The Education Business Blog

Is the instructional materials market in the tank? I've spoken with people at a dozen companies who are all seeing the same thing - since November 1st a moderately down market has dropped like a stone. A senior executive at one of the big 4 publishers flatly stated that this was the worst he'd seen it in 35 years. I'm inclined to agree.

Since this appears to be an industry wide phenomena how should companies react? That depends on whether you think this is a temporary stall or a permanent realignment of funding for materials. How you see that depends on whether you focus on the supplemental or basal market.

For the supplemental market the evidence points towards a stall - at least so far. Low sales numbers don't match the funding availability, there is no evidence that a huge amount of funding has been pulled from the market all of a sudden, What we do have is an abundance of uncertainty which is prompting districts to sit on the funds they have.

On the basal side it is another story. In general states are stalling, canceling, and opening up their adoptions as a means of responding to budget shortfalls. Given the long wave nature of adoptions even stalling is more than a temporary problem for the large publishers. The large publishers have reacted accordingly with McGraw-Hill laying off over 500 people and HMH a smaller number. It appears that the brunt of those layoffs occurred in adoption states. States also appear to be using the crisis as an opportunity to reform adoption rules in ways that open them up to new media and competitors (technology).

As a general rule a down market for basal materials means an up market for supplemental as schools fill gaps and extend the range of the basal programs. In this market the best we can hope for is probably level funding for supplemental, which given the dismal numbers on the basal side amounts to the same thing. As the old joke says "I don't have to outrun the bear, I just have to outrun you…"

The current market is a noxious intersection of several trends.

1. Stimulus - Everyone was expecting a cooling in the market when the stimulus program came to an end in September. Then the Feds announced that they would grant extensions through next September to pretty much anyone who applied. Prudent districts will sit on these funds until next summer when they have more information about all funding sources. Technically this isn't bad news - but it doesn't help us right now.

We may also be experiencing a "stimulus hangover" similar to a sales dip in the car market after a huge round of incentive driven purchases.

2. Adoptions - While state tax receipts have stabilized and even started a very slow crawl back they are still too low to fund essential services. Witness California cutting $1 billion from K12 and Higher education. Numerous states have cancelled or postponed adoptions and there is some evidence that this whole market mechanism is unravelling before our eyes. Since many districts don't know when they will be able to buy core materials they are husbanding their available funds for a much broader array of products than in the past - competition is more intense.

3. Technology - The success of blended print/technology products is upending the traditional buying processes in districts. This is the result of new regulations on the adoptions that are moving along that allow districts to purchase in many media rather than requiring a book. New product evaluation procedures need to bring both textbook purchasing and technology experts together. This is taking some time to figure out and gumming things up.

4. Waivers - The Department of Education has created uncertainty about accountability requirements by moving ahead with the waiver process. This is really a result of Congress's inability to pass a reauthorization of ESEA (NCLB). Something had to be done.. The new guidance districts are getting from the feds is often in conflict with existing regulations at the state level - until this is resolved districts won't be comfortable releasing funds they already have.

5. Budget - The Super Committee failure at the end of October aligns almost perfectly with the stall. Correlation isn't causation, but in this case a good argument can be made that uncertainty about the availability of federal funds cascaded through the decision making processes under way at districts. As of the end of December the new budget actually increases Title 1 and IDEA. This was too late to help with December sales but should free up Title 1funds in particular in the new year.

6. Rescissions - As part of the DOE applying the existing rules in a tight budget they are getting stricter with states about rules and regulations. This has resulted in some states seeing rescissions of already allocated funds. These are not large amounts - 1-1.5% in average. But for cash strapped states who can't make up the difference it is creating a huge problem. Until people at the district level have certainty on the funds they can spend they will wait.

Decisions Decisions

So what should companies do? Do you take short term actions to tide you through a couple more months of uncertainty or do you plan for a different future? Market mavens are counseling a wait and see attitude - expecting that once the budget issues are resolved in the next 6-8 weeks that the funding levels will be pretty close to flat. They are urging supplemental publishers to refrain from doing anything drastic until we have more information.

From the outside the layoffs at McGraw-Hill and HMH are linked primarily to the cratering adoption market and teeing up new investment in technology solutions. There may be some correlation to the short term dip, but they appear to be strategic moves addressing longer term trends. In other words they probably are not harbingers of what smaller companies should be considering.

In the end every company will have to make their own informed decision and accept the consequences. Get out there and talk to some customers, consult the folks who track funding, look at your product pipeline, and match your response to your findings. There will be no "right answer."

eBooks, iPads, and the Kindle are changing the fundamental structure of the publishing industry. From a strategic perspective they are having the largest impact on the development and pricing of products. In other words it is affecting the "what" deeply. The "how" has not changed all that much, regardless of whether you are selling print and/or technology.

There are four fundamental strategies for a growing a company in the K12 sector because even in the best of times K12 is (mostly) a zero sum game. In 2008 I wrote a post about this competitive dynamic:

In normal times education budgets grow at 2%-5% a year. Most start-ups or new products need to grow at a huge multiple of that - 30% to 300% or even more. Mathematically in order for you to grow someone else is must lose out.

K12 Growth Strategies

How does a company go about "stealing" share from other players in the market? Below we look at innovation, distribution, acquisition, and diversification.

1. Innovation - This is the most obvious - if you build a better product people will flock to you while ignoring the tired offerings of your competitors.

The best example in the market today is interactive white boards which are now in over 60% of classrooms (70% is considered market saturation for most technologies). This has mostly happened over the last 5 years.

Since this platform is now ubiquitous a new innovation frontier is content for these devices like Saddleback's excellent math programs.

PCI published our award winning PCI Reading Program - the first research based comprehensive program for intellectually disabled students in decades. It is designed for today's Special Ed population, including a much higher number of students with autism. Tellingly it is a combination of print and software. This product line has seen explosive growth in a rough market.

Success requires a clear vision of market needs and how to apply new tools to those needs in an economically efficient way. Easy to say, really hard to do.

2. Distribution - Distribution is the achilles heel of all K12 start ups. If you have something innovative making more people aware of your innovative solution will drive new business. The problem is that there are 3.8 million teachers in the US and they are bombarded with marketing messages. Cutting through that clutter at that scale takes time and money.

The largest publishers have actually contracted their distribution networks in the last five years. They collapsed their supplemental teams into their core basal teams with the predictable result that the supplemental business has shrunk. There is a fair debate on how much of this shrinkage is falling demand on the customers' side and how much is publisher neglect. What is clear is that the publishers' actions have fueled the fire at some level.

This has created opportunities for mid-market players with niche distribution networks to fill the gaps at both ends - with their own products and as distributors for larger and smaller players. As I noted last fall:

"...[in the attention economy] access to expertise becomes very valuable and companies that can help their customers make informed, relevant, and effective decisions will thrive."

3. Acquisition - Between starts ups innovating new learning technologies and mature mid-market companies seeking exits Education is a target rich environment for those seeking acquisitions.

The core challenge has more to do with investor expectations for returns on capital and the speed at which the education market moves. Due to the stickiness of education solutions once they are adopted they pay out nicely over a long period of time. Put another way - the payoff is there in this market but most investors are not patient enough to earn it.

Right now the larger publishers seem to be sitting this out but people looking to enter the market - like News Corp - are active. Private Equity groups are circling as well but many probably see education as a low risk hedge rather than a core investment. The VCs are quite active - but they are investing in small innovative start ups.

One of the more interesting plays may be marrying the playbook of the PE and VC camps. Leverage the distribution muscle of an established player than can reach across the market with the disruptive innovations coming from the smaller players through creative acquisitions. Culturally and operationally there are significant challenges in this approach, but the payoff if done correctly is a dramatic reduction in the time to market for innovations at a time of disruptive change.

4. Diversification - Another approach is branching into new markets. There are opportunities in corporate learning, education systems in other countries, tutoring, trade publishing, home schoolers, etc. for publishers who currently sell just to schools.

This mistake that may company's make is underestimating both the changes in product design and the distribution challenges associated with moving into other markets.

Does your box say "program" instead of "programme"? At a minimum you will need a new box if not a complete page review and spelling update for the guts of your program if you want to sell it in the UK or Australia. Are you ready for the rough and tumble of trade publishing or corporate learning?

Moving into new markets requires sustained discipline as you learn the rules of the road and a willingness to invest over a long haul. If you are looking for a quick hit don't waste your time on this approach.

Summary

If you are thinking about how to grow your business (rather than just holding on in tough times) then some combination of the four approaches outlined above is where you will probably end up. Your vision, access to capital, and discipline will determine what the right mix is for your company.

I've probably missed some obvious alternative to the four core growth strategies outlined above. Feel free to drop me an email or comment and we'll update the list.

In "Four years into the ebook revolution: things we know and things we don’t know" Mike Shatzkin does a great job of summarizing the state of the trade publishing business. Education Publishers take note - this is your future.

In "Predicting Player Behavior and How Zynga Profits From Data Analysis" John Rice picks apart the Wall St. Journal's article (paywall) with an eye to education. Talk about data driven business models is all the rage in EdTech - this is what it really looks like. Money quote:

"We feel that a purely data-driven approach has significant promise for creating accurate predictive models of player behavior in games without the difficulties associated with earlier modeling techniques."

I'm involved in the LRMI (which I'll be blogging about in more detail). I'll also be speaking about this in the at the Frankfurt Book Fair in two weeks (Hall 4.2 Hot Spot Stage Fri Oct 4th, 4:15 PM).

As I used to say to my kids when I dropped them off at school "Have a great day, if you can't have a great day have a good day, if you can't have a good day there is always tomorrow."

OPOL

There are bad ideas that become iconic for every era because they were popular fads. Pet Rocks, the Pacer, Supply Side Economics, and .com groceries all come to mind.

Looking back we all scratch our heads and wonder - why?

Gamification, ripping the reward and recognition systems out of video games and applying them to behavioral modification is likely to stand in for our current times in the future.

In the attention economy everyone wants stickiness, products that get used a lot. Some of the stickiest products ever invented are video games. World of Warcraft has a whole genre of humor dedicated to how obsessive players are. The list of sticky games is long, Whyville in education and it's many spawn like Farmville on Facebook come to mind.

The most common elements in gamified applications are:

• Achievements and Badges
• Leader Boards
• Progress Bars
• Virtual (or real) Currency
• User Challenges

Please make the stupid stop.

Personal Experience

The opinions expressed in the column were earned through experience. Like many in the education game community, I was initially excited about extending the power of games to other contexts. But as I used these tools I found that they could spur a week or two of use but they lost their punch quickly and faded away. After the 5th application the pattern started to emerge.

I've been using. Weight Watchers excellent iOS app for a couple of years now. It is useful and well designed with plenty of what could be considered game like elements. But it is not a game. Tracking your food necessary for success but is still a chore. I never stayed up until 1 AM trying to get to the next level of weight loss (hmm but maybe I should...).

Based on my experience there are three fundamental errors that underly the rush to gamify everything.

You Are Unique - Just Like Everyone Else

The first error is assuming everyone responds the same way to game mechanics. There is quite a bit of literature on the different styles of gameplay most of which builds on Richard Bartle's work. Anyone who has spent a meaningful amount of time in the on-line game arena quickly identifies with Bartles four categories of Achievers, Explorers, Socializers, and Killers.

Simply put. gamification only works on a sustained basis for a subset of the population - it is not a universal panacea. Not only that but the Achievers often play for the recognition of the other groups - so only focusing on this one group omits the necessary context of Achiever's motivation.

Systems Theory

The second error is assuming that you can separate the reward system from the other elements popular games and have it work. Non-gamers, most of the people throwing time and money at this problem, see the reward systems in games and make the assumption that you can simply repurpose the badges and achievement trees elsewhere.

If you took a steering wheel and handed it to someone who knew nothing about cars they could describe in great detail what it is. It is round, hard, ridged, has a stem, and there is a large bag packed into the center. What they couldn't tell you is what it does. Context matters for true understanding.

Why is it round (human arms), why is is it ridged (human fingers), what does that stem do (control of other front end systems), why is that bag there (human lives). None of those things make sense without understanding the human and other machine components of the larger system.

If you want to understand game reward systems you need to play a lot of games so you can grok the context.

Conversely if we hired a master mechanic and told them to go buy the best example of every car part we would not end up with a functioning automobile. Systems design also has to apply to context. Our steering wheel has precise dimensions so that it attaches properly to the steering column and provides proper sight lines to the speedometer.

Bolting cutting edge game mechanics onto bleeding edge mobile apps does not a useful thing make (usually).

Remove reward systems from games and you do not have a functioning mechanic. Even an extremely well designed gamification system out of the context of the rest of the game has no sustainable use. You might get short term gains but only the obsessive compulsive Achievers will stick with it. (That is a market segment, but not the one everyone is shooting for.)

Game Contexts

There (at least) three contexts in games that interact with the reward elements in ways that make the overall system work. The true value lies in how the components ALL interact. I will refer to these as components but in practice they are nested systems themselves with their own internal dynamics.

Narrative context - scratch 90% of gamers and they tell you that they engage with the story line of the games they play. In a casual game it may just be that the birds are angry, in an MMO it may be an intensely co-created universe like Eve Online. Since so many of these involve elves and rescuing princesses or invading alien bugs non- gamers too easily dismiss what they see as silly window dressing. Don't. At one level the reward system is the marker for your progress through the narrative. It makes the immersion more immediate and reminds you of how far you have progressed.

Social context - we are social and competitive beings. These two elements are linked. It is hard for me to sustain competitive fervor against people or groups that I am not socially close to. Trust me on this one, I'm a Red Sox fan. Or pick any college rivalry. Why is Words With Friends so compelling? What keeps people playing World of Warcraft for years on end? It is the relationships and the rivalries, some friendly some not, that emerge from playing together. Competing with random strangers to be "mayor" of a local coffee shop isn't a sustainable business model. The novelty wears off and we drift off to places where we can truly interact with other people.

Fun context - last but not least game reward systems are situated inside of an activity that is fun. Taking a boring chore and bolting game mechanics on it doesn't make it any less boring or any less of a chore. Put another way, sober up a horse thief and you've got a sober horse thief.

In many ways these relate back to the other three categories identified in Bartle's work - Explorers like engaging with the narrative, Socializers revel in schmoozing, and Killers play for the joy of offing competitors. All rely on the presence of the others to get the full experience.

Conclusion

Education and learning in a school setting is a long term project not subject to quick fixes and panaceas. It would be a mistake for Education Publishers to embrace gamification without the larger contexts of games. I passionately believe games can make a huge difference in learning, but we need to embrace all the elements for it to work.

I'm not saying reward systems can't be well designed , but you can't just take the game elements out of context and have them work on a sustainable basis.

For he that gets hurt
Will be he who has stalled
There's a battle outside
And it's ragin'

It'll shake your windows
And rattle your walls
For the times they are-a-changin'

Bob Dylan

We used Michael Porter's Competitive Analysis as a foundation for our discussions. Close reading of this book will get you 50% of an MBA (i.e. fancy ways of saying buy low, sell high). It is accessible to the general business person and provides a framework that has stood the test of time.

Porter posited that there are five fundamental forces that act on an industry and that a change in any one of them can force a realignment. Our analysis surfaced changes in ALL 5.

Porter's Model Applied to Education Publishing

I've highlighted some of the more significant changes we face as they relate to each force. I've ranked them according to the degree of change we expect to see from each force.

Threat of new entrants. Are there new players entering the space with different business models, product offerings, or marketing strategies?

• Technology players are entering the space in large numbers funded by Venture Capital and inexpensive toolsets.
• Privatization players are expanding the Charter School Market. Some of these are writing their own curricula.
• The industry is globalizing.
• The iPad and Andriod tablets are coming.

• Open Education Resources are becoming more sophisticated and better organized. These products are free and funded by large infrastructure companies trying to create demand for their products (e.g. Oracle, Apple, etc.)
• States and Universities are exploring bespoke curriculum independent of publishers. Common Core could fuel this change.
• Wiki's and other web based resources are serving as repositories of static information (traditional role of textbooks). See iPad above..
• Parents are taking a more proactive role in securing learning services outside of school

• Competition for scarce dollars post stimulus will increase the aggressiveness of marketing.
• Education is largely a zero sum game, so as new well funded players enter they will drive for share by competing on price.
• Digital production processes allow smaller players to match the development cost basis of large publishing houses.

• NCLB forced consolidation of decision making at the district level. This has changed both what is being bought (more comprehensive solutions) and how it is being purchased (more RFPs).
• Disruptions in the adoption process due to short term funding crises may become permanent as technology permeates schools.
• Common Core may give rise to new consortia to counter balance the traditional big 3 states (CA, TX, FL).

• Consolidation of large publishers has created a large cadre of editorial and design professionals who are doing work for hire.
• Indian and other low wage spots are competing for production work.
• Technology specialists are in high demand as companies transition from print to digital.

We've all wrestled with each of them at one time or another over the past 4-5 years so there isn't much here that should be a surprise to anyone in the industry. But I hadn't sat down and put them all up on the board at the same time. That was a sobering moment.

We Are Not The First

The only thing new in this world is the history you don't know. - Harry Truman

Some of the lessons I take from their experience are:

• Pricing models will rationalize to the unit of appreciation
• We need to learn to co-exist and compete with free
• Focus on your true value-add (there is still high demand for music producers)
• Distribution still matters, even if it changes
• Nothing ever goes away in the classroom, but new tools are added all the time
• New entrants usually under-appreciate the scale at which education works
• Institutional buyers will not act like consumers (the iTunes fallacy)

What To Do?

Let him who would move the world first move himself. - Socrates

Sadly, we are also likely to see venerable companies unable to adapt.

The most important thing is to raise your own awareness of the forces of change and to think before you respond. Can you proactively get ahead of the curve? Are there defensive moves to buy yourself time? Do you have the right resources to survive? What do you know that the new guys don't?

Bottom line - map out a strategy and then make sure your company is fully aligned to executing it. You may need to invest in training, you may need to overhaul your production process, you may need to secure financing. You may need to do all of this and more.

Half measures will avail you nothing.

On that note lets have a young Mr. Dylan play us out where we started. The original - still the best version.

What do you do with 112 degrees of dry Texas heat on a Sunday afternoon? We sheltered in the Alamo Drafthouse for the Harry Potter matinee and brunch.

Our 17 year old son Peter was sitting between Leslie and I, his broad shoulders connecting us as a family. The cartoons had run, the infamous "no talking" video had played (nsfw), french toast was cooling, the lights dimmed.

As the Warner Brother's logo emerged on screen I began to cry. This final movie, at the start of Peter's final year of High School, was a moment that caught me completely off guard.

It was the realization that the childhood of both our boys had been wrapped neatly by J.K. Rowling's books and movies. Peter is a young man and will only be living with us for a few more months. Our children literally came of age to this iconic coming of age literature. There are millions like us.

I remember reading the first books to our boys when they were still wearing footed jammies. 7 was the magic age at our house when Harry was introduced. When I was home we'd settle in on the couch in front of the fire. When I was traveling I used first generation video chat to read to them from afar. They'd be snuggled up in one of their beds with a laptop before them and I'd be in some bleak Westin. The distance didn't matter, magic happened as the words flowed.

A couple of months after the first movie came out Leslie was walking into the supermarket with our two redheads. A five year old girl stared in awe and whispered to her mother that the Weasley brothers were there. Some days of mischief proved the wisdom of her words.

Having friends at Scholastic made me a hero - we were guaranteed copies of the books as soon as they were available. Thank you Jean.

Our sons were roughly the same age as the main characters as the series unfolded. The personal struggles of Harry, Ron, and Hermione bumbling through puberty were the same ones our boys encountered. Not the dark magic part though, thank goodness.*

The Potter series created opportunities to discuss the role of good and evil, the nature of friendship, the power of learning, and human sources of danger in the real world. The fantasy context made these conversations safer, but there were valuable lessons embedded throughout. Only one other series rivaled Harry for the depth and complexity of the issues presented - Lord of the Rings.

These stories will resonate for future generations; the long tail of cultural influence is just beginning. But there will never again be a generation that grows up alongside the unfolding saga, first in print and then in the movies.

It was the languorous unwinding of the story over years that was part of the magic. Too often in our "everything, all the time" culture when something captures our fancy we swallow it in one large gulp.

With Potter you had to wait, you had to remember, you had to savor. Just as we have with the story of our own boys growing into men. It was that echo that gobsmacked me.

The good news is that unlike stories with tidy endings life just goes on. Our children transition into young adults, their adventure continues to unfold (but the stakes get higher). I hope that the lessons from the books and our discussions come in handy.

The art of storytelling is not a natural act for education media companies, but as we move to transmedia it becomes essential to holding an audience. The craft of narrative has a long and healthy future ahead of it in education, but we need to be recruiting for this outside of our normal orbit today.

Thank you Ms. Rowling - your story was a lovely frame for the childhood of our sons.

OPOL

* Spoiler alert - I'm pretty certain that had Bellatrix LeStrange ever come between Leslie and the boys that she would dispatch Bellatrix with the same gleeful ferocity as Mrs. Weasley.

Is the Internet making us dumber or are we just using our brains in new ways? The BBC posted a great overview of a new study which makes the case for a neat trick the brain is pulling now that we have 24/7 access to the web.

The article notes:

"When participants knew that facts would be available on a computer later, they had poor recall of answers but enhanced recall of where they were stored.

The researchers say the internet acts as a "transactive memory" that we depend upon to remember for us"

When it comes to designing education media this has huge implications for every aspect of the products that come out of our industry. Design, marketing, implementation - all need an overhaul in light of this one simple concept.

This is part of why I'm so excited to be participating in the Learning Resources Metadata Initiative (LRMI) as a delegate from the publishing industry. I'll be writing more on that in the coming months as the project gets off the ground.

Start your week on a positive note and go read the BBC's article.

At ISTE 2011 in Philadelphia this week we were blessed with gorgeous summer weather, hot but not oppressive days and cool evenings perfect for a city walk. The show was hot too, well attended and and well run. So it may seem like an odd time to declare that this trade show's days are numbered. Tech shows like ISTE and TCEA are surging in attendance while warhorses like IRA go begging for attendees. Received wisdom is that everything is moving to the tech side.

I'm going out on a limb to argue that the trends of the last 5 years, declining core content shows and strong attendance at pure tech shows, are about to reverse themselves. In the coming years we'll see a resurgence of IRA, NCTM, and other content shows. ISTE will wither to a hard core platform technology event.

After IRA I noted how tech unfriendly the event was - they have a long way to go in encouraging and recruiting tech solutions. As I strolled the floor at ISTE in Philadelphia this week noticed the flip side of this coin. There was very little in the way of core content solutions that are delivered in genuine transmedia packages. It was ALL technology, PURE technology.

A huge part of the maturation of ed-tech is that it is finally blending in seamlessly with traditional media. No longer are schools spending on "gee whiz lets get some tech down the hall" baubles. Educators get how tech can be integrated into core instruction and publishers are following suite, starting to deliver on this demand. For an example see the blending of PCI's Life Science Textbook with games from Filament - "You Make Me Sick."

Also see my last post on how this is manifesting itself in the sales process.

In this world the attendees at ISTE are the dinosaurs. Schools are accelerating towards a time when they are not going to be thinking about tech as something separate and unique. Improving student outcomes with a blend of print, on-line, manipulatives, and professional development is increasingly just "how it is done."

IF organizations like IRA embrace technology they can revitalize themselves at the tech conferences' expense(thats a big if). Schools just want stuff that works to teach reading, math, and to a lesser extent science and social studies. If transmedia becomes the norm then that stuff will be found by the content experts at their content show.

This trend could go far beyond trade shows and change the landscape of trade media as well. Tech & Learning - more focused on platforms. The Reading Teacher - solutions galore. Welcome to the new normal, same as it ever was.

What happens to ISTE in this scenario? There will always be a need for a show for platform technologies and IT services for schools. Some of this could be absorbed by school supply shows like NSSEA, but my guess is the SIS companies, IWB providers, networking consultants, and hardware vendors will always want a place to showcase their offerings. That however is a much smaller show than the one I just walked through.

This won't happen quickly - if I'm right it will unwind over the next 5-10 years and will move in fits and starts. But it sure feels like the triumph of all the evangelists of education technology is to stop being special, set aside, and to blend into the background. For many this goal has been the central theme of an entire career (mine included).

It will be a bittersweet mission accomplished.

When educators choose new classroom materials their first challenge is to sift through dozens of options and narrow the search down to four to five options. In other words before they say "yes" to one solution they need to find reasons to say "no" to a host of other options.

Prior to Common Core the most significant filter was "alignment to state standards." If a company couldn't provide a correlation that showed substantial or complete compliance with a particular state's requirements it never got past the first meeting. No one really used the correlations once the product was purchased, but it was a useful filter to help narrow the field of choices.

In the last six months I have noticed a significant shift in this process. Most districts now require some flavor of "technology" in any curriculum resource they purchase. Like standards correlations they don't particularly care what it is - but they won't consider products that don't have a technology component.

A cynical publisher could throw some crappy IWB activities and Examview into the mix and call it done and they would be in the game. In many cases this is what "Free With Order" really means.

Leading From The Front

But I don't believe that is a sustainable competitive response to this shift. Digitization is a true long term wave sweeping over instructional resources. Slapping some junk in the box or burying your head in the sand are not sustainable survival strategies.

Rather than taking the easy out I believe publishers have a responsibility to map out a compelling vision for how they see technology being woven into classroom practice. Like many I don't believe we will ever get to a pure technology solution - but the blend of traditional print, manipulatives, and technology is evolving in some very interesting ways.

This kind of work isn't easy - it involves developing a point of view and taking real risks when you allocate people's time and capital. But the winners in this race will be those who do unto others rather than waiting to be done unto.

At the end of the day educators and students will select the winning visions as practice evolves. Only one of the components of the solutions that emerge will be publishers' contributions. But - we have an opportunity to add significant value to this process and justify our presence in an era of user generated free content.

You must be present to win.

The role of textbooks in a rapidly digitizing world is an open question. The publishing industry needs to develop a new paradigm for commercially produced instructional materials or it faces extinction.

• Will they be replaced by digital learning packs of atomized content?
• Will Professors self-publish whatever materials they need?
• Will piracy destroy the textbook market?
• Are static textbooks even relevant any more when information is exploding at an exponential rate?

Now, thanks to the folks at Nature (a division of MacMillan) and their new eTextbook Principles of Biology, I glimpse a promising path forward. As is so often the case with paradigm shifts once it "clicks" in your head it is so simple that you wonder that you didn't get it earlier.
Better late than never I guess.

The product itself is innovative but from what I can tell not groundbreaking. It won't ship until September but from the description it sounds similar to Our Choice or Roma, excellent examples of cutting edge iPad publishing for non-fiction.

