Ok, so the University of Phoenix has a six-billion dollar market cap. That means that somebody, somewhere is wanting products they sell. There is a market in education that views it as an legitimate expense. The only question now we have is cost and perceived value.
Instead of a four-year, pass-or-fail model for education, how about switching to a incremental model? You can have 50 levels of applied knowledge, rising all the way to PhD. People can purchase small amounts as they can afford it. Certification systems could tie into the levels. Early levels could require 2 or 3 courses in other areas. Later levels could be more narrowly targeted. A universal directory could manage it all and allow competition between providers.
As some random internet commenter, I agree with the author: this field is getting ready for major innovation. Just not quite yet.
> You can have 50 levels of applied knowledge, rising all the way to PhD
Nice idea. I think fine-grained representations of the learner's "state" will lead to interesting applications in the future.
Though there are a few things going on. Having the credits for course the Advanced Calculus course MATH314 on my transcript granted from {{U_name}} means a couple of things: (1) I passed the class, (2) I probably know all the material in the courses which are prerequisites (D.CALC, INT.CALC, MULTIVAR.CALC, LA), and (3) I am ready to take more advanced courses that require AdCalc (like say, a 3rd year Electricity & Magnetism course).
My feeling is that none of the above three aspects are worth certification. (And payment!) This level of knowledge cert. would be too granular. What we want certification for is at the end of the completed degree. ACHIEVEMENT UNLOCKED: ENGINEER
That being said it would be cool to have University "credits" portable in between institutions without having to jump through hooks trying to get administrators to accept credits form other universities...
The University of Phoenix receives an incredible amount of taxpayer subsidies. Between budget cuts and the low-quality instruction it (and similar schools) provide, I think that's the most ripe for disruption.
The one thing I'd like to see the data for is the notion that the poor in America are more likely to try new things. This has not been my experience -at all-. I hadn't even heard of a Montessori school until I came to Palo Alto, CA. The idea that the poor are more likely to try things would make sense, but as an Asian-American growing up in this country, I noticed that the poor Caucasians were more likely to be set in the their ways than the rich Caucasians.
Yeah, I think the author is conflating the attitudes of parents in failing school districts with those of administrators and educators in failing school districts. The "new, experimental things" the author mentions are mostly institutional policies. The people making these policies are educators who, by nature of their profession, see education as an investment.
Khan Academy is pretty successful. Millions of students have benefited from their work, without having to pay a dime.
Sal Khan's vision of what education should be like is spot on and I strongly agree with him. He seems to be sincere about this thing and has received millions in donations.
This is not a company looking for success by means of an 'exit'. They are actually making a difference to millions of students. In doing that they're being successful.
Wish we could see more of this instead of useless, gimmicky stuff.
True, but Khan Academy doesn't significantly deviate from the hypothesis in the model -- if you provide the content for free, it's as cheap as or cheaper than all the alternatives {do nothing, $pay_service_from_a_startup, $government_subsidized_service}. At that point, it becomes a quality issue.
I think that you and the OP have similar values -- the key takeaway is that you're probably not going to become a billionaire by "revolutionizing" education.
(Heck, IMO, it's incredibly unlikely that you're going to become the next Sal Khan or Kiva -- it takes a lot to convince those key someones to give you millions of dollars for social good as opposed to a known actor.)
This post seems to make lots of sense. I think going into the education market, you must feel at least some passion for doing something good, leaving a mark, making a difference (however small). I would even go as far as saying that making lots of money from education is some kind of a contradiction in terms. Good teachers and educators don't usually make a fortune, but they make a difference.
I think that's why VC and education do not go well together. If you plan to make an exit, then you're not really there to support the next generation of people who want to learn. You're not a teacher or educator if you're there only to make the jump up to the next thing.
In that sense, the idea of passionate angels, and small startups that can find a niche and build a sustainable business out of it makes a lot of sense. It might not make you a millionaire, or won't disrupt the entire education market, but it should hopefully make you proud and help even a few people improve their learning experience.
disclaimer: my startup kenhub.com tries to build a (small) platform to make learning anatomy more easy and fun.
