups Do Not Succeed (2011) - ALee
https://avichal.com/2011/10/07/why-education-startups-do-not-succeed/
======
analog31
I've told this story before: Back when I was in college, I had a summer
internship at a place that was a service center for the K-12 schools in a
large county. Microcomputers were the big new thing. We had a facility with
one of each kind of computer (Commodore, Apple, Radio Shack, etc.) and all the
software we could lay their hands on. Teachers could come in and try things
out.

My impression was that the "educational" software was extremely crude and one-
dimensional, basically glorified flash cards. Today, the "educational"
software is Web based, and more flashy, but still retains that lack of
breadth. It's hard and expensive to write interactive software, so a lot of
the apps are basically one or two templates, with different sets of data /
parameters for different lessons.

 _Here 's a picture. Move your mouse around. When something lights up, click
on it, and a little box of text will pop up for you to read._ I kid you not.
This is real. Today.

Now I have two kids who are in high school. We have acquired (can't say bought
in most cases) piles of educational technology, yet little or none of it was
"EdTech." The most glaring example was Microsoft Office. The kids used it to
create reports, presentations, drawings, etc. It has been supplanted by Google
Docs, which they now use heavily, including for collaborative assignments.

We've played with Jupyter/Python. My son is learning solid modeling using some
free app. One of them uses DuoLingo daily, as does my spouse.

Some of their educational technology is still in the analog domain: Musical
instruments. ;-)

I think the take-away for me is that we are providing our kids with technology
that supports their education, but it isn't written for kids. It's the same
stuff that grown-ups use. Jupyter/Python is an example -- it's my primary
computing tool for my job. Another common feature is that these are
_creativity_ tools, not _consumption_ tools.

~~~
geebee
Part of the problem is that programming is supposed to be "fun", as in "fun
and games", not as in a serious topic that you enjoy so much you call it fun.

This is why a lot of programming is taught through graphical games. I'm not
knocking Minecraft style programming lessons, they can be very motivational
and build up programming skills and thought processes.

Unfortunately, I'm not that kind of programmer. I'm more the type who enjoys
scikit-learn and kaggle than xbox. Even as a kid, I was more interested in
programming to know who had the advantage in 3v2 rolls in Risk than
programming a game itself (in other words, I wanted to program to get insight
into a game, not to play the game itself).

But I wanted to introduce my 12 year old to programming, so rather than trying
to learn about Minecraft, I helped him install jupyter notebook and showed him
how he could automate some of his math homework. We wrote a method to
calculate mean, median, range, that sort of thing, and he learned how to feed
a series of lists into it, and graph it.

Believe it or not, this pleased him a great deal. He left feeling slightly
buoyed, like he'd gained an edge.

But if programming remains an add-on to a school curriculum, who wants to do
more math in an after school program, or a summer camp? So "learning to
program for kids" will probably remain heavily focused on graphics and games.
Which may be ok, my interest in simulating a dice roll rather than programming
a game per se may not be reflective of how most kids (who have great
potential) are wired.

And honestly, programming Minecraft is among the _best_ of the educational
software. Zoombinis was pretty cool, too, even if it was purely a game. Truth
his, much educational software just re-teaches math, or history, but with
buzzers and rewarding little cartoons for wrong or right answers.

~~~
WorkLifeBalance
I think there's a spectrum from graphical games to full programming. Games can
be designed which can explore problem solving, debugging and programming.

For example "Human resource machine" is entirely visual but if you happen to
click 'export' you get a very basic assembly language style output. If you
never clicked export you wouldn't even realise you were "programming", you
were just solving the problems on screen. The game does at time explain the
analogies used. If you prod the people they'll describe linked lists but such
understanding isn't required to progress.

Moving across the spectrum a little there are games like TIS-100 and Shenzhen
I/O which do involve programming but with very small instruction sets and
graphical debugging and feedback.

These aren't aimed at children so are more complex than would be suitable for
children but what I'm trying to get across is that they don't specifically
teach _programming_. You won't come out of it knowing python or C. You won't
know about stacks or function calls. But they do teach problem solving and the
run/explode/debug loop of getting an instruction set to work on different sets
of data.

By being games they gameify the process of wanting to reach acheivements while
also solving the "what do I build?" aspect of more freeform/creative
programming learning which can often be a dead-end without a sense of aiming
toward a goal.

I think a Human Resources Machine style game aimed at a younger audience could
be greatly impactful on teaching a programming mindset.

------
avichal
Ah yes, the annual resurfacing of this blog post :) unfortunately I think most
of it is still true. I should do a follow up...

