PILOTed

Skoolbo Discussion

I had a very thought-provoking conversation with Colin Brown of Skoolbo last Friday.

Skoolbo is a free resource for teachers, parents, and kids worldwide that contains short learning games. They are used by over 50,000 schools (about 300,000 students ages 5-9) around the world with about half of all users coming from the US. There is a premium version for schools with enhanced ways of tracking student progress and assigning work to students.

The conversation centered around learning research an d a new partnership with ChuChu TV. If you haven’t heard of ChuChu TV, you really need to learn about them.

The Research

The Skoolbo platform responsibly (based on their student privacy and child safety policies) tracks student performance and activity, and makes the research available to researchers. Lamar University correlated the data with itegs (International Test of Early grade Skills) for Australia, Canada, Hong Kong, New Zealand, the United Kingdom, and the US. In these early grades, the US did surprisingly well, showing the greatest improvement in reading and numeracy skills in the lowest quartile of students, especially compared to the UK and New Zealand, which are both seeing increasing gaps between higher and lower performers. And, if you don’t look too closely at the number of countries included, you will be relieved to know the US never ranked lower than 6^th.

In general, top performers at age 5-6 are more advanced than lower (bottom 25%) performers of children three years older, ages 8-9. It would be interesting to find out if those gaps increase even further as the children grow up. Boys are about 3 months more advanced than girls in numeracy skills, while girls are about 3 months ahead of boys in reading skills. These trends go across all countries.

One surprising outcome was the incredible lead of Hong Kong in numeracy skills. Even at age 5.5, Hong Kong students are three grades ahead of students from the other countries. And these weren’t “privileged” Hong Kong students, the students were poor, with no Internet access at home and whose first language is Chinese. One big cultural difference is the importance of Math in the culture in Hong Kong; there is a firm belief that Math will take you anywhere, and that it’s simply not acceptable to be bad at Math, it would be as foreign as saying, “I am bad at breathing, so I won’t breathe.”

Colin said that Skoolbo is committed to making the data available free to researchers.

ChuChu TV

ChuChu TV runs Youtube channels of educational videos for children ages 0-6. Colin said that for the last 5 years, their prime channel has ranked in the top 20 of all Youtube channels, with about 500 million views a month, and is the number 1 preschool channel worldwide. SocialBlade currently rates them 21st (with 10.5 billion views), which is still nothing to sneeze at.

While I hadn’t heard of ChuChu before the conversation, I did check with relatives that have young children, and they used these videos with their kids.

ChuChu employs about 230 animators who churn out videos with musical educational content.

With their content free, ChuChu makes their money on Youtube ads.

What’s next?

Marshall McLuhan coined the terms “hot” and “cold” media in Understanding Media back in 1994. And while Youtube  is a 21^st century phenomenon, watching videos is still passive learning on cool media.

Colin is partnering with ChuChu to add learning content and analytics around the videos in a joint venture named Chu Chu School. Games, activities, curriculum, tracking, and reporting will be available in a school package in the next few months.

It will be very interesting, to watch this merger one of the most popular creators of children’s content and a widely used education games platform, to see if they can successfully use the mechanisms of Youtube tie-ins and freemium offerings to reach schools and parents and offer them subscriptions.

How to get EdTech Products into the hands of more students

A summary of the Education Business Forum

I have to congratulate co-chairs Robin Warner and Mitch Weisburgh (wait, that’s me, am I allowed to congratulate myself?) for putting together the best group of speakers ever at the SIIA’s Education Business Forum last week. This is the conference to learn about the business of running an education technology organization:

• how to finance growth and product development
• what are the emerging trends and technologies that have the potential to transform education
• how do you get your products into the hands of more students
• how to prepare for partnerships, mergers, exits, and acquisitions
• network and forge partnerships with successful EdTech investors and businesses

Here are some highlights.

Financing your Ed Tech idea

Before you have revenue or product, if you haven’t run and sold businesses before, you’ll need to bootstrap the business yourself or get money from friends and or family members. You can gain access to good resources and networking opportunities through incubators such as StartEd in NY or LearnLaunch in Boston. Grant financing up to $1 million is available through SBIR programs at the US Department of Education and the National Science Foundation, although the grants are very competitive.

Once you have customers, you still need to bootstrap until you reach around $100,000 to $200,000 in revenues, but at that level you can look for Angel Financing for rounds of $150,000 to $500,000. Angels generally invest locally, and being part of an incubator is a strong vote of confidence that influences angel investors.