I'm surprised the article doesn't touch on the main reason why startups at the "quality" end of the market struggle to get beyond the early adopters, which is founders' assumptions that the target market is as autodidactic and focused on acquiring skills in the most efficient way possible as them.
"University of Phoenix...They are a company that makes it easy to get the same quality diploma that you would get at the local college."
It damages the credibility of the author to make a statement like this. University of Phoenix degrees are less marketable than those of public universities. If someone wants specific evidence there is a Frontline episode on education that features UoP heavily.
In addition, UoP is basically a parasitic entity exploiting a loophole. They take federal money intended to provide access to useful education, and people who think a degree will improve their marketability, fail to deliver to either party and pocket a percentage.
Another thing not mentioned, so many faculty and administrators are often technophobes, luddites, and in some cases dinosaurs. There is a very strong "union" mentality about anything that even begins to encroach on the classroom experience, so professors and teachers will fight that tooth and nail.
Otherwise, I pretty much agree with everything in this article based on what I've learned about the education business recently. It's a long, long, long game and my guess is that most investors (right now) will not have the stamina to play it. It will happen, but my guess is that tipping point will not be reached as fast as it does in other verticals.
I was working on an education idea a few years back in university, something very similar to YC's Lingt. After reading up on the market, I came to the conclusion that education was a sales-driven business, not a product-driven one - ie you can't beat Blackboard with a better product, because they have an army of salespeople and you don't. However, I do think you could "consumerise" edutech products where you sell directly to consumers, and where consumers are willing to pay a lot, like in language learning or professional qualifications. (Which suggests I should have stuck with the Lingt idea, but whatever).
I've thought about it as well. It is extremely hard to innovate successfully commercially inside the educational system. On the other hand, targeting the bottom of the system, the individual teachers, parents, students, and the like, does work locally. Scaling that up to something akin to your stereotypical internet startup, however, is hard or even impossible because once you get big you're start messing with the educational system as a whole, looping back to the original problem of entering into the educational system. Still, I think that selling individualized educational services will work, it just does not scale.
If you want to sell a million dollars' worth of product, there's a quantity/quality of sale ratio. You can sell a million people something that costs a buck, or a thousand people something that costs a thousand, or one person something that costs a million. Hidden inside this is a problem that affects all startups, not just education... there's no money to be made selling to poor people, because they don't have much money. Poor people aren't thousand dollar customers, generally. If you want to get rich selling to them, you need deep/broad market penetration.
So to make money on an education business, you either need very broad use (at least six figures of users), or something of very high value to those who can afford it - the thousand people for a thousand dollars model (much more than that, and you're actually selling to institutions).
When we say "startup" around here, we're specifically talking about a pretty narrow economic model... angel/venture funded software companies targeting $10M-$100M+ annual sales in less than a decade. It needs those hockey-stick graphs to justify the investment. How do you get that?
There are probably spaces that can be exploited by startups - mobile software that simplifies the lives of college students in the under-$100 range, for example. But really, I think the innovation mostly has to come as entrepreneurship within institutions.
When we say "startup" around here, we're specifically talking about a pretty narrow economic model... angel/venture funded software companies targeting $10M-$100M+ annual sales in less than a decade.
That may be your definition, it may even be a popular definition, but it is by NO means "the" definition of "startup" here. I don't see, for example, any evidence that everyone here thinks of angel/venture funding as being a requirement to be a startup.
I believe you will find any posters here to like @sgblank's definition of a startup as "a temporary organization designed to search for a repeatable and scalable business model".
Anyway, if you put aside the absolute requirement for hockey-stick growth curves, you liberate yourself to pursue things in different ways, and follow a different tack. And if what TFA suggests is true, this might be a good idea for education startups. If you're counting on broad changes in thinking at the level of society-at-large, you probably don't want to be in a hurry. Being under the gun from a VC is probably counter-productive in that case.
> I think the innovation mostly has to come as entrepreneurship within institutions.
Sometimes it does. We are using LON-CAPA (http://en.wikipedia.org/wiki/LON-CAPA) to administer tests to the hordes of first-year students who need to take out classes as part of theit gen.ed. requirement. You couldn't handle them with a roomful of TAs.