Edit: I'll address the comments/thoughts here in a follow up blog post. Glad
to see so many people thinking about this space. It's a great thing for the
world to have entrepreneurs building here.

~~~
jamesrcole
"The underlying culture will change and expose interesting opportunities in
the long term, but probably not for another 5 years."

Given those 5 years have now passed, what's your assessement of the situation
now?

------
jldugger
> The average, middle class person thinks about education as an expenditure,
> not an investment.

The way I remember it, middle class folks in Kansas City suburbs really,
really care about the quality of their schools and levy property and sales
taxes to fund it. Rural Ohio townships where dual earners are making 17k less
than the national median for such households may not have a lot of middle
class to speak of.

Cost and outcomes have always been a tradeoff. 1:1 tutoring is the gold
standard for educational outcomes. We know that from there, outcomes fall as
teacher:student ratios rise. This fundamentally puts a cap on returns to
improved quality -- if your improved school outcome is comparable to adding
one additional teacher per grade level, well, you better be cheaper than those
teacher's salaries. And good luck finding that data in the first place. It's
not easy to convince folks to run the experimental treatment on their children
to get that data.

~~~
rahimnathwani
"1:1 tutoring is the gold standard for educational outcomes."

Is it? I'd be interested to see some data to support or refute this. I'd
always assumed that students benefit somewhat from other students being around
(due to observing how others learn, being pushed to be better etc.), so
perhaps the ideal ratio would be in the 1:2 to 1:4 range.

If people have really figured out that 1:1 is better than 1:2, 1:3 and 1:4,
I'd love to see that data.

~~~
mikekchar
I worked in a high school for 5 years teaching English as a foreign language.
I was not a great teacher because being a teacher is really hard, but I
learned a lot in those 5 years. I will let you in on a secret.

Education is _not_ what the teacher does: it's what the student does. Most
people think that the job of a teacher is to organise information and explain
it to students to make it "easy to understand". This is just plain wrong. In
fact, by doing so you cheat your students because you steal their opportunity
to organise information and discover how to understand it.

1:1, 1:2, 1:20, or 1:40 doesn't actually matter from a perspective of teaching
material. If we make the teacher the font of all information, then we also
make the teacher the bottleneck of learning. I was teaching language and if
you want native level fluency and proficiency, then you might need to spend up
to native level time acquiring the language. In other words, to get to a 10
year old's ability, it might take you up to 10 years of nearly full time
practice. Sorry, but I'm not going to teach you 58,400 hours (10 years, 16
hours a day) unless you have Bill Gates level money to spend.

So, you're going to spend something like 3 hours a week in my class, and only
something like 30 of those weeks are going to be productive in a year (if I'm
lucky). So that's a pidly 90 hours of instruction per year. I'm going to teach
you practically nothing in that time.

This is what is wrong with education.

But getting back to 1:1 vs 1:40. In a 1 hour class, if I have 40 students I
can spend just over a minute paying attention to each student. In other words,
I'm going to present my pidly amount of information and hope like hell that
you're going to do something useful with it -- because I do not have enough
time to interact with even one person in the class. If you assume that 1 in 40
students have a behaviour problem (just 2.5%!) you will see that I will expect
to be interrupted in every single one of my classes. So probably I won't even
be able to present my pidly amount of information. Probably I will just
babysit and the students who know how to study will do well, while the others
do poorly.

As we reduce the ratio, I have more time to interact with the students. But
it's really important to realise that if I waste that time trying to teach the
material, I will do no good. So in fact, what I want to do is let the students
study and then _watch_ them so that I can can correct their behaviour. By
doing that, they can become good students and succeed in studying.

How many students I can handle depends a lot on my class management skills and
also on the students. Some students require _no_ intervention. They just need
a friendly, welcoming, and engaging environment in which to study. Some
students need considerable attention. 1:1 might be amazing for some students,
but even 1:10 or 1:20 could be amazing for others (depending on the teacher).
Some students like to study alone, some like to study in pairs, some like to
study in groups. You have to be flexible.

~~~
smallnamespace
My first day with my new violin teacher, he asked me who my teacher was. I
gave the normal answer, and he said 'Wrong! _You_ are your own teacher. I am
just here to help you teach yourself.' Have never forgotten those words.

We need teachers who will enable their students to learn for themselves. Only
then can the teacher no longer be the bottleneck.

------
jondubois
I worked for an Education startup a couple of years ago. They had a really
good math learning product which blew away the competition in terms of
software quality but they didn't achieve exponential growth. It was linear
growth but at a very good rate. The trick was to sell directly to schools and
educational institutions.

There are new challenges there but it's also very high-reward. You can sell
1000 licenses from a single deal with a school. If you get a government public
school contract you could be looking at 100k licenses from a single deal.

I think that companies which do big b2b deals have become greatly undervalued.
VCs are so obsessed chasing exponential growth curves that they seem to have
forgotten that the earth only has limited population and that buying power has
become much more centralized and is becoming increasingly centralized.

~~~
meepso
There is truth to the centralization issue in education, we see more and more
deals being done at 100k levels. Makes the current way of doing business on
smaller language markets obsolete, I'm not sure it's for the better.