Professional investors start getting interested when you have $500,000 or more in revenue and are looking to scale your idea with investments of $1M to $3M, and there are different levels of professional investors at even higher levels if you are in the $8M to $15M revenue range.

Tech Trends that Have Transformation Potential

IBM is one of the companies leading the charge in artificial intelligence, machine learning, internet of things, block chain, eXtended Reality (XR, which subsumes both augmented reality and virtual reality), and game based learning. If you missed Phaedra Boinodiris’s talk on where these technologies are leading us to, what types of jobs they open up, how they are being used in education today, and how to partner with IBM to catch these waves, you missed it. Maybe consider coming to the next SIIA event, the Education Impact Symposium, in June.

Jussi Kajala of the Finnish company 3DBear and Lisa Castaneda of Foundry10 talked about studies on the use of Augmented Reality and Virtual Reality applications in schools. These technologies help students visualize spatially, can be incredibly immersive, and provide students with experiences they might otherwise not have. And here’s a request from students, “Please don’t ruin XR when you bring it into schools.”

Career Readiness

The work environment is incredibly chaotic; this is what we are preparing students for. Companies are not looking to keep their employees for any length of time, and they are unwilling to invest in preparing them for the workfoce. Recruiting tech talent has become a zero sum game, each company is poaching talent from the next. Companies deploy recruiting systems to screen from thousands of potential applicants for jobs, looking for keywords that indicate experience while applicants are learning how to game the system. In the meantime, how are people supposed to get the experience when experience is an entry level requirement? College degrees are widely used as indicators of some level of competence even though they are very poor indicators of proficiency or ability. We are all starting to question the wisdom of frontloading 4 years of education before careers when that education does not truly train people for their jobs and when nearly everyone is going to need retooling a few times during their working career.

There are growing opportunities to help students visualize possible careers, learn hard and soft skills, intern and apprentice, and display competencies at secondary schools, postsecondary, and after.

How to get your product in front of more kids

Here are some of the concerns voiced by the people who make decisions about whether your products get in front of kids:

• Do you really know who my student is and how your product is going to help my student
• If you tell me your product is going to solve all my problems, I’m going to be skeptical
• What is the installation process like, I don’t want to do installations, I want something cloud based and scalable, but something that will work even if the network has problems.
• Are you going to save me time, money, or effort?
• Can the data be used by the dashboard I already use?
• It is mobile friendly?
• Is it WCAG 2.0 Compliant (and if you don’t even know what this mean, you’re out of the running)
• Are there independent people who can vouch for your product’s effectiveness, and can I talk to them?
• When things go wrong, how do you react and how will you support me?
• Who is using your product now, and can I talk to them?
• Why did customer who no longer use your product stop, and can I talk to them?
• How do I know you’ll be around in 5 years?
• Can I trust you?

Other Opportunities to Learn on Edchat Interactive

From Consumption to Creation: an online discussion this Tuesday on the changes in pedagogy as we switch from “listen and learn” to “do, make, and learn” with Monica Burns.

Let’s Make School Dangerously Relevant: exploring the role of schools, classes, and teachers in the shift from an industrial model to a global innovative one with Scott McLeod.

What I learned at the Edchannels Conference/EdTech Investor Summit

Martin Keck of Needham talked about 9 trends that most influence EdTech investors:

1. The rise of the Private Equity firms, who see good potential returns in the education market, but whose entry also means increased focus on profits and cash flow, and probably lower valuations for mergers and acquisitions.
2. Increased usage of digital materials in K12 means predictable annual revenues.
3. Coding Bootcamps had their initial hype and consequent crash, but seem to be growing at a sustainable growth based on market needs.
4. Private Equity firms are pooling together groups of companies, expecting that synergies in operations, sales, and marketing will give them increased clout, growth, and profitability.
5. The marriage of content, data, and interactivity heralds success for content that is more engaging and personalized with learning analytics.
6. In Higher Ed, students are looking for a financial return on their time, money, and effort, so schools that can tie their programs to employability will increasingly win over traditional colleges and universities.
7. The International market is larger than the US market
8. Analytics and the ease of collecting and reporting on data are increasingly a factor in the buying decision for content and systems.
9. Schools and programs that that collaborate with employers could be a tsunami of success.