Where does this place "education" companies like ClassDojo and Code Academy? The author says education companies don't experience consumer-product level growth but both of them have definitely done that. Is that because they are more "consumerized" in that they don't always target schools directly? Is it because they are free? Or is it something else?
Many people make lots of money in education-related businesses. But if your focus is on making money, you are not going to create something that is available to all students.
I have a conviction that a quality education should be available to everyone. To that end, it really seems that most education resources should be free and open.
That said, developers deserve to be paid well for their time. I think the ed-tech world should focus on paying good developers a respectable rate for creating high quality, free and open resources.
The nice thing about education: it only takes one to deliver to many. If we could have one person make an open Algebra Textbook millions can benefit from it.
We just need a systematic method to pay for this material to be produced.
One approach which I think has a future, would be for educators to produce printed textbooks (i know... i know... very retro;) and make a reasonable profit from each sale.
This is essentially a streamlining of the traditional textbook publishing model, focussed towards authors' interests (66% margins is the kind of incentives to make knowledgeable person want to sit down and write a book). It is a pretty good value for the student too (1/3 of cost of book offered by traditional publisher).
Specifically for textbooks, students appreciateª the value/portability of the printed book and are willing to pay for it. If the cost of the perfect bound book (delivered to your door) is lower than what it would cost to print out and bind a pirated PDF, then the business will work.
Honestly, I think that print-on-demand and the above author-centered publishing model have the potential to bring about an intellectual revolution on the scale and importance similar to when the Gutenberg press was invented.
Open textbooks don't always work. The reason for this is that courses differ slightly from university to university. Using an open textbook then becomes and exercise in identifying the parts that you don't require at this stage, which in itself is a bit of pain and a huge waste of time.
> The average, middle class person thinks about education as an expenditure, not an investment
Is it a state-occupied (compulsory) education system that does so? IMO, it is. For example, many(most? vast majority of?) people go to college to get a diploma, not to get actual education. The system sucks and doesn't deliver any actual value(in terms of knowledge or personal growth, not in terms of signaling to the market), so no wonder that people don't view education as an investment.
This is a good article, the only thing that is missing is that universities are cash-strapped, too, these days, and they would like to outsource instruction to whoever can deliver.
I think universities are cash-strapped to the degree that they can't get more government checks, something most educational startups won't have any access to (and maybe this will be more true for more universities as student loan defaults keep increasing).
> I think universities are cash-strapped to the degree that they can't get more government checks
That is correct: funding through federal and state grants (and for state universities funding through state funds) has been gutted, and that is why they have to make up the shortfall by increasing tuition.
In fact this is a common pattern: there is this shift from shared risk to individual risk. There might be many startup opportunities lurking there. For starters, I'm surprised to see that there is no union or trade organization that would make a group health insurance plan available to its members.
Most universities refuse to adapt to the changing availability of funding. They use grant funding to build large infrastructures that have large ongoing administrative or other overhead costs. When the grants dry up, they don't downsize, they raise tuition or come up with new fees. As with governments, it's almost impossible to get fired from a university job. Time off and other benefits are lavish, and there's almost no accountability to actually do anything of value when an employes is actually at work. The salaries aren't great, but when you can roll in at 10, take a 90 minute lunch, and go home at 4, and have 6 weeks paid time off, and health insurance at a price so low it is essentially free, nobody complains much.
Can you site a source for "funding through federal and state grants (and for state universities funding through state funds) has been gutted"? I don't think this is universally true[1] and some of it is hidden in the "cut" = "didn't get expected increase"[2].
1) I am fairly sure ND went up
2) MN universities said this for a number of years
"Didn't get expected increase" is equivalent to a budget cut, because the time horizon at a university is long - you hire a tenure-track professor in a suitable field, give the person startup money and hope he will stay and get grants in. It takes several years to recover this kind of investment. You simply cannot have politicians dick every year with the operating budget, it makes planning impossible.
That is in fact what has put space research in the US far behind. That sort of project takes decades from proposal to wrapup.