~~~
jondubois
I think a problem is that most parents (in the west) don't have any ideas or
opinions about what learning tools are best for their children - Most parents
are happy to let the education system decide what's best.

I think most busy parents these days tend to see the school system as an end-
to-end automatic education machine; you insert a young uneducated child, put
some money in it and several years later an educated adult comes out.

With that mindset it's easy to see why it's better to do deals directly with
schools than trying to get the attention of the parents.

------
Lich
I'm currently working for an education startup right now. We are struggling.
Have been for the past few years. The biggest problems I've noticed:

1\. Cost. When you deal with school districts, you usually sell for X number
of devices. So for example, all devices for 5th-7th grade, something like
that. When you sell alot, schools will usually ask for volume licensing.
Schools don't want to see prices above $5. This goes for devices for the
quality of the devices they purchase. Often, the student device is cheap, low-
powered, and in the case of Windows devices, packed to the brim with all sorts
of software running in the background: web filters, virus-scanners, and some
educational apps. Top that off with apps that students install like Spotify
and games, it slows the machine down to a crawl or causes problems that might
interfere with your software solution.

2\. Different school districts have different needs. Although our software
solution was initially meant to be for general use by all schools, we kept
running into school district that needed very specific needs to that school or
district. That lead to developing new features that only a small handful of
school district would use, sometimes confusing users who did not need such
features, or didn't even know we had the feature.

3\. If your software solution works with student information systems data, it
can often be a nightmare getting school districts to create that data.

4\. School IT teams are...pretty terrible. Or rather, they're swamped with so
many issues from so many products and devices, that they care very little as
to learn how to deploy your product properly. Have documentation? Trust me,
they probably won't read it. You will most likely get an e-mail asking how to
deploy.

5\. Trials, trials, trials. Schools aren't going to pay up just because they
see a video demo of your product. They're going to want a trial at minimum for
half the school year, maybe more. Then...

6\. ...Politics. Decision to purchase needs to be approved by some board.

~~~
discreditable
Coming from the grades 9-12 sysadmin side, I might be able to provide some
perspective. Every school is wildly different, so I would recommend against
applying my perspectives too broadly.

1\. Cost: Windows licenses for student PCs are just under $20/PC/year (for
us). Is your $5 software 25% as useful to students as their operating system
is? Even worse, the reality is if I put your software on my 1000 computers
I'll be lucky if 300 of them use it. That's something to keep in mind when
working with per-device licenses. I agree installed system software bloat is a
problem. That results from every department having different needs. We might
be a little different in that we don't allow students to install/run foreign
software (using AppLocker).

2\. I agree different schools are amazingly different. I collaborate with a
few other schools around me and whenever we meet I'm pretty floored by how
differently each one approaches basic problems. These significant differences
really add up and I can understand how supporting schools might be a pain.

3\. It seems like every vendor wants access to my SIS. That's a privilege not
granted lightly. I'm generally okay with automated CSV dumps of bare minimum
data uploaded over a secure channel, but some vendors have the nerve to
request direct LDAP or Oracle database access over the public Internet. No
way!

4\. I'll agree school IT teams are generally terrible. Among my peers and
schools I collaborate with, I'm the only one with a degree in IT. Many are
older and migrated to the role from something else (former math teachers
surprisingly often). Some find themselves shoehorned into the role because
they happened to be the most technically-inclined among the staff. These guys
are uncomfortable in powershell/cmd and typically use contractors or local
PFYs to handle technical details. Schools do not pay enough to attract decent
talent. I could work for a local company and make 1.5-2x more doing less than
I do here, but for now I like this environment.

5\. While video demos can be helpful product overviews. I distrust video demos
just as I distrust other marketing wank. I want to test drive the car before I
decide to purchase it. That said, I wouldn't expect anyone to let me demo
something longer than 60 days. The long time in my case is that exploring new
software is _usually_ a backburner project, and I am likely to have other
things come up that take priority. I never put production data into trial
software however.

6\. Yes, purchasing processes are a pain. I 100% agree. I currently have a
request for $60 of printer toner that's been sitting in the requisition
process for over a week. Trust me, it's just as bad for us on the inside.

~~~
Lich
Thanks for providing your perspective! I've always wondered what it was like
on your side.

1\. I totally understand this. I've actually often wondered what a waste of
funds it is when I see school districts purchase several hundred licenses of
our product, but only a handful of teachers and students end up using it. I
understand though that it's hard to just purchase the right amount of
licenses, since you never know if another teacher/student down the line might
want to start using it.

4\. Yes, I've been to a few local schools for support and there's quite a few
teachers who are handling the simpler IT side of things. From the IT staff
that I've met in schools, I think I would like the environment too.