Angela Nelson of Stages Learning talked about the different ways of getting products into schools: direct sales through a dedicated sales force, indirect sales with independent reps or resellers, catalog and web-catalog companies, Educational Service Agencies and School Consortia, Company Websites, Short term trials or pilots, platforms or online marketplaces, freemium offers, and open education resource platforms. But also pointed out that none of them are foolproof and no one seems completely satisfied with any of the channels.  Guess that’s why EdTech companies consult with me.

Sean Cavanagh of Education Week talked about trends in the demands of EdTech purchasers:

• Demand for cloud computing is rising
• Internet connectivity is improving, but it’s still not close to ideal
• Districts are demanding more transparent pricing
• Most state education budgets are s-l-o-w-l-y improving
• Districts have some more flexibility in ESSA, but no new federal money
• Educators are still struggling to integrate tech to improve instruction and need help
• Personalized learning is a goal, but the just is out on how effectively it’s being deployed
• Changing populations, demographics, and psychographics are changing demands from districts

What we learned talking to district administrators about social studies and science

About the authors

Karen Raugust has written for more than 50 magazines and other publications; authored and contributed to more than two dozen books and book-length reports; and provided editorial
services to publishers, entrepreneurs, corporations, and nonprofit groups.

Mitch Weisburgh has been founding partner at Academic Business Advisors since 2005, and helps organizations align their products and services with the ways purchasing decisions are
made in the education market so that they can scale and make a difference to kids and educators.

What we learned

The practice of education may finally be changing.

Karen Raugust and I approached the State Education Technology Directors Association (SETDA) with the purpose of seeing how districts were teaching and selecting materials for Social Studies and Science. The SETDA directors put us in touch with district curriculum decision makers, and we conducted 37 interviews of between 45 and 75 minutes.

In traditional education, the teacher lectures the class, students then read from their textbooks and complete problems at the end of the chapter, and at the end of each unit there is a test. This is sometimes supplemented with activities and worksheets.

That practice doesn’t seem destined to survive for much longer.

In science, the administrators we talked with are focusing their acquisition of content and the application of classroom pedagogy on 3 Dimensional Learning, and in social studies on Inquiry Based Learning. Both practices revolve around engaging a student’s curiosity, letting the students’ need to know (in order to accomplish some goal) drive their need to learn. Of the 37 individuals we interviewed, every one of them had already moved in this direction in at least a few grades in their schools, and was expecting it to spread.

Because this is a new way of teaching, it requires a change in the way teachers conduct their classes. Learning to teach using this methodology requires:

• Different lesson plans requiring prep work and planning
• A more fluid way of interacting with the students and the content
• Different ways to assess student progress and intervene to facilitate student learning

Every interview cited the need for professional development as critical to success.

The materials also need to change. Students are more involved in learning by doing, which diverges from the textbook pedagogies. Many of the interviewees were choosing materials on an ala carte basis. There was a repeated preference for the ability to pick and choose exercises and materials, including parts of textbooks from various publishers, OER, teacher-created materials, and supplemental resources. Having someone vet and curate resources and provide a menu of options is attractive to districts. Many also articulated that they wanted materials that incorporated learning from multiple disciplines in the same activities. This is embedded in the Next Generation Science Standards and was especially noted in elementary education. Also cited was adaptability, providing teachers with the ability to take advantage of new developments and current events.

Open Education Resources (OER), original source materials, and science kits were often stated as critical components of 3 Dimensional and Inquiry Based Learning. The prime focus of the pedagogy was what the students were doing, and the content filled in what the students wanted and needed to know.

Many interviewees mentioned the use of at least some high-quality OER materials in their schools. A common advantage cited by districts that chose free or low-cost resources was that they were able to funnel the savings toward professional development for the teachers and/or activity kits for students.

In many cases, districts are using materials that are a combination of online and print. Even when a district is 1:1, there are issues with a totally digital solution:

• School bandwidth may make simultaneous use of materials cumbersome,
• Some of the resources may not work on the devices the students are using,
• Not all students have high speed access at home.
• Students come to class without recharging their device batteries first, creating need for occasional print backup.

We are seeing a transformation across Education as materials move from print to digital, learning moves from memorization to experience, and content selection moves from textbook adoption to curriculum curation. These changes present incredible opportunities (and threats) to any one selling content or materials into schools. Anyone wanting a detailed analysis of how to approach this market should look to purchase the Simba Information report Lessons Learned: Selecting and Deploying K12 Science and Social Studies Content.