NIH is one research funding source and SUNY is one school system. I am wondering about the overall trend. How is it dicking with the budget when you get the same amount as last year? Not a lot of people can say that these days.
And when you consider that universities have been raising their tuition prices by 5%+ per year for decades, if they get the same check as they received last year means that they will have less money to spend.
The article throws out the baby with the bathwater.
Let's focus on the consumer market for US grades
7-12 and vocational education, especially computing.
For fine arts such as singing, piano, violin, other
instruments in a symphony orchestra, guitar, dance,
painting, sculpture, photography, etc. it appears
that overwhelmingly the way children make progress
is (A) their family has some expertise and
encourages their children and (B) the education is
available in the home, in the church (e.g., for
choir), or from private tutors, e.g., a local piano
or violin teacher. E.g., for violin, consider Ms.
Caroline Goulding as at
http://www.carolinegoulding.com/
Or consider Ms. Alina Ibragimova playing the Bach
'Chaconne' as at
http://www.youtube.com/watch?v=Tezau3hlRxs
She's good; the last part of the first D-minor
section is world class work. Tough to believe that
she learned how to do that in a standard school!
For the consumer market for grades 7-12, before a
consumer will devote much time or energy to
education, they need to know that there will be a
'payoff' from official education 'certification'
which mostly means better grades in grades 9-12 or
higher scores on tests of the College Entrance
Examination Board (CEEB), e.g., as at
http://en.wikipedia.org/wiki/College_Board
Of course good scores on CEEB tests are useful for
getting into college and getting college
scholarships.
So, really such consumer education has to aim at
existing graded courses in grades 9-12 and/or
subjects tested by the CEEB.
Now we face a hard lesson: Doing well on these aims
is "not a spectator sport", more work than just
watching TV, and a lot of hard work.
For such learning, the first source is the student's
usual school. For more, the student may want some
tutoring. A few students want to do better than
what is available in the school.
For tutoring, here's an approach: Find what are the
more popular textbooks and develop some videos tied
closely to those main books. Then a student who
needs tutoring, or just to get ready for a test on
Monday, could use the videos for just the place they
are in their textbook.
For going beyond what is available in the school, a
student could use some guidance and then the
learning materials. For going beyond, we are really
aiming just at some CEEB tests, in particular, the
tests of the College Level Examination Program
(CLEP) as at
For the course content, just get some of the best
available textbooks and then maybe have some
corresponding supplementary videos. Some on-line
tests so that a student could 'check their progress'
would be helpful.
E.g., maybe a student wants to do well in calculus.
So, get a book on calculus aimed at the CLEP test in
calculus.
For still more, that is, for an ambitious student in
grades 9-12, just aim at the subject matter tests of
the GRE.
For vocational, the audience of Hacker News the
unique, world class cream of such education. Why?
Because in the US, nearly all education in practical
computing is from self teaching from books, on-line
fora, practicing at a computer, on-line
documentation, e.g., the Microsoft MSDN Web pages,
etc.
Improving such vocational education? Not easy
because it would involve at least writing better
books than the best ones already available from
O'Reilly, Microsoft Press, and many other publishers
and better Web sites, fora, etc. For one company in
education to improve on all those sources is
hopelessly difficult.
So, where do I see a significant startup opportunity
in education for grades 9-12 and vocational
education? I don't. Really, that's good news: The
CEEB seems to have the needed means of
'certification', their tests. Otherwise, get some
good learning materials, commonly just textbooks
although maybe PDFs downloaded from the Internet.
The bottleneck is the work -- no spectator sport and
no royal road. Instead hard work. E.g., look at
the left hand finger tips of Ms. Ibragimova; they
are bent backwards. So were those of Jascha
Heifetz. Why? Thousands of hours of intense
practice. Hard work.