------
twunde
The article correctly identifies consumer-facing education businesses as being
incredibly difficult. I used to work in education and Chegg is the only
consumer-facing company I can think of in the industry. Most other education
companies have either sold or partnered with schools (Neverware, Clever, Jamf,
etc). One of the interesting things with the market is that it's difficult to
start penetrating districts since school budgets can vary year to year AND
because many purchases have to be approved by school boards. But as soon as
you're in, you essentially have a monopoly for a number of years. It's
enterprise sales without the immediate huge money payoff. That said, there's a
lot of money out there in education

~~~
analog31
I'd add Texas Instruments, with their graphing calculators. They have an
extremely low tech product whose prevalence actually detracts from kids
learning to make effective use of computation. But they've established a
monopoly position by understanding what real problems they're actually
solving: 1) Moderating development to within a pace that teachers and the
curriculum / testing industry can keep up with. 2) Keeping cheating under
control.

Disclosure: I have two kids in high school, both of whom need graphing
calculators for their schoolwork. Both would prefer to use Python/Jupyter.

~~~
jacobolus
I got all the way through high school (AP calculus, etc., high school class of
2004) and through lots of technical courses in college without ever needing a
graphing calculator, except once during the AP exam, and possibly once for an
in-class exam, for which I could borrow one from the school (the rest of the
time I just had a $5 used “scientific calculator” but a slide rule would have
been just fine, and in college a laptop with real programming languages on
it). Learning arcane features of the calculator’s function is not really
necessary for the AP exam and is a waste of time, but I would recommend
spending a couple hours familiarizing oneself with the basic features before
the exam.

Students and parents are often fed a misleading impression of what tools they
will actually need to work through a course, and pressured to buy calculators
that are not necessary, preying on their desire to succeed at school. I think
I was the only student in the class with enough moral outrage about TI’s
calculator scam to try such a thing, but my impression was that it really had
no practical consequences, except for me spending a lot less time than the
other students playing low-quality snake, brickout, and tetris clones.

~~~
icebraining
The real fun came from _writing_ those low-quality clones :)

It could even be relevant: I used the projectile equations from Physics class
for my Artillery clone.

~~~
jacobolus
Not that there’s anything inherently wrong with writing code in Basic or Z80
assembly language, for a very limited device with no proper keyboard, 24K of
user-accessible memory, a 96x64 pixel 1-bit display, and no other sensors or
output devices, but I’m pretty sure the time could be spent more effectively
in some other programming environment.

------
10-6
This article was written in 2011, and I think since then with the "learn to
code" movement becoming so popular and coding bootcamps promising to help
people get software development jobs, things have changed a bit--at least for
edtech companies teaching programming skills.

There are a ton of popular websites that teach people coding/software
development/design skills online now that have grown incredibly over the last
few years, but still not really getting to mainstream status. Treehouse, Code
School, DataCamp, Udemy, Frontend Masters, Udacity, Thinkful, Codecademy are
just a few popular websites where people can learn to code today and all of
them have a subscription plan. I don't think any of these have reached
"mainstream" status, but there are definitely a lot more websites and
applications today teaching people to code via subscription plans than there
were 6 years ago.

Whatever your thoughts are on the whole "learn to code" movement, it's clear
that the landscape for edtech companies teaching programming/software
development has changed since 2011. Will any of these companies teaching
people to code ever reach "mainstream" status, I don't know.

~~~
bhaumik
Thinkful pivoted from a subscription model to being a school focused on job
placement a couple years back. Our core products are remote immersive & part-
time courses in software development & data science. But tying back to the OP,
the immersive program has a no tuition till you're hired financing option,
(which a few other schools offer too). It's been pretty exciting hearing the
joy from applicants who wouldn't have been able to afford the course w/
traditional financing options.

------
ChicagoDave
I built Textfyre in 2007 and closed in 2011. Gates Foundation put our ideas in
their grant program and put all their resources into existing publishers.
Later, Pearson was on NPR spouting many of Textfyre’s pitch points. None of
these companies have figured out Interactive education or reduced cost or
improved quality.

I still believe we could have, but we couldn’t convince others. Mostly because
a real MVP would have cost millions to create.

But we could have saved states billions by replacing textbooks with online,
interactive, cross-discipline content.

The market is closed to startups. The industry is fighting disruption in every
way they can.

~~~
anonymous5133
I completely agree that Pearson sells itself as innovative but it is anything
but that! Their "mylab" type products aren't innovative. It is just the same
old same old. I would even argue that it has been counterproductive because
they're now moving to FORCE students to buy new expensive textbooks to get the
homework grading code. Pearson has absolutely zero interest in disrupting
anything. They only care about building their monopoly on textbooks.