The New Model

The real innovation is in the business model. There are two elements of their model that are game changers.

A. Lifetime access to updated content. I think most grads have a few core textbooks that we still reference for our vocational and avocational interests. Personally I've gone to the well with Principles of Corporate Finance and Roman History over the years. But both of those fields have moved on since I studied them decades ago. It would be a huge value add if I had regular updates as each field advances and the materials are changed.

Right now publishers leave this value add on the cutting floor. We have to update our materials anyway to keep the content current but we have no way of passing that work on to prior customers. If that can be done digitally with a marginal cost of close to $0 it is a big win for the student and the publisher. It provides a compelling reason to purchase rather than pirate.

B. Site license purchases that can be bundled into tuition. This change has two important aspects.

First - site license pricing will upend one of the inequities in the college textbook market. The decision makers (professors) and the purchasers (students) are two separate entities and the purchasers have very little individual buying power. By uniting the decision and the purchase in an entity with a great deal of purchasing power (the University) it should help control costs while delivering a superior product. Publishers will have a huge amount of costly friction removed from the market as well (stocking college bookstores).

Second - there is a perception that textbooks are an out of control cost. If colleges broke out the cost of the new stadium or the Faculty Club you might see more outrage over tuition hikes. Compared to tuition which has doubled every 9 years since 1958 (roughly double the rate of general inflation), textbooks are a bargain. Textbooks are a small fraction of tuition and haven't increased anything close to that rate. But, because they are a direct purchase by students they get a lot more scrutiny.

If costs are controlled from site license purchasing and bundled into tuition the perception that textbooks are a rip off might subside. The schools benefit by building a lifelong connection to the student as well (assuming their subscription travels with them at graduation).

In the end this would make the university textbook market a lot more like the K12 market where states and districts make the buying decisions.

Conclusion

For K12 the far bigger innovation here is the lifetime "membership" in a textbook that comes from creating a student account. Building, nurturing, and adding value to that relationship over the long haul is a completely new way of thinking about our business.

For Higher Education the site license shift will have huge implications for who, what, and how instructional materials are purchased. It will upend a lot of sacred cows so it won't go down easily ("no Professor, you don't get to choose any book you want...") and it isn't a panacea (e.g. it won't solve the problem of the cost of niche materials).

In both cases the economics are pretty compelling and point to a way forward for publishers that skirts the piracy issue with innovation rather than enforcement.

Next

In a future post I'll write about the challenges for publishers if they begin to implement these ideas on a broad scale. These changes will upend decades of established business practice, process, and systems.

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Hat tip to Michael Cairns over at Personanondata for highlighting this topic.

John Scalzi was interviewed by Library Journal recently. Among other things he addressed ePublishing, copyright, and the role of libraries in our culture. As always he dispatched wisdom with a solid dose of wit.

The whole article is here - it will be a well spent 10 minutes to get your week started.

On the cultural relevance of libraries:

"I'm very pro-library in a philosophical sense, because I think that every city, every town, every village, every place where there's people needs to have a repository of knowledge and people who can help those in that area use it....the point for me about libraries is not how they work for my career but basically how they work for my culture."

On ePublishing from an Author's perspective:

"I could [self-publish] right now if I wanted to write a novel, pay someone to edit it, copyedit it, put it on Amazon, the iBookstore, and Barnes & Noble retail channels and get 70 percent of that going directly to me. But then the question becomes, what are my core competencies? Do I really want to spend all that time doing all that other crap when what I'm good at is writing books and then telling people, "Hey, I wrote this cool book!" ...I'm not an artist. I'm the worst copyeditor in the world. So I don't want to do that. I want somebody else to do that."

On copyright terms:

"While I'm alive and while my wife is alive, specifically, I want to make sure that we receive the benefits of the work. But the idea that the great-grandchildren I will never meet might be sitting there going, "Oh, well, my great-grandfather wanted this about his art, and he was very serious about this." It's like, "Dude, yeah, I don't even know you. Go out and get a job." Life plus 70 is completely ridiculous. Life plus 25 is sufficient."

If you like his thoughts here I recommend Scalzi's blog Whatever where he provides a real practitioner's insight on ePublishing and his books which are excellent SciFi.

Will e-publishing kill traditional publishing houses? The following is presented as an antidote to this meme.

John Scalzi is not only an extraordinarily good science fiction writer he is also a pioneer in e-publishing and a very funny blogger. I loved this piece because it encapsulates so much of the current self-absorbed silliness and wishful thinking that poses as strategic thinking in publishing and those trying to kill it.

Take a deep breath and ask the questions deeply about what it means and you will see how wrong most of these statements are.

Scalzi gets the last word:

"... if you see one or more of your favorite arguments for how ZOMG EPUBBING WILL CHANGE THE WORLD FOR EVAR on the bingo card, you can be assured that your argument is not, in fact, anywhere as good (or original) as you might think it is. You might wish to cultivate new ones, or at least learn why your favorite argument isn’t always super-mega-ultra-convincing to those of us who have to think about this stuff as it regards our professional lives."

What is good product development? The answer is deceptively simple to answer and devilishly difficult to pull off. Basically people want three things - better, faster, cheaper. All the complicated analysis in the world boils down to these three fundamentals. Get them right and your odds of success go way up.

You need to nail at least two of them, preferably all three. You need hard evidence to prove you are doing them - and the definition of success must be from the customer's perspective.

While it is easy to see how this plays out in technology (better/cheaper = iPad 1 vs laptop, better/faster = iPad2 vs iPad 1, cheaper/faster = Netbooks vs. iPad) it is more difficult to suss out what this means in education.

Tailoring your mix of these benefits really depends on what specific customers need. Here are a four examples - one from each possible combination.

Variations on a Theme

Better/Faster/Cheaper - For certain students self-paced on-line curriculum fits this bill (Apex). It isn't a universal solution but for self-motivated students it can accelerate learning while holding costs down.

While many technology solutions claim they meet all three of these, in truth very few do. The reason is the infrastructure required - high end computers, broadband, professional development, and wi-fi, etc.

Better/Faster - High end interventions that take unorthodox approaches to teaching and learning often fit in this category (like PCI's SpellRead). If there is solid research to back up the claims these solutions can be winners even though they don't compete on price. They often come with a real commitment to staff development. Versus the cost of students dropping out they are not expensive, but versus traditional reading programs they are. You don't use it where you use traditional programs so this trade off works.

Better/Cheaper - Sometimes a book is all that is called for, and renting that book is better than buying it. Welcome to Chegg. There is evidence that students at the university level who have access to digital textbooks migrate back to print after 2-3 semesters. Print is still cheaper and easier to manage than digital in many cases. This won't be the case forever - but this highlights the essential insight that the only thing that matters is your customer's viewpoint on these issues.

Faster/Cheaper - Given the evidence we have today many of the flash based learning games fall into this category (Food Force, Peacemaker). We don't have enough hard evidence that they are better yet - but they certainly get students engaged with the content more quickly than traditional materials and many of them are free. When we have definitive evidence that they are better they will be a home run.

Success in this arena is tightly linked to picking the right target market. My thoughts on that are here.

What are the missing skills needed in education publishing to create 21st Century products for 21st Century learners? I penned a thought experiment for EdNet on this topic.

Education Publishing’s Own 21st Century Skills Gap – Change Begins At-Home Edition

Fun Architects, Content Marines, Talent Wranglers, and Shibboleth Hunters all get shout outs.

It was fun to step back and think about "the dog that didn't bark."

What gaps do you see that will require new skills?

A fresh batch of piping hot links that may be of interest to those in educational materials.

Are game mechanics the key to great social media marketing? The following link weaves some fascinating connections between the world of gaming and the world of encouraging people to try new things (the essence of marketing).

Everything I ever learned about marketing I learned from Dungeons and Dragons by Ian Lurie at Conversation Marketing.

What does this mean for students AND teachers?

Can authors simply ignore publishers in the world of Kindle and iBooks? Amanda Hocking, a 26 year old living in Minnesota, is minting coin at an astounding rate with no publisher.

The Very Rich Indie Writer over at Novelr.

Can this happen in education? You betcha.

How does ePub overturn the economics of print distribution? Mike Shatzkin's take on the demise of the wholesale model in trade publishing is worth a look. These economics are headed towards education and we'd better sort it out sooner rather than later.

Random House joining the (formerly) Agency 5, and what it might mean at the Shatzkin Files.

As Ted Turner is fond of saying "Lead, follow, or get out of the way."

Seth has a new book. Go read it (in your iPad).

Who Will Say Go?

We need a whole lot more of that in our business.

What is the best way to break into education publishing? If you are young and starting out what launching pads set you up well for a career in the world of instructional materials and software?

I'm bullish in the industry and think we are in one of the most creative and fascinating eras as traditional print publishing blends with digital production and distribution. There is going to be a huge amount of disruption but there will be an enormous amount of opportunity in the midst of all the changes.

In the first part of this series I focused on the best ways to prepare and organize your search. Today I turn the focus on what kinds of jobs industry entrants should consider.

Print or Software? (both!)

Digitization is hitting instructional content full force but books are not going away any time soon. The cost of equipping every student with a tablet or laptop is still prohibitive (despite the bleating of the hardware companies).

For this reason seek a blended tech/print publisher rather than a pure tech or print play. Print and software are built using two very different paradigms - each of which has a lot to teach a newcomer. Learning how to work with both will set you up for the long haul.

Company Size

When I started out in the mid '80's I was told to get operating experience at a large company. At the time this was a sound approach - big companies had the resources to invest in new people that smaller companies didn't and seeing well developed processes deployed at scale was a solid base.

In the age of agile development and a market in the midst of disruptive change I don't think that advice holds. Most of the big companies are thrashing around trying to find a strategy that will hold. While there is still a great deal to be learned in a large publishing house I'm not sure I would start there today.

As the bigs have consolidated over the past 5 years many of their best people have fled to smaller companies where the politics and uncertainty are more in their control. If you are looking for good mentors (and you are interviewing them as much as they are interviewing you - right?) then you can find them there.

More importantly the small companies can react nimbly to the changes going on around them. In eras of disruptive change the big organisms die off and smaller ones fill their niches (to become tomorrow's giants).

Go International

Education publishing is globalizing but until recently it has been a very parochial business - companies were organized around serving specific nations. Culture and politics still play a huge role in what materials get selected and produce a drag on the pace of globalization. But the long money at places like Pearson and HMH is on a fully global industry (HMH's slogan is "Your Global Education Services Provider").

Because the industry has been so fractured there are few people with experience who know how to work the international side of things. This creates an opportunity for new people who have taught overseas or who are willing to take on the unknown.

Even if the job you start in isn't international in scope be sure the company you are talking to is engaging internationally.

Jobs To Consider

I polled a table full of industry veteran executives on what jobs they would want to start in today if they were in your shoes. Here are some ideas - but don't limit yourself to them. As I stated in my last post companies hire people to solve problems - your goal is to find a problem that you have some basic aptitude for regardless of the title.

Sales - There is no better way to understand how a business really works than to go out and sell. When I started in the Cable TV industry in the early '80's I was filled with idealism about arts and political programming. Knocking on doors taught me that people just wanted more sports, more reruns, and more movies.

A few seasons selling to schools will help you understand the real reasons buying decisions are made and exactly how they are organized. If you are going to be in the sausage business you really do want to know how it is made.

Consulting - Most education companies have a sales role called "Consultant." In this context it really means a former educator who can go toe to toe with the educators on the other side of the table. It is an essential role and one that former teachers and administrators are uniquely qualified for. Also, if you think asking for the order is icky this may be a good way to get your sales experience.

Consultants travel a lot - you will learn to love your local airport.

Customer Service - This is another great entry spot, particularly if travel is not your cup of tea. Spending your days talking to customers is as good a grounding in the realities of the business as Sales.

In particular Customer Service gets an up front and close look at the systems that power the business. In an era of data driven decision making that is critical experience.

Teach - You should consider a couple of years in the classroom. I'm a bit of an anomaly in the business in that my experience was teaching Japanese businessmen English for half a year. Most senior people in education started as teachers and many went on to be administrators before crossing over.

But there is an interesting and potentially better approach available to today's initiates. Seek out one of the many virtual school organizations and teach on-line. This is going to be a critical component of the product mix for all publishers going forward and understanding what works and what doesn't in this environment will make you more effective.

While you are teaching seek out publishing companies and see if you can get on an advisory board for new products or act as a part time writer. Many people use this approach to get into editorial. It gives both sides the opportunity to get to know each other.

Other jobs to consider if your skills bend that way are Marketing Support, Business Analyst, and Editorial Support.

Purchasing, Finance, and Operations are essential areas - but the skills in these departments are generally transferable between industries rather than specific to education publishing.

If you already have a foundation in one of these areas and burn to enter this particular industry they are great places to get your foot in the door. But if you are starting out with the specific goal of getting into ed publishing I'd recommend one of the other positions listed above.

Summary

Taking the time to learn the craft early will pay off in spades as you build your career. Resist the urge to skip steps, the most important of which is working directly with customers (or being one...).

Even if you have a burning desire to do something very specific - editing, coding, selling - you will probably benefit from filling some of the other roles in an education publishing operation first. There is no substitute for boots on the ground experience.

Welcome, we need you!

(read Part 1 here)

How do you find a job in education publishing or technology?

Recently I was asked for my thoughts on entering our industry by a mid-twenties alum of my high school. In the course of the conversation I found myself getting re-excited by all the great prospects in our industry. It also spurred me to turn my own experience over and reflect on what worked for me 25 years ago when I was in his shoes.

I'm grateful I was asked to help because it brought my focus back to why we do what we do.

My thoughts on this fall into two categories. Today I'll share a couple of timeless ideas for a job search that I've seen work. In the next installment I'll delve into where the interesting opportunities are today and where I'd look if I were just starting out.

Any Job Search - Any Time

Odds are you will find a great job through networking. Monster or more traditional means can help you frame a search but the best jobs surface inside of networks of influence. Your focus should be on accessing those networks. The following tips are the most essential to this process.

Focus on Skills Not On Job Title

Take the time to look at where your particular talents are and have ready examples for proof. Don't say "I want to be an Editor." Do say "I enjoy bringing order to chaos - and here are two examples of how I've done that..."

An interviewer knows you want to be in their business - you are looking for a job after all - what they want to discover is how you will add value to the organization. You do that through your unique talents and your challenge is to bring those into high relief.

In my case I'd taken an eclectic path (street musician, camp counselor, entrepreneur, credit manager, sales, trainee). Early on most of us have this kind of wandering profile. Teasing the common threads out so that you can articulate them takes work.

We are usually oblivious to our greatest talents because we just see it as "how I do things." It wasn't until I'd sat down with "Where Do I Go From Here With My Life" that I learned how to do this. I wrote a 100 page "job autobiography" and then went hunting for common threads. When I was done I'd baked it down to three key bullets that showed how I had added value in every situation I'd been in.

Most people try to cast a wide net in search of "a job." The problem is that most companies don't have "jobs" lying around - they have problems they need to solve. To solve them they want people with the right aptitude and skills to address them. Which leads to the next point.

Be As Specific As You Can Be

The more clarity you have about precisely what you want to do the more successful your search will be. This sounds counterintuitive to many job seekers - which is part of why it works. You will stand out.

The truth is that other than industries populated by sociopaths* most people empathize with those looking for work and want to help. But you need to give them a clear idea of how they can help. A general statement that you want to be employed doesn't help them. The more specific you can be the easier it is for them to understand how to tap their network of influence to assist you.

How should you be specific? If you are doing a informational interview know the industry and general problem set you are interested in. If you are interviewing for a particular job don't focus on the job title - focus on the problems that the person doing the job is expected to deal with and how you are suited for that. Don't say "I'd like to be a Sales Rep." Do say "As we've discussed I have a passion for helping kids learn which is why I want to leverage those skills to reach more learners through education technology. My classroom experience gives me a leg up on the real problems teachers are wrestling with..."

What's The Worst They Can Say - No?

A job search is fundamentally a sales job. When you have your product knowledge down (see above) it then becomes a numbers game. The more people you talk to the closer you get to finding the right opportunity. But reaching out to strangers takes some guts.

Even when you know or think someone has a position I recommend asking for an informational interview. Until you meet them and vice versa the fit remains unclear. If you are not right for them but they are impressed with you they will direct you elsewhere in their network.

A respectful request for help in your search will meet with a wide variety of responses. Some will ignore you completely, some will refuse, but enough will make 30 or 60 minutes available to chat with you that it will work over time.

It is hard not to take the rejection personally - but the reality is that the people you want to be talking to are often extremely busy and your approach just didn't rise above the radar level for them. It really isn't personal so don't take it that way (or find a another way to reach them).

And remember - victory in any interview is at least two more contacts. Reward yourself when you accomplish this.

Putting It Together

Developing a clear idea of how you add value with a precise statement of what you want to be doing will add jet fuel to a job search. Your clarity of how you add value and the precision of your goals will make you stand out in a very crowded field. The reaction of people you meet will be along the lines of "wow - this person has some great skills and a strong sense of purpose and I'd like to help them - I know how to help them."

Finally - Go Outside And Play With the Dog

I love the prayer "God - make me half the man my dog thinks I am." A job search can be a soul leeching experience. In my time I've found that 5-6 hours a day focused on it is all I can productively handle. A little of the lemonade you can make from being out of work is finding time to enjoy your family and hobbies. This will recharge your batteries and keep your focus on what is most meaningful in this world.

Exercise is important - those endorphins make you feel better and you need all of that you can get. I've been in the best shape of my life when looking for work - largely because I spent 90 minutes at the gym mid afternoon 3-4 days a week. It was essential to my sanity.

Next Up

Where would I look in Education Publishing and Technology if I was starting out today.

READ PART 2 HERE

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* Investment Banking and Politics come to mind....

Image credit - Jessica Hagy at Indexed

Do you have a bright idea for new education business? Today's guest post is from the team over at the Zell/Lurie Institute's Social Media Fund. Note that the deadline for submission is February 18th - shake out those fingers and warm up the keyboard.

By Darrin Nagengast

The Social Venture Fund at the University of Michigan is one of the world's first student-run venture capital firms focused on supporting social entrepreneurs. We've been covered in the Wall Street Journal and Businessweek and are currently looking to make an investment of up to $250,000in a groundbreaking social enterprise.

In particular, our Education Circle is excited to review business plans focused on disrupting the traditional frameworks in K-12 education and work force development. In addition to having sustainable and scalable business models capable of delivering financial returns, these enterprises should have direct social impact that targets: improving student outcomes, closing achievement gaps, and improving education about and access to post-secondary and employment opportunities.

The circle will be initially focused on the following areas:
• Learning aids and technology in and out of the classroom
• Solutions to enhance the learning environment
• Human capital solutions
• Information and data management systems
• Holistic solutions to effect student health, mind and/or body
• Engagement, empowerment and increased participation of student stakeholders, e.g., teachers, parents, mentors

While we are interested in plans that meet the criteria above submissions are not limited to this scope if you feel you have relevant and outstanding idea.


Entrepreneurs interested in being considered for funding should send a copy of their business plans to svfeducation@umich.edu by February 18th, 2011.

Education spending patterns have been abnormal for several years. Publishing used to follow very predictable patterns - no more.

Between the Great Recession and ARRA Stimulus funds we have been living in an era of seesaw budgets for three years. Since education spending lags the general economy by up to 3 years this will continue until at least 2014.

I can remember entire decades where budget flows were so steady that you could predict the entire year within +/- 10% after the first three months. In 2008, 2009, and 2010 the first half of each year told you very little about the second half.

Let us review.

2007 - This was generally a normal year but the slowdown began to appear in the summer when property values began to decline. District Administrators could see the writing on the wall for state and local budgets that depended on property assessments and started to pull back discretionary spending.

2008 - The first of half of the year was slow but relatively normal. As the economy tanked the market dropped off a cliff in the second part of the year. The uncertainty of the election contributed - which Districts harboring funds to make sure they had enough to meet payrolls.

2009 - This year started like 2008 ended, but with the ARRA stimulus there was hope in the air. By September the market flipped to a boomtown through the end of the year as ARRA kicked in.

2010 - Stimulus spending continued to fuel unseasonably high purchases right through the summer months. In the fall the market began to stutter - one month up, one month down. The elections and the uncertainty about the role the Federal Government is going to play in backstopping State and Local budget shortfalls has got many Districts sitting on their hands again - just like 2007 and 2008.

2011 Prediction

So what will 2011 look like? The honest answer is "who the hell knows?" But that has never prevented me from having an opinion.

The big story this year will be the disaster in State budgets. Since over 50% of all spending on education nationally (and more depending on the specific state) comes from this source the crisis here will have a significant impact on education spending no matter what happens at the Federal level. Every penny of stimulus will help - but I don't see a scenario where the Feds can cover the shortfall - palliative care is all we will get.

January to to May - the market will look more like the second half of 2008, with schools and districts conserving funds as the Feds and States sort out who is going to pay for what. A government shutdown over the debt ceiling or other partisan wrangling in DC would exacerbate this further, particularly if the threat of recisions are in the air (which they are).

June-September - Barring changes to ARRA the remaining funds have to be spent by mid-September. Educators will scramble to make sure they maximize their access to these funds before they expire leading to a boomlet in instructional materials. One option on the table is extending the spending deadline - which may actually be a good thing for publishers if Districts get another year to spread the funds over.

This presents a unique challenge to publishers who will need inventory and staff to supply the boomlet. Sustaining this commitment through the first few months of the year will require some fortitude and more attention paid to the pipeline than to actual bookings.

October-December - Free fall. Post stimulus and deep into state budget crises I expect spending in these months to fall to late 2008 levels. Districts will be struggling to meet payrolls and funding for other resources will be very very tight.

Summary

The politicians are in an unenviable position. On the one hand the money really isn't there - particularly at the state and local level where balanced budgets are the law. On the other hand a child's need to learn isn't linked to the economic cycle - and in fact the forces driving the realignment of our economy call for a more educated workforce.

Short changing education helps balance out of whack budgets - but it also puts us as a competitive disadvantage on the world stage. How this question is resolved in the next 2 years will be THE central factor in how the instructional materials market evolves. The ESEA reauthorization will be the pivot point for this national conversation.

As always - getting involved in legislative affairs is one of the best investments a publisher can make. Even if you don't have an impact on actual legislation staying in the loop on what is coming out of the budget sausage maker will give you a leg up on the market.

Update - See this New York Times article for details on how this is playing out in Illinois. ht Tim McHugh at Saddleback.

Education publishers and Learning Management Systems have a long and somewhat checkered history. Open source publishing, XML, and content digitization are changing the LMS landscape rapidly. In today's guest post Louise Dube outlines the issues facing companies creating instructional materials.

By Louise Dube

What to do? Educator Buying Trends, a recently survey by MDR reveals that Moodle has the largest installed base of Learning Management systems (LMS) in K-12. Equally interesting is that Moodle's strongest presence is in large districts. These districts have the IT infrastructure to support the development and customization of an open source platform.

After Moodle, the floodgates open and districts use everything and anything as a “learning management system” …that is when the school understands what a learning management system is.

A cavalry of vendors to the rescue!

Districts increasingly need a single point of access and management for digital curriculum assignments, assessments, student work, lesson plans etc... Right now, just about every digital educational resource offers an "LMS." They range from light versions with assignments and reports to a full blown solutions including portfolios and groupings and more.

In an informal poll I conducted last year, many elementary schools told me they use “Read 180” as an LMS by which they mean that this is how they evaluate student reading performance and progress. Given this definition, the number of LMSs numbers in the hundreds if not thousands.

With all of those resources available, case closed, or… With the proliferation of digital curricula resources teachers are overwhelmed with the information and available resources. The job of the learning management system becomes even more crucial as the gatekeeper to a digital classroom.

This proliferation of solutions brings into stark relief the fact that the edtech industry, despite its many accomplishments, has not solved the central need of the school, a simple tool that makes the life of the teacher easier and better.

Single signon and centralized reporting will not suffice. The question of how to approach the learning management system goes to the heart of the publishing dilemma in the digital age, i.e. how publishers will continue to defend their margins.

Content, Content

The proliferation of learning content is unstoppable. Khanacademy has over 1,800 free animations/videos teach anything from pre-algebra to the French revolution (notably absent is English as a discipline).

I believe the value of the publisher never lay in the presentation of basic concepts, that is required but insufficient. Open access to basic content should be welcomed by publishers who are now relieved of providing the same 3 ways to teach addition. On its own, this kind of free content will make little difference to the quality of K12 education but it is evidence of a larger movement towards an “app” world.

The digitization of the curriculum requires that the old full grade curriculum monolith be broken into individual pieces and elements for instruction customized to the learner. Elements can be individualized or combined for individual consumption by the learner. Whether the content is prescriptive or inquiry based, this “appification” of the content will require the teacher to act as orchestrator and coach/mentor. The federal government – at least under the current administration – is leading and supporting the transformation of the teaching role through Race to the Top and other funding sources.

Historically, the publishing industry built products for the realities of the classroom, and those who have tried to effect change through products have often failed. Today, change is the reality in the classroom and publishers have to contend with this change. This implies that value will shift from content toward how we support teachers in their changing role in relation to the content.

Publishers' Dilemma

For the publisher, whether and how much to continue to invest in the development of an LMS is not clear. One option is to continue to refine a closed management system that controls the content presented and how it is measured. While many publishers would prefer to stay with this more conventional approach, the day is fast approaching when the pressure to open the system will be overwhelming.

Almost all publishers with closed systems provide a single sign-on alternative with most allowing broader customizations of their systems for large purchasers. Some publishers are concerned that opening up a system will compromise the ability to ensure fidelity to the research or the implementation model.

The reality is that schools draw on a multitude of content sources. The content used by the kids in computer lab co-exists with the project, worksheets, homework tutors and other supplemental materials in the classroom. Many schools are currently using WIKIs as partial LMS. In this model, the school “owns’ the improvement gains and the choice of the educational approach. Vendors in this model will need to support schools in building winning resource solutions to meet the educational goals.

One note of caution: as learning management systems become pervasive, sophistication will grow, and a professional class of open management systems will build ever higher barriers to entry. I note a new press release by Moodle about its Joule 2.0 platform which includes collaborative tools and social networking which exists outside of Facebook. Smaller publishers will find it hard to compete in this arena as content driven features (lesson plans) split from “management” features (assignments, groups, reporting.)

The other option is for the publisher to assume it is not in the LMS business, embrace the concept of learning modules and support a multitude of LMS. Standards adoption has always been painfully slow and continues to be insufficient. Standards lag along with business model concerns are barriers today.