ASUGSV 2017 Thoughts

There were 3500 people at this year’s ASUGSV conference, most of whom were either looking to raise money, invest money, show off the money they’d raised, or feed off the companies who had raised money. This is really a conference to meet and hear from EdTech businesses.

Is education really about the students? Or perhaps Liza Minelli and Joel Grey nailed it in Cabaret, money makes the world go around.

It’s a shame that raising money for your business isn’t a sustainable business model; there’s going to come a day when all those companies that have found funders are going to have to prove their projections.

With all that, I have to acknowledge that there were dozens of really interesting presentations, and it was really hard to pick and to balance going to presentations with individual meetings.

Here are some highlights.

The Chronical of Education: the trends roiling higher education

• Information Literacy: many higher ed students have trouble identifying partisan or paid-for content and assessing credibility
• Cyber Security: not just the rising of threats (colleges are very vulnerable), but preparing enough students for burgeoning job demand in this field
• Poverty: Nearly half of all students in higher ed come from families within twice the poverty line; one out of 5 have gone hungry in the past month; how can they better support these students?
• Social issues which include activist athletes (reactions to racism, should athletes be paid, and should athletes be treated as students), providing a reasonable safety net, sanctuary canvasses, defending diversity, reckoning with a not-rosy history (participating in slavery, discrimination against gay students), providing due process for offenses that do not penalize the accuser or accused until the facts are in, and harassment vigilance
• Survivability of small colleges with small endowments, shrinking application pools, and rising expenses
• Employment and pass through after college, especially now that there are ranked lists of colleges and their return on investment and talk of having colleges share the risk with their students
• Retraining and continuous training, as we all come to grips that whatever job we are doing now will probably be obsolete in 20 years
• Student loan issues and default rates

Playing It Smart: Games and Neuroscience Making an Impact in Education and Talent.

You can’t measure impact in education the same way you do in pharma; you can’t isolate the factors, the cost is too high, and by the time you are done, the product is obsolete. A more agile measure of efficacy is teacher reaction; and teachers are increasingly embracing games.

Formal, traditional learning has put a lot of people at a disadvantage; gaming can get them excited and leverage what are often seen as disadvantages in traditional learning as strengths.

VR can provide a powerful experience for learning, as learners participate in a context that combines auditory, visual, and kinesthetic stimuli. We need to find applications that are financially viable in that they are necessary and expensive today.

Coding is a key skill for this century, it will be necessary no matter what your job. We need to move beyond the belief that coding is something you learn in a few weeks. Setting kids up for a lifetime of success entails giving them a base so that they can become creators even if the specific skills will be obsolete in 20 years.

Millennials and the Demographic Tsunami

Some things to think about:

• Millenials are going to have faster opportunities to move up, stemming partly from women being 7 ½ years older when they are having their first child than they were 40 years ago so that there is a shortage of Gen Xers, Boomers retiring. The challenge is now to get them the experience they need to lead
• Millennials, both as consumers and in the workforce, care about diversity, and they judge companies through that lens
• Millenials demand instantaneous feedback, stemming from accumulating likes on FB or from playing video games for example. A once or twice a year performance review is not going to cut it
• Most millennials would prefer not to job hop, as long as they see annual raises and opportunities for career growth.
• There is a disconnect between the way learning occurs in schools and universities (programmed content) and the way it usually occurs at work (on the job coaching, just in time learning) and companies need to do a better job of helping new workers adjust.
• You can’t design an effective solution for Millenials as consumers or workers without involving them in the design process

And for me, now it’s on to preparing for SETDA, ISTE, and Serious Play. Hope to see you there or at an upcoming Edchat Interactive.

Interview with Education Financial Analyst Trace Urdan

The following is an abbreviated and highly edited version of a fascinating interview with Trace Urdan.  For over 16 years, Trace has followed the investible education sector from early childhood through corporate learning on behalf of private and public market investors, most recently as Equity Research Analyst at Credit Suisse.

The interview is about 40 minutes, and well worth listening to. Click the link below to play.

Trace Urdan Interview w Mitch Weisburgh

It seems that for at least 10 years, you've been possibly the premier financial analyst on education. What attracted you to become a financial analyst of the education sector?

I started in publishing, and decided to take a shot at being a financial analyst. The education sector is fascinating, it’s a mixture of finance, policy, research, politics, variety of different business models, and the unique aspect of selling into the government and school systems. I believed strongly that there is a role for private capital in the education system. And I welcomed the opportunity to be a voice representing investors in the industry.