However, I am an optimist and believe that even with well entrenched interest
groups (big textbook publishers, school districts, unions etc.) there is still
paths to disruption. At a fundamental level, education is simply teaching
someone something new. That's it! If you are providing something quality then
people will naturally flock to it or share it.

I think the future education startup simply needs to focus on building high
quality learning materials. Then either give those products away for free or
innovative monetization models (ie. watch 5 video ads to unlock the content
etc.). Don't focus on trying to sell to school districts. Focus on going
straight to the consumer: students or parents. Every student I know is already
going online to get extra homework help, resources, youtube videos etc.

~~~
ChicagoDave
The only way we'll change education is to disrupt the classroom from a
systemic point of view. We have to prove there is a better way. That can only
be done with high quality content newly constructed for interactivity.

This is where Pearson, Britannica, et al fail. They have a library of content
created over decades with a guaranteed state-driven pipeline into classrooms.
This content is specifically created by old school experts specifically for
printed chapters in a bound book.

Creating real interactive content would require content experts work within an
interactive digital agency framework, which would require a sizable R&D budget
with a lot of trial and error. We're talking millions of dollars spent before
a completed product was available.

But here's the upside. Textbooks cost each state roughly $100 per student per
year. An online system might charge a fraction of that (Textfyre targeted
$1/student/year).

Imagine the state of Illinois saving $99 per student per year over several
years.

The investment is risky to a degree, but I view it no differently than Kennedy
choosing to go to the moon. You decide to do it. You find the best and the
brightest to enable the vision. You enact the vision. There is an upfront
cost, but the vision and results would alter the course of history in the
world.

Interactive, adaptable education systems are the future. They would be able to
reach everyone on the planet regardless of age, gender, politics, class, or
any other identity labels.

I have a second start-up (Wizely). I'll probably keep swinging if it doesn't
hit a nerve. If I ever have one succeed and make (a lot of) money, I will re-
invest my profits into education and what I call positive social engagement.

My advice to ed-tech startups. Find a way to make money, but immediately
redirect all profits to attacking the classroom. That's where we need the R&D
to go. As the OP said, consumer-based ed-tech has its limits.

The classroom is where we need to drive innovation.

~~~
anonymous5133
I completely agree with you and I agree with disrupting the classroom. A good
approach is to simply make an online classroom that has all the bells and
whistles of innovative technology - on-demand, free or low-cost, high-quality
materials, community interaction and so on. For traditional subjects the
existing textbooks are good from a content point of view. They've been peer
reviewed hundreds of times. The problem is that it is difficult to just self-
study these books and understand the subject completely.

------
thelock85
Lots of solution-focused dialogue here but from my experience, I've come to
believe that education startups fail because the education marketplace is
actually a loose confederation of communities and consumer preferences are
more akin to individual values and beliefs. This makes it really difficult to
market evidence-based solutions or scale your sales strategy.

------
smallnamespace
Couple of other causes:

\- It's very hard to measure to value add of education; people have spent
lives working on this

\- Only half the value of educational institutions comes from educating
people; the other half comes from the credentialing where they pick out the
'brighter' individuals, but measuring how much a credential is worth is almost
impossible for most individuals

~~~
anonymous5133
Credentials aren't immune from disruption. Just look at how the trades work.
They all are using some sort of independent testing company that certifies
people. In the future employers might not care if you have a BA degree if
instead you have an electrician certificate or some comptia certification.
Those credentials might be more valuable. Perhaps in the future there will be
certifications for programming languages that are industry standard.
Accountants have their CPA and lawyers have their BAR exam so on so forth.

~~~
lostboys67
But theirs more than one way to do it :-) and from my dads experience
chartered status is more about who you know not what.

And in the USA in particular what point are BAR exams when you get people with
ZERO experience of law appointed to senior legal positions - No offence to one
of Obamas Supreme nominations but they had no real world judging experience -
shades of E l Wisty

------
shafyy
Might have some good points, but:

\- As it says in the post, there is a lot of generalization. And usually
generalized advice for something as specific as building a startup is not good

\- This is 6 years old - not sure if it still applies. A lot has changed in
the tech possibilities since then

------
crimsonalucard
There is another facet to this equation. Think about an investment banker. The
skills an investment banker learns in college are largely irrelevant to his
job.

One could say that his degree was entirely a waste of time, yet in order to
qualify for a job in investment banking you need to go to a prestigious school
and excel.

I see many spaces where education is largely irrelevant and functions only as
a filter to reduce the supply of people who are qualified for a job.

~~~
anonymous5133
That structure won't last into the future. Investment banking is already being
disrupted through blockchain ICOs and similar stuff like that. More and more
people are just using index funds so there is no need for an investment
professional anymore. There will always be the goldman sachs and similar firms
but how much people do they really employ?

~~~
tonypace
The point is not solely related to investment banking. Education as social
signaling will not be disrupted by the blockchain.