Conclusion

Publishers will resist the commoditizing of content. Nevertheless, new products such as Sky from Learning.com understand that with the rise of self authored and free content, value will lie in integration, enhancement and ease of use. Those who will win will not only offer differentiated content but will also have real solutions for classroom implementation for individual student needs, and more than a token effort at teacher development (not just what to teach but how to teach the content). As a result, I would expect to see significant expansion of professional development integration within the content.

Louise Dube

Louise Dube is currently consulting in product management in the educational technology industry. Louise has over 15 years of experience marketing and developing educational technology for K-12 schools, students and parents. She has worked extensively on creating market driven innovative technology solutions to close the achievement gap. Most recently, Louise was President at Pangea Tools. Previously, she served as Vice President for Product Management at Scientific Learning. Louise can be reached at louisedube at aya.yale.edu

Today's walkabout focuses on a fundamental shift in the instructional materials industry away from the scale economics of the big textbook publishers to the value of niche focused expertise. I believe this is the future of our business.

In a world where Home Depot crushes the local hardware store only themselves to be crushed by Lowes this probably sounds foolish. Why shouldn't Pearson and Houghton Mifflin Harcourt do the same in education? In their business model everything becomes a commodity and low prices rule. Indeed - that is precisely what has happened over the past couple of decades in education.

But there are fundamental and intersecting trends that are leading us away from this model and in a fresh new direction.

An Era of Disruptive Change

There are three extrinsic forces reshaping the larger world around textbook publishing which are starting to exert counter pressure to the trend to gigantism.

1. The analog to digital transition that has upended one intellectual property based industry after another is finally laying siege to the textbook citadel.
2. Globalization is both opening up new markets on the revenue side and new suppliers on the cost side
3. At the same time all of us are suffering from overload as the net has exploded access to information, knowing what is important is harder than ever.

In this new environment the very things that make the large publishers strong work against them. I've written about them in the past couple of years (links above) - but I realized recently that the synergies between them are accelerating and amplifying change in education publishing.

Digitization - It's Our Turn

Music, television, newspapers, trade books, and even the family snapshot have all been turned on their heads by digitization. Despite significant investments in educational technology over the last 30 years textbooks have been largely immune until very recently. Ingrained statutes, classroom practices, and cultural expectations about school have all contributed the delayed transition.

Economics also played a role - equipping every child with a mobile access device with enough bandwidth and battery life to deliver content digitally is still a mountain too high.

But cracks in the foundation have appeared - Texas, California, Indiana, and several other states are leading the way towards using textbook dollars for technology substitutes.

For the major publishers the problem is the same faced by the music industry. It turns out most people don't want to buy the whole damn album - just the 2-3 songs they like. Self-publishing undercuts the monolithic products built by the mainstream publishers.

Consider that many of us now:

• Publish our own "newspaper" via blogs, RSS feeds, and social media.
• Master our own music albums by creating mixes on our iPods.
• Schedule our personal TV network with our PVR.
• Print our own photos.

Over the past couple of decades education publishing has been characterized by waves of consolidation into a handful of giant conglomerates. This is a typical pattern in an industry as products commoditize.

If products are effectively interchangeable (commodities) competitors gain competitive advantage through industrial scale cost management (economies of scale). Bigger warehouses, off-shoring production, distribution networks built on fleets of professional salespeople, and access to capital drove smaller players into the arms of Pearson, McGraw-Hill, Houghton Mifflin (Harcourt), and Scholastic.

We can see that they became huge - but what were the market forces that drove them to do this?

To understand how things are changing we first need to see how the current structure came to be. I believe standards and accountability were the primary causes.

Impact of Standards - Commoditization

As publishers all wrote to the standards for the same 3 states (CA, FL, TX) the books became interchangeable. I've worked for two of them - but take the logo off and I couldn't tell you a Harcourt book from a Pearson tome. Since prices are relatively inelastic (states after all set the budget in advance) companies competed via the “free with order” (FWO) giveaways rather than through the core products.

This meant that the company with the lowest cost basis could afford to give the most away and increase their odds of winning the race. It also meant they needed a lot of stuff to give away. They got big to reduce costs and bought a lot of supplemental print and tech to differentiate themselves around the edges.

Impact of Accountability - Distribution Footprint

At the same time NCLB brought a new level of accountability across the chain of command in school districts. The result was a move to district level decision making. With their job on the line an Assistant Superintendent for Instruction is going to want control over the purchases that Teachers and Principals used to make.

Selling at the district level is a completely different game than going classroom to classroom. Reps who used to swing by a school and stuff mailboxes with catalogs were being asked to sit down with Superintendents and engage in solution selling. Companies that relied on teacher networks or direct mail found themselves losing share to companies that could sell at the high end.

This also played to the scale the larger publishers operated under. They already had national sales infrastructures with a broad pool of talent to insure coverage anywhere opportunity beckoned. Because they were already playing the adoption game at the state and district level they were able to leverage this presence into other segments (technology, supplemental materials, etc.).

As long as a relatively stable basal textbook business was the heart of the industry this model perpetuated itself.

Adoption Interurptus - Rot at the Core

The textbook adoption market is no longer stable - the patient has an irregular heartbeat. California and Florida have delayed or simply cancelled major adoptions. Texas is opening the process up to technology based products, and many other states are experimenting with ditching the whole structure.

The complex network that these massive companies built around themselves is crumbling. This is why I used the rather uncharitable metaphor of large dinosaurs last week. Their ecosystem is suffering multiple shocks and in biology when that happens the big beasts go first.

Next – we look at the impact of digitization, globalization, and the attention economy on the competitive landscape in education. Hint – the big guys have problems with all three.
Related Posts:

Big Textbook Publishers = Dinosaurs?

An understatement - education publishing is changing.

Heck, publishing writ large (trade books, music, movies, news, etc.) is shifting in dramatic and unpredictable ways. Textbooks are one of the last little corners of the intellectual property world to enter this new era.

Today's post is a teaser for a longer piece I'm going to publish in the next few days. Mark Sumner's "The Evolution of Everything" got me thinking about our industry in biological terms as we enter this era of rapid change.

I believe that two forces, one blindingly obvious and one subtle, are causing an huge shift in the source of value and differentiation in the instructional materials market.

First - the analog to digital transition is upon us and will shuffle the deck the same way it has in music, television, and the news business.

Second - we are also seeing a quieter revolution in buying behavior as a deluge of information swamps inboxes. In the attention economy time is more important than money. The value of expertise is increasing at the same rate as the flow of information.

These forces indicate that the primary value drivers of our industry, which has witnessed several waves of consolidation, are going to reverse direction - more value creation will be found in smaller entities in the coming years. I address the first issue today.

In Epochal Shifts Big Dies, Small Survives

Why were some dinosaurs so big?

"Big animals pack around a big gut, and big guts on average are more efficient at extracting nutrition from food. As sauropods expanded their diet to include less and less nutritious sources, they needed to pack around bigger and bigger stomachs—a kind of arms race of limited calories and vitamins as these creatures attempted to nab every source of food possible." Mark Sumner - The Evolution of Everything

For the past several decades the big education publishers have been building their businesses on a base of scale efficiencies. Ever bigger warehouses, vast conglomerations of imprints, printing in Asia, and political influence that only employing tens of thousands can earn. At Harcourt Achieve we had over 27,000 SKU's - and that was before it was merged with Great Source.

"The end of the Cretaceous was a nasty time. Lots, and lots, and lots of things died off that weren’t dinosaurs. Overall, about half of all genera and three-quarters of all species failed to make it from one side to the other, from one period to the next.

There was no single characteristic that seems to have been a good predictor of surviving past that ugly line of iridium enhanced clay in the geologic record, but there was certainly one that was a good indicator of not making it: large size. Many small animals died at that time, but every land animal bigger than a standard poodle was a goner." Mark Sumner - The Evolution of Everything

Summary

If the biological metaphor holds the changes we will experience in publishing over the next several years will play to the advantage of small to mid-sized companies at the expense of the major publishers.

I don't believe this will be an era of extinction - just that the conditions of rapid and disruptive change will create more opportunities for smaller more nimble companies. The big guys will survive - but like TV or music their share of the business will shrink.

In my next post I will explore the impact of the attention economy, why this is happening, and some ruminations on how it will play out.

Related Blog Posts

The Web Broke the Big Publishers Business Model (coming)
Information Overload
Getting the Units Right
Instructional Monocultures

50% of the men did not wear neck ties at this year's Frankfurt Book Fair. Traditional publishers are struggling with appropriate responses to digital transformation and aping the casual style of Silicon Valley seems to be popular. Interesting fact - if you wear a suit without a tie you still look like a Book Rep.

This sartorial mis-match of rhetoric and reality summed up a lot of what I observed. Publishers are saying all the right things, but they haven’t quite figured out how to do them.

Educational Publishing Leaders

The Education Publishing Pavilion had a CEO Roundtable on Wednesday. Houghton Mifflin Harcourt, McGraw-Hill, and Pearson all had delegates on the panel (50% tieless). Many fine things were said about the market transition in education (globalization, technology, accountability, etc). But where it mattered the most - what the big 3 are going to DO about these trends - it wasn't particularly illuminating. My crack after the talk was that they are going to differentiate in the same way.

Snark aside there were several interesting take aways from the panel.

• Pearson spent more in 2009 in product development than they have ever spent (no insight on how much of this is in education or if it has been sustained in 2010). Still - given market dynamics this reflects a very aggressive stance on their part, which is a good sign for the de-facto industry leader.
• HMH has created a $100m internal innovation fund (Pearson did something similar in 2005). This should help spur new ideas after 2-3 years of turmoil and layoffs as the various parts of the organization were consolidated during the recession.
• McGraw-Hill is focused on deep localization as they globalize - they recognize that what China wants is quite different than requirements in Australia. Some markets are radically different - 70% of education publishing in India is local (as in regional not national).
• All publishers are struggling with creating a new paradigm for digital content. Requiring ISBN's for technology products is kind of silly - and yet from a systems standpoint they can't do anything else - yet. This also applies to the culture of the sales side - book reps don't have a good track record with technology and tech reps are going to need a compelling tech vision to sign on.
• They resent that LMS providers have built a $500m business in content (well, at least one of them resents it...). There is a sense that the proliferation of systems is going to have to end - we need some standards so that content can be interoperable.
• Expect to see more alliances with technology platform providers like Microsoft, Oracle, and Apple. I think this applies to publishers of all sizes, but it is a real shift for the big guys who have had a go-it-alone ethos. Time will tell if the clashing paradigms can be reconciled.

Serious Games - Going Dutch

Another aspect of the Book Fair that I love is getting exposed to trends from elsewhere. One topic close to my heart is gaming and Holland had a big presence in the Education Hot Spot focused on edugames.

Mijn Naam ist Haas is a captivating "game" for young children where they co-create the game (draw a line and it becomes the road Haas walks on, draw in the sky and clouds and birds appear, etc). It is a great redefinition of a side-scroller that draws the learner into the world. The Dutch Government supported it with a $640k euro grant.

Another interesting looking game was a project management simulator built around the pyramids. Companies are using it to expose people to best practices. I couldn't see if salt and beer were the currencies of choice.

Expect to see the Dutch moving many of their games into English in the coming couple of years. For US developers this may also be an interesting market to branch into.

Also - none of the Dutch men wore ties, and some even wore (gasp) jeans.

Holy Cow It Is A Big Show

You shouldn't rely on any one report back from this event - it is simply too huge for anyone to really wrap their arms around it. It saw a few things and drew some conclusions but my perspective isn't definitive.

Globalization is real and moving in both directions across a wide variety of education niches.

I made good contacts in Europe, the Middle East, Southeast Asia, and Oceania. Most of the other vendors I spoke with in the Education Hot Spot or in the American Collective had similar results.

I have gotten a great deal out of attending this conference the last two years. When I was consulting my practice went global - mostly foreign publishers entering the US market seeking expertise. Now that I'm on the other side I'm pushing global as offense and defense against the unknown.

If you are still focused on just your own country you are limiting your growth at a time when we are all challenged to find new markets. You are also setting up the risk that an outside entrant will steal your share. You must be present to win so show up next year!

When textbooks go fully digital what will schools buy? Will they buy individual lessons, units of 2-3 weeks length, or full curriculum that span a year the way they do today? This is the $5 billion question facing our industry.

Mike Shatzkin has an excellent post on this topic over at The Shatzkin Files. His framing is concise and revealing for those of us mapping out strategy for the analog to digital transition in instructional materials.

He was on a working group preparing for a talk about copyright across different publishing markets:

[I needed to say]..why the problems caused by digital change for newspapers and magazines and record companies were so much more grave than they were for book publishers (so far.) It is simply stated.

For those businesses, the unit of appreciation does not match the unit of sale.

By that I mean that record companies sold us albums when what we wanted were songs. That’s what their economics were built on. The minute we could buy songs, it blew up their business model. Newspapers sell us the weather when what we want are the box scores, or the horoscopes when what we want are the comics. There are many books which will be read cover to cover. Newspapers and magazines are rarely read cover to cover. It was never thought of as wasteful or uneconomic that most people actually consumed a small percentage of every newspaper and magazine they bought. But it gets harder and harder to make that sale in a digital environment.

The Answer - All of the Above

I've noted elsewhere that Education is not a lone target market - it is an industry with many niches. If we think about units of appreciation we can see that there will be instructional products like novels that are already sold in the unit of appreciation and products like music "albums" that will shatter on contact with digitization.

As I turned this over it occurred to me that what is being taught will be a major factor in this. In a nutshell skills development requires products very similar to what is offered today, knowledge development demands a variety of source materials, and fundamental reform efforts may demand a larger horizontal and vertical integration not available today.

Baby Bear - Just Right - For instruction in basic skills (reading, math) where the focus is on developing fluency and automaticity full curricula that use a consistent pedagogy and emphasize a predictable lesson structure will always be valued. A consistent approach puts the focus on the skills not on the structure.

This is not the same as "kill and drill", the focus is on consistency not rote learning (not that there is anything wrong with that...).

This will also apply to materials for students who are struggling - reducing the distractions between their reading skill and the grade level content is essential. One huge distractor is jumping around to a lot of disparate materials. Considerate text makes a big difference here.

Mama Bear - Too Big - Knowledge acquisition for on-level students is an entirely different kettle of tea. If we want to model 21st Century Skills for learners it is incumbent on teachers to use a wide variety of source materials so that students can experience how knowledge is developed in the real world. Social Studies, Science, Literature, Career Readiness etc. all demand a catholic approach to content. The unit of appreciation is a lot smaller than a textbook - in many cases it is a single page document.

Whether this breaks down to the individual lesson or learning atom or is a the unit level remains to be seen (again - probably all the above). Given the time pressures on teachers we will probably see multi-week units that are packaged as a very popular option (many teachers do this on their own today). While it is a threat to the industry it is also an opportunity - digitization makes it easier for publishers to play in this game as well.

Papa Bear - Too Small - At the other end of the spectrum some schools and districts may be in the market for comprehensive reform. Individual textbooks that are siloed into disciplines may actually be too narrow a unit of appreciation for these customers.

One option for them would be curricula that are integrated across disciplines and which are horizontally and vertically aligned to student skill levels (e.g. multiple reading levels for the same content and/or spiraled strands through the standards). Another option might be platforms like Blackboard that provide some structure, but which can be filled with content.

Equally important in this may be bundling additional services with content - specifically ongoing professional coaching targeted at improving teaching. not just product orientation.

Summary

I really appreciate Mike's crystallization of this concept because it gets to the heart of many of the critical strategic decisions the companies in our space will face in the next 5-10 years. Get the units right (from your customer's perspective) and your business will be right.

"With the right support and intervention...people with learning disabilities can succeed in school and go on to be successful later in life." Wikipedia

Last week PCI acquired SpellRead, Momentum Math, Text Connections, Summer Ventures, and an unreleased Algebra program from Kaplan. I don't normally use this blog to talk about what we are doing specifically at PCI, but given that this is an unorthodox move in these economic times I thought I'd lay out the case for the acquisition.

These intervention programs target reading or math and they fit snugly into our line of products for academically challenged students. They are age appropriate for middle and high school students who are significantly behind grade-level expectations and need intensive, small-group instruction.

They also have some outstanding research results - in fact SpellRead was the small group intervention program rated the highest by the What Works Clearinghouse.

Really? In this economy?

It may not seem like the optimal time to be making a move like this with the economy and education budgets looking like they will stagnate or decline for the next several years.

But as we look ahead we see an ongoing emphasis on serving all students and in particular reaching those students that traditional approaches have failed. A quick review of the policy directives coming out of the Obama Department of Education makes clear that accountability is not going to be sacrificed to short term economic pressures. That in turn means schools will continue to invest in reaching students who are struggling.

Evidence also shows that companies that invest wisely during downturns emerge stronger than competitors who pull back. We have increased our catalog distribution, hired sales reps, and boosted our on-line presence in the last 18 months. These new products fit nicely into our channel mix and should help fuel our market beating growth record of the past couple of years.

The Strategic Context

The supplemental publishing world has been in transition for several years. The traditional market for small scale ad-ons to basal materials is still there, but alongside it a world of comprehensive targeted intervention curricula has sprung up. In fact, most of the growth has come from the comprehensive side - examples include Read 180 and Wilson in reading and Carnegie Learning and TouchMath in mathematics.

The reason for this is rooted in student outcomes. Educators have figured out that instructional materials designed specifically for the job at hand are much more effective in reaching these students where they are. It is possible use adaptations and modifications of the basal textbook materials - but it isn't optimal.

All of these products fit into this new category.

A More Complete Product Line

PCI has traditionally served both the Learning Disabilities (LD) market and the Intellectual and Developmental Disabilities (IDD) market. For the past 3-4 years our internal product development focus has been on filling a huge gap for IDD focused academic programs. The PCI Reading Program and Environmental Print are behind our rapid expansion in 2009 and 2010.

The acquisition refreshes our line on the LD side with 5 top notch programs. Our Development Team's first reaction on seeing the materials was "this is exactly what we would have written." We were impressed by the simplicity of design and the thoughtful structure provided for instruction in the materials.

If you are interested in seeing where we go with them be sure to tune into our web site for further developments. We have some pretty cool ideas about how to take rock solid programs and wrap them with innovations that build on 19 years of expertise in serving these students.

Related Blog Posts

PCI Announcement
Build Instructional Materials for 21st Century Skills

In discussing the potential for ads in e-books - the latest hail mary pass of traditional media - Paul Carr at TechCrunch dropped this gem:

It’s a compelling argument, but like so many compelling arguments made about the future of books, it’s also hampered by consisting almost entirely of bullshit.

Its also a pretty good disclaimer for readers of this site....

Scribd is working hard to be the text version of YouTube. Upload some text, tag it, and let the world discover it. It isn't just unpublished novels - many copyrighted textbooks are already there via unauthorized uploads.

Like YouTube, users can upload anything and the site isn't under any legal obligation to screen for copyright protection. Copyright holders have to proactively scan and search for their content. Get it taken down today - it can be uploaded again tomorrow morning.

For example, Key Curriculum Press's "Discovering Advanced Algebra" is available for anyone to download all 888 pages for free (and has been since last August when it was posted by "skihe63"). It has been accessed 8,898 times since it was loaded less than a year ago. It is an older copyright, but still - on Amazon it sells for $25. That is $222k in value.

This isn't just Key Curriculum Press's (fixed) problem - they are algebra texts from McGraw-Hill, University of Chicago Press, and many other publishers a click away.

"Gee - nice copyright you have there. Be a shame if anything happened to it."

What are Key Curriculum's (fixed) options? They should submit a report to Scribd to remove the illegal copy (and hopefully they will - edit THEY DID). But that just solves it for this one instance - today.

The only way to get Scribd to protect your copyright is to cut them in on the action. Upload your content, and let users download the PDF for a fee which you share with Scribd. Then, and only then, will they screen for unauthorized copies.

So publishers are starting to up load their own content and cut Scribd in on the action - protection money if you will.

While Scribd has the Milleneum Copyright Act law on their side it sure feels like they are doing something immoral. Once they are on notice about a copyrighted material they should be obligated to screen for it. Key Curriculum's (fixed) unambiguous notice is right on page 3 and it explicitly prohibits reproducing it, storing it, or transmitting it without permission.

How it Should Work

Technically, scanning text for a copyright notice is a trivial exercise. If TripIt can decode 95% of the confirmation emails I get from a wide variety of travel providers this is child's play.

You would think that if Scribd wants publishers to be allies that they would scan for copyright notices and require up-loaders to explicitly acknowledge by publisher name that they have authorization (not some dense generic mealy mouthed legalese that is deliberately designed to be ignored). A dialog like "We detected that Key Curriculum Press holds a 2004 copyright on these materials - click here to acknowledge that you have the publishers written permission to transmit these materials to our servers. Violations of copyright law can expose you to personal liability."

Hell - they could go a step further and provide a link to request permission from the named publisher.

But don't hold your breath on Scribd doing the right thing on this score - there is money to be made in playing it fast and loose with other people's property.

Conflicting Values

We know from market after market that increased exposure grows the market - but it often does so in ways that are highly disruptive to existing distribution mechanisms. The music business isn't hurting right now - music publishers are. Movie attendance went UP after HBO went on-line in the early '80's.

The trick for publishers is to figure out how to surf this transition and to see opportunities in challenges. If we reflexively try to fight folks who are playing too cute with our property but who have the law on their side we are going to lose.

As a netizen I find my value for free and open access to information is coming into direct conflict with my publishing hat. I want the hard work put in by the writers, editors, designers, instructional designers and others involved in the creation of our intellectual property to be able to continue providing high value.

There are no easy answers - we will have to hire people to monitor this new world for us and our web marketing teams need to figure out how to align with sites like Scribd rather than fight them.

---------------------
Hat tip to Tim McHugh at Saddleback for sharing their approach and thoughts on this topic with me.

Note: I mistakenly attributed the Algebra title in the piece originally to Pearson's Modern Curriculum Press - I knew better and the good folks at Key Curriculum Press were good natured about it. The references have been fixed.

Last week the New York Times published a piece titled $200 Textbook vs. Free. You Do the Math by Ashlee Vance.

Today we take up the challenge posed in the title and demonstrate that Open Source Textbooks are twice as expensive as books in the K12 market.

Let me state right up front that I'm all for using economic and technology forces to drive costs down while improving services. I agree that Open Source instructional materials have a place and will play a role in coming years in doing exactly this. But they are not the panacea painted by their advocates in the article.

Mr. Vance's normal beat is Silicon Valley, so it comes as no big surprise that the article is largely a big wet kiss to Sun co-founder Scott McNealy's publicist. Mr. McNealy rightfully gets props for his sustained commitment to Curriki which has built important infrastructure and tackled thorny questions about user generated lesson plans. But this article goes far beyond that effort in painting a misleading picture of what open source means for schools.

Worse, Mr. Vance's lack of expertise in education led him to make three additional fundamental and common mistakes in how he presented the facts and interpreted them. Lets start with those and then proceed to the "math."

The foundational errors are:

• K12 does not equal Higher Education
• Cutting textbook costs will not make a material difference to education reform
• Recreating the book experience on-line is not sound instruction
• Open Source technology is more expensive than books in education (today)

These are two distinct markets with unique competitive and customer dynamics.

Evidence? The companies that serve them have completely different K12 and Higher Ed sales forces, marketing departments, and development teams. If there were synergies beyond buying paper and press time in bulk they would be taking advantage of them.

In Higher Education the books are chosen by individual Professors and purchased by the students. This results in very narrow niches and resulting exorbitant costs that the end buyer has little or no negotiating power to counter. When a Biology Professor is one of 6 educators requiring his own book you end up with the $200 books referenced in the title.

By comparison K12 is a bulk institutional purchase where the textbook decision is made at the State or District level. The buyers have huge bargaining power which they have instantiated in legislation and regulations around the adoption and purchase of instructional materials. The typical K12 textbook costs $35-$60 and is used for 4-5 years at a cost of $7-$12 per student.

So which is it $200 or $12? It isn't even close and I haven't gotten beyond the first word of the title.

Second Error - Cutting textbook costs will not make a material difference to education reform

I'm all for using the market and new technologies to save money and improve learning. But textbooks are such small potatoes in the overall education budget that it is laughable to think that even if you could magically eliminate this cost (which we will show you can't) that it would make much of a difference.

We spend $550 billion a year on education in the United States. K12 instructional Materials are 1% of that cost. Completely eliminate it and you have barely moved the needle.

Yes $5 billion is a lot of money - but in the context of of the whole it is insignificant.

Thus the whole premise of the piece - that a noble retired entrepreneur is leading the charge to fix education as we know it is silly. These efforts will, at best, nibble at one small corner of the overall challenge. Love him or hate him at least Bill Gates is tackling the real problems head on and at scale.

Third Error - Recreating the book experience on-line is not sound instruction

This error is perhaps the most fundamental of all and one I would have expected a veteran technology reporter to pick up on. Textbooks companies have in fact spent the last 20 years trying to recreate the book experience on-line. The results have been universally disappointing and are the equivalent of reading plays on TV. It is neither interesting or a good use of technology platforms.

Technology at its best allows us to do things in a new and more productive ways. For this to happen the experience needs to be redesigned and reengineered from a technical and cultural standpoint. This is why most technology diffusion takes 25 years despite the accelerating curve of innovation we find ourselves on.

The good news is that we are at 25 years of PCs in education and change is a brewin'. The bad news is that posting PDFs of textbooks isn't where the market is headed.

Where this really hurts the argument being made in the article is that doing new stuff in innovative ways can be expensive. If we replace textbooks with compelling on-line simulations and games designed for classroom use (my vote for the best use of technology in education) look to the budgets of game developers to get a sense of the scale economics that will be required to support this effort.

Innovation yes. Retreaded open source PDFs as the answer - feh. Been there, done that, didn't work very well.

Follow the Money

This is always good advice when you find arguments being made that don't stand up to scrutiny. In this case you don't have to look any further than the screen you are staring at right now. The hardware vendors are the ones who have been pimping the idea of "free" content on the web as the solution to schools problems coming on 10 years now.

Sun was a hardware vendor at heart that wrote software to move iron (e.g. Java). Apple has been instrumental in changing the adoption requirement in Texas that allows adoption money to be used for digital products. Their end game is allowing adoption money to be spent on their equipment (e.g. iPad).

This. Is. Their. Idea. Of. "Free."

Equity

But "the computers are already there you say - this would be leveraging existing infrastructure to trim costs." Wrong. The first error conflating K12 with Higher Ed ignores a fundamental difference between the two markets. Higher Education is a choice - and included in that choice is the student's responsibility to provide their own technology. K12 Education is legal requirement and the state is required to provide all the necessary resources in an equitable manner to ALL students.

Read that last sentence twice and never forget it. Unless EVERY student has access to the platform the state has what is called an equity issue. The fact that 4-5 computers may be present in the classroom doesn't mean that all students can access it - much less access it at home when they are doing their homework and using their textbooks.