In other markets, companies of under $500 Million are really small, below what they call microcap. What is the education market like?

It used to be that micro-cap was $50M in market value. But companies are postponing going public until they are much larger. You may have seen that EverFi just raised $190M in private financing. Ten years ago, they might have gone public. You  don’t have as many early stage companies playing themselves out in the public market, especially in education, as you used to. Another part is that it’s really really hard to scale a business in education; it’s a difficult sector (for more in this area, listen to the audio).

What makes you believe that we will have better outcomes for kids by having a collaboration between private money-making organizations and public and nonprofit institutions?

There is no question that education is a public good and a public responsibility. We haven’t seen any indication that governments have been very good at investing and innovating in education. That’s something that private capital has been very good at, which the public sector can then adapt. I’m going to be provocative and say that anything that has been ground breaking and innovative in education, K12 and higher ed, has been capitalized and driven by private businesses. The kinks get worked out and then you see it migrating to the public sector and accruing to the benefit of everyone. (listen to the interview for examples)

Two, you see public education funding Is being increasingly squeezed. We’re talking about taxes going down, not taxes going up. Having access to the private capital market is a requisite for building capacity. You see that explicitly outside of the United States, especially in emerging markets, where governments have real challenges in trying to educate their population. They are spending their efforts in trying to get their populations literate, and the private markets are the ones who can pay for upper secondary and higher education.

The two reasons are that private capital leads to innovation and that there just is not enough money to build the capacity that is needed

I feel strongly that there is a huge opportunity investing in education outside the US. There is no question in my mind that direction of the world is to increasing higher levels of education (listen to the interview for why, for the Pearson and Laureate examples, and the long term as opposed to short term outlook).

Let's look at higher education for a minute. There is certainly some truth to the belief that private for-profit institutions as an industry, have taken a great deal of money from the federal government, not delivered against the promises that were made to students, and then saddled the students with debt while they took the profits. On the other hand, what's often ignored is that the community college community hasn't really had significantly better results. Similar graduation rates and student success rates, but instead of the students being saddled with debt, the expenses are hidden because they are borne by the whole population through taxes. So we've had two different methods, and if the goal is employable adults who are able to support themselves in a middle class lifestyle, both have really failed. Some part of that, of course, is that these individuals are leaving our K12 education system, and they really are not prepared for whatever comes next, life, career, or higher education. But looking at 18 to 30 year olds today, what do you think the real opportunities are to improve their lives?

Some of these issues are that our political goals have been about improving access, that if we provided more access to higher education. That aspect worked really well, but didn’t solve the entire problem. Now there is greater attention being applied to outcomes. That process is ongoing and it is iterative.

What the private markets bring is that you are starting to see a whole new range of models that are attempting to get at the skills people need aimed at people who may not need a four year degree. You are seeing MOOCs, low cost colleges, low cost college credit, and solutions that are trying to match up employer needs to potential employees and their education and training. We are seeing the beginning of a whole new skills marketplace (there is more on this in the interview).

Is education worth investing in?

I think the way to frame that is your risk tolerance and your time horizon. We talked earlier about the international opportunity. I think that’s the closest you get to money in the bank, both at the K12 level and in higher ed. That’s going to work for you in the long term. More speculative and exciting is this gap between what students get from education and what employers need. Some of those firms are going to hit it, and they may not look like education companies per se.

I talked before about how government can’t do everything that needs to be done and the role of private capital. The cost of using public capital is that there has to be a return. Education is something like $3 Tillion globally. It only takes a small paradigm shift in order to create a real business opportunity. You don’t have to bet on the entire education system being transformed; you just have to bet on being able to create value in some dimension in a meaningful way (there is more on this in the interview).

Over the last year, all of the large publishers have posted disappointing results. And now we've seen the HMH has hired a new CEO, McGraw-Hill Education's COO is leaving, and Pearson has a relatively new team. What do you think is going to happen in the world of education publishing?

In higher ed it’s pretty clear the publishers are being disrupted by open education resources and emerging models. It was always an oligopoly where the publishers all agreed I won’t tread on your space and you don’t impinge on mine. But they got too greedy, and the market started looking for alternatives and those alternatives are disrupting their businesses. The publishers are turning into new technology platform companies, which has opened the market to new entrants. The business model is changing. And you’d be betting will the new entrants grab the market or will the established companies adapt fast enough. We are right in the middle of it, and it’s hard to see who will prevail. There are a lot of innovations digitally that are better than what print could do (lots more details on all of this in the recording).