------
virmundi
Unfortunately I’m on my phone and I don’t have access to my laptop that has my
research on this. Sadly, ed tech doesn’t work. The UK realized this. The US is
starting to, state by state. This is not to say it can’t work. So far the
startups have issues with not being able to provide an innovative product that
works reliably.

------
jkuria
What about companies like The Great Courses (formerly teaching company) that
takes out full page spreads in the WSJ on a regular basis? Are they still
niche?

~~~
anonymous5133
Yup, still niche. If you look at their courses it is primarily consists of
unique topics or subtopics of a bigger topic. If they want to be a disruptor
then they need to start creating college courses and reduce the price. Create
a certification system and create innovative learning systems for the courses.

------
amitmathew
Interesting article! If you're thinking about targeting consumers in edtech,
there's a lot of good advice in here. My company mainly sells to medical
students, which are a highly incentivized group of consumers, so we can avoid
some of the pitfalls mentioned in the article. However, most of the action in
edtech is focused on selling to institutions because that's where the money
is. The good news is institutions are more willing than ever to try out new
technologies if you can convince them you can impact recruitment, retention,
graduation rates, etc. Of course, that's easier said than done. Not many
startups can wait around for 5 years to do a comprehensive research study. And
you get all the classic problems of selling to institutions (and magnified in
education): slow sales cycles, multiple decision-makers, politics, etc.

I think an interesting problem in edtech today is there are a lot of
"startups" that fit in that dangerous area between a small business and a
high-growth startup. You'll find dozens of companies that help improve
mathematical skills, create STEM games, or build products for improving
reading and writing comprehension. A lot of these companies might grow to be
multi-million dollar companies over several years, but they won't fit that
"classic" startup growth curve. Since venture money is flowing relatively well
(and a few VCs focus specifically on edtech), a lot of these companies get
funded. But there's a dilemma for these entrepreneurs: what do you do when you
realize that your company is growing 2x each year (which is great!), but not
at 10x where your investors want you.

------
smashingfiasco
What this post is lamenting is the loss of some actor like MECC. We had great
software written for students (not adults) at one point. Many of us here have
used it and fondly remember it. Titles like Oregon Trail, Reader Rabbit,
etc...

Unfortunately, MECC got spun-off from the actual Minnesota education system,
then purchased by a giant ed-tech company and left to wither. The endowment
that MECC (in its purist form) left behind faded in time.

There is still a lot of great educational software out there. It's just all
locked away on a MacOS 9 box, tied to libraries and runtimes that never made
the jump to Mac OS X and then iOS.

From the business side of it, we'd honestly need something of a PBS-like
software company to reconstruct what we lost with MECC. I think that's the
only way it'd work. The software would have to be made, not because it was
profitable, but because it needed to be made and was a good thing for our
society to have.

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orb_yt
I understand this article is a bit outdated, but companies like Duolingo or
Clever seem to prove a few of the author's arguments wrong.

One would think there would be a market for Duolingo style apps for other
subjects, such as mathematics, where the user is simply charged on a
subscription bases. Could such a business not survive?

~~~
azinman2
People want/need to learn another language for a very wide variety of reasons.
While it is “teaching,” it’s also squarely in its own domain. I’m not sure
they’d have an easy time transitioning to Duolingo for math. While I don’t
have their demo stats, language learning often extends well into adulthood...
many corporations will pay for employees to learn a new language, and English
schools are popular world-wide. Not as many adults are motivated to learn
calculus, which then leaves a younger market with less ability/willingness to
pay.

~~~
orb_yt
I do think that the overwhelming majority of Duolingo users are likely
learning on their own volition, rather than for their job.

> While it is “teaching,” it’s also squarely in its own domain

Could this idea simply be because, for the most part, language learning
applications have been the most successful? Other than Khan Academy, which is
mostly videos, i've never heard of another company building similar products
for other subjects.

I'm not sure whether it's because the market doesn't exist or that it hasn't
been tried.

~~~
azinman2
Language is pretty unique. You can be interested in, marry into, befriend,
worship in, born from, work in, read in, watch in, move to, befriend, and be
moved to a new language.

As humanity requires language, learning a new one can happen at any stage of
life. Rarely do people spend casual time learning what is typically taught in
youth. Yes there are always people interested in TED talks but that’s
effectively TV. Yes people go back to school but that’s focused structured
time. Language is better if learned interactively, in both casual and formal
settings. I can read a history book and feel accomplished. Reading a French
textbook without application won’t work as well. Language requires active
learning, where as many other subjects do not. Language apps such as duolingo
are well suited accordingly (even better would be a really great
conversational bot that could help you better pronounce your words).