In Higher Education the standard is much different. A company like Flat Earth Knowledge can offer their solution knowing that it is the student's budget that determines if they can afford a computer on which to run the "free" book.

Infrastructure Requirements

So to do the math on moving to open source digital textbooks one has to calculate the costs based on providing every student with a reader device that they can use on their own time. That device needs to handle the complex color charts and images contained in instructional content and ideally should be able to run simulations and other complex software that allows students to explore and play with ideas rather than passively absorb them. The screen needs to be large enough that students can read it without squinting since - hopefully - they will be staring at it for several hours a day.

In other words it needs to be an iPad or Android tablet. Dell's Streak starts at $300 and the iPad at $499. Both include a monthly subscription that runs to around $125-$160 a year. Given how hard kids are on technology (puddles, playground tussles, etc.) you will also need a service contract at roughly $40 a year.

In Which We Do "The Math"

If the device lasts 3 years your annual cost at the low end is $265 per year. A bulk purchaser might be able to negotiate something closer to $200 per year - but not much less than that given that the margins on the devices are already razor thin. At the mid-range it could go as high as $400 a year.

I'm being gracious and not including the cost of the networks and IT staff needed support this kind of enterprise wide implementation of a platform. Since instruction is the core mission of the schools the bulk of that cost should rightfully be allocated to this effort.

At last we arrive back at the original promise of the article. What does it cost to provide a student with textbooks? At the HIGH end for 5 classes it is $58 a year. If we throw in some supplemental materials we get to a cost of $100 per student per year. Or almost exactly the $5 billion+ that is spent in K12 on instructional materials (54 million students).

So back at ya Mr. Vance - $10 billion a year for technology or $5 billion a year for books - You Do The Math.

There is already a significant base of technology in schools - but it tends to be more in the supplemental side of things not in the basal instructional resource area that includes Textbooks. This is because of the equity issue.

To get some sense today of what it costs to implement a basal instructional technology program look at Scholastic's hugely successful Read 180. One actual proposal has the cost at $783 per student. This is for the digital/print instructional materials only and does not include an inch of network or a single keyboard.

We will ride the cost curve down and at some point - in the future - the benefits associated with the migration to the new technology will be justified for core instructional materials. It probably won't even be when it is less expensive. If technological delivery truly delivers more effective instruction it can be justified at a higher cost (see Read 180 above).

But I think it is clear we are not there yet for the broad mass of students and teachers. We should be experimenting with this today and building the tools and resources to take advantage of it when we get there. Again - kudos to Mr. McNealy for his sustained efforts on Curriki in this regard.

Summary

The New York Times has utterly failed in its mission to inform the discussion of this issue by presenting the grossly misleading promises of the open source movement. What the advocates of this move are really pushing for is a transfer of the costs from books to a much more expensive platform.

I'm not an apologist for the textbook industry. I've spent over 20 years as a vocal and public advocate for technology innovation in education (here and here). But we do students and educators a disservice when we don't provide them with a full set of facts to make decisions with. The open source debate is loaded with hidden agendas that the article did not touch on but which have a direct bearing on it's central claim that this movement will save schools money today.

This is creative thinking at work. How do you arrest someone for cleaning a tunnel - even if it looks like graffiti? I imagine the call to Police HQ was pretty amusing and resulted in a lot of head scratching.

It often takes explicit subversion of our preconceptions to reveal our unspoken assumptions about every day life.

Two questions for EBB readers:

Does making someone smile at delicious irony improve retention of the instructional objective?

If so - how can we use non-traditional means to culture jam students into a higher awareness of the world around them?

HT to zeFrank

Guest blogger Mike Baum of Sophia Consulting shares his insights on ISTE 2010.

By Mike Baum

In the old Road Runner cartoons, there’s always a point where the slavering coyote, relentlessly and enthusiastically pursuing his dinner, runs off a cliff. But he hangs in mid-air momentarily, falling only when he realizes there’s no longer anything supporting his feet. Walking the floor of ISTE (nee NECC) last week, I thought I heard “beep beep” from time to time.

On the surface it was a very good show. Attendance down a couple thousand from last year, but you expect Denver to draw smaller crowds than D.C. About 200 fewer exhibitors but that’s par for the course right now – and still one of education’s biggest show floors. No one I talked to missed the Elvis impersonator from 2009, either.

Attendees had money to spend. Visitors to the booth of one of my clients often opened the conversation with needs for fall, grants they expected, budgets they still had to allocate. That’s one of the things that make ISTE today such a must-attend for technology companies – unlike a few years ago, a high percentage of attendees are really shopping. And they’re looking for educational solutions, not just gadgets or wiring.

If there was a “buzz” at this show it might be “the year of mobile.” Vendors, sessions, and corridor conversations focused on ways to use iPods, iPads, phones, and even older tech like netbooks, to put applications in kids’ hands more quickly, more interactively, at lower cost. Software vendors are being challenged to make their content run on just any platform teachers have or want to use. The “21st Century Classroom” – all interactive, all the time – fits this paradigm just fine and was also all over the show, with whiteboards, projectors, panels, and student responders, which have proliferated like crocuses in springtime.

All very good, and a genuine trend – but how far can tech buyers run with it before they realize they’ve run out of cliff? ARRA money will only go so far. At her presentation on the future of federal funding, ISTE lobbyist Hilary Goldmann put a brave face on it but had to admit that this time, E2T2 may really be dead. While it could be 2011 or 2012 before our contentious Congress finally agrees on a new ESEA, dedicated tech funding has fewer and fewer defenders. ISTE is trying again to get momentum behind the ATTAIN Act (Achievement Through Technology and Innovation) but the current administration seems focused on other priorities, and the public mood is starting to swing against finding new things to spend money on.

And state budgets will keep reeling for some time from the effects of unemployment and housing-price declines. My airplane reading right now includes the weighty and depressing This Time is Different by economists Reinhart and Rogoff (the title is intentionally ironic). Their historical data indicate that it takes five and six years respectively for jobs and housing to start recovering from major financial calamities. Figuring from 2007 or 2008, take your pick, at that rate it will be 2012 or 2013 before we see improvements, and there’s always a time lag before state tax collections and disbursements reflect the economy. A couple weeks ago I was interviewing the tech director of one of our large urban districts and asked his opinion about the funding outlook. “Things won’t improve till about 2015,” he replied. At the time I thought he was a pessimist. Now I think maybe he’s a prophet.

So should tech companies just go into hibernation for the next five years? Not necessarily. Maybe it will be a good thing to have tech funding merged with school-improvement and professional development initiatives. It could keep us focused on why we’re all in this business in the first place.

Recession or recovery, this country will go on spending about half a trillion dollars on K-12 schools per year. If schools are going to spend some of that money on handhelds or clickers or anything else, it will be because they produce results when teachers really know how to use them effectively. If administrators are ever going to get less twitchy about letting kids use as mobile educational devices the cellphones two-thirds of them now carry (the figure rises to 70-85% when you get past age 11), it will because the educational uses are plain, proven, and easily implementable by teachers who mostly aren’t techies.

Among the educators walking the mile-high floors at ISTE, I saw a lot of principals and other non-tech people looking for solutions. Not “solutions” in the tech sense – solutions to problems with educational achievement. Are we providing the research, the real-classroom models, the teacher training they need? And are we making it plain to them how it works for them? If not, the Road Runner of technology growth in society may just keep streaking along ahead of us while we look around and find the ground under our feet has disappeared.

Mike Baum
Principal
Sophia Consulting LLC
mhbaum (at) gmail

Mike’s education blog:
http://mhbaumk12.wordpress.com/

Yesterday the minority in the Senate ended the chances that the Extender's Bill would pass the Senate. While 57 Senators - a clear majority - wanted to do the right thing a determined minority used procedural votes to force mass layoffs of teachers, firefighters, and police across the country (300,000-500,000).

There are rumors that the two sides are still talking - but most analysts say that any action will likely take place after the Summer Recess in mid-Fall.

It isn't just education that is affected. Over a million people will be dropped from unemployment rolls. As a side benefit Hedge Fund Managers get to keep paying taxes on their multi-million dollar bonuses at a rate (15%) lower than most of the formerly employed teachers and cops (25%).

There is no way this is good news for the economy - none.

They may blather about other stuff - but that is the real effect of yesterday's vote. Don't forget that.

States and Local Governments (SLG) are facing $300 billion in budget shortfalls this coming year. Unlike the Federal Government they can not run deficits. They pay their bills or they go bankrupt (which cities like San Diego are actively considering). The only solutions to this problem is a Keynesian infusion of support from the Feds or mass layoffs and drastic spending cuts.

Keep in mind that 80% of education spending is for staff. The only way to address a significant shortfall in school budgets is to lay off lots and lots of teachers. Schools will cut the other stuff - but there is only so much they can do with that other 20%.

The impact on education will be long term and devastating. The children in the system now will bear the brunt of these cuts in the form of increased class sizes, shortened school hours, and over burdened teachers. This is the choice that was made in the Senate yesterday.

In crisis management mode simply keeping the lights on will be the priority - not reform. We'll continue to hear lots of bombast about global competitiveness, but when an entire state (HI) is considering a 4 day school week that rings a little hollow. If schools are facing a choice between laying off even more teachers or delaying materials purchases another year or two that is an easy choice from their perspective.

The political calculus appears to be aimed at the elections in November. I guess the theory is that if the economy is wrecked even further than it already is then the minority party will benefit from voter unhappiness. Sadly, as political bets go it will probably work.

I know. to many of you this is a harsh indictment. Given the history I don't see any other conclusion. Lets take a look at the two primary reasons given for voting against the bill.

"It wasn't bipartisan"

Hard work and real compromises went into crafting something the minority could support. The original $200 billion deficit financed proposal was cut in half to $110 billion, and to ally concerns of the minority only $30 billion of that was deficit financed. No one denies there is a crisis, there just appears to be one party determined to do nothing about it even when they are included.

We can't forget that a solid majority of 57 supported the bill. It is only the procedural votes - which are not Constitutionally defined - that require super majorities. If you want to see where requirements for super majorities on budget issues will take us just look to California. Feel better?

When this post on bipartisanship in the current political climate was written in February I thought it was over the top:

Imagine trying to negotiate an agreement on dinner plans with your date, and you suggest Italian and she states her preference would be a meal of tire rims and anthrax. If you can figure out a way to split the difference there and find a meal you will both enjoy, you can probably figure out how bipartisanship is going to work the next few years.

"OMFG The Deficit!"

Yes the deficit is a concern. But it has been a concern for 30 years and according to most credible economists we are not in any danger there. If we were in danger the bond markets would be sending a clear signal - they are not.

I have a hard time with lectures about fiscal responsibility from the folks who supported $1 trillion in off the books deficit financed wars. Or $700 billion in TARP money for the Wall Street. Or the Airline bailout after 9/11. Yet when it comes to $30 billion in deficits to support teachers and kids it is "the end of America as we know it." Sigh.

What these clowns should understand (and probably do) is that State and Local Government funding lags the general economy by 3 years. It takes this long for economic swings to be reflected in tax receipts and budgets - particularly property taxes which fund a huge amount of education spending.

That means that we are just entering the worst phase of the recession from local government's perspective. While the general economy may be picking up - SLG needs the ongoing support of the Feds for a year or two more.

Where to from here?

July will tell the tale for school budgets. Normally it is our busiest month of the year. We will see if it signals a pullback to keep what funds schools do have in reserve while States sort out funding priorities in the crisis. That will take some time, meanwhile all our business could suffer.

Is it the end of the world? No - billions will still be spent on education. But decisions will take longer, new initiatives will be fewer and farther between, and genuine reform will be put off for another day. Marginal suppliers will go under, others will have to scale back and hold on. The learning opportunities of a generation will suffer.

As an industry we should not forget this vote. It directly affects our customers in an extraordinarily negative way and it does so for pure political gain. There is no argument that can be sustained about good governance in opposing this bill.

Note: The opinions expressed here are my own.

Common Core Standards (CCS) will have a profound impact on the instructional materials market. The big players like Pearson and McGraw-Hill are on-board as endorsing partners, but smaller supplemental publishers have as much (if not more) to gain if the initiative is successful.

Common standards will reduce structural barriers to entry, reduce costs (and hopefully prices), and make it easier for new players to enter the textbook market. They also make it easier for open source publishing and have the potential to stall the market during implementation.

In this post I am not going to wade into the politics of whether Common Core Standards are good or evil. My goal is to look at this from the potential economic impact on the companies that serve the education market.

Publishing companies will have a major role in the CCS plays out. As the initiative's web site states:

"Standards are not curriculum...The curriculum that follows will continue to be a local responsibility (or state-led, where appropriate). The curriculum could become more consistent from state to state based on the commonality of the standards; however, there are multiple ways to teach these standards, and therefore, there will be multiple approaches that could help students accomplish the goals set out in the standards."

State of the Market Today

"The nice thing about standards is that you have so many to choose from."

Andy Tanenbaum - Computer Scientist

We'll look first at Adoptions and then at Supplemental materials.

1. Competitive Framework: Adoptions have very high upfront fixed costs and a zero sum competition on the back end.

The whole market structure sets up extraordinarily high barriers to entry. You need the capital to develop and sample a program, the staff to reach every district in a state, and a deep backlist to draw FWO materials from.

It can cost $30-$40 million to develop a submission for TX or CA (with rumors of some at $125 million+). Once the materials are developed companies then compete for state endorsement which can take up to a year. If you make the cut publisher then go district by district to win the actual business. All along they are sampling like crazy and flying fleets of people around to present and schmooze.
Budgets are fixed ($35-$75 per student on average) and until very recently the money could only be spent on books, so price competition is low. The textbooks are all developed to the same scope and sequence - meaning they are essentially identical commodities (yeah - a bunch of editorial folks are going to have my scalp for that one).

For a competitive edge publishers sweeten the deal with Free With Order (FWO) materials - software, supplemental texts, test prep, on-line versions etc. With high sunk costs publishers are eager to close as much of the business as they can and the incentives all point towards competing to a marginal profit of zero.

This may sound like a good deal for the schools - but having followed this for some time there are three big downsides many schools don't think about. First - most of this FWO stuff is not top quality. If publishers could charge for it they would. Second - it can make up to 60%-70% of the materials you receive - it will consume your time to figure out what it all is. Third - as a result it goes into a closet and never sees the light of day again. Storage is costly.

Caveat - there are some wonderful materials provided FWO - I'm speaking on average here (ok Editorial - put down the pitchforks and back away slowly...).

2. Writing to state standards favors three very large adoption states - everyone else lives in their world.

Many of the objections to the CCS are around the centralization of decision making. This ignores the reality of the market and the fact that right now 47 states have limited say in the matter.

California, Texas, and Florida dominate the adoption market. Given the high cost of building a program other states get adaptations of the CA/TX/FL books (and yes - there are plenty of exceptions to this rule).

Any text that doesn't address a state's standards fails on the first sales call. The big states use this as power to shape what gets written and how it is organized. Witness the recent dust up in Texas about pulling Thomas Jefferson out of the history standards. California uses its Legal and Social Compliance Review to shape not just what gets published - but how it is presented.

With both California and Florida on the sidelines because of the economic crisis Texas has the field to itself right now. BUT - since Texas exceptionalism led them to sit out the CCS initiative their relative power may be very limited. A consortium of 5-6 mid-size states would trump Texas' market footprint in the eyes of publishers.

3. Supplemental and intervention materials are already written for national audiences - but accommodating competing standards creates mush.

No state is large enough to sustain a focused development effort for supplemental materials. These resources are written for subsets of the larger student population. Publishers usually pull the standards for the big states (see above) and some of the national associations (NCTM e.g.) and write to this mashup. It isn't efficient, it can lead to odd sequencing, and no one gets exactly what they want.

Publishers also end up absorbing the high cost of correlations to individual state standards after the fact. This ends up in pricing. In many of the smaller states publishers can't afford to do a correlation, leaving educators there to guess on whether they are addressing the standards.

This creates a worst of both worlds scenario. Materials are written to standards but articulating how they are correlated is confusing, time consuming, and expensive.

Moving Forward

Why Would Publishers Support Common Standards? The Upside.

Given this context what is in CCS for publishers? Here are just a few that I can think of. Please add more in comments that I've missed.

A simplified business model. By developing for a national audience costs can be spread over a much larger base. This should both improve profitability at the margin and create pricing pressure saving schools money. A Win-Win.

Technology is changing the game - maintaining links to 50 sets of standards that change on different schedules is daunting and expensive ongoing commitment - particularly when the content itself is becoming more dynamic. Even though databases make this easier there are just too many moving parts to manage.

Playing nice with the major funders - most of the money for materials comes from State and Local budgets. Since CCS comes out of the Governors it makes sense to be at the table.

One of the big publishers will also reap outsized rewards on the testing side. If we move to a common set of standards there will be more standardization of high stakes testing.

Smaller publishers will find it easier to enter the market - niches will grow in size when it becomes easier to break out of regional territories.


The Downside
Don't get out the bubbly just yet. There are some potential downsides that publishers need to be wary of as this change moves through the market.

Self-Publishing by a consortium of states. This is hinted at in the language used to promote the project. Given the major push that open source textbooks have been getting recently there is a high probability that some group of states will begin publishing materials through their university systems. All of the ways that CCS helps publishers would also assist this kind of initiative.

New entrants as barriers to entry get smaller. There is a growing interest in the financial community in education. As we move further into a knowledge based economy education is more important than ever. This can take the form of new products (primarily technology) or in the creation of private schools and on-line academies.

Market disarray leads to a stall in purchasing. Another very real risk is that the confusion that will ensue from all the change will cause local decision makers to just sit on their hands. If the transition takes several years - as I expect it will - then this could be a damper on business already damaged by the recession.

Conclusion

On balance publishers have a lot to gain from Common Core Standards. It makes sense to throw our weight behind this effort in the coming years while making sure we are positioned to compete in an era new entrants and more efficient business models.

Funny and scary at the same time.

J.A. Konrath on the end of print.

HT to Bob Carlton

My take away from the first day of the Association of Education Publisher's Content in Context Conference (#ciccon): educators have always needed Education Publishers, but they have never particularly wanted them.

What are you doing at your company to remain necessary in the digital age?

It's been four weeks and my iPad still has that new computer smell. Now that I've been using it in my workflow I wanted to post some additional comments on it's utility in an educational setting.

In general I think my original take holds up well - this is fantastic tool for consuming content, is extremely useful as an outboard content manager, and passable in a pinch as a creation tool (this whole post was written on it).

On a meta level it is truly amazing how natural the "point and do" nature of the touch interface feels. Once you understand the grammar of the device it all just flows. A mouse now feels clunky for most operations other than image processing or massive spreadsheets.

I don't think I will ever buy another laptop - although I will continue to need a desktop/office machine (for a while).

This post is organized in three sections:

• Consuming Content
• Managing Content
• Creating Content

Consuming Content

I've been using computers daily since 1983 and the iPad is hands down the best user experience I've ever had when it comes to content consumption. It isn't any one thing - screen size, portability, battery life, Wi-Fi + 3G always on access, multitouch, and a great line up of apps all contribute. New users will find that the temptation to over-consume content is a phase you need to pass through.

On-Line News (RSS)

My daily "newspaper" is now Early Edition - a nifty RSS reader that presents your feeds in newspaper like headlines for scanning. Tap on the heading and get the full article Best of all - just like a newspaper the feeds refresh every day and then disappear. No more opening up the reader after a week away and seeing 500 articles weighing down your conscience. I also scan the New York Times, BBC, NPR, and Newsy (video).

Books

As a straight text reader it is no better or worse than most of the eReaders I've seen. It doesn't work well in direct sunlight but is fine otherwise (I'm writing this on my shaded porch mid-morning with no problems).

I absolutely love the ability to tap on any word and pop the dictionary open, particularly for older books. I'm currently enjoying Grant's memoirs, no small book.

Some people have complained about the weight, and when you are lying on your back in bed it can get a little wearisome. If you are comparing it to a novel it is heavier, but when you compare it to a textbook (or four) it is featherweight. I bought the Apple case and the ability to prop the device up three different ways makes a big difference.

Games

Games are a hoot. Playing iBomber 2 using the accelerometer to angle your flight path just feels right. Fieldrunners is an addicting tower defense game that grew up on the iPhone but is much better in the larger format. Just about any game feels and plays better than on the phone (Mah Jong, Solitaire, Sudoku, etc).

For those of us who have been advocates for game based learning this device opens up a new avenue of exploration. Always on access and location awareness have some particularly interesting applications for augmented reality gaming within a community.

Video

The video wars are real and annoying. As more video goes to HTML5 this is going to wane - but regularly there are blank spaces on my screen where Flash should be. I expect this will be the issue the first competitors latch onto.

But don't be dismayed, there is plenty of video. I just fired up Netflix - being able to watch movies and TV on demand is going to be particularly nice. ABC has an app that streams their content over 3G. YouTube already worked just fine on the iPhone so no worries there.

And video is gorgeous. I'm actually looking forward to my next long flight!

Implications for Education:

Devices like the iPad will change how content is shaped and delivered. Portable true multimedia delivery with the power of databases on the backend is the leap we have been aiming towards for 30 years. That day has arrived.

As a replacement for textbooks this is a lightweight wonder. It should open up a wave of creative innovation for multimedia instructional content with real time formative assessment (via game-like experiences).

I know this sounds like hyperbole - but remember that as a tech veteran I was skeptical and planning on holding out for a generation or two - until I got my mitts on one for 24 hours. So many of the barriers to real multimedia in the classroom and beyond just melt away with devices like these.

Price is going to be the final frontier manufacturers will have to cross - then Katy bar the door. Your old publishing paradigm will not survive.

Managing Content

I've been using Things on my Mac to manage action items for myself and my team for a few months now. This friendly GTD manager has improved my effectiveness as a manager by an order of magnitude. The iPad and iPhone versions have allowed me to take it mobile and capture and assign action items on the fly (instead of transcribing them after a meeting).

I'm finding the triumvirate of devices isn't redundant, and having them linked and synced is a huge boost. There are some places I only have my phone, the pad is my choice for meetings, and my Mac is best at my desk.

My only beef at this point is that as with any evolving tech not all features are on all devices. Most notably the ability to assign an item to someone only works on the Mac. It is still infinitely easier to just drag it over their name once I've synced than transcribing it, so it isn't a show stopper. I'm assuming this will be resolved in an upcoming release.

Email works seamlessly - I connect to both IMAP and Exchange servers on my nine email accounts and everything is going smoothly. With the iWork suite installed ($30 for word processing, spreadsheet, and presentations) I have access to almost any attachment.

Integrated calendaring is wonderful - and having it synced with the desktop and phone is just as useful here as it is with my to do lists.

Both email and calendar are great examples of apps that have a high utility on my phone but which benefit from the larger screen of the pad. iPhoto also falls into this camp. As a general rule when you are managing stuff more screen improves usability.

Implications for education

Students have always been challenged to manage information - schedules and homework assignments in particular. Teachers face an even more daunting info management task as they juggle assignments, rosters of students (and their families), state and district standards, and instructional materials.

The iPad will be a real boost for both groups. At a basic level it will make automating and interacting with complex data much easier. Blackboard's demo of their iPad app shows how this can work.

But most importantly I believe it will make it easier to make connections and use information in on-line databases at the teachable moment. With 3G you can dig into your stuff anywhere at the moment of need.

Sure you can do most of this on your phone today - but after three years the scrunched over squinty stare at my phone is wearing thin. The iPad provides much more natural and human scale interaction.

Creating Content

The iPad is an imperfect content creation device, at least without a couple of additional tools. For short bursts of writing, photo editing, and simple drawing is performs admirably. More complex tasks can become a chore.

Admittedly my facility with the interface is still evolving and I've been so bowled over by the consumption and management tools that I have not done a ton of creation yet. My take on this could be quite different in six months.

Don't believe the hype about touch typing on this device - you might be able to make it work but I've reverted to a two finger hunt and peck style. The speed I get with this approach is similar to thumb typing on a Blackberry and is quite acceptable, but it is about half of what I can do with a keyboard.

I have found when taking detailed notes in meetings that an external Bluetooth keyboard is essential. I think this will also make it possible for me to travel without my laptop. For walking around a show floor I'll just need the pad - if I'm back in my room writing a blog post I'll be on the keyboard. (For the record this whole post was written without the keyboard.) No more paper notepad for me.
I think I will probably never buy another laptop. I'll have a full blown system at my desk for big tasks and my mobile tasks will be shared between the iPad and iPhone.

Implications for Education

We will still need computers in schools for content creation. If kids are writing a couple of paragraphs or using a worksheet a pad will suffice. At the primary grades a pad may be all that is needed. As the assignments get more complex students will need access to a variety of devices including full blown computers.

Ironically it is quite possible that pad computing will bring back the computer lab. As kids dash between classes juggling assignments, doing just-in-time research, and taking notes the highly mobile pad will rule. When it comes time to write a 5 page paper, delve into a complex set of scientific data, or draw an image existing platforms will have a role.

Over time this may change. The fate of scientific workstations may hold a cautionary tale for PCs (all flavors). Initially the workstations held their own and even flourished as low cost PCs flooded the market. The specialized hardware, large monitors, and data crunching capabilities had a place and earned a huge premium. But eventually Moore's Law caught up with them as PCs rivaled their specs. Poof they went to a niche of a niche.

In Summary

After a few weeks of steady use I'm convinced that pad computing will change the face of educational publishing.

The most immediate impact will be in instructional materials as publishers scramble to take advantage of the new interface. As a buyer I would move carefully in this environment - there are likely to be a few dead ends as we collectively discover the best uses of the new tech. Find those places where the impact will be the greatest and start there.

A second wave of benefits will come when the SIS and Data Warehouse folks design easy to use interfaces for their systems. Since most of these are web based already this isn't that big a technical leap - but it is a huge user interface challenge.

But the huge payoff will come when students can create and manage their content on these devices. Interactive wiki like textbooks, vast video libraries, and student portfolios should have a new and more usable place in teaching and learning.

That is - when the price comes down. Which it will.

Get ready.

An iPad has been floating around the PCI office for the past week (thanks to Randy Pennington's ed-tech jones). Will it be a game changer for education? Can it redefine how we deliver instructional content?

I've tried to refrain from commenting on the iPad until I could see and multi-touch it. Having worked at Apple for 7 years (back in the Pleistocene era) I'm wary of 1.0 releases.

It appears that my skepticism was misplaced in this case. My iPad 3G is now on order (yay!).

Here are a few impressions I've already formed. I'll continue to comment as my personal use matures.

The iPad size and interface make it the perfect content reader.