I did some such things: (1) I'm no good at violin,
have too little talent and never practiced nearly
enough, but I did make it through the D-major
section of 'Chaconne' and parts of the rest mostly
via being self-taught. (2) I never took freshman
calculus. The college where I did my freshman year
was not so good and pushed everyone into a 'college
algebra' class a bit beneath what I'd already done
in high school (in the same city as the college but
the best high school in the city -- Dad carefully
selected where he bought his house). So, I showed
up for the tests only and otherwise got a good
calculus book and dug in. For my sophomore year, I
went to a much better college and one that happened
to have a quite good math department and just
started on their sophomore calculus from Johnson and
Kiokemeister, then also used at Harvard. It's a
good calculus book. Did fine: Made As in that
calculus, got Honors in Math, and 800 on the math
subject matter test of the GRE. (3) I continued with
a lot of largely independent study much like I'd
used for freshman calculus, and that background was
crucial for my Ph.D. in Engineering -- really some
applied math. (4) My career has been in applied
math and computing. I've taught computing in two
well-known universities, but I never really took a
course in it and, instead, was essentially
self-taught, as is nearly standard on HN.
One little victory: One Christmas at the farm of my
wife's family, I was upstairs practicing violin. A
bright daughter, about 9, of one of my wife's
sisters came up and watched. So I put my violin bow
in her right hand, showing her how to position her
fingers to hold it (the more natural Russian way
Heifetz used and not the less natural German way!),
put the violin under her left chin, and let her make
sounds. Her mother had been trying without success
for years to get that girl interested in music, but
the next day her father asked me "Now, how much is a
violin going to cost me?". She was a bright girl:
She was at a large, very competitive high school,
the pride of the community, and in her senior year
her parents were surprised to discover that she was
by a wide margin the head of her class. She got
Valedictorian. In college the retraced the steps of
my wife and got PBK. She got her LLB at Harvard and
started at Cravath, Swaine & Moore. Bright girl.
So, net, really, just do the darned work, and no
great educational startup opportunity.
For a reader who got this far and heard of the Bach
'Chaconne' here for the first time, here's what it
is: At one point, Bach wrote six pieces for
unaccompanied violin (he did the same for cello).
Three of the pieces he called called 'Sonatas' and
the other three, 'Partitas'. These pieces are
secular, unlike his other ecclesiastical music.
While Bach was mostly a keyboard player, especially
for organ, his violin and cello pieces show amazing
knowledge of violin and cello, even if heavily he
tried to have them play chords more appropriate for
keyboards.
The crown jewel of the unaccompanied pieces is the
last part of the Partita #2 called the 'Chaconne'
which was a old dance form.
A lot of the music is trying to play on 3-4 strings
at once. Those efforts can view as chords sometimes
and just more than one melodic line at other times.
Bach was good at doing such things.
The piece is in three sections, D-minor, D-major,
and D-minor again and is a 'theme and variations'.
The variations have great variety, slow to fast,
calm to agitated, low pitches to high.
The D-major section starts off calm. Soon it is
playing some nice arpeggios with some triplets. The
triplets get to be more and more intense, say,
'insistent'. The end of the section is essentially
the climax of the piece and is the most difficult
section to play. Depending on how it is played and
heard, the last bars can sound like chords or
several melodic lines, each heard before. How to
play the last few notes is up to the violinist, but
Heifetz makes a big climax there and then quickly
moves to the start of the last D-minor section which
can view as some 'cathartic' relief from the
intensity of the climax at the end of the D-major
section.
Due to the use of the chords and the relatively
non-melodic main theme, for a listener the piece
takes some effort to follow well enough to 'like'.
What it all 'means' is for the listener to decide.
But it does appear that something intense and
determined is going on underneath there somewhere.
Playing it is great fun -- parts of it are a great
way to scream out to the heavens the spirit of
humanity or some such.
There is an old joke: At times the piece is played
on guitar. So, at a concert a guitarist in the
audience sat waiting for the concert to begin. With
nothing else to do, he mentioned to the person next
to him "The Bach 'Chaconne' sure is difficult to
play."
The next person was composer Castelnuovo-Tedesco,
known to be a man of few words, who said nothing
until the concert was over at which time he turned
to the guitarist and said, "The Bach 'Chaconne' is
the greatest piece of music ever written." It's my
favorite.
Again, the bottleneck in education is the need for
the students to do hard work. Given that, there's
lots of great music, good violins and pianos,
textbooks, CEEB tests, colleges, universities,
guidance, YouTube videos, etc. With the hard work,
we can soar to the heavens. Without the hard work,
we're stuck in the mud.