I’m not saying there aren’t other markets, but I am positing it’s def not
evenly distributed across subject matter.

~~~
tonypace
English Central attempts the conversation bot but it is fairly terrible.
Competition would be welcome.

------
jv22222
There's also the issue that single point tech solutions often don't help
schools, or districts, in a meaningful way.

This is because "the tech" is just the tip of the iceberg and there's a
disconnect between the districts that purchase software and the teachers who
are left to try and figure it out on their own.

I wrote in more detail about this issue here:

[https://www.forbes.com/sites/forbestechcouncil/2017/11/13/wa...](https://www.forbes.com/sites/forbestechcouncil/2017/11/13/want-
a-modern-school-system-technology-is-not-enough/#272169d343c6)

------
tonydiv
I am trying to build an online coding school for kids ages 6-13. I mostly
agree with what's being stated because we already have customers in China,
Korea, and Japan despite doing no marketing there. They are hard markets to
ignore, especially when US parents are a harder sell. In order for us to be
successful in the long-term, we must be a cross-border company.

Coding is one of the things that parents are increasingly willing to pay for,
but it is still in the process of becoming a middle-class family demand.

[https://block.school](https://block.school)

------
tmaly
I have a 4 year old, and I have found most of the educational things that work
well at a young age are crafts and STEM based kits.

I was looking at the apple app store today as we were waiting for an
appointment. It is quite flooded with all sorts of educational apps, but most
that I tried were of low quality. Performing a search for the best reading or
math app did not improve much.

I think there may be an opportunity here, but it would take a team with
diverse talents and not just a team of developers to build something good.

------
davidgh
I appreciated the point that VCs think about education differently than the
masses.

Reminds me of the AirBnB guys pitching their original idea of people renting
out their couch for strangers to sleep on and getting thrown out by virtually
all of them. “Who would EVER want that??”

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nargella
I joined an edtech company earlier this year: yellowdig.com. I think the thing
I'd echo from this post is that time definitely needs to be on your side.
Having connections also really helps. I'll keep the points about cost in my
back pocket.

------
tianshuo
If you are a startup marketing for the Asian market especially China, feel
free to send your BP to me(tianshuo@galaxyinternet.com), we are a VC that
helps foreign startups (and local startups) understand the very complicated
Chinese education market.

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benzheren
In China(or South Korea, or Japan), it is totally a different story. Majority
of the parents think education as an investment, thus one of the best places
to do an education related startup would be in China.

------
ivan_ah
Good points. I think the blog post would have benefited from a definition of
the "education product" the author has in mind, because otherwise it remains a
little vague.

I can think of at least a dozen educational services and products and it's
possible/likely the optimal growth strategy would be different for each of
these. For example, tutoring service (in person or remote), learning web
application, learning mobile app, classic content products (print textbook,
digital textbook, recorded video lessons), new-media content products (e.g.
new apps or learning modality), etc. Then there is the whole "credentialing"
aspect, which we all hope will go away but currently it's still a very
important: people are easily impressed by big-name universities, and three-
letter degree acronyms.

The "edtech space" is very interesting. The OP is totally right that it's not
obvious how to make money given that neither schools nor students have
money... (Sure there are rich kids and motivated parents who can pay and they
will enjoy the value, but it's a very ugly thing to deny access to knowledge
to someone behind a paywall/subscription just because they can't pull out a
credit card and follow the funnel.)

In addition to the traditional for-profit startup model, there are big
developments in the ed-tech sector by non-profits like Khan Academy. Some of
the best learning UX/UI and content to come out in last decade is from KA.
More generally, the open educational resources (OERs) are starting to be a
thing now... there lots of good open content and there is potential for
companies to be "service providers" on top of the vast sea of "commons." Open
source gave us an interesting last two decades. Now imagine what will happen
when open content becomes mainstream too?

On the other hand being too open with the content and starting with a "yes
take it all for free" strategy is a sure way to end up out of runway. How many
non-profit projects shut down because of lack of funding. Aren't there always
strings attached when receiving funding from governments, NGOs, and
philanthropists. What if they change their mind next year? Or two years form
now? There is something beautiful and robust about a self-sustaining project
like a for-profit startup. I know teacherspayteachers and other for-profit
projects that are doing very well. Definitely something to learn there.

It all depends on what you want to optimize for, but the fundamental algorithm
in the edtech space remains the same as in all other spaces: deliver more
value than you capture and be in the right place to ride the wave up.

------
pascalxus
I must say, I really like how this blog does thorough use cases with deep
information about the why things don't succeed. 2 thumbs up!

------
ziikutv
This really is a great read. Reading the first bullet alone is worth its
weight in gold.

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booleanbetrayal
I think what smart.ly is doing is pretty unique. Disclosure: I work there.