I've had an iPhone (which I love) for a couple of years. Reading web pages - even those designed for the iPhone - is an eye strainer for those us of a certain age. But for web browsing the iPhone was a huge improvement over the Blackberries I used for years. It was great - until I saw the iPad. Now it feels cramped. Sigh.

I used the phrase "content reader" with purpose. Unlike Kindle and other eReaders the iPad does a whole lot more than text - and in gorgeous color. Movies, animations, games and simulations, and music look and sound spectacular.

I refrained from jumping on the Kindle primarily because about 80% of my current reading is web sites and email. It does neither of those well. Besides, I've never been particularly impressed by recreating the book experience on technology - it just isn't a very imaginative use of the tech. It reminds me of putting plays on TV.

That said - books look beautiful on the iPad. Just don't plan on reading them in direct sunlight.

For education I can easily see the iPad (or something like it) displacing physical textbooks. Because illustrations can be animated (don't try it on the Kindle) and because external web links work flawlessly, the iPad stands alone today as a platform for education content publishing. At 1.2 pounds it slips in a backpack and it sits unobtrusively on a desk.

Stir in a full blown education management system with innovative content and you have a winner. Blackboard has a nice demo of their iPad application in the video below. I can see students and professors at the University level flocking to this experience.

Power to Last All Day

Power has been an achilles heel of several generations of mobile education devices. Because the iPad will run on a charge for a day or two it clears one of the quiet barriers to wide spread technology adoption in the classroom. Teachers and students need to know that the tech will be there whenever they need it if they are going to integrate into daily usage.

Want proof? Look at whiteboards. Until schools started installing them in every classroom teachers could never count on having access to the tech at the teachable moment. As a result they were not widely used. Long lasting power for mobile devices changes the game in the same way.

I saw an ad from Apple last night that this battery technology is in their next generation of MacBook laptops. I'm sure other providers will follow suit shortly. So this advance won't be limited to the iPad.

Small Bore Authoring

I don't think we are going to see the next great novel written on the iPad. But short bursts of tech like blog posts, notes, and and 1-2 page papers should be just fine. The lack of tactile response on the screen based keyboard makes speedy typing problematic. With an outboard keyboard it gets a lot easier, but then you have another piece of crap to haul around, semi-defeating the purpose.

Other media actually do better with multi-touch. Managing, cropping, and resizing photos with your finders - a snap. Editing video and audio by dragging things around - very cool.

I'm looking forward to heading out the on the road with nothing but the iPad. I can stay on top of email, write blog posts, and upload photos with ease (about 99% of what I do out of the office).

There are also presentation solutions - connect to a projector or whiteboard and take it away. There will doubtless be wireless solutions for this as well which will be really nice.

Problem - Price

Except for specialized applications the current price is too high for widespread educational adoption. Full fledged laptops are in the same range. The low end version is $499. The top of the line is $825. Throw in AppleCare and a couple of extras (case, adapters, etc.) and you are in the $700-$1000 range.

I expect Apple will drive down the cost curve as fast as they can - even producing education specific versions to create a market in the $200-$300 range. At that point it gets easier to justify replacing textbooks with the reader.

Competition?

It is too early to really tell who is going to take Apple on in this space. My guess is that people won't stand by for 6-8 months the way they did after the iPhone was released. Expect this to be more of a dogfight. My guess is that Google's Andriod platform and one other provider will emerge as the competitors.

This Mashable roundup has a good rundown on the likely candidates. I'm not sure that in the touch tablet form factor a scaled down Windows 7 will be better than a scaled up iPhone/Andriod OS, but time will tell.

I do believe that the iPhone App platform is a huge leg up for Apple out of the gate regardless of who their competition ends up being. Just look at the thousands of education titles and lectures that already exist.

What's A Textbook Publisher To Do?

For now this is an R&D platform not a distribution channel. I couldn't even bring myself to charge mine on the company card - I took it as a personal expense. But I want to use it, live it, and see how it can change my own workflow. With that experience in hand I hope to have a sounder vision of how the technology can be used in the classroom. It will definitely take off in the trade and home education markets first - schools will follow not lead.

Over the next year we will scatter some around the organization and let people play with it. We'll try some simple projects to learn the toolset, and then we'll get into the serious business of crafting solutions for students with special needs. The multi-touch interface holds huge potential for the population we serve.

We already discovered that Dragon Dictation on the iPad (signficantly better than the iPhone app) can support one of our employees who is deaf in small meetings. It allows more natural and spontaneous two way communication than having to use a sign translator. We speak and it goes to text, she types and we can read it.

Conclusion

The iPad feels in my bones like a game changer - in fact the last time I was this excited about a technology purchase was in 1985 when I purchased a 128k Macintosh. It is so intuitive and easy that a 2 and half year old can figure it out in a matter of seconds. Watch the video below. When she finds the spelling lesson she says "It has games!"

Federal ARRA stimulus funding has been keeping schools around the country on life support for the past year. Despite significant layoffs around the country it headed off catastrophe in many states. That era is coming to an end later this year or early next year.

It was heartening to see Secretary Duncan take up the cause in a statement issued today. Unless Congress acts and provides a second round the deteriorating tax climate at the state and local level is going to cause massive disruption to the education system in 2011 and beyond.

“We are gravely concerned that the kind of state and local budget threats our schools face today will put our hard-earned reforms at risk,” he stated. “Every day brings reports of layoffs, program cuts, class time reductions, and class size increases.”

Potentially hundreds of thousands of educators and other personnel could be laid off if action is not taken quickly to help states and districts cover shortfalls...Literally, tens of millions of students will experience budget cuts in one way or another.” Moreover, schools, districts and states that are working so hard to improve—will see their reforms undermined by these budget problems.

The Secretary urged members to consider another round of emergency support for America’s schools, similar to the aid provided to states through the American Recovery and Reinvestment Act (ARRA). “If we do not help avert this state and local budget crisis,” he warned, “we could impede reform and fail another generation of children.” (emphasis added)

States can not engage in deficit spending and will balance their budgets on the back of massive teacher layoffs, school closures, etc. In most states education is the single biggest line item and accounts for 50% of the budget. While it is always the last thing Governors want to cut they simply won't have an option in the years to come.

The only cavalry that can save the day here is the Federal Government stepping in with additional deficit spending to prop up education budgets.

• Is the political will there to step and engage in additional deficit spending?
• Will advocates for privatization use this as a political opportunity to destroy public education? Many of these folks are also strongly anti-deficit.
• Will reform efforts be set back decades by draconian cuts?

This battle will largely be fought in the next 12 months and those of us who serve schools should get shoulder to shoulder with any educational association we have a stake in supporting. Join in this fight!

Seth Godin makes a critical point for instructional materials.

The platforms are changing all around us. Mobile phones, iPad, Kindle, Android, white boards, Moodle, etc.

Are you paying attention?

I refer you to four part series about technology substitution in the textbook publishing industry. Don't write the changes we are seeing off to temporary market fluctuations. By the time you notice the real trend it will be half over and you have little chance of catching up as the change accelerates.

The economic meltdown is only adding gasoline to a fire that was already going. The tighter funds get the more motivation our customers have to seek efficient alternatives to print.

How much of your development budget are you spending on R&D? The temptation in a down market is to hunker down and focus on low risk projects. I suggest that if you are not spending at least 10% of your development funds on cutting edge projects you are at a high risk of being irrelevant by the time the education market turns in 2014.

Today's hotlinks include Pearson's take on publishing for the iPad, designing playful experiences, the coolest marketing program I've seen in a while, a new augmented reality game to promote social change in Africa, and Photoshop disasters.

John Makinson of Pearson Penguin gave an interesting talk on the future of publishing in an iPad world. Textbook publishers take note - he specifically cites one as part of his examples. This isn't just for Penguin.

Pearson gets it - mostly. But they can't escape the book metaphor. Essentially this is the sidescroller stage of evolution. Beyond Pong, but no further than Mario Brothers. Do something interactive, flip a "page." 3D, embedded social connections ("who else in the world is looking at this page that i could talk too...") etc. is still in the future and will require some radically different ways of constructing and navigating content. Hopefully they are working on that in the back of the back room. Hat tip to personanondata.

Katie Piatt: The Process of Play - shares a solid framework for designing playful experiences in educational settings. The emphasis is on playful not on games. It could be used in a wide variety of products.

ISU study shows that violent video game play makes more aggressive kids. This broad study confirms common sense. What the headline writers miss are two key points. First only a small portion of games are violent, this is not a blanket indictment of games. Second, the effect sizes while real are not particularly large. So lets build some more cool non-violent games like:

Portal 2. I. Can't. Wait. If you missed the original Portal go get it. This is also one of the coolest product sneaks I've ever heard of - marketers take note.

OR - play Susan McGonigal's new game Urgent Evoke designed to politically empower people in Africa. She did great work with World Without Oil - this one looks even more interesting.

And for your amusement go visit PhotoshopDisasters. Warning: you will waste at least 5 perfectly good minutes chortling over this site. You must read the captions - hot piping snark.

Have a great weekend.

OK - admit it, trade shows are fun. Sometimes traveling to a distant city, circulating with your peers, and dining out on the company can be a kick. You are learning too - about competitors and about your customers. The deadlines around a trade show can produce drama and tension, and some people thrive on that.

By comparison web marketing can be a daily slog and there isn't much direct contact with the customer. Web marketing requires persistence and patience. Success is metered in small steps and delivered incremental improvements over time.

In this article I explore who should prioritize shows and who should focus on web marketing and I share some ideas about how to compare the two.

I focus on these two activities because in most cases the best source of funds to drive growth in web presence is a bloated show budget. The palette of marketers is much broader - and the metrics used here can be used to compare the full range of options.

What's a marketeer to do?

Big companies are answering this question in different ways. Apple is shunning trade shows in education pretty much altogether (zero presence at FETC last week). Promethean had a campus sized booth, cheerleaders, and free gourmet cupcakes for all.

Who is right? As always the most important question to ask about marketing spending is "compared to what?"

In order to influence customers you need to be present in different media and locations (print, web, trade shows, catalogs, peer to peer, PR etc.). Customers lend credibility to companies they see popping up in different places.

A marketing budget is a series of compromises that should maximize visibility and revenue. One of the challenges in marketing is justifying visibility when there isn't a direct tie to revenue (i.e. when your CRM can't make a direct link). Depending on your circumstances both trade shows and the web can fall into this category.

I believe the relative value of trade shows has declined precipitously in recent years when compared to web marketing. That doesn't mean you should abandon shows, you just need to think very carefully about using them in the right way. At the end of the day what really matters is profitable revenue.

Lets dive into a pool of numbers to look deeper at this question.

Trade Show Economics

Lets make some rough comparisons to get a sense of the relative worth of the two channels.

Consider a trade show with 5,000 attendees.

• A company with a decent presence (a 20x10 space) might get 100 leads a day requiring follow up.
• If the show goes 3 days this equates to 300 leads.
• These leads will require sales time and energy to further qualify and in the end might be whittled down to 50 sales (1% of the attendees at the show).
• The cost of attending the event will probably be somewhere around $20,000 (booth space, shipping, travel costs, entertainment, signage, drayage) with another $15,000 or so staff time in setting up the show, manning the booth, and then qualifying the leads and closing the business after the show.
• Total outlay $35,000 and a cost per lead of $116.

With a gross margin target of 70% you need to make $1,000 per sale, or $500,000 to make these events revenue neutral. You should be promoting expensive products or reaching decision makers who buy in large lots to make these economics work. If your average order size is less than $1,000 you are losing money on the trade shows (using the lead/order flow assumptions above).

Scale this up or down - the basic economics remain the same. Go cheap and end up in the back corner in a 10x10 and your leads will drop and be lower quality. Glitz it up with rock star lighting and your cost per lead skyrockets along with the required revenue.

Non-Economic Benefits of Trade Shows

There are also non-revenue benefits to being at a trade show and these shouldn't be dismissed out of hand. You build brand awareness, network with other providers in the market, and provide support to current customers.

The most compelling benefit is that full fledged sales conversations can take place at the event itself. If decision makers (larger budgets, more influence) are present at a show then a low number of leads may not be as much of a concern, in fact the show may be an extremely efficient of way of meeting with large number of these folks in a short time.

In education this would argue for attending AASA but not IRA. The attendees do need to be walking the floor not playing golf, so your mileage will vary.

Another valid reason to attend a trade show is influence with the sponsoring organization. If the membership are important customers of yours it is good form to show up and support their professional association.

Brand impressions are less - well - impressive. Assume that 30% of the show attendees are paying enough attention when they walk by your booth that they get an impression. You will reach 15,000 people over the course of a year at a cost of $23 per. Yawn. At the end of the day (or fiscal year) top and bottom line results are all that count - impressions won't buy a cup of coffee.

One other thing - trade shows are moon shots. It is almost impossible to learn and modify on the fly - the event passes so quickly that if your show promotion or materials fall flat you have no chance to recover - until next year.

Internet Marketing Economics

Now lets look at a comparable example for web site.

• The company has invested a significant amount in building out their web presence using an outside contractor to do the heavy lifting which cost $200,000.
• Amortize this over three years and your annual expense is $66,000.
• In addition to this they have three people dedicated to managing the web presence for both content and technical infrastructure at an annual cost of $150,000.
• Ongoing SEO and on-line marketing might cost another $15,000 a year.
• Coding and contract design to tweak and extend the site might cost another $40,000 a year.
• Total annual expense is $271,000.
• Average daily traffic for the site is 700 visits with a 2% conversion rate to leads and 1% purchases.
• On an annual basis this translates into 255,000 impressions, 12,775 leads, and about 6,300 purchases.

Non-Economic Benefits of Web Marketing

The brand impression argument is much more compelling for the website - the cost per impression is a fraction of a tradeshow's ($1 vs $23) and the volume is higher.

Even better - the quality of the raw leads you get on the web are often the highest short of personal contacts from your sales force. I carefully chose the phrase "raw leads" because the downside of web leads vs. show leads is that they are unqualified - no one has talked to them yet to get a sense of how truly interested they are.

But - these customers are actively seeking you out when they search on the web and then put their hand up for attention. At a trade show most of the people who stop are just chatting - they were walking down the aisle and needed a break. This is one of the fundamental differences in on-line lead generation and all other forms (here is an extended post on this subject).

While websites generate leads at a slower pace, over time they greatly surpass tradeshows in high quality leads because the volume is so much higher. It isn't even a tortoise and hare story since the leads from a 3 day trade show are equaled on the web in 10 days (100/day vs. 31/day).

The Bottom Line

So lets break it down. The following chart maps out the examples I gave above.

From a marketing investment standpoint these are equal - the return to the company after the cost of goods and cost of sales is zero. But this isn't realistic for a specific company - it merely shows the price points at which each option starts making a net contribution to the larger business. Between $61 and $1,000 the web is going to be a much better deal for you.

Get Real

The key is to make this specific to your company. You do that by applying your average order sizes and gross margins for shows and the web and your specific metrics (costs, response rates etc).

Here is an example from an average of a few supplemental companies that I have familiarity with. Their trade show related sales are typically double what they earn on the web largely because a Rep is actively working them. BUT - even with the benefit of this difference they are losing money on trade shows and are wildly profitable on the web.

To get to parity on the contribution margin if we hold the web order size at $250 the comparable trade show revenues need to be $4,000 per sale.

But what about gross margins - won't they affect this result? Somewhat - but order size has a bigger impact on this decision. If your gross margins are 90% you have a breakeven of $778 on trade shows and $48 on the web. If they are 40% breakeven is $1750 for shows and $108 for the web. The essential story doesn't change.

This example makes clear why Apple is shunning shows and Promethean is investing heavily. Apple sells tons of individual computers at something less than $4k with moderate gross margins while Promethean is mostly doing building or district level deals that bring in orders in six and seven figures with higher gross margins. The gearing all works in Promethean's favor for shows and in Apple's favor for the web.

In Conclusion

The conclusion is pretty clear - if your average order size is modest you probably should not be prioritizing trade shows (or you should be focused on dramatically increasing your average order size). Most companies should go to a handful of shows for the non-economic benefits - but choose carefully and scale your presence appropriately.

Don't be seduced by the work and "prestige" involved in trade shows - its easy to think that because you are busy and talking to customers that you are doing the most productive thing. Dig deeper - challenge your comfort zone on this.

Do you think about your web presence as a 24/7/365 trade show booth or is it something you feel like you have to do? Is it getting the same level of sustained attention that major events get?

Shouldn't it?

FETC 2010 provided an opportunity to assess the health of the Education Technology market. In today's guest blog my friend Mike Baum shares his take on the highlights and lowlights of this year's trade show

By Mike Baum

Coming to Orlando from Wisconsin in January, I expect warmer weather. I didn’t expect 50 degrees to be greeted as a warming trend. And when I saw the conference center adjacent to my hotel was hosting a national beekeeping convention with the alarming title “Keeping the Hive Alive,” I began to watch out for falling metaphors.

Traffic Report

The Florida Education Technology Conference (FETC) 2010 wasn’t all bad news by any means, but true optimists had their work cut out. Attendance and traffic, while possibly higher than last year’s debacle, were light and sporadic. Exhibitors by one account were down by 100, with absentees divided between business casualties of 2008-09 and firms keeping powder dry for ISTE (nee NECC) in July and possibly TCEA next month.

At least one long-time major exhibitor has permanently downgraded FETC to a “regional show” vs. the must-attend national show it once was. Companies still seem to consider FETC an important “announcement show” – more in a moment – but that’s due less to real significance and more to just the calendar, like the New Hampshire primary used to be.

Attendees

Booth visitors were mostly classroom teachers, some school administrators; of the few district people I encountered, most were IT with focus on the “T” – not engaged in curriculum decisions. Some shoppers, few buyers, at least at this moment.

To some extent this was to be expected: continued weak economy, a state whose budgetary problems are in the top 10 or 15, still early in the decision-making year. And as Lee’s last entry of 2009 noted, spending is likely to come even later this year than usual, nationwide. One bad swallow does not the Heimlich Maneuver make. Still, I think one can reasonably draw some conclusions – both negative and positive.

Implications

Negative: with apologies to my beekeeping friends, the buzz is over, at least for a while. One presenter at the show pointed out that we’ve come off a decade of education spending at 2X GDP growth, and that’s over. Much of that money came from rising property taxes driven by the real-estate bubble. The splash from that burst bubble is likely to dampen ed budgets for the next 2-3 years.

Tech spending may be further retarded by success: technology is ubiquitous in society and pretty plentiful in schools, so it’s not a question anymore of adding technology so much as what you do with what you’ve got, to really impact educational outcomes.

Vendors also have an increasing amount of “good free” to compete with – perhaps a dozen FETC sessions touted free resources from everyone from district or state consortiums (Florida especially is rife with them) to our friends at Google. So we all will have to come up with compelling educational reasons to make incremental or replacement purchases, at least for some time yet.

Positive: life goes on, technology is here to stay, and even if the market is stagnant there’s always gain in market share. NetTrekker formally announced expansion of their popular safe-search and web resource platform to the U.K. Discovery Education announced plans to enter the next Florida adoption head to head with traditional textbooks, as they did successfully in Oregon. Online delivery of content isn’t a panacea, but where it provides schools with a clear advantage it will sell. Expect pushback from the traditional publishers, of course, but historically they have trouble really focusing on ed tech.

What To Do?

The key, I believe, is finding fertile spots – I hate to call them “niches” – where technology makes it easier to do things educators want to or must do in light of larger trends. Such as?

Professional development – increased demand for “job-embedded” PD, which has to be largely online-enabled.

Writing – several people have pointed out that kids are actually writing more than ever before, between texting, blogs, and social networking – and if those messages are often short and cryptic, well, so is haiku.

Assessment – isn’t going away, must be delivered in short, teacher-friendly bursts to be really effective in improving outcomes.

Games – to many, a four-letter word, but increasing research (as presented by Lee at a fascinating session) shows they can demonstrate real educational outcomes if properly designed.

Targeted applications that help individualize, improve academic learning time, increase motivation.

Up here in the frozen north we know that a hard freeze is necessary every so often – kills mosquitoes, and many seeds actually require one to germinate in the spring. Maybe that’s an encouragement while we’re working to keep the hive alive.

Mike Baum
Principal
Sophia Consulting LLC
mhbaum@gmail.com

Mike is a business growth consultant specializing in K-12 marketing and product strategies. Former CEO of Renaissance Learning, he has 15 years of experience in the education market and over 25 years of helping companies become bigger companies.

At PCI we are putting the finishing touches on our 2010 budget. The Stimulus funds are creating a particular challenge as we look out over the next 12-24 months. On the one hand there should be plenty of new money in the market next year. On the other, despite ARRA an additional 9 states are sliding into California like crises as the housing slump begins to affect tax receipts.

There are two core questions companies need to answer as they think about priorities for the coming year.

• Timing - when will the funds flow?
• Volume - how much of the stimulus will be available for instructional materials?

By December 11th 2009 less than 40.1% of the stimulus funds have been committed, and much less than that in some specific funds (e.g. Special Ed is only 12.3% spent). Since funds have to be obligated by this coming fall and spent by the fall of 2011 that probably signals a wave of orders in next summer's buying season.

But wait! It has taken three years. but tax receipts are finally catching up to the housing slump. Since 34% of education funding comes from property taxes (Richard Sims, NEA) this is going to mean that moving forward more ARRA funds are going to supplant state funding. Depending on a particular state's reliance on property taxes and how hard they have been hit by the Great Recession we will see a wide variety of state level differences.

[click to see a state level report of ARRA spending]

This affect is going to be felt broadly. Texas, which has not been hit particularly hard by the slump, is facing a shortfall and is planning budget cuts. Florida on the other hand is in full blown crisis mode (along with NJ, IL, WI, and several others). You will need to look at where your pockets of strength are to gauge the impact on your particular business.

We expect the spring to be tight - Superintendents will sit on any funds they have until they know their new allocations from the legislatures. Once this issue has been resolved the summer will be extremely busy.

% of Spending by Month

For publishers this kind of curve presents a particular budgeting challenge. The investments you need to make in staffing, inventory, and marketing to maximize your returns during the summer need to be made during the spring when the outcome will be in doubt. It would be easy to bet wrong in either direction - either holding back and letting competitors reap more than their fair share or overspending and being left with your own ugly budget cuts in the waning months of the year.

2. How much of the stimulus will be spent on instructional materials?

If the curve above represents when the funds will flow what about the amplitude? Just how much growth will ARRA mean for Education Publishers? I've speculated before that about 4%-5% of the stimulus will be spent on instructional materials. Normally materials are about 1%-2% of education funding but because there are so many restrictions on how ARRA funds can be spent we expect a slightly higher amount to flow to materials. They are a relatively quick and non-controversial investment in most cases.

This would mean an incremental $4-$5 billion in the publishing and materials markets. Since the funding sources that will go for materials have the most money left the big bump is still ahead of us. Title 1 has 78% left, IDEA has 88% left, and Ed Tech has 98% left [link]. By contrast only 1% of the construction money is still available.

This will be spread over 2010 and 2011 but odds are that about 60% of the balance will be spent in 2010. Roughly, that could translate into an incremental $2.6 billion available to publishers this coming year. Wow.

The chart below presents an interesting view of a company doing $10m in revenues pre-stimulus. Note that in both scenarios (flat and up 20%) the revenues will be below a normal year through May. For the first four months to equal a normal year's revenues annual sales would have to be up 50% over a normal year.

Revenue Projection by Month

Conclusion

This is going to be a very unusual year in a market that is used to a high degree of predictability. Mileage by state will vary widely - so dig deep in your planning scenarios to project the impact in your areas of geographic strength.

Plan for the best, expect the worst, and watch all your leading indicators very closely.

The tribe gathered, bad coffee was drunk, stale muffins were eaten, and we shared insights and guesses about where education technology and publishing are headed in era of tight budgets and ARRA munificence. It was a typical first week of December in New York.

Here is the first of my overviews of what happened during the week. Subsequently I'll dig into the AEP CEO Roundtable, the MDR Christmas Party, and the AEP Hall of Fame Breakfast.

SIIA Education Technology Business Forum - Tuesday Dec. 1

International

The panel on International Opportunities discussed the trends outside of the US market - the growth of mobile phones as a platform, the demand for professional development to make sure existing investments are being used, and that no one (not even Pearson) can do go international on your own - partnerships are essential.

One point that was almost a throw away at the end but which is critical for companies just starting down the international path - translation is not localization. The management tools, images, and examples all need to be culturally appropriate.

Funniest moment - when Steve Dowling from Pearson was asked how companies smaller than Pearson can take advantage of international opportunities he deadpanned "We'll make you an offer..."

Investment

A second panel "Where are the Investment Dollars?" struggled to answer this question. Short answer - they are not there - come back next year. George Cigale, the moderator, jested in earnest that given what we heard from the investment professionals on the panel that it would be easier to raise $5 million through revenue tied to ARRA than to try to raise capital.

Investors see Education as the last inefficient media market and want to invest in companies that are going to create disruptive innovation. Incumbents who are trying to accommodate the current system need not apply.

Also - if you have already done all the hard work of building a product and proving that the business model works they would be interested in possibly, maybe, looking at it. Next year.

Part of the reason for this hesitance is that while the Stimulus is creating unprecedented opportunities for education companies, it is making valuations problematic since investors rightly see current performance as unsustainable.

My humble suggestion is that until investor groups demonstrate a willingness to actually take some risks alongside entrepreneurs that we stop inviting them to this event. We are like a battered spouse, always hoping they will love us next year if we just try harder. There are many examples of small education companies who have found alternative paths to capitalization - those are the examples we need to be elevating to the podium.

Fundamentally education can be an extremely profitable market with intense long term loyalty. The problem for most investors is that it is all about a mountain of slow nickels rather than a small pile of quick dollars.

We are the proverbial turtle and most investors have the patience of a gerbil. One good outcome (hopefully) of the current downturn is that it will wring some of the quick-buck-at-any-cost mentality out of the investor community. A return to fundamentals will greatly help education.

Post Stimulus Outlook

This panel tackled the question of what a post stimulus market will look like. Richard Sims, Chief Economist for the NEA, shared a frank and rather brutal analysis of what lies ahead for education budgets. The punch line - while real estate started to tank in 2006 it wasn't until 2009 that actual tax receipts started to suffer at the state and local level. There is a three year lag in the funding flow. This matters because 38.5% of education spending comes from real estate taxes.

If the market bottoms out next summer we have 3-4 years of declining state budgets ahead of us. There are 9 additional states who will find themselves in California's shoes in 2010 including NJ. FL, and IL. He projected that it will be somewhere between 2018 and 2020 that we return to 2006 levels of funding. Get used to it.

He was also not as concerned with the debt we are running up - but only if we spend it on things that generate growth in the long term. Debt financing is a common model for companies - and the US has shown before that it can also work for countries.

