Education is where the rubber meets the road: it is the system which does the most, good or bad, to produce a generation of Americans who will be able to operate effectively in the more entrepreneurial workplace that is coming — and it is one of America’s most dysfunctional and change-resistant sectors.One important step to improve American education would be to use technology to support more effective education. This isn’t about having cable in every classroom; it is about using the power of the information age to transform the way America teaches and learns at every level from pre-K to adult education.This will only happen as more companies develop and market new programs and products, and that’s only going to happen when venture capitalists think there is money to be made in the field and offer promising start ups (that, for example, put experienced teachers together with tech wizards to design products that actual teachers find actually helpful) the resources they need to turn a vision into a product.Unfortunately, venture capitalists are staying out of the K-12 education market in droves. The world’s central bankers are printing money as fast as they can, there is more capital floating around the world system than ever before, and venture capitalism has made handsome enough returns for so long that the whole process of financing start ups is more advanced and efficient than ever before.Enhancing American educational performance is one of our greatest needs, and with millions of young people in school, the potential market is huge.Yet with all this going in its favor, venture capitalists aren’t biting. A recent meeting that brought venture capitalists and education bigwigs together came up with some interesting reasons why. According to a report at Robgo.org, the VC folks identified the following three big obstacles:
- VC’s look for a rapid path to growth, but it isn’t available in K12 sales. VC’s almost categorically pass on any company that requires sales into schools and districts
- Slow transmission of information. One would think that a program that is successful in a few districts or schools would spread quickly. Not so. My friend Teddy Rice, the founder of a growing company in the ELL space shared his experience walking into districts that had no clue what his company did, even though most surrounding districts were using his product with great success
- On one hand, investors get excited about “over the top” opportunities that bypass traditional sales channels in favor of a more direct-to-consumer approach. But Alex Grodd from Better Lesson brought us a bit back to earth, reminding that the only payers are consumers, teachers, and schools/districts. And it’s easier said than done to get consumers and teachers to pay for core educational programs on a broad scale.
The dilatory, creaky and risk averse decision making and payment processes in school bureaucracies were also cited as a reason that VC money stays out of education: it’s virtually impossible for school districts as currently organized to move at the pace start up companies require.Some of the ideas that came up to fix the problem were interesting: wider adoption of common core curriculum standards would expand the market for new products aimed at a curriculum that could be taught in many localities and states, for example. Giving individual teachers the power to pull the trigger on small scale purchases of software or other material for their classes would increase the number of potential customers and make it easier to market to them. Developing better methods to demonstrate the effectiveness of good products (and the uselessness of bad ones) would make it easier for a new product to demonstrate effectiveness and for word of its success to spread. Such measures would also give a greater comfort level for large institutional purchasers — like school districts.Some of the problems the VCs experience permeate the textbook market as well. Cumbersome, politically charged reviews and bureaucratic obstacle courses keep a lot of good potential textbook writers out of the market, and flood the market with cheesy sludge: textbooks so fat, diffuse and PC that they bore and confuse students rather than stimulate and interest them.Because the textbook companies are already established and don’t need VC finance, they can survive this process. Indeed, established textbook producers thrive on it as the cost of learning to manage the approval process is so great that it keeps potential competitors out of the market and allows textbook companies to pass the costs of development onto purchasers of approved texts.For both textbooks and new information products and teaching systems, all this needs to change. Moving authority in education closer to the grassroots — giving principals and teachers more power over how to teach and more information about what works while rewarding them for making wise choices — is probably the most important step to take.Getting venture capitalists to help fund the development of a new educational system is a much more important piece of a school reform program than most of the ideas that come out of the traditional educational and foundation communities. Empowering teachers and principals to innovate and experiment, and opening the classroom doors to the kind of creative thinking that has transformed American business operations and hugely increased productivity in so many fields is a big part of the reform agenda America needs.And having smart and nimble VC firms driving educational innovation rather than funding armies of bureaucrats to suck their thumbs and tweak the conventional model is both more effective and, for taxpayers, much cheaper. Let the private sector and investors bear the cost of the research and design of new educational systems.There is nothing partisan or ideological about this kind of approach; both Republicans and Democrats should be able to get behind it. Let’s hope they do.