~~~
kolp
Would you mind explaining what your company does and why you think it's
unique? I visited your website and I am still none the wiser.

~~~
booleanbetrayal
We offer a free, licensed, MBA course and offset the operational costs via a
hiring engine that takes a cut on employment match. Online only, interactive,
non-video content. There's also an extremely low-cost, licensed, EMBA program
for those people who are already gainfully employed and just want to develop
their business / operational knowledge.

------
oceanghost
Thanks for this. Working on an educational cost reduction thing... :)

~~~
japhyr
What are you trying to reduce the cost of?

~~~
oceanghost
The whole damned ball of wax.

------
zukzuk
Top Hat — a Toronto based post-startup — has successfully gone against just
about every point in this article. This article is full of whatever the
inverse of survivorship bias is.

------
0xCMP
So education != tech education, correct?

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juskrey
Because academic-style and bootcamp-style education is largely a bullshit. As
opposed to apprenticeship which happens in real business conditions.

~~~
itronitron
i would include self-apprenticeship as well since people can learn many things
easily on their own now (via internet)... unfortunately taking a bad class can
rapidly kill a person's interest, especially if they have already invested
considerable time into the subject matter

~~~
juskrey
I think you wanted to say autodidactism (which is also legit). Apprenticeship
implies following someone.. but yeah, not necessarily face-to-face.

------
m52go
Mods, please add (2011) to the title.

~~~
sctb
Done. Thanks!

------
KirinDave
Meanwhile, Udacity...

------
adamnemecek
Figure out a way to franchise high schools to make them into coworking spaces.
All teachers are remote and all teaching happens over skype. The employees on
site are there only to make sure the kids dont kill each other. Offer an
insane amount of subjects (this is possible since there might be only 30 kids
worldwide interested in xyz, now they can take a class on it).

The future of education is something along these lines I think. One could
really make a lot of money with this because the costs will be fractional
compared with real high school. Also no "athletic departments" fuck that shit.

~~~
visarga
I like the idea. The role of the teacher would be to coach students (like
giving them advice, monitoring progress). What was missing from the MOOC
formula was real person, in the flesh accountability for learning.

~~~
ivan_ah
Yes, human in the loop is definitely good. Reminds me a bit of the "Granny
cloud":
[https://youtu.be/dk60sYrU2RU?t=12m](https://youtu.be/dk60sYrU2RU?t=12m) (talk
is worth watching from the beginning)

------
alexashka
This is well written, and frankly off the mark.

If online education got people cushy jobs the way university degrees get
people cushy jobs - online education would be massively profitable.

That's not the case. There's nothing else to it.

Regarding online education in general:

Universities/colleges should have to post their full curriculum, lecture notes
and all textbooks and chapters used for each class - that's enough.

There's no need for businesses here - just tell us what you're teaching your
class, and anyone interested can go read the textbook. Make video lectures
available as a bonus for a little bit of money, that's it! A lot of students
already don't attend classes and just read the lecture notes and chapters
needed.

These online education start-ups remind me of companies that take Craigslist
and start adding unnecessary bells and whistles to justify their existence. We
already have craigslist and it works folks. Stop trying to make a buck by
being so incredibly boring.

~~~
anonymous5133
Universities already do that. Simply go to google, type whatever course you
want to learn followed by syllabus. Some of the bigger schools have all the
teachers list their syllabus on a central page as well. Obviously it is for
the benefit of the student but indirectly the syllabus is the outline of the
course - lists textbooks used, chapters covered, homework problems etc. To get
notes you might be able to find online somewhere.

~~~
alexashka
Great. This is not obvious to most people. Especially people who've never been
to university like me.

So the last mile left to accomplish in 'online education' is to standardize
the presentation of the syllabus/outline and inform people that that is a
viable option.

------
Spooky23
This is interesting but not well structured.

Basically consumer facing spending is about delivering cheap services, whether
that be babysitting style tutoring, textbooks or slinging a minimally viable
educational experience that aligns with government programs.

Targeting schools is an enterprise play. You either have the ability to
survive the public school sales cycle, or the connections to get the money
people behind charter schools to buy your crap.

Personally, I think this is a shitty startup market. It’s an insular industry,
most non-content plays have entrenched competition or a bunch of players
(Microsoft, google, apple) doing a half ass job for free/cheap. It’s easier to
do enterpsie style business with normal government entities.

Targeting poor people is dumb because poor folk give zero shits about
education. If you have the political juice, targeting a government agency with
money to burn on helping poor people makes more sense.

~~~
jeffmaxim
“Targeting poor people is dumb because poor folk give zero shits about
education.”

Don’t even know where to start on this...

~~~
Spooky23
How many low income households are spending money on Kaplan courses?

You may find that harsh, but it’s reality. Doing what the author suggested
(producing low quality cheap crap) may sound more sensitive, but in my mind is
unethical.

Things like Khan academy have traction because third parties pay the bill.
Online degree mills have traction because an uncritical third party (ie the
government) loans the cash to students.