Companies have to be focused more than ever on the parts of their solutions that help districts be more efficient and that deliver savings over traditional ways of doing things.

Obama's Education Technology Policy

Karen Cator, the new head of Education Technology at the USDOE, spoke about the plan they are assembling to drive technology usage in schools. I'll write in more detail about this later but the bottom line is that the tech plan will focus on enabling the four assurances included in ARRA. They intend to use the bully pulpit to make sure that our tech dollars are going for useful items rather than flashy products that gather dust.

Summary

I came away from the day inspired by the entrepreneurs that are working hard to build interesting businesses in the education market. I also came away chastened by the pessimism of the investment community and hard realities of our economic situation.

Those of us in the business need to get up every morning willing to make a difference in children's lives and focused on doing it in an efficient and sustainable manner.

Technorati Tags: AEP Hall of Fame, Association of Education Publishers, CEO Roundtable, Ed TEch Business Forum, ETBF

The education publishing tribe's annual gathering is in New York this week. Today kicks off with the SIIA Ed Tech Business Forum (sold out) at the Princeton Club followed by the AEP CEO Roundtable (2 seats left) and the MDR/Peter Li Christmas Party tomorrow (by invitation), and the AEP Hall of Fame Breakfast on Thursday.

This annual trek is an important part of the culture of our industry and if you have not participated I encourage you to make time next year. I love me some social media - but there is no replacement for looking people in the eye, handshakes, and hugs for old friends. 95% of communication is non-verbal after all.

Over the next few days I'll be putting up a few posts about the events this week. My intention is not to provide general reporting, but to drill in on a few things I find interesting. We'll see how that goes.

New York in early December is a special place. The air is crisp and clear, the store windows are all dressed for show, and the expectation of Christmas hangs in the air. Make your hotel reservations early and stay to see the tree lighted!

Technorati Tags: Association of Education Publishers, CEO Roundtable, Ed TEch Business Forum, ETBF, MDR, New York, AEP Hall of Fame

literacy n. The condition or quality of being literate, especially the ability to read and write.

Surpise! It turns out that the generation in school today is writing more and reading more. Several recent reports provide evidence to support this startling claim. The internet - a time pig that has consumed us with new ways of doing things - has wings.

This trend is global - according to the CIA literacy rates went from 50-60% in the 1970's to over 80% by 2005. Teens are leading the way. TV is for geezers.

If you are an education publisher are you stuck in the paradigm that kids are reading less? Are you aware of the kinds of writing they are doing and are you building it into your products?

Reading

Publisher's Weekly reported last week that the lone bright spot in trade book publishing is the teen market.

"In an industry without a lot of good news to report, the one consistent bright spot has been publishing for teens. While adult trade sales are expected to fall 4% this year, juvenile and young adult sales are expected to increase 5.1%, according to the PW/IPR Book Sales Index."

"When asked what formats they prefer, 79% noted paperback while 74% said hardcovers. Audiobooks were favored by 6%, while e-books were noted only by 6% and 13% had no preference as to format."

New technologies are driving up the reading habit.

Libraries that have instituted game nights have seen teen circulation of books soar.

"...once teens come to library because of gaming, they also find time to study, to check out books. Most importantly, they also find time to learn. They learn about information technology, they develop research skills that will serve their life-long learning needs."

"Gaming in libraries? You bet! with an investment of about $900, (less than 1 tenth of 1% of budget) we have over 3,000 new young adult library users."

"...receptive coding skills, the ability to immediately recall a word or series of numbers. This type of testing indicates greater focus and attention, a key issue for children with ADHD. The more times the kids played the game, the better they did."

The evidence shows that todays kids are reading more and that new technologies can have a positive impact on old habits.

Writing

In September I shared an article from Wired about the revival of the written word in the age of social media. An excerpt is here:

Work done at Stanford shows that todays students are writing more than their parents - in fact 38% of their writing is has nothing to do with school. Better yet - they are writing for an audience - or at least an audience wider than a single Professor.

Here are a couple of key quotes (emphasis added):

"...young people today write far more than any generation before them. That's because so much socializing takes place online, and it almost always involves text."

"It's almost hard to remember how big a paradigm shift this is. Before the Internet came along, most Americans never wrote anything, ever, that wasn't a school assignment."

"The fact that students today almost always write for an audience (something virtually no one in my generation did) gives them a different sense of what constitutes good writing. In interviews, they defined good prose as something that had an effect on the world."

We are seeing the same pattern in literacy that we have seen in other media as they digitize. Increased exposure and access leads to an increase in demand. Movie studios fought HBO tooth and nail - until they realized that more people were going to the theater. The web - with its heavy emphasis on text - is leading a revival of literacy skills.

I can see my generation huddled around a TV watching Dukes of Hazard reruns muttering to ourselves that "three channels of TV were enough for us - why do these damn kids need all these books. Don't even get me started on all that high falutin writing they are doing...."

The younger generation is leading the way as they absorb and reflect the values of the internet culture. Engage, advocate, make, connect, reach out, sift. Read. Write.

By Guest Blogger Randy Wilhelm - CEO of netTrekker

One of the most obvious ways to engage students is to give them access INSIDE of school to all of the amazing Web 2.0 tools that engage them OUTSIDE of school. Who hasn’t tried to get through to his 15 year old with an iPod cranked in his ears and a cell phone glued to his hands?

But as students’ familiarity with and reliance on the Web 2.0 technologies grows, schools are still fighting the battle of how to incorporate these engaging tools while keeping kids safe and protecting them from inappropriate content and online activities.

Safe Search Awards

To help answer the question of whether safe search is useful search, we sponsor the Safe Search Awards program. Each year netTrekker honors the 100 top districts that encourage students to search widely and safely. The Awards Index is broken out by small-, medium- and large-sized districts.

Top Award Winners

• Large District - Forsyth County Schools in suburban Atlanta finished first for the 3rd straight year (over 7.3 million safe searches)
• Medium District - Tangipahoa Parish School System in Louisiana (1,875,328 searches)
• Small District - Austin Public Schools in Minnesota (675,485 searches)

7.3 million searches? For 32,000 students? 228 searches for every student is a lot of information access no matter how you measure it. Students are finding the information they need via safe search, and they vote with their fingers every time they access content this way.

Why are students using these tools so extensively? We provide vetted and relevant digital information (content, images and videos) that they can source, evaluate and incorporate into their learning projects.

Teachers also need ways to quickly and easily find digital resources that meet individual learning needs.

Publishers Wanted

Content provided by Educational Publishers is particularly useful in an engine like netTrekker that focuses on instructional relevance. Publishers have an opportunity to proactively deliver their digital content through netTrekker, reaching over 10 million students in thousands of schools. If you're interested in learning more about this option contact Alan Whisman, Director of Business Development at awhisman@nettrekker.com.

netTrekker is honored to help schools with the foundation of safe search. Ten years in and we continue to develop our safe search tools into a solution that brings together educational content and web 2.0 resources to engage students in a more personalized learning experience.

It is something good for kids, and that is what we are all about.

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Disclosure - netTrekker is a former client and Randy and I sit on the AEP Board together.

Vast is too small a word to describe the Frankfurt Book Fair. Spread over several buildings - each the size of a normal convention center - one can find everything related to publishing in the world. It's literally literature.

We attended this year because education publishing, a business with deep local ties based on culture and economics, is globalizing along with everything else.

In my consulting practice prior to PCI half my clients were international companies, not traditional US based publishers. This was my first clue.

My second clue was that some of the people I respect the most in the supplemental materials market have been attending Frankfurt for 15-20 years. Their companies do healthy international business that contributes significantly to the bottom line. Teacher Created Materials, Evan-Moore, Benchmark, and others surf international opportunities in the American Collective.

As one of them pointed out to me - if you have a meeting that goes bust you just move on to the next one 10 minutes later. It isn't like you flew to the country and spent 2-3 days on a single meeting. In 2-3 days at Frankfurt you can expect to have 20+ meetings.

PCI's focus on students with special needs means our market is relatively narrow compared to some of the other publishers. Even so, it was an incredibly productive few days - I met with publishers and distributors from almost every continent.

If you are considering moving into this arena the advice I've gotten is to make a 2-3 year commitment to building momentum.

To jump start your efforts AEP (The Association of Education Publishers) in partnership with the Book Fair sponsors the Educational Publishing Pavilion (EPP). They book the hotel, handle set up, and get you a small stand in among other education companies. They also work hand-in-glove with the US Commercial Service (a division of the Department of Commerce) to book appointments with prospective partners and to provide staff to tend your booth when you are away for appointments (thanks USCS team!).

Other AEP companies in the Education Pavilion included SMART, National Geographic, Nettrekker, National Science Teachers Association, Solution Tree, Livescribe, and Eye on Education.

I recommend the Buchmesse highly if you are thinking about expanding internationally. We have been able to make connections that should bear fruit over the next several years.

Disclosure - I am on the Board of AEP.


Additional Media:

Facebook Photo Album including shots of Bill Evans, Rachelle Cracchiolo, Tom Reycraft, Peter Schneider, Jo-Ann McDevitt, and David Beacom.

AEP Video Link

How is the marketing mix for companies that sell to K12 schools evolving? At a time when we are experiencing an explosion in the number and type of marketing programs we are also seeing rebalanced budgets and a consolidation among the large support organizations. The economic downturn has only accelerated these trends - it isn't responsible for them.

The Paradigm is Shifting - Slowly

To begin with - maturing internet search and peer to peer social media networks are changing some of the underlying assumptions of what marketing does. Put simply, it is far more important to be found today when someone is searching than it is to interrupt them when they are not. A customer who has typed in relevant search terms and come upon your site or who reaches out to their network to help them solve a problem and been referred to you is the highest quality lead you can possess. They are actively seeking a solution that may include your products.

Put another way - when you mail a catalog 99 out of 100 people are not interested enough in what you have to say to act on it. By contrast 99 out of 100 of the leads from the web or social network are ACTIVELY in the process of seeking solutions.

This causes a severe case of cognitive dissonance in traditional marketers. They gotta talk to a whole lot of people to be effective - more people, more contacts, mass reach is the name of the game. The new media numbers scare the bejesus out of them because they look so small. If it helps - imagine a line of 99 people standing behind each web lead. 100 visitors to your website translates into a 10,000 piece direct mail campaign with a 1% response rate.

What are companies doing about this? The ones who are growing are investing marketing effort and budgets in driving traffic and social media presence.

Here are some of the marketing activities:

• Write a company blog
• Add valuable commentary to other blogs - like this one (;->
• Social media network presence (Facebook, We Are Teachers, etc.)
• Optimize your web site for search and e-commerce
• Establish a Twitter fan base
• Loyalty and retention programs

The problem for traditional direct marketers used to immediate results is that they put up 5 or six posts - don't see any meaningful traffic - and they move on. So many blogs go absolutely no where that Google won't even take you seriously until you have at least 20 posts. For real traction shoot for 40-50. If you have a reasonable posting schedule of 1-2 posts a week it can take the better part of 6 months to get to this point.

If you don't see results in six weeks don't move on to the next shiny marketing object. You need to invest for 12-18 months to see real results in this sphere. If you stick with it you will see customers your competition don't even know exist. They will get to your site - find exactly what they were after - and take action.

Social Media and Marketing Budgets

Since sincerity and authenticity are the coin of the realm in social media it is very difficult to outsource this type of activity.

The best money you can spend here is on people to manage and engage in on-line communities. The choice of wording is precise - you don't engage with (traditional marketing - we do it to our customers) on-line communities - you need to engage in a conversation (new marketing - you are a member of the community) - involving real give and take.

The goal is building a new kind of house list - a list of customers who want to be engaged in a sustained conversation with you.

Because traffic builds slowly and organically this requires a sustained investment in people and activity.

But peeling money away from traditional marketing to do this isn't as easy as it might seem.


Traditional Marketing Still Rules

Chucking traditional marketing activities while you engage in the new stuff would be suicide. The paradigm is shifting - but the change is very slow and evolutionary. More importantly, traditional marketing activities can be successfully cross pollinated with social media based marketing.

At PCI we are having a lot of success working our catalogs and our web presence as one combined outreach effort. We cross promote them and find that customers like moving back and forth as they use each for a different kind of decision making. We also track our channel based activity and while catalogs have seen modest declines in effectiveness in the past few years they still make up the bulk of our revenue base.

Many companies have shifted direct mail to email campaigns with mixed results. It is certainly cheaper to blast out emails - but schools have grown increasingly sophisticated about blocking anything resembling spam.

We are at a point with email that you may be better off moving to a hybrid of traditional direct mail with a web response mechanism. Treat your direct mail piece as a resume' that gets you in the door - manage your website as the interview.

Bottom line - while you may be scaling back your traditional marketing efforts you can not abandon them. In fact - by linking them explicitly to your on-line efforts you find synergies between them that improve your effectiveness.

Traditional Marketing Budgets

Even as the paradigm shifts many companies are finding it hard to shift out of their old spending patterns. The new stuff isn't coming on-line fast enough to just cut the old - and declining returns from traditional approaches mean you have to increase your spend to see the same results you got in the past.

In this context companies are getting more and more creative. There is a lot of list swapping between companies (I mail your house list - you mail mine). People are merging old activities with web based campaigns (see above). Marketers are also becoming ever more data driven.

Managers are also grinding harder on suppliers and rewarding those who can innovate and deliver better services at a lower price. In a world where priorities are shifting and budgets are not growing this one of the most powerful ways to free up budget for the new activities.

Support Organizations

In this context there has been some real shifting around in the external support organizations that K12 Marketers rely on. Consultants, list providers, research firms, and advertising venues have all been going through transitions of their own.

At the high end there has been consolidation that mirrors what we have seen among the major publishers. Pressure on marketing budgets is also weeding out marginal players. A company like MDR - which has now subsumed QED and EdNet - is reacting to the fact that there are fewer and fewer large companies that can buy their high end list services. Remaining customers are seeking the efficiencies a larger supplier can deliver.

Marginal magazines are closing left and right - although traditional favorites like Tech&Learning and T.H.E. seem to be doing ok. This isn't just happening in education - here is a list of 10 well known magazines that closed this year.

In response to the technology shifts several new companies are coming in at the mid range. EdRoom, EdWeb, and TeacherTube are some examples of this kind of activity.

At the small end, competition for consultants, agencies, and research is intensifying as large companies shed staff. There has never been a better time to seek highly qualified marketing people on a consulting basis. We started a LinkedIn group for Education Business Consultants about a year ago and we have over 300 members from around the globe.

Research firms seem to have been hit the hardest in this context. This insight is purely anecdotal on my part. If this is true is isn't a smart move on the buyers' part. Imagine you are lost, hungry and thirsty. Would your first action be chucking the map out the window? That is the equivalent of cutting research during an paradigm shift combined with a severe economic downturn. Sigh.

In Conclusion

In the 20 years I've been involved in marketing to schools there has never been a more interesting AND more challenging time to do this job. Shifting paradigms, new approaches, and severe budget pressures make managing the mix a real juggling act.

Good luck with that.

Clive Thompson over at Wired has a great short essay on the modern revival of the written word in the age of social media. He cites work done at Stanford that shows that todays students are writing more than their parents - in fact 38% of their writing is has nothing to do with school. Better yet - they are writing for an audience - or at least an audience wider than a single Professor.

Here are a couple of key quotes (emphasis added):

...young people today write far more than any generation before them. That's because so much socializing takes place online, and it almost always involves text.

It's almost hard to remember how big a paradigm shift this is. Before the Internet came along, most Americans never wrote anything, ever, that wasn't a school assignment.

The fact that students today almost always write for an audience (something virtually no one in my generation did) gives them a different sense of what constitutes good writing. In interviews, they defined good prose as something that had an effect on the world.

First Hand Experience

Writing to engage an unknown audience is a skill that, until very recently, only a few of us have had to master. My blogging experience has convinced me that this is a good habit of mind to develop. When I have to explain my thinking in an on-line context I'm forced to organize my thoughts into a logical sequence and put some metaphorical polish on them. Its a mental workout.

When I started this blog over 2 years ago I realized that I hadn't written for an audience in decades. Other than a couple of brief forays into campus journalism I'd almost always written for someone I knew on a topic that was an assignment or an internal work project.

When we are sharing a drink at the EdNet reception tonight I'll be able to speak with a bit more authority and ease than I could pre-blogging.

Implications for Publishers

A critical part of engaging and motivating today's learners is incorporating the new literacy tools into teaching and instruction. Just because writing is an assignment doesn't mean the only person who counts is the teacher.

Imagine an assignment where the grade involves engaging others with your writing - provoking a thoughtful response to your ideas. Wouldn't this be far more interesting than regurgitating the facts? Wouldn't it be more authentic? Wouldn't the engagement provide a wider view for the instructor to gauge the work of the student?

Here are a few questions to stir the pot as you look at your own materials.

• What are you doing in your products to encourage writing that is visible beyond the classroom?
• Are you engaged in social media yourself - learning first hand the new craft of writing?
• Have you created an on-line space where students can share their ideas?
• Do you reference tools and resources that allow students to blog, wiki, tweet, and plurk?
• What are you doing to help teachers make this transition?

EdNet 2009 starts this Sunday in Chicago. This is one of the three most important events of the year* for networking and professional development in the education industry. I've been attending since the early 90's with only a couple of absences.

Nelson Heller, EdNet's founder, has also been a friend and mentor - as he has so graciously been to many of us across the industry. This year the conference is under MDR's aegis - and it will be the same top-notch opportunity to expand your consciousness it has always been

Why is this event important? In a nutshell it is all about conversational efficiency. You can talk to more people about partnerships, recruiting, selling, or just "gettin ta know ya" in a few hours at EdNet than you could in two months on the road.

Making The Most Of EdNet

Here a few tips I've learned over the past 18 years that might help.

1. Ignore the sessions. The most important work at EdNet happens in the lobby, bar, and coffee shops around the hotel. If your goal is to have conversations with a lot of folks you can't very well do that when you are sitting in a session.

2. Attend the sessions. That said - there are some wonderful opportunities to polish your knowledge base and see the industry in new ways in the sessions. Take the time to scan the schedule and star the ones you want to try and attend.

3. Be clear about your goals. If you show up without a clear idea of the kinds of conversations you want to have there are endless opportunities to engage in meaningless banter. This doesn't have to take long - hell you can even do it on the inbound flight. You also don't have to have specific people or companies in mind, just let folks know what you are after and opportunities will find you.

4. Learn to gracefully exit non-productive events. At some point you will find yourself in a meeting or session that adds no value to your goals. Find ways of exiting these as kindly as you can. You never know when you will want to engage with the folks you are disentangling yourself from - so don't be rude. But don't let them waste your precious time.

5. Leave time for serendipity. Some of the best meetings I've had at EdNet happened off the cuff. Don't over-schedule yourself.

6. Your ears are more important than your mouth. There are many people at EdNet in "pitch" mode - looking for anyone who will listen to their story. I've found that an enormous amount of market intelligence is available for free - but you have to ask good questions and listen hard to the answers. Leave the pitch at home.

I hope to see you in Chicago in a couple of days - travel safe!

* The other two are the AEP Summit and SIIA conferences.

Special Education appears to be the first K12 market segment seeing the education stimulus dollars flow in volume.

At PCI Education we saw our numbers start to move up towards the end of May. By August we were roaring on all cylinders. As a private company we don't report out our details, but July was up over prior year and orders booked in August were more than double what we saw in 2008. I've heard through the grapevine that Cambium is in the same boat.

What is particularly stunning for us is that according to the reports on the USDOE's site by the end of August only about 15% of wave 1 of the IDEA ARRA funds had been committed. This handy report shows all the stimulus buckets for education and how much each state has already spent - bookmark it if you don't have it.

As I meet with other folks around the industry I'm not hearing similar stories about revenues. Some people have seen a modest pick up, but so far other segments seem to be lagging behind us. So the important question is - is there something unique about Special Ed or are we just on the leading edge of what everyone else will start seeing soon?

Timing

The Special Ed and Title 1 dollars were the first education stimulus money's released to the states back in April. Given this, it makes sense that our customers would see the funds first.

It took a full 8 weeks before we even saw a modest uptick and a full four months before we were comfortable that we were seeing a true trend. At months 5 and 6 we seem to be fully into it.

I would be interested in hearing from others in comments if you are seeing similar patterns. As confirmation - we only started hearing from people at the District level that they had the funds in hand towards the end of July.

Market Cycle

We also know that the regular IDEA funds were released as normal in July. Since districts usually order most instructional materials in the summer, what we might be seeing is educators spending their regular IDEA funds in anticipation of using the stimulus funds for salaries etc. later in the year. Even if this is true - which given the restrictions on using ARRA for avoiding the funding cliff doesn't seem too likely - we are seeing a huge spike in business.

The bad news for other publishers is that if ARRA funds for your products were not available in the summer buying months you may not see the big bump until next summers buying season. We do expect more of a bump in November/December than normal as schools buy materials for the spring semester - but the big buys will come in 2010. The good news - districts have two more years to obligate the funds so they won't loose the funds at year end.

Clear Guidelines

One of the advantages Special Education has is that the IDEA funds are specifically earmarked and because the program is decades old the guidelines are clear. As an established funding arena it may just be easier for districts to start spending these funds first because they don't have to engage in all the internal negotiations more ambiguous new programs (like SFSF) come with.

On top of this, because the Feds plan to audit the spending for compliance, school districts may hang back for more complete guidance in other areas before being comfortable spending the money.

Funds may be taking longer in other markets because there are two additional steps involving a lot of politics that Special Ed can ignore.

1. Get clear guidance from the Feds on what is allowed
2. Negotiate within a district on how the funds will be spent

Some of our particular spike may also be product related. PCI has two new comprehensive reading programs which are being well received in the market. PCI Reading Program and our new Environmental Print Program which are for students with intellectual and developmental disabilities at the middle and high school level. These are selling very well and this is driving some of the spike in our business.

The good news is that if you have something similar in terms of new products the stimulus funds will give them wings into the market. The even better news is that this doesn't account for all the activity we are seeing.

If you have been skimping on R&D and don't have recently released product this may be more of a problem for you - schools still want fresh copyrights!

Conclusion

I believe we are among the first to see what other publishers will start seeing as we get into the fall. There are a couple of unique things about Special Ed and about PCI that may be accelerating the funds coming our way - but the funds will flow. We expect the pace to continue for the next several months and to peak in the summer of 2010.

Perhaps the best news in all of this is that the spike in business is pushing us to do exactly what the act was intended to do - we are hiring for several new positions.

Student Information Systems (SIS) and Data Warehouses (DWS) are the bedrock enterprise software systems in K12 school districts. The K12 Decision Support Systems Market Report is now available. The 118 page report is based on a survey of over 300 district level IT Directors.

ARRA Accountability Market Intelligence

Given the strong emphasis in ARRA on data-driven decision making (D3M) and accountability auditing, the information in this study will provide valuable insight into a market with an urgent and well funded need. The report is a map of territory that has been uncharted.

The Education Recovery site states the stimulus funds will be carefully audited:

ED will hold ARRA fund recipients accountable through reporting and monitoring...ED will monitor all ARRA programs throughout the life of the grants...This includes annual reporting of participation and performance data and site visits to many States.

Report Content

The information is tailored for the needs of SIS and DWS vendors, partners, investors, and policy makers.

The report covers:

• Market share trends
• Intent to purchase by segment in the next 36 months
• Brand awareness and market momentum
• Customer satisfaction levels and causes
• Pricing models and preferences
• Product lifecycle
• Implementation models and timing
• District IT infrastructure (including SIF implementation)
• And much much more.

This study builds on the popular 2003 SIS Trends and Opportunities Report. I have had many requests over the years for a follow up study to show how the SIS market is evolving. The new report leverages the 2003 information to provide a longitudinal view of the SIS market.

As the folks at Educational Systemics and I considered our options we decided that we also needed to cover the emerging market for Data Warehouses. Many districts have installed these systems in the past 7-8 years and we wanted to know what this important new segment of the market looks like. We added a section to the report for this market segment and the insights we gleaned should be useful for decision makers as they evaluate what is next.

Purchase Information

More details about the report are available at K12-Decision-Support.com. You can purchase off the site using any major credit card. Important - SIF, SIIA, and AEP members get at 15% discount.

The 118 page PDF (1.5 mb) will be mailed to you within 24 hours and is for distribution within the buying organization.

You can also contact me with any questions you have about the report by emailing me at info@k12decisionsupport.com.

Many Thanks

Any project of this scope is a collaboration among many people.

• The team at Market Data Retrieval (MDR) were fantastic sponsors who provided a helping hand at many crossroads.
• Our media sponsor Technology & Learning provided the valuable initial lift to get the project going and will be reporting out some of the findings in their magazine and web site.
• Educational Systemics was critical during the survey design phase - making sure we got the questions right. They will be providing follow up consulting services to those who are interested.
• Larry Nelson stepped in at a critical time and wrote the Data Warehousing section.

We'll be blogging here and over at the report site on some of the high level findings in the next few weeks. Be sure to add both sites to your RSS if you are interested in following this thread.

In this second of a two part series, guest blogger James Mayfield Smith responds to my post on Storyline in Textbooks and Video Games. James is an educational consultant, sales executive, and trained applied mythologist.

Part 1 can be found here.


Part 2 of 2: The Tactical Use of Story to Sell

By James Mayfield Smith

When done well, story can be an effective tactical approach for facilitating the buy cycle of a teacher or administrator. It can engage customers, humanize the sales process, build strong emotional connections, and stimulate passionate customer evangelists.

Lucky for us, the teachers and administrators who are our customers long to hear stories and share them with others. We can engage them with the power of business narrative as we architect conversations about our educational solutions. Far more than simply telling the right story at the right time, such a process involves.

• Getting clear about our own story of who we are as a company (and as an executive, regional manager, sales rep, etc.) and the value we bring so that we can be remarkable, as Seth Godin puts it.
• Utilizing data to follow the breadcrumbs to the story that districts are likely to be telling themselves. This allows us to ask the right questions when engaging administrators.
• Listening deeply to the needs of administrators and teachers, with the intent of discovering their deeper story of who they are and the underlying values that drive their decision-making. Such values are often very different, even for those who share a similar role across districts.
• Asking the right questions to find the polarities that plague them. For example, do they need to boost test scores with students who are on the cusp of proficiency, but lack dedicated staff to implement an intervention? Identifying the duality of where they are being squeezed is one effective approach to finding the precise lever that will close a sale, especially during tough budget times.
• Engaging our customers in genuinely relevant dialogue at each stage of their buying cycle. It’s the district’s buying cycle that determines the timing and outcome of the deal. We can facilitate targeted decisions at each stage to keep the purchase moving forward. In contrast, when a sales rep has entered “Presentation made. Awaiting decision.” into the CRM system and doesn’t continue to facilitate the buying cycle, odds are that the purchase may stall with a key contact who is overburdened with other decisions. We can bet that a competitor is moving their own deal forward to take the zero-sum dollars from the budget that might otherwise fund our solution.
• Using business narrative techniques (a.k.a. stories and conversations) to facilitate and co-create a shared future story featuring our customer as the central character and our company as a solution provider that meets their specific needs.