In K12, it’s more an institutional sale with buyers who are very risk averse and so there is less willingness to try something new to save a couple of dollars on the margin. I think the publishers are still pretty solid in K12.

We are just completing a study where we’ve been talking to district curriculum buyers around the country. You should talk to me in a few weeks on what changes we are seeing in K12 buying behavior, and in how they are using content.

What do you think would be something good to invest in?

I would say that Laureate education at $14 is a steal; I don’t see how you’re not going to make money if you buy Laureate at $14. The entire world is going to increasingly be attending higher education, and they are going to need private partners, and it is pretty clear that Laureate is going to be a key participant in that (more on what to look for in investments in the interview).

Trace, what's next for you?

At this moment where there are a lot of exciting things happening in the private markets, and a lot of public companies that are in decline. There aren’t a whole lot of public EdTech companies to invest in. I’m looking at a lot of opportunities, some with private companies, maybe I’ll be in another capacity like private investing or banking. I’m exploring at the moment.

You’ll be at ASUGSV in Salt Lake City next week if anyone wants to reach you, right?

Yes.

I’m sure everyone who is anyone is going to be trying to get a meeting with you. Hope to see you there.

(In an earlier version, I forgot to press the shift key, so I typed 43 Trillion, instead of $3 Trillion. My bad.)

xEdu, the Finnish EdTech Accelerator

I spent Friday, March 24, at the University of Helsinki where I attended training sessions for EdTech entrepreneurs and then a meet and greet with xEdu, the EdTech accelerator in Finland.

xEdu provides these companies with business courses and coaching and access to research, government and public authorities, educational buyers in Finland, educational buyers in targeted countries, larger companies, and talent.

For background, there are two types of organizations that help companies achieve sustainability. Incubators help companies from the idea stage through to prototype or product and possibly first customers. Accelerators help companies from first product to sustainable revenue. xEdu is an accelerator.

The xEdu portfolio companies include

• 5 More Minutes: a platform to use popular games for education (my client)
• 3D Bear: a tablet app that gamifies 3D printing
• Mightifier: an app that encourages kids to give each other positive feedback and raises self esteem, decreases bullying, and thus improves learning results
• Seppo: an app that allows teachers to create games from real-world quests and experiences outside the classroom and to follow student progress

I attended a session on modeling social impact, a session on telling your story, and a meet and greet with a delegation of potential partners and buyers from China.

Modeling Impact

If you’re going to create an education business, you need to make a clear case for the impact you are going to have. That’s why teachers and schools will use your product, and it’s a good part of why investors will invest in your company.

The session modelled how to document and talk about your impact:

• What is the need that potential buyers and users face?
• Define your goal; what is your company or product going to change?
• What are you providing?
• What are users going to do to use your product or service?
• How is using your product going to change the users and how do they benefit?
• What is the long term benefit and impact to the broader community or society?

Modeling a company’s social impact is an important iterative process for EdTech companies. This session was very well done, and it is very similar to what we do with our portfolio companies.

Storytelling

Decisions to purchase or use a product are generally emotional although justified and backed up by logic. Too many entrepreneurs, especially at technology companies, focus only on the data and logic, and ignore the power of the story to sway others to their vision.

Stories are such a key element of communicating about any company or product; they can hit the emotional center of the right audience. But this session, and the model provided to create a story were so weak, that I was incredibly frustrated; I couldn’t sit still. No one, not even the presenter, could tell a story that would motivate a potential user or buyer.

This is what should have been covered.

A story has to be personal; it has to be about a person in a specific situation.

The purpose of the story is to have the reader or listener identify with the main person, the problem(s) that the person faced, and the results that the person wants to achieve. After the story, you want the listener to be thinking, “people like me use products like this” (to borrow from Seth Godin).

Your business needs multiple stories, because there are multiple roles for the different people who will use or buy a product, and you have to have a story that matches the main roles.

One model for writing the story is

• This is the problem this person faced.
• These were the implications of the problem existing and not being solved.
• This is how the person was personally affected.
• This is what they did to solve the problem (and possibly how they came to the decision to do that).
• This is how they did it.
• These were the results and how they felt about using the product.
• This is how you can achieve the same results

Companies need to develop stories about how they were founded, why they exist, what they are doing for customers, and the effect they are having. The stories need to be tailored for different targeted audiences and media. Good stories allow a company to grow, thrive, and survive.

