The Education Business Blog

Today guest blogger Randy Wilhelm - CEO of Thinkronize shares insights from the 3rd Annual "Schools and Generation Net" survey.

By Randy Wilhelm

As the father of five school-age children, I am reminded daily that each child is special and each one learns differently. For instance, I have one son who learns best when he can hear the text he is reading at the same time. Another of my children is very tactile and has to touch something to understand it.

When we set out to commission – our 3rd annual “Schools & Generation Net” survey – I expected that teachers and principals well understood the critical need for differentiated instruction. However, when the results were tabulated, what made me sit up (and put down my iPhone) was the overwhelming majority (85%) that looked to the Web as a solution – and even more telling, the 60% of educators that agreed that their districts should invest more in digital resources, shifting dollars away from print materials.

The headline from the survey results, “Educators Want Web Solutions to Avoid Traditional Cookie Cutter Instruction,” points to the fact that today’s classroom is not well equipped for customized learning. Because kids learn differently and assimilate information differently, “one text for all” doesn’t cut it. Teachers need other instructional materials to help kids learn.

Today’s teachers are challenged to find resources that are both aligned to state standards and designed to engage every child in the learning process.

• The survey found that more than 70% of principals and nearly 70% of teachers expressed a need for assistance in finding resources that meet state curriculum standards.
• Four out of five educators (80%) agreed that they need multimedia Web resources, such as digital images, video, animation, and voice, to both stimulate and motivate their students.

In a utopian society, teachers would have the flexibility to invest in digital resources that they believed would help each child learn. But the decision doesn’t lie with them. It usually lies with the districts. And in some states, investing instructional materials dollars in digital Web-delivered resources isn’t even allowed. As David Thornburg, Futurist, Lecturer, Author and Director of Global Operation, Thornburg Center, put it, “At a time when the need for powerful educational resources has never been higher, this study of educator's needs and wants shows a strong desire to transition from print to online resources delivered through the Web.”

Bottom line? In today’s critical economy, where the squeeze is being put on everyone – including our precious schools, we are spending a disproportionate amount of dollars on print instructional materials. We need to re-look at the 1-2% of state expenditures that go toward instructional materials and the $4 billion spent on print materials and invest those dollars in digital resources that provide every child with a customized learning experience, every day.

Update: Michele King responded to this post with a practitioner's perspective on how web tools can help teachers plan for differentiated instruction.

Related Posts:

Instructional Monocultures

Print and Technology Blending

Teachers and the Internet: Five Things You Need to Know

A Wave of Change Sweeps Over the Industry (series on Technology Substitution)

What are the prospects for raising capital for education technology companies in the current financial meltdown? Last week at the SIIA Ed-Tech Business Forum a panel of investors tackled this question. The panelists presented some solid and detailed advice for investors and companies seeking capital during the recession.

Key Points:

• Many investors are seeing Education as a safe harbor in a turbulent market, it is seen as relatively recession resistant. Education's profile is rising as a marquee investment arena for the next 10 years - it is a good time right now for education.
• Take in as little as possible at as light a valuation you can get because valuations are going to be low for a while.
• The strong are going to win big in this downturn. Access to capital is going to be an important differentiator in this market.
• Most venture firms are not looking at new deals, they are focused on down rounds and propping up existing investments. They are also all moving up the deal chain to safer investments than they make in normal times. If you are raising money be aware of this.
• It is all about being profitable per customer in this market. Hope isn't a strategy - go get paying customers and drive a lifetime revenue model
• Focus down on the core of what you have to provide and strip the organization down to doing just that. Have a crystal clear picture of who your customers will be, how they will find the money, and what are the essential features.

The panelists were:

• Moderator - Chris Curran, Managing Director Berkery Noyes
• Frank Bonsal III, Partner New Markets Venture Partners
• Kevin Custer, Founding Partner, Arc Capital Development
• Lou Pugliese - President Learning Diagnostics

Chris began with an overview of the market trends. Many investors are seeing Education as a safe harbor in a turbulent market, it is seen as relatively recession resistant. He noted that there is a huge capital overhang - investors have lots of funds but are making few investments. In education fundraising is actually up this year but we are seeing deals that are over capitalized. Later on Frank made the case that this is a bad deal from the entrepreneur's side.

Most investment groups are setting the bar higher for new deals. Investors are looking for $10m Revenue and $2m EBIDTA which leaves out most K-12 Ed-Tech companies. Companies at this size need capital to invest in Sales and Marketing to scale up. Lots of education companies with good products in the last 10 years have failed because they couldn't get past this hurdle.

His slides include a list of the private equity investors in education and a list of 100 deals that have been done in the education space in the past two years.

Follow below the fold for details on each panelists comments and the audience Q&A.

Continue reading "Raising Investment Capital - Strategic and Private Equity Perspectives - Education Technology" »

This panel is made up of seasoned veterans of the M&A markets for Education Technology companies. They addressed the K12, Higher Education / Post-secondary, and general M&A climate.

The panelists are:

• Moderator Jeff Fromme - Dorsey and Whitney LLP
• Robin Warner - Managing Director at Van Tulleken Company. K-12 Market
• Vivek Kamath Director Berkery, Noyes & Co. - Higher Education.
• Mark Marchesano with the Jordan, Edmiston Group (JEGI). M&A in a Turbulent Market.

It is sponsored by Empirical Education.

Key insights:

• Look to the UK market - it is an 18 month leading indicator of what is going to happen in the US market.
• Professional Development is now mandatory for all solutions in the UK. Are publishers using this to hold open source at bay or is this a real switch taking place?
• The US market is contracting - there are fewer strategic buyers because they have all merged and the Private Equity guys are sitting things out for a while.
• Buyers don't want to take any risk right now - only companies with proven business models, strong teams, and organic growth need apply.
• For profit higher ed is growing - the economy is actually helping with this as people look to expand their skill base.
• Expect to see many buyers looking for bargains over the next couple of years. Don't expect to see much in the way of IPOs.
• In K12 multiples are higher (almost double) for companies that have a strong technology component - but it has to be integrated well - it can't be a bolt on.
• Multiples are higher for Higher Ed than K12.

For my more free form notes follow below the fold.

Continue reading "Financial and Industry Analyst Views on the Education Technology Market" »

I will be blogging today from the Software Information Industry Association's Ed Tech Forum 2008. The event is taking place at a monument to mid-20th Century American hegemony - the Princeton Club in New York.

This is the first year they have had a real blogger friendly environment - they have set up a table with power and easy access. The other bloggers here are Annie Teich and Ken Royal. Several of us will also be tweeting the event - look for the tags edtech08 and #etbf.