Why did I destroy a perfectly good book today? Actually more than good - Murukami never disappoints. Kafka on the Shore isn't in quite the same league as The Windup Bird Chronicle - but it is a damn fine book.

Did I burn it? No.

Did I rip out the pages and make airplanes? No.

Did I dog-ear my stopping places? No.

What I did was far worse than all that. I read it like email, like a corporate report, like history homework. I raced through it at the pace of our modern life.

At this speed I grasped the most basic meaning and shot on to the next passage without pausing to reflect on the poetry in the words, the river of metaphors (and this book flows deep with them), or even a lot of the humor.

I know better. Art takes time. I got the nub but left the best parts on the page.

This breakneck pace is a survival skill for coping with the onslaught of information we face every day. But when we let that be our only mode of consuming information we skate across the surface of the modern world without ever nourishing ourselves from the deep well of art. We are like boaters in the middle of a lake who are dying of thirst because we are bailing our boat out all day long. We are swamped in words.

In my book, any list of 21st Century Skills that doesn't include learning to read/see/hear for deep pleasure is incomplete.

Here is a simple challenge that will take 10 minutes a day for 10 days. Read a poem, then take 5 minutes to just sit and think about it. Go back over the words. See how it all connects. Feel the dreamlike connection of concepts, words, and emotions that arise from the flow. Is it hard and shiny like a diamond or rough and splintery like old wood? Did you even like it?

After doing this see if you are taking this reflective perspective with you into your workaday world. If it works (and it may not) then spend some time thinking about how you would teach this skill in the instructional products you create. Are you creating opportunities for deep reflection, or just skating over the surface of the standards and checking them off?

Or - rush on the to the next post you must consume!

Interactive Whiteboards (IWB) are all the rage in education right now. Market penetration is about 15% of classrooms and climbing like a rocket. Is it time for publishers to jump on this bandwagon? If so, which digital whiteboard is right for you?

I spent the better part of my time at the National Education Computing Conference (#NECC09) in Washington DC this week attending presentations put on by Smart Technologies and Promethean. My goal was to evaluate whether PCI Education should embrace these tools as part of our publishing plan.

The Good

I'm excited about what IWB's can do for children with intellectual and developmental disabilities (IDD) (the market PCI serves). The ability to project large images and the engagement that comes with directly interacting with the media have the potential to improve instructional outcomes. The boards are kinesthetic, visual, and with the addition of speakers even auditory. All students can benefit from this, but IDD students in particular should get a boost.

Both companies have created on-line spaces where teachers can share lessons they have created. Promethean has the edge here - they have over 350,000 teachers in their community Promethean Planet, making it one of the largest on-line teacher communities in the world. Smart's Teachers Hub is smaller but has a nice mix of resources and professional development.

Another very strong development is a range of tools that are platform independent. One of the metaphors that the white board companies are batting around is that their toolsets (IWBs, response systems/clickers, and audio projection systems) are the "operating system of the classroom." The problem from a customer standpoint and a publisher standpoint is that realistically you only want to support one OS. RM's Easyteach has long had a suite of tools that run on any board. Promethean is promising that if you develop with their tools that the projects can run on other's boards. From a publisher's perspective this is good - but the reality is that few schools will want to invest in a white board which includes software and then go buy a different system. A solution exists today - but for this market to mature more work remains in this area.

The Bad

The tools are still evolving. Many of the examples that I saw were eerily like HyperCard projects from 15 years ago. The gap is that there isn't very much database functionality behind all this - just a flip chart based screen by screen metaphor. Both companies will kick me for saying this - but the closest application to what they provide today is PowerPoint.

Doing animations, and creating interactions seems to involve a series of tricks and work-arounds. Teachers who embrace the technology won't have any difficulty mastering these techniques - but for the rest of the world the tools are not quite as robust as they need to be for easy local authoring. With the amount of investment going into this space it is only a matter of time before the products mature.

If I were in the white board companies' shoes I'd go buy HyperStudio and build out from there. If I were a teacher and wanted to author a bunch of stuff this is the tool I'd use. Maybe a new entrant like Polyvision's Eno will will do this - they seem to be willing to break the mold and they don't have too much invested in a proprietary tool set.

Very little energy has gone into protecting copyrighted materials even as both companies are wooing publishers. Digital Rights Management is a hornets nest and I can understand why the white board providers want to shy away from it. I'd give the edge to Promethean on this one - they have created a "safe" mode where a publisher can release materials but local printing can be blocked (even screen scraping).

A side note - in many cases this is not an issue of the publisher wanting to place unreasonable restrictions on the use of materials. For a lot of older content they simply don't have the rights for open digital distribution.

The Ugly

As Doug Stein wrote on this blog recently the biggest danger of focusing on IWBs is that without systematic reform and professional development it reinforces the Sage on the Stage teacher role.

At its root the competitive arena is a complete rehash of the Mac vs. Windows battles of the early 90's.

The companies are going at each other with the same arguments that Apple and IBM/Microsoft used. Smart touts their worldwide market share (60%) and the need for kids to use the same tools they will encounter in the workplace (see IBM PC marketing). Promethean pushes the meme that their tools are designed specifically for education and are therefore more appropriate for schools (see Apple education marketing). On this one I have to side with Promethean. Their tools do look much more appropriate for the classroom and their student response system (clickers) are much more advanced for input and assessment.

On the customer side we are seeing administrators make the same mistake of assuming that the technology in and of itself has some magical quality that will change and improve what happens in the classroom. In many cases this is driven by a hard nosed career calculus - in the early '90's one of the most visible statements a new Superintendent could make was putting computers in schools. It was expensive, visible, and doable within the 3 year average job tenure they had. IWBs fit the same bill.

Sadly what we learned was that technology without extensive professional development changed absolutely nothing. This was the real lesson those who want to learn from history should take away from this battle. Fortunately Secretary Duncan appears to get this and while he has touted white boards as something ARRA funds should go towards he has also stressed the need for training.

Summary

What do I recommend?

Publishers should start working with IWB toolsets and figuring out the design challenges associated with creating interactive content in large screen format. IWBs are here to stay and their penetration into classrooms is going to climb. Getting familiar with the tools and how your materials can be developed so they are IWB friendly is important. I'd pick one of the cross-platform toolsets - Promethean or RM - or even just work in PowerPoint or HyperStudio.

On the school side I think both solutions are viable although I'd skew towards the Promethean solution since they are so focused on just the education market. It shows in their on-line resources, their development tools, their peripherals, and in the maturity of their approach to the market. New entrants like Polyvision's Eno also deserve a close look - they have a smaller footprint in the classroom and on your budget.

Doug Stein of Memespark has some commentary to share on ARRA and innovation.

By Guest Blogger Doug Stein

I don’t know if you saw this article. It details how one district is spending the ARRA education stimulus money:

• Most of the 6.5 million will be spent to keep teachers in place
• 1.4 million in Title I will be used to outfit all K-5 classrooms in Title I schools with:

• SMARTboards
• Clickers
• Audio systems
• FASTT Math (Tom Snyder’s LAN-based system)

• SMARTboards in all 9th grade remedial Algebra and English
• $51,700 to hire one technology teacher to train the other teachers…

Multiply this by thousands of districts and we’ll have spent a lot of money putting lipstick (and Chanel) on the pig.

To be fair, the one-time nature of the money would mitigate against using it to fund long-term programs; it’s always easiest to spend one-time money on things where you can point-and-grunt to prove you didn’t’ waste it. I’m still hoping some insightful districts will use it instead to “lubricate” the transition to better educational models.

[Lee's note: I'm hoping many companies also use the one time boost in sales to respond to the disruptive changes the industry is facing regardless of the economic climate. This is an opportunity to drive change for our customers and for ourselves.]

How can technology and innovation reshape education? Union Square Ventures put on Hacking Education - a conference that brought educators and entrepreneurs together to hash this out. Unfortunately they didn't have any practitioners from the education technology and publishing industries there. After reviewing the well written summary of the discussion I put together the following extended comment to add the perspective of someone who was there, did that, and got the t-shirts.

As someone who has spent the last 18 years in the Education Technology and Instructional Materials businesses I feel the commentary misses the mark from a business perspective. This isn't a critique of what was was covered - many of the participants are people I admire and cite frequently - Danah Boyd, Fred Wilson, Katie Salen, Steven Johnson , NT Etuk etc. It is meant to talk specifically about the business challenges of translating these great ideas into practice.

It might be tempting to dismiss folks who have been in the trenches as old school - people who "don't get it" - but some of us are not clinging to old paradigms but working hard to create new ones. Experience may blind us to new possibilities - but it may also guide you around some of the land mines many of us have already stepped on.

Most of us who have followed this path have been guilty of advocating massive changes through technology. Sometimes this takes the form the kind of carpet bombing Danah talks about - just throw enough CPUs/Bandwidth etc at the problem and it will magically happen. Other times it is the old saw about having a hammer and the world looking like a nail - see game based learning.

Both approaches share four problems:

1. They never address the scale issue. You can always find success with a few small experiments. If you have been around the market you see the same examples trotted out again and again. As a sales rep for Apple 18 years ago I told stories exactly like Gepettos. They are heart warming inspirational tales of learning and adventure - they are not a scalable business model.

We educate 54 million children in this country - develop a solution that will work for more than 500 at a time and you have something. Remember that in most communities the school system is the first or second largest employer. We spend $550 billion a year on education in the US - second only to the military. You can't run from the scale issue if you want to create businesses that serve the market as opposed to a very narrow niche.

2. Educational practice evolves incrementally and nothing ever goes away. Video games will have a huge impact on learning (they already are) but they are just one more tool in the bag. When a teacher uses and interactive white board it is the functional equivalent of scratching charcoal on a cave wall.

I believe we are at an inflection point and that education is ready for real technology substitution (see this in depth series here about it) but it will probably take a different form in education than it has in our personal media diet.

The most interesting design challenge in our market today is designing systems of instructional products (print, tech, professional development, social media) that amplify and compliment each other. To date most of the energy has gone into siloed products created by technologists or print publishers without any meaningful cross over. Most print publishers create technology that attempts to recreate the book experience on-line - snore. Most technologists are on a mission to kill traditional practices. Both miss what educators are asking for - blended products that use the best of all media.


3. The user developed content model assumes a motivated learner. On-line classes work best for the same students traditional correspondence courses worked for - i.e. not your potential drop outs but those with an extra dose of motivation. See item 1 - I've seen dozens of businesses that were able to get a few hundred users doing creative and interesting learning on-line that were never able to scale up.

Apex Learning which does on-line classes finally settled on AP level courses because those students work well for the environment. The rest of our learners need an actively involved coach and guide to work with them - a teacher. Products that are designed for a blended environment are the scalable answer for broad numbers of students - some on-line some real world.

The group talked about how kids are required to attend school by law. You also need to factor in that schools are required by law to educate all kids, including the ones who don't want to be there. It is a two way street. Innovative materials can go a long way towards addressing this - Tabula Digita's Algebra games are a great example of using technology to improve engagement with the content. UGC won't magically help these kids.

4. Poorly designed economics. Every time an idea runs into problems addressing scale or market needs people start talking about the home school market followed by the private school market. My BS meter goes off whenever I see this in a business plan (or comment thread). These are sizable markets - but each is only about 10% of the whole in students and considerably less than that in dollars. From a distribution standpoint they are also the most diffuse - making it extremely expensive to reach them for very small sales.

The web is definitely helping here, but at the end of the day if you are only going after these segments you are not hacking education - you are chipping away at the fringes. The biggest change will come from working with public schools to address the needs of a broad range of learners.

Christiansen's work would tell you that these are the markets where the innovation will occur first, but I'm not convinced. I think there are segments of the public system where disruptive changes can flourish - ELL and Special Education are two examples. Traditional materials don't work for these kids (disclosure - I'm CEO of a Special Ed Publisher).

Atomized Instructional Content as a Business Model

Another idea that runs into problems with the economics is atomized content. There has been a huge amount of buzz around this for the past few years - the idea being that if we can just turn instructional materials into the equivalent of iTunes teachers will be free to pick and choose the best bits and assemble them in meaningful ways.

This is a very seductive concept but misses an important distinction about educational content. A lesson structure is a bit like an operating system on a computer. If cut/copy/paste are done differently in every application it is very difficult to scale a platform. The user can't use a common base of experience to manage other tools. The same holds true for instructional materials. I'm not advocating traditional textbooks but something in between. Strands of content that can drop in for a week or two rather than an entire years worth.

Try this thought experiment from a business perspective. Assume you have a front line supervisor who has 25 direct reports. Best practice would argue for between 5-8 reports. How much time will that Supervisor have to think strategically about the business? Now imagine that they are required to submit daily and weekly progress reports on all 25 employees - no slacking off on a few of them for a week or two. This is your average teacher. They don't have time to assemble mix tapes of content for all their students.

This conference asked all the right questions. But Education is not a mirror of other markets. I stopped reading the newspaper and my life became richer through social media and blogs. But I can't imagine my kids getting a great education (as they have) if it was left up to our family to sort it out on our own. We need an educational system and if you want to build a business (at least in the near term of the next 5-10 years) you will need to find your entry point into the one that exists.

This is an enormously interesting time to be in the education market. We share the belief that the ultimate killer app is learning - the mind is wired for it. The businesses that can re-engineer publishing to support 21st Century learners and educators will have a bright future.

Related Blog Posts

Education Marketing 101 - A four part primer on entering the K12 Education Market.

Technology Substitution and Textbooks 4 part series

10 Ideas for Building Education Products for 21st Century Learners part of the Information Overload series

Ann Foster of Parents for Public Schools has a great post about the pending No Child Left Behind reauthorization. She is a former school board member and presents a good balanced view of some of the key issues that need to be addressed.

In particular I appreciate her focus on the problems of including most Special Education students in the regular testing regime. She writes:

But perhaps the biggest travesty of all involved the most challenged and vulnerable students in the school district – children with physical and mental disabilities – which in some cases included those who could not even sit up. Sure, there was a provision in the NCLB law that allowed districts to exclude a certain percentage of special education students. But it had no relation to the number of special education students in the district. As a result, some children had to take the test who should have never been required to. It was cruel and unusual punishment. And it should never have happened.

She also covers high-qualified teacher requirements, unfunded mandates, and other issues that Congress should deal with fairly this time around.

Moodys* has completely withdrawn credit ratings for Houghton Mifflin Harcourt (HMH) after downgrading it to high risk just last month. This action means Moodys believes there is a high probability of default. From a practical standpoint this means that it will be harder and more expensive to service the company's $6.7 billion in debt on $2.1 billion in revenue.

According to the Irish Times the rationale was:

"the business risk and competitive position of the company versus others within its industry; the capital structure and financial risk of the company; the projected financial and operating performance of the company over the near-to-intermediate term, and management’s track record and tolerance for risk,”

The timing is particularly inauspicious as stimulus funds for education are just starting to show up in purchases of instructional materials. This should accelerate rapidly into June and July.

If the company is going to fail, it is in the interest of schools and the publishing industry that it happen as gracefully as it can. Many of the lenders have already agreed to relaxed terms which is a good sign.

How HMH would break up and be absorbed by the other industry leaders is an interesting question. There would be obvious questions about anti-trust issues since so much consolidation has already occurred in the industry. The many venerable imprints and popular materials would continue to hold value so they would ultimately find a home, probably with some kind of private equity play. The question would be at what price in this market?

Hopefully for all our friends at HMH the tide will turn once the ARRA money is flowing.

*Moodys requires a free account to access information on their site.

Serendipitously the New York Times published a front page article yesterday about "The Story of Stuff", a short movie about man's impact on the environment. It makes the point I was after in Sunday's post about the power of story-line in instructional materials. The movie has gone viral globally (7 million views) because it encapsulates the lesson in a broader narrative that kids (and grown ups) can connect to their own lives.

Some quotes from the article that support the contention that we can use stories more effectively in instruction and that we can trust kids to make up their own minds when given a chance to.

"...many educators say the video is a boon to teachers as they struggle to address the gap in what textbooks say about the environment and what science has revealed in recent years."

"Mark Lukach, who teaches global studies at Woodside Priory, a Catholic college-preparatory school in Portola Valley, Calif., acknowledged that the film is edgy, but said the 20-minute length gives students time to challenge it in class after viewing it....Mr. Lukach’s students made a response video and posted it on YouTube, asking Ms. Leonard to scare them less and give them ideas on how to make things better. That in turn inspired high school students in Mendocino, Calif., to post an answer to Woodside, with suggested activities."

If you don't think story-line matters in instructional materials just look at the pie fight over evolution in Texas. At its root this is a battle over which story we use to make sense of how we got here. Advocates on both sides will be unhappy with this characterization - for them the fight is over the truth. My goal in this piece is not to take sides in this argument (I do have one) but to talk about the power of story-line in instruction.

"And The Moral of the Story Is..."

Theories, metaphors, legends, myths, etc. are all attempts to impose order on our perception of the world. These stories give us a shared shorthand to help us make decisions about how to think and act. Without the moment of "oh this is like the time when x did y in the story about z" we'd forever be stuck deciding what to do next - stories help us be efficient. It is so wired that our brains even make up stories when we are sleeping - dreams may not make literal sense to our left brain but our pattern seeking right brain has the steering wheel during those hours.

One of the challenges of publishing in a world of standards designed by committees is that it is often hard to detect the broad story-line since those standards represent a series of compromises. This is particularly problematic in arenas where fundamental questions are discussed (like evolution). We end up with the intellectual equivalent of milk toast rather than chewy rye.

This is very similar to the critiques heard frequently in the blogosphere about the "he said she said" nature of TV reporting where every issue has to have two equal sides. As Daniel Moynihan quipped "people are entitled to their own opinions, but not their own facts." The credibility of TV reporting suffers because we know at a deep level that the way they present things is not real. Many instructional materials suffer from the same credibility destroying "balance."

If we look outside of education at the arenas where people get their information they are all dominated by story-lines - TV, books, video games, movies, blogs, and arguably twitter (@ingenbio is active again - great use of twitter to tell a story). But - when we publish textbooks we run from story-lines to avoid controversy.

The Problem

As a publisher, the business case for avoiding many story-lines (and the controversy that comes with them) is pretty compelling. We can't afford to alienate factions on the decision making committees. Bland is safe. Publishers are lining up to print something that will cover the bases in Texas.

Many educators are wary of stories because they have frequently been used to impose one perspective. This approach can stray into outright propaganda. Just because something is presented as a story-line does not mean it is true, or good, or useful (the Nazi's had a strong story-line).

But, looking at it from an instructional perspective, avoiding story-line removes one of the most powerful teaching tools we have. Story-line taps a fundamental structure of the mind. We end up with a meandering thread of facts and fictions that don't hang together.

We end up with the modern textbook. Meh.

Fear vs. Trust

It strikes me that the motivating force to avoiding strong story-lines in instructional materials is fear. Fear that learners will accept as truth ideas which we might see as dangerous. Fear that the teacher won't be equipped to get students to probe deeply and develop critical thinking. Fear that a teacher will propagandize students. Fear that we will lose the sale to a safer alternative. Fear that our world view might not be as solid as we want/need it to be.

Actions motivated by fear almost always make the world a smaller place. Bland instructional materials avoid controversy, but they are not as effective as they could be. In the global economy we can't afford to sacrifice effectiveness to fear.

The opposite of this kind of fear is trust. Trust that learners can critically judge information. Trust that teachers will respect different view points. Trust that our worldview can be challenged and that we can grow if needed. Trust that our materials will be effective enough that we can win business against "safer" alternatives. When we trust our world gets larger but we wade into controversy, we embrace debate, and we challenge ourselves to grow. This isn't always fun, but it is more effective in the long run because it makes us stronger.

Most schools expose students to the story-line the Nazi's spun along with the facts of what transpired when people acted on it. There is deep learning in this approach. In this case, presenting them with the story and facts serves as an intellectual inoculation. If we shrink in fear that some students might find that story compelling (sadly some will) we avoid the larger benefit of a shared understanding that we need to fight this kind of thinking when we encounter it again (sadly we will).

Reading the Tea Leaves

I suspect we will see strong story-lines creeping back in via non-traditional media first. Look to formats like video games which are inherently story telling platforms (even if it is as silly as getting the jewels from the lobster people to free the princess). I believe the engagement that comes from a good story is part of the reason games have shown disproportionate impact on struggling learners - the story gives their mind something to adhere to as the learning is going on. This binding thread is missing in the textbooks which have failed these students.

As starting points look to Chris Dede's work on River City or Constance Steinkuhler's work on scientific discourse in World of Warcraft for more on this. Go visit the nutrition area on Whyville where students get their avatars purposely ill to learn what healthy eating looks liike. Heck - look at the enduring success of Oregon Trail.

This isn't an easy problem to solve. Traditional publishers will follow the lead of the market even when there is compelling evidence to support change. Educators operate in a political arena that makes controversial innovation difficult.

What should Texas do regarding the Evolution controversy? If we operate from trust students should be exposed to all the competing story-lines and they should be presented in their strongest contexts (e.g. evolution in the science classroom, creationism in comparative religion). From this robust exchange students should be free to weave their own story together in a way that makes their lives meaningful. If we don't trust them to do this we make their world a smaller place.

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Related Post Developing Reading Fluency = Grinding in Video Games

Relevant Excerpt - "Many (not all) low performing students don't have a story thread in their lives that helps motivate them to grind in school (doing homework). Students who are high achievers generally have a story line that is central to their identity that gives the grind meaning and a purpose. Without that story line much school work is just tedium."

"The Power of Story: Teaching Through Storytelling" (Rives Collins, Pamela J. Cooper)

"The Power of Story: Change Your Story, Change Your Destiny in Business and in Life" (Jim Loehr)

One of the fundamental shifts No Child Left Behind (NCLB) caused in Special Education was accountability for teaching reading, math, science, and social studies.

Traditionally many Special Ed classrooms focused on life skills - the functional skills students with intellectual disabilities need to live as independently as they can. Academics were not the focus. Because students in SPED are now tested and factored into schools' AYP calculations this has changed.

MAINSTREAM MATERIALS MISS THE MARK

Most mainstream publishers responded to this by "dumbing down" their existing textbooks and materials or adding a few accommodation and modification tips. Special Ed publishers had catalogs full of life skills products but were short on academics. The result has been a gap in resources to help educators teach academics and functional skills side by side.

With the exception of a couple of states, there also has not been any clear guidance on an appropriate scope and sequence for teaching academics to students with low incidence disabilities.

From what we understand of the priorities of the new administration, no matter what happens to NCLB in the reauthorization, this challenge will remain.

At root the mainstream publisher approach doesn't work because just taking the reading level down and providing some additional guidance in the Teacher's Guide doesn't solve the specific needs of these students. This may work well for students who are 1-2 grade levels behind - but any more than that and this approach breaks.

WHY?

There are a three primary reasons.

First - these students move at a different pace. Even when the accessibility of the materials is improved, the pacing remains the same as the mainstream materials. In many cases this isn't realistic. These students need to practice a skill 100 times not 10 in order to master it and retain it in long term memory.

Second - the repetition required for SPED isn't accounted for in the mainstream materials - not even close. As one of the speakers at this year's CEC stated "[students with intellectual disabilities] get bored too." This is why many of the life skills products traditionally have been engaging games or hands-on activities that stand up well to repeated use. Doing a worksheet for the 50th time isn't a lot of fun.

Third - even where highly qualified teachers are available, the person working directly with a student is often a paraprofessional. If the student has been mainstreamed, then the regular teacher may not be aware of the recommended differences in instructional approach. In both cases, instructional materials require more teacher scaffolding to be effective than that found in regular education products.

WHAT TO DO?

At PCI we are tackling this on multiple levels to help schools meet this challenge.

1. We are publishing comprehensive curricula that address the academic standards and seamlessly integrate life skills objectives. For example, our Environmental Print series coming out this summer teaches the meanings of common signs found around a community using stories and symbols while also addressing language arts standards. Students learn about main character and what to do when they see a Stop sign at the same time.

The PCI Reading Program is another option for those students who have not had success with Phonics or Whole Language instruction. It is a sight words program tailored specifically for students with developmental disabilities, autism, or significant learning disabilities.

Both programs come with direct instruction support for when the materials are being used by paraprofessionals.

2. Our new Academic Curriculum Framework is a curriculum framework aligned to states standards that provides guidance to educators about what should be covered in every grade for students with moderate to severe intellectual disabilities.

3. For more specific needs, we create turnkey kits of materials aligned to standards that help address Language Arts, Math, Science, and/or Social Studies. Since we distribute over 7,500 products from 200 publishers in the Special Education space we can assemble a complete kit to fit virtually any need. We've even put a Turbo Solutions Builder on our website to allow educators to build these kits on their own.

We are finally starting to close the gap in materials and guidance to help educators meet the twin goals of teaching academic skills and life skills to low incidence populations.

Note: This post is related to my role at PCI Education.

At 35,000 feet, with a steaming Starbucks and a purring iPod I read my Grandfather's memoirs last Wednesday. I'd already put in several hours of work when I decided to crack the sheaf of Xeroxed reflections written three years before he passed in 1964.

Ninety eight years ago in the summer of 1911 he was young Officer in Training in the English Army. Then poetry happened.

"I was on a march across Salisbury Plain in full regalia because we were going to sleep out that night. It turned out to be the hottest day on record and out of 600 more than 200 collapsed on the way. We were not a happy company, but we managed to bathe in the river when we reached out destination and that revived us. At night we lay down on the ground near the old ruins of Stone Henge, the oldest and most astonishing group of temple stones in England...The evenings are very short in England in summer and I think it was shortly after 4 in the morning when I was stamping around trying to get some circulation in my cold feet that I noticed the sun starting to rise over the old temple stones. At the same moment there was a racket and over the stones came one of the earliest aeroplanes in the world, the first I had seen and about 1,000 feet up. I was looking at a combination of the oldest and newest in the world. While I stood transfixed the motor of the plane conked out and the plane wobbled all over the place, but finally landed right side up. We rushed over and there was the pilot strapped in but shaking so hard he couldn't do a thing. We unstrapped him and laid him on the ground to carry on his shaking because he had had a close brush with death."

It was indeed one of the first. The British formed their first Airforce units in April 1911- the Air Battalion of the Royal Engineers. They had a total 57 pilots - I'm assuming 56 after this incident.