Meet and Greet

At the meet and greet, each of the portfolio companies made a presentation to the Chinese delegation, and then set up a temporary office for a longer discussion with interested parties. The delegation consisted of media executives, school administrators, and teachers.

I was very impressed with 5 More Minutes and also with Seppio. At 5MM, we were able to make a good connection with a potential partner and an operator of 14 schools.

Conclusion

There are some really cool EdTech companies in Finland. All the companies I saw are developing their products in English, and preparing for markets outside of Finland. The Finnish government is helping these companies with grants and low-interest loans that do not have a personal guarantee. xEdu is providing coaching and connections. It’s a great experiment to see if that improves their chances of success. I think it will.

Gaming the Brain

Yesterday, in an ASUGSV preconference webinar, Michael Moe, Lauri Järvilehto, Marja Konttinen, and Tom Kalinske discussed how education around the world is at an inflection point, and what we can expect.

Games have always been engaging and instructional. A game is nothing more than complex problems waiting to be solved. For example, Lauri’s young daughter knows 140 Pokémon by heart, but it’s questionable that that will be a skill that will prove useful later in life. The issue has been that fun games are typically low efficacy for targeted knowledge and skills acquisition, and games that were designed primarily for learning have been boring. And gamification, trying to lay game-like elements over traditional learning activities, has shown some but limited utility.

While the technology for engaging video games has been around for a while, we are just starting to learn how to harness play scalably, in order to create learning opportunities that are both engaging and that teach to learning objectives.

A great game puts you into flow. It’s challenging enough to remain interesting, but not too challenging to become frustrating. When you are accomplishing, growing, and develop a sense of competence you are hooked. When you first feel a task is impossible, and then realize you can and then have solved it, you experience fiero. The human mind is conditioned to play, and play becomes a game when people start seeing how well they are doing; great games involve others as a team and/or as competitors. In games, we become conditioned toward action -> fail –> learn -> succeed -> reward, a pattern inherent in the growth mindset, persistence, and grit.

Both schools and learning content are changing to adapt to game-based learning.

Games for learning have to be able to stand on their own as fun, challenging games, AND they have to have learning goals. Game developers are finding that they need to interact closely with subject matter experts during game design in ways that previous instructional designers never did. It’s not enough to find the formulas and algorithms that underlie the field; the game has to incorporate what makes the field fun and challenging. When you are playing a game, and your adrenaline and heartbeat go up, when the game makes you cry and laugh, the experience and learning are deep and personal. A great learning game ignites the same emotional attachments in the game play that practitioners experience when they practice.

On the other hand, learning through a game is not like learning from a book. Games aren’t linear. Players have a degree of agency not normally experienced in school. Games generally have multiple outcomes and multiple paths. Early adopter teachers have been using video games like Minecraft and World of Warcraft to teach for years, and we are starting to see their best practices filter through to other classrooms.

Examples of how the game-based learning is evolving include

• Big Bang Legends from Lauri’s and Marja’s company, Lightneer, which is a problem solving game around particle physics.
• Minecraft and MinecraftEDU, now from Microsoft, which engage kids to build, program, and problem solve
• And TeacherGaming which is surrounding engaging commercial games with educational activities so that they can be utilized by teachers.

It’s great when kids (all of us really) are so absorbed in what we are doing that we don’t even realize we are learning. This happens in great games, and also in problem-based learning.

And if you’re interested in problem-based learning, maybe join us on Edchat Interactive Thursday March 9 as Kevin Brookhouser discusses how to implement 20Time learning.

Highlights of the Education Business Forum 2016

What’s driving entrepreneurship in Education?

Keynote, Victor Hu, Managing Director & Global Head of Education, Goldman Sachs

There is more entrepreneurial activity in all areas of education, and annual dollars investmented in education companies  are about 5 times higher than what they were up until about 8 years ago. Victor talked about six trends and forces that are driving entrepreneurial innovation in education:

1. The demand for technical skills, companies pay more employees who have the technical skills they need. This is driving demand for people to get those skills quickly and economically.
2. The Digital Revolution has made the consumer directly reachable; there are no distance or time barriers. This is especially true outside of the US, where content and learning companies are reaching parents and learners on their mobile devices.
3. China has more Millenials looking for jobs than the US and Europe combined.
4. Lots of people are looking for adult education different from what Universities traditionally offer. Innovations are reducing the time and cost to get the skills and knowledge to meet some specific purpose through cutting edge content, analytic insight, and platforms that integrate the data, analytics, and content.
5. As K12 moves to digital, whoever owns the platform controls the flow. The innovations are facilitating communications between teachers, students, and parents.
6. There are bold bets to rethink education when we are not restrained by location and time, and we are under pressure to do more with less.