The issue that education runs into as a business is that the people for whom it would add the most value don't have present resources to commit. We've seen three models:
1. Public financing. This is the most successful; even if there's a reputation of bureaucracy and mediocrity (largely because public schools have to contend with the full range of inputs) the system actually works extremely well. A lot of people (read: short-sighted conservatives) just don't want to pay for it, so they gripe about the public-school model itself, rather than (admittedly, serious) issues with execution.
2. After-the-fact donations. The problem here is that it converges on a Nash equilibrium where the rich get the resources anyway because they are most likely to be future donors. (Depressing news: in spite of the "economic miracle" that college is supposed to work, but hasn't for a long time, the #1 predictor of whether someone will be wealthy is having wealthy parents.)
3. Non-dischargeable debt. Student debt might have been a good idea (a) before it started having effects itself on pricing --making college again unaffordable and replacing minor debt loads with indentured servitude-- and (b) were the economy less volatile than it has been since 1990 or so. It's horrible now.
None of these solutions (of the three, public financing being the only one that works) admit themselves well to the startup business model.
(Depressing news: in spite of the "economic miracle" that college is supposed to work, but hasn't for a long time, the #1 predictor of whether someone will be wealthy is having wealthy parents.)
That might be "the #1 predictor," but out of how many predictors? What "percentage" is it, if that term is even meaningful here? How do we decide what counts as "wealthy?" Is it income or assets? If income, what happens to people making $300,000 a year but spending it all (I have met these people). What happens to the Millionaires Next Door (http://www.amazon.com/The-Millionaire-Next-Door-Surprising/d... ; it has done more to shape my thinking about wealth than any other book. One surprising fact: most millionaires don't have extraordinary incomes but do consistently live below their means and save their extra money)?
If having "wealthy" parents is the #1 predictor and accounts for, say, 20% of the likelihood of the next generation's wealth, and, say, education accounts for another 10%, what happens if 40% is noise / randomness? Then noise accounts for twice as much as wealth! Most of the actual peer-reviewed studies I've read about this topic come to the conclusions they do through some dubious data decisions.
I'm not trying to pick a pointless, semantic fight here, but I see a lot of statements that try to compress a complex set of issues and questions into a single metric. As usually happens with this sort of thing, there's also an element of anecdote here: I have seen kids from wealthy families piss it all away and kids from poor families do the opposite. My own grandparents had virtually nothing and didn't speak English.
but I see a lot of statements that try to compress a complex set of issues and questions into a single metric
This needs to be posted over and over again under each posting pretending to know how "things" work. Social life is incredibly complex, and anyone pretending to have found the single, all explaining causality is flat out dishonest.
Being able to capture some of the future earnings of recipients of education would work well, and work well within the startup model.
I predict the best startup opportunities in education are either international or involve teaching/training those in groups already receiving benefits. i.e. being paid by the military to train people leaving the military (via GI Bill, 9/11 GI Bill), those in the military still, or corporate training programs for their existing workers.
(corp training could be everything from MCSE/A+/CCNA to serious certification to use technology, or specific-to-jobsite ojt)
There might be a market training or teaching prisoners, current disability or welfare recipients (if there were a way to train them to do jobs which could then remove them from disability...), etc. too.
And probably also value in teaching people how to do things they themselves value, like "how to ski" or "DIY for dummies", etc.
The fact that many colleges are subsidized by the government prevents many other solutions from gaining traction.
When an 18 year old looks at the options he goes to a public school because all he has to do is sign on the dotted line. These students will not even feel the burden of the cost until they leave.
Instead of a four-year, pass-or-fail model for education, how about switching to a incremental model? You can have 50 levels of applied knowledge, rising all the way to PhD. People can purchase small amounts as they can afford it. Certification systems could tie into the levels. Early levels could require 2 or 3 courses in other areas. Later levels could be more narrowly targeted. A universal directory could manage it all and allow competition between providers.
As some random internet commenter, I agree with the author: this field is getting ready for major innovation. Just not quite yet.