How do knowledgeable investors evaluate education opportunities?

1. Robin Warner, Managing Director DeSilva + Phillips
2. Jonathan Harber, Founder, StartEd Companies
3. Judah Karkowsky, Global Head of M&A, Cengage
4. Amy Margolis, Principal, The Riverside Company

Investors look for the exit, is it likely that the company will sell for enough in 5 years for investors to earn 10x what they put in? Is the company going to achieve escape velocity in a really big market.

Questions that investors ask themselves:

1. Can these people pull it off?
2. Is there a big enough opportunity? You’re not going to get investors in a venture with a potential for $20 million in revenue.
3. Does the product meet a market need, and do potential customers have a way to pay for it?
4. Have they shown good progress in the time since they’ve started?

A typical professional investor will have about 2000 deals cross their desk each year, look at 10%, and invest in 2-3.

The Inside Track on Raising Capital

1. Rita Ferrandino, Founding Principal, Arc Capital Development
2. Don Cogan-Draw, Co-Founder, Newsela
3. Elena Cox, CEO, vibefect
4. Daniel Pianko, Managing Director, University Ventures
5. Marie Schwartz, CEO, TeenLive Media

When you make up your mind to accept professional investment, you’ve also made up your mind to sell the company; investors make their money at the exit.

You need to research a potential investor; you can’t just make a standard pitch every time. You need to show why there is a fit with that investor. Figure out what is going to appeal to the investor by looking at what they’ve invested in already.

Raising money is a job; you won’t be able to devote as much time to the rest of your company as you have in the past while you are raising money.

If you raise $10M you need to be able to show that the company is going to be worth at least $50M. In education, only 1-3 companies a year sell for that amount.

Your pitch deck is to get enough interest for them to be willing to spend the next 2-3 months figuring out if they are going to invest in you. The deck, and your presentation using the deck, isn’t going to raise the money.

If you have bad news, don't make potential investors dig to find it. They will find it, and then they won't be investors.

Please No Squeeza Da Banana, Or Do Pilots Really Work?

 

Hey! Please no squeeza da banana!
Because when-a you do dat,
Den-a you make her flat….
So please no squeeza da banana!
If you squeeza, Officer, please,
Squeeza da coconut!

I used to love going to Pop pop’s house, and hearing him sing that song.

UC Davis’s Pilot-to-Purchase Project points out, “Public school districts indicate reliance on pilots to make purchasing decisions about education technology products.” And certainly Education Technology publishers rely on pilots as a critical part of the selling process.

A pilot is an evaluation of whether a product will be purchased. A pilot is neither a randomized controlled study nor a Beta test. While randomized controlled studies may have a place, they take too long and cost too much to be used for purchasing decisions. And while a pilot will provide valuable feedback for an Ed Tech provider, the product should already be ready-to-purchase.

But how do we prevent pilots from going flat, like the squeezed banana? How do we make them more meaningful than squeezing a coconut?

1. Go into the pilot with criteria for success and a method for measuring that success
2. Establish and maintain communications between the EdTech provider, teachers, and student throughout the process.
3. Avoid technology problems, and, when they do occur, solve them rapidly.
4. Teachers need to be comfortable with the product and technology
5. Give the pilot enough time

Sounds easy right? Here’s a hint: it’s not, but worthwhile projects rarely are.

Mathematica Policy Research and SRI International have produced a tool to help educators and EdTech providers keep pilots on track, The Ed Tech Rapid Cycle Evaluation Coach, which is in Beta right now. Some of the key questions for planning:

• What is the problem you are trying to solve or opportunity you wish to pursue?
• Who should be involved in the selectio process?
• What are the technical requirements?
• How much training is required and how will it be delivered?
• What’s the indended implementation approach?
• What kind of data/reporting tools do you need?

And questions for the evaluation:

• Do intended users find the resource engaging?
• Is it accessible for all target users?
• How easy is the technology to use?
• Is the effect of the pilot above a threshold?

No more squeezing bananas, let’s make pilots meaningful. If you’re interested in conducting or planning pilots, let’s talk further.