Harry Wilson emigrated to Toronto in 1913 and as a result managed to avoid the generational genocide of 1914 and beyond. Almost all of his college friends perished in the war. The rest of the his story is woven through the 20th Century, moving to the US, pioneering research in Radio transmission, Mayor of his town during the Depression, Entrepreneur in his 50's and 60's.

It is easy to lose sight of how far we have come in so short a period of time. Ninety eight years from crash landings at dawn to email, coffee, and a book in the few short hours it takes to get from Austin to Seattle (with a stop for a sandwich in Denver).

Times are tough, and we have difficult choices to make, but the conditions of our existence have shifted so quickly in just two generations that it makes me optimistic for the day when this economic blip is over. In the long view we'll be just fine.

Its the short term that scares me. The 20th century was the most violent in our short history. MIllions perished in a long running war of ideas and money as we sorted out the best way to organize and control an industrialized society. In the ocean of dislocation that marked this era hateful ideologies took root and were tools of power for the greedy and delusional.

As we pass from industrial to information economy the dislocations will be no less jarring at an individual and national level. Witness the death of newspapers (ironically reported daily) which is both a social transition and a personal tragedy for those who made their living in the industry.

As our collective lives improve many individuals pay an extremely high price. Education in this context is not just about having the job skills to adapt, it also means having the social and networking skills to contribute to the well being of our friends, family, and the endless stream of strangers who touch our lives. This wisdom is both ancient and urgently modern.

If you publish instructional materials are you part of the solution?

Business Development work requires a certain suspension of disbelief to function smoothly. In the initial stages of any conversation both parties have to be open to undiscovered possibility. Often the most profitable opportunities only become clear after a false start or two.

I'm naturally optimistic and I allow myself to be seduced to new possibilities in initial meetings with potential partners. The positive side of this is that I've been involved in some creative and profitable deals that wouldn't have come off without a period of listening and exploration. The negative side is that it is very easy to send misleading signals to the other side who interpret your enthusiasm to engage as a leading indicator of a pending deal.

The Gullibility Paradox

This outlook creates a paradox because Business Development can't be allowed pull a business into time consuming distractions and strategic cul de sacs. You must be disciplined about the conversations you enter and how long you allow them to proceed before you bail out or engage. But unless you talk to people who are outside of the orbit of conventional wisdom you won't add much value in the long run.

It is common sense to be skeptical about any potential deal and to stay focused on your knitting. For the bulk of the managers in a business this is an imperative. But for those involved in Business Development your role is to explore the possibilities of an unknown future, and the skeptical approach in this specific context does not serve the needs of the business.

Roads Not Taken

I've seen the downside of not taking an optimistic approach.

In the mid-90's a major computer company approached the software company I worked for with an exploratory meeting. At the time we had a very close partnership with their chief rival. We were surprised when what was supposed to be a casual meeting of 2-3 people turned into a group of 10 on their side. My Business Development Manager went into the meeting with a mindset that discussion was pointless because of our other alliance and it came through in his words and body language. We didn't react to the signals that were coming our way and the conversation didn't go well.

Two months later they bought a rival for an absolutely ridiculous multiple on earnings.

I'm not sure if they would have bought us in the end - but we never got the chance to even have the conversation because we came into the meeting with our minds closed to the possibility.

The Solution - A Moving Scale

On the internationally accepted Eeyore to Tigger scale it helps to start every new conversation at about 75% Tigger. The closer to a real deal you get the more Eeyoreish you need to become.

I wrote about the Eeyore side in an article on Parnterships In Education - as you iron out details you need to assume that what can go wrong will go wrong (because, well, it will).

A Couple of Caveats

Does this mean you need to enter into conversations with people you don't trust? No - trust is the bedrock of any successful deal. Opening yourself up to entreaties from sleaze-balls isn't a business strategy, its a death wish.

Should you talk to anyone? No - there isn't enough time in the day to talk to everyone who comes your way. But at least for initial meetings you need to dial down your resistance to unusual approaches and opportunities. If there is a peripheral connection it can't hurt to listen for a few minutes. You might schedule a phone call instead of a dinner but you will learning something from every encounter if you are listening.

Conclusion

If you are involved in Business Development I encourage you to develop your openness to possibility from unusual sources. This is after all the essence of what you are trying to do - unearth opportunities that are profitable precisely because others have not discovered them yet.

If you can learn to manage your own outlook as you move through a deal you will surface the gems with optimism, and then negotiate a deal that can stand an encounter with the real world with skepticism.

This article is based on notes from a panel at the Ed Tech Industry Forum in New York that took place in December. The insights the panelists shared are no less relevant now that we are into the new administration and sorting out the economic stimulus.

The panel consisted of:

• Moderator - Todd Brekhus - VP and CMO Plato Learning
• Francis Alexander - VP - Scholastic
• Robert Iskander - CEO VIP Tone
• Dr. Steve Ritter - Chief Scientist Carnegie Learning

The common threads that emerged from the comments are summarized as:

• There is opportunity in this economic climate - children still go to school and it is a political priority.
• Everyone needs to sharpen their game and focus on articulating value more effectively.
• SaaS is a mixed bag - lowering initial costs but setting up a long term commitment School Districts may hesitate to commit to in this climate.
• The Obama Administration will be friendly to NCLB reform and technology.
• Technology enabled individualized instruction is a growing trend.
• Customers are implementing books first, technology second.

Q - The Education Market has observed downturns in the past, yet companies have come out stronger with new products and more efficient business models. What is your view of the current economic situation and the education market.

Francis Alexander (Scholastic) - There is one evergreen resource - children. There is opportunity - but you have to be a lot more focused and sharper about how you approach your customer base. Even in California there are categorical funds that are available. Warren Buffet still sees education as the one growth sector in this economy. There is still a demand for innovation and schools have an urgency around closing the achievement gap and improving test scores.

Scholastic has found that a message about being safe and proven and being proactive about helping customers find federal funding for products resonates.

Robert Iskander (VIP Tone) - The economy is disruptive on a scale that was unanticipated even 3 months ago at EdNet. Education is going to be fine - the downturn will be selective. Companies that have a balanced portfolio of consumer and enterprise will do better than pure play on one side or the other.

There are areas of growth - but they share a focus on cost savings for the customer. Virtualization, technology consolidation, etc. Value propositions that will save money based through innovative technologies will be the winners. It will be a selective process. Virtual learning will keep travel and other expenses down.

Steve Ritter (Carnegie Learning) - Making the transition from relatively good times is going to require a huge amount of focus. It requires knowing your customer and keeping them satisfied. One of the nice things about education is that doing well saves them money by reducing dropouts - efficiency is not just about running operations less expensively but about improving educational outcomes the first time around.

Todd Brekhus (Plato) - Subscription based SaaS models are going to be a real challenge from an ongoing retention model because budgets are under pressure. On the flip side the up front cost of SaaS is lower so it is a mixed bag. They work hard to define a return on investment in dropout prevention etc. and articulate that for their customers. The ubiquity of data systems is helping here. Forty two states now have data systems to monitor policy in action.

Q We are at an inflection point. What is your long term view of long term trends.

Steve Ritter (Carnegie Learning) - More individualized instruction is a broad trend.

Robert Iskander (VIP Tone) - Everything is going to move to a web service given the cost savings vs. legacy systems. Content as a Service, Software as a Service, People as a Service. How do we integrate all of these into a single platform with 24/7 delivery and platform independent. This is what his company does - so his perspective is understandable but a bit narrow on this topic.

Francis Alexander (Scholastic) - ACT.

• A - Accountability is stronger than ever even post NCLB but the nature of the assessments will change. Obama's people are tired of "autopsy" assessments - they want more "well kid" check ups (more formative assessment and less focus on summative measures). Response to Intervention (RTI) is going to accelerate because of this.
• C - They expect a big push to college readiness starting all the way back at early childhood education. This will be accompanied by a move to IEP's for all students and long term mentors beyond their teachers.
• T - Technology is the enabling environment for this. It will move the emphasis from textbooks to on-line delivery.

Q - We have a major political change in Washington and throughout the country. What impact will will these changes have on funding at the federal, state, and local level. How will this affect the education market?

Francis Alexander (Scholastic) - Obama's team are starting to talk about where education fits into the stimulus package. The UKs stimulus package does address this - particularly for infrastructure things like e-Rate. Obama has talked about $500 million education in matching grants for education technology. [Note: the final Education number in the stimulus was over $50 billion].

Robert Iskander (VIP Tone) - e-Rate is tied directly to the economy since it is tied to phone bills. As people switch to VOIP it will decline. NCLB is a bit question mark. The eventual revisions may involve more technology but it isn't clear yet. Hopefully the bailouts will affect the Department of Education as well.

Steve Ritter (Carnegie Learning) - He expects Obama's administration to be more friendly to education technology. They also expect to see technology spending to become more mainstream in schools - it is becoming part of the way they do business.

Q - What tactics can companies employ during a time of economic difficulty to remain healthy and vibrant.

Robert Iskander (VIP Tone) - If you don't have cash you were expecting business as usual. Companies in this position are going to be making severe cuts. Strategic investments will have to wait. If you do have cash in the bank this is a great time to buy people who don't have cash.

Steve Ritter (Carnegie Learning) - The key is focus. Don't try to be everything to everyone. Geographic focus on a state by state basis. A lot of schools don't have enough bandwidth to run SAAS - so a local installation option is important.

Francis Alexander (Scholastic) - Everyone needs to control costs and cash. They expect the market to come back and when it does being in technology will put you in the right place.

Todd Brekhus (Plato) - Stay hyper-focused on delivering only the features that are essential and usable to drive renewals and keep your costs down.

Q - There are a lot of smaller companies and start ups here at the conference. What advice do you have for them to keep in mind during this time in our economy?

Steve Ritter (Carnegie Learning) - Focus more on your customers than on your technology. This is the time to understand what they need and how they operate. Your technology may be great but if isn't filling a real need you won't go far.

Robert Iskander (VIP Tone) - If you don't have money in the bank then stop what you are doing and go raise it. If you do have it focus on profitability in the short term.

Francis Alexander (Scholastic) - Be a good smart partner to school districts.

Todd Brekhus (Plato) - Focus on solutions not products. Make sure your return on investment is well articulated for all stakeholders and customers.

Audience Questions

Q - With all the emerging SAAS models are we exposed to a global marketplace? (Asked by Nelson Heller)

Robert Iskander (VIP Tone) - Knowing customer requirements is essential - US companies have a leg up in servicing this market. With a strong dollar there are some interesting opportunities to invest outside the US (India, Australia). Open source is going to play a big role in this economy.

Todd Brekhus (Plato) - This panel is made up of content companies - we believe good instructional design sells. There is a play for the objects - but the value chain hangs on how the content is presented to students and how it demonstrates improvement against standards. Most of the open source materials don't do this.

Q - Should you focus on print or technology in this climate?

Francis Alexander (Scholastic) - Scholastic drives delivery of book content across multiple media. They are working towards blended delivery. It isn't an either or but what serves the current need best.

Steve Ritter (Carnegie Learning)- They have seen strong growth in the print line. They expected it would be blended - but currently districts are phasing product in by doing the print first and bringing in the technology later.

A few months ago we started a LinkedIn group for consultants who serve education and the companies in the education market. We've been slowly building and have 96 members as of this morning.

If you serve the market come over and join - we want to crack 100 members. We are a friendly group and are figuring out how to share ideas and practice ideas.

If you are a company that serves the market this is a great place to find consultants who can help you grow to the next level.

Here is the description of the group:

This is a networking group for consultants who serve the education industry - textbook publishing, education technology, supplemental materials, professional development, and enterprise systems. Members are in management consulting, public relations, professional services, recruiting, financing, marketing, sales, and other consulting functions.

What impact will the economic stimulus have on educational materials and technology? A front page New York Times article yesterday left no doubt that education will be a significant part of the legislation. The Times reports that the total education allocation could be as much as $75-$95* billion a year over current allocations for the next two years. In sector that accounts for about $530 billion in total expenditures, 92% of which has traditionally come from state and local taxes, this represents a seismic shift in the Federal Government's influence on the market.

The questions executives in the industry have to wrestle with are how much of the total will be spent on instructional materials, when will funds flow, and what products will schools buy? The answers to these questions will drive investments, hiring, and M&A for the next couple of years.

I've talked to a few folks around the industry to see what people are thinking and the notes below represent a collective set of insights. It is still early days, the legislation probably won't be in a final format until mid to late February, but many companies are making decisions now about their '09 plans.

How Much Will Be Spent on Instructional Materials?

Historically about 1%-2% of education funding is spent on textbooks and supplemental resources and another 1%-2% is spent on education technology. 70%-80% of education funding goes to salaries. The question is will those ratios hold up with this new funding?

I'm betting that the percentage for materials and tech will be higher than normal - 4%-6% of the total is an educated guess. The bulk of the funds will still go to salaries - but it won't be for hiring, it will used to avert layoffs. Schools really don't like to hire people with transitory funds. Between unions and other requirements if they can't see sustained funding they will use the rest of the funds for infrastructure and other one-time purchases. A good chunk will also go to construction and deferred maintenance which could should boost the technology side of the equation.

Education companies have no compunction about scaling up and down based on market conditions - witness the efforts around any major adoption on the upside or the rolling layoffs at HRH on the downside. If the goal is creating new jobs quickly steering funds to instructional materials will have an immediate impact.

Rather than a contraction it is possible that we could actually see growth in our sector this year. If the annual increase is $80 billion then anywhere from $3 b to $4.7 b could flow to materials and technology. At least half of that would replace funds that have been cut or allocated elsewhere already, so the net impact could be $1b to $2.3 b in increased spending, or about 10% growth in the market. This would create a lot of publishing jobs if it happens.

If I'm wrong and the traditional ratios hold then we'd see flat sales year over year as the infusion replaces funds that the states have cut or will be cutting soon. Either way the stimulus is good news for education companies.

One huge caveat is that it is possible that states that are particularly strapped (e.g. California and Florida) would use the Federal infusion into education to move funds they would have spent there to other parts of their budgets. This could result in no net improvement or still a contraction in education spending depending on how dire their overall budgets are. If you have significant sales in one of these states you should pay particular attention to how the stimulus is implemented locally.

When Will Schools Start Spending?

The consensus is that the impact on publishers will be fairly immediate even if the federal funds don't start flowing for a few months. Most School Districts are sitting on budgets that were allocated and approved last year - in other words the funding is there, they just aren't spending it. Once Administrators are confident that the new money will be available from the Feds they are likely to restart spending from their current budgets. Since the significant portion of the education buying cycle is still ahead of us we may actually see a fairly normal year through August.

Note that any indecision about how to implement the program at the state level could delay schools releasing current funds until those questions are resolved.

The implication for companies is that you should be out working the pipeline for the big deals that could close in May-August. If the bill passes in February by late April or May you should start to have a handle on how schools are going to react and you can adjust at that time.

What Products Will Schools Buy?

The impact will be uneven across the industry. In this economic climate and with these funds there are types of products that will do better and some subject areas that will be favored.

Because the funding is only for a couple of years Districts will be loathe to commit to anything that requires ongoing expenditures. This means that subscription products and products that have big annual support fees or large infrastructure requirements won't do as well as one time purchases. A print reading program will probably beat out a subscription based on-line reading program in this climate because it costs less and it is a one time purchase.

By subject area the goals of NCLB aren't disappearing so expect to see an ongoing focus on Reading and Math. STEM is also a clearly stated priority of the new administration (see Obama's statements) so I would expect to see a heightened priority in this area. Many states are now testing Science which would couple local pressure with Federal priorities.
The legislation is also targeting existing programs that have been historically considered partially funded mandates - notably Title 1 (economically disadvantaged schools) and IDEA (Special Education). These are long term federal priorities in education and do not require extended arguments over program design and implementation. Focusing here is smart politics if the goal is getting funds released quickly.

Companies that provide professional development may also do well since Title 1 has significant set asides for training. One of my contacts also speculated that Districts might be willing to invest more in their current teachers by hiring contractors to be in the buildings doing longitudinal on-site PD for the next couple of years rather than hiring new staff.

Conclusions

This legislation is good news for our industry. At a minimum it may replace funds that have been cut by the states and on the upside it could actually create some growth in the market. Companies that provide products with a one-time purchase that target core subject areas and can be purchased with Title 1 or IDEA funds should do very well indeed.

If you would like to disagree or add something to the conversation please post a comment or send me a guest blog post. Guest posts are very welcome, if you would like to know more please send me a note.

-----------
*A note on the numbers. The total federal education budget under the legislation could be as much as $150 billion a year for the next two years. Since the Feds are already spending about $60 billion we have structured this analysis around the incremental $80-$90 billion.

The ideas presented here are speculative, general, and are not business advice. The implications for any specific company should be analyzed to craft a specific response to the market. Full disclaimer here.

Education is high on the list for the economic stimulus package being proposed by the Obama Administration. Congress also supports turbo charging education so the likelihood of significant aid to schools is very high. But where oh where will the money actually go?

• Construction?
• Maintenance?
• Teachers?
• Instructional Materials?

As experts in this area and as citizens we have a responsibility to speak up. This doesn't mean pulling strings for our particular companies, it means making sure all of our money is spent wisely with the long term in view.

Patrick Riccards over the Eduflack blog has a great analysis titled Shovel-Ready or Funding-Worthy? It is a sound synopsis of the choices at the Federal and local level. Will the money go to the best connected (e.g. districts with lobbyists) or will it go the place where it will make the longest term difference in the economy (e.g. STEM).
I'll let Patrick have the last word:

We just need to remember that the stimulus is not intended as a bailout. It is meant to serve as an investment in our nation. It is meant to create jobs and strengthen economic opportunity, both now and in the future. For our school systems, that means it shouldn't go to the first program in line or the first idea that offers to create a job or make us feel better about ourselves. We need to focus on the investment side of the equation, ensuring that these new federal dollars are going into efforts that will make a difference — both in the short and long term — and can demonstrate real ROI. If K-12 dollars are in short supply, shouldn't we make sure that new dollars are being spent on worthy efforts? Let's eliminate shovel-ready from our vocabulary (at least of K-12 vocabulary). It's time to practice saying "funding worthy."

AEP - Association of Education Publishers. Primarily supplemental companies, a mix of print and technology providers with an emphasis on instructional materials.
SIIA - Software Information Industry Association. Technology oriented and a mix of instructional and enterprise solutions for education.
AAP - The Association of American Publishers. Large companies, primarily the basal textbook providers.

The Consumer Products Safety Improvement Act (CPSIA) is punishing the children's publishing industry. Go over to Publishers Weekly to read their summary of the disruption caused by the mandate that all products targeted at children under 12 be tested for lead and phthalates.

The law was passed in response to issues with Chinese toys - but it was written in such a broad fashion that it is sweeping into its net products that have never included lead or plastics (like paper and cardboard).

The problem is that the industry just found out in November that it applies to books and they have to be in compliance by February. Violations carry stiff fines which could bury small publishers.

No one - and I mean no one - is suggesting that we ship unsafe products to children. But the way this was implemented makes no sense. We should be targeting it at products that have the potential to contain lead. Otherwise it is nothing but an earmark for the lawyers and the industry that performs these tests. As always - follow the money.

Links

Consumer Products Safety Improvement Act - Official site of the CPSC
CPSIA- Central - Blog that tracks all things CPSIA
ALA Wiki on CPSIA - American Library Association's Wiki that tracks CPSIA related issues
AAP Twitter Feed - Some updates as available on Twitter at acaciaO. Hash tag #cpsia

Guest blogger Michele King provides a practitioner's perspective to Randy Wilhelm's post Web Content is a Source for Differentiated Instruction. Michele is an administrator at a large urban school district and a former 1st Grade bilingual teacher.

By Michele King

As the Instructional Support Coordinator for a large urban district, I am responsible for transitioning our district away from print-based instructional resources to a database driven solution accessed by teachers over the Internet. I read Mr. Wilhelm’s post with great interest and my experience working with teachers closely aligns with the “Schools and Generation Net” survey results.

A compelling finding out of this survey is that 60% of educators agreed districts need to be investing more in digital resources, shifting dollars away from print materials. Teachers perceive (and rightly so) that district level staff typically drive this decision. Instructional trailblazers are often on their own in the digital frontier.

Who are the 40% that disagree with investing more in digital resources? I call them the “binder” teachers – those that cling to papers from days gone by as their primary source for instructional planning. I’ll never forget the occasion in which I visited a teacher’s classroom and found her preparation centered on boxes labeled by months. I could almost hear her thinking, “Oh, it’s January, I better dust off my February box and pull out my Valentine activities. What copies do I need to be making?” The only differentiation I observed was by calendar month.

Malcolm Gladwell, author of the current New York Times best-seller, Outliers, wrote a very interesting article for The New Yorker called “Most Likely To Succeed”. The article discusses how to determine what makes one a “bad” teacher versus a “good” teacher. A key premise of the article is that teachers have to be sensitive to the individual needs of students (hello, differentiation). I wholeheartedly agree with that premise, however, what the article does not discuss is that teachers need help in gaining access to appropriately aligned resources that enable them to deliver instruction in a more targeted and effective fashion.

The first phase of our online instructional guide initiative is to flat line the current curriculum and restructure it into a web-friendly format. The idea is for content to be easily accessed and consumed by the teacher for instructional planning purposes. As I rolled out our pilot program to a dozen or so schools, every single time I presented at least one person brought up the need for more efficient access to web-based resources. Our teachers are hungry for a cultural transition in the schools (and school districts) away from the binder-based mentality to the 21st century notion that teachers should be able to efficiently access what they want when they want it.

Imagine that!

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.

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.

• 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

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.

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.

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.

In the US we just had the most interesting election of my lifetime. What to do now that all the hullabaloo is over? Take the civics quiz to see much you remember from Social Studies and how closely you have been paying attention.

Take the test here.

The core message - that we ignore civics at our peril - is well taken. Social Studies is one of the subjects that has taken a hit under NCLB. Publishers, to their credit, have tried to help by creating programs like QuickReads (Pearson) that teaches reading fluency through Social Studies and Science. The reading passages are aligned to grade level standards. But don't you think it is a little odd that we have to "sneak" this in?

Elected officials did significantly worse than average citizens on this test. While this sounds horrible - well it is. 79% don't know that the Bill of Rights expressly prohibits establishing an official state religion and only 32% can properly define the free enterprise system. If you wonder why we have an endless stream of deficits and a soaring national debt look no further than the 59% who were unable to identify business profit as "revenue minus expenses." Sigh.

Or not. I don't buy that somehow in the past we had this idyllic total knowledge of the public sphere and that all citizens were well informed. We have always been free to be informed and free to be ignorant. These days - with information overload hitting us from all sides - a little selective ignorance isn't a bad thing, its a survival instinct. That said - if ignorance is bliss why aren't more people happy?

I follow politics the way a lot of people follow sports so I'm fairly well tuned in. I was also a History/Political Science major in college. That would explain how I got 100% on the quiz. No - I didn't peek.

So in this week of Thanksgiving see how tuned in you are to civics and perhaps learn a thing or two. See if you can beat the 78% average for the month.

The Intercollegiate Studies Institute puts a survey out every year. Their mission is "to further in successive generations of American college youth a better understanding of the economic, political, and ethical values that sustain a free and humane society."

This short video chronicles the rise of credit default swaps and the subsequent impact on the financial industry better than anything else I've seen.

Through financial engineering - not value added - the Wizards of Wall Street were able to create a financial black hole that ultimately - well watch the video. You'll see.

What does this have to to with education? Our industry is going to suffer along with everyone else as we work our way out of this one.

Tap tap.

Phil Sansom and Olly Williams are the filmmakers responsible for this bit of fun.

Products designed for the classroom must meet the needs of teachers first. If students are the primary users of your instructional materials this may sound a little backwards - but it isn't. Teachers can make or break your product before a student ever sees it.

Designing for teacher ease-of-use should be a core competency at any education publisher.

Today we tackle issue #4 in the series on selling and marketing to educators.

Part 1 - Obey the Calendar
Part 2 - Education is not a target market - it is an industry
Part 3 - Education is a zero sum market

In the rush to get a product to market too often education publishers overlook the features and resources that make life easy for the teacher. The problem isn't that teachers are lazy, as many in the business world tend to fantasize, quite the opposite. The challenges and demands on a teacher are every bit as daunting as mid-level supervisors in large companies. Their time is at a huge premium and to manage their workload they develop detailed processes and structures - known more commonly as lesson plans.

Your Challenge

Your product has to insert itself gracefully into this workflow or it will fail because the teachers won't make room for it. They already have things humming along, thank you very much.

If students can learn more effectively with your products shouldn't teachers be willing to bend a little to make this happen? Yes they should - but even the most elegantly designed product requires the teacher to go through a learning curve. The time they invest in learning how to use your product shouldn't be amplified by additional time demands because your product isn't complete.

Almost anyone can find a small group of teachers willing to go to extraordinary lengths to make a new product work. Don't be tempted to conclude that all teachers will be willing to put this amount of effort in. If your goal is to reach a broad cross section of classrooms you have to design for the average teacher.

Poor teacher design surfaces differently for technology providers than for print publishers. The software paradigm of iterating to success tempts ed-tech companies to cut corners on teacher tools. The most common oversight is that companies assume that teachers will key in student rosters. I can almost always tell who knows something about the market when we get to this part of the presentation. Inexperienced companies will hand wave past this topic - assuming some kind of magic will occur to get student names into the system. Those who have been around the block a time or two will have a thoughtful approach that doesn't burden the teacher too much.

Populating rosters is tedious and time consuming. In districts with high mobility rates accuracy is a huge problem - the average district has a mobility rate of 20% but I've seen extreme examples of up to 90% where there is a high migrant farm labor population. There are simple solutions (.csv files) and more automated options (SIF) but you must think this through.

Textbook publishers have a different problem - since they tend to see a product as complete and done when it is published any aftermarket additions are outside of the normal workflow and are unanticipated expenses.

In these cases it is more often a case of not including supplemental resources that your target population needs and/or that your competition is providing. Examples include ELL teaching guides, standards correlations, presentations for electronic white boards, and on-line homework help. None of these things are particularly hard to add to a product - but they erode your profitability, and play havoc with your schedules - and you can't sell much until you have them.

A Caveat

Is it possible to go too far in accommodating teachers? Yes. The trick is to balance an almost endless set of feature requests and enhancements with what is essential and compelling.

Companies in this market have to strike a balance between business and learning - and the best way to do this is to have a team that is a mix of former educators and business people. Go too far in either direction and you are out of business. If the educators rule the roost your products will be perfect but marginally profitable because of all the extras tossed in. If you apply rigorous business standards only you won't address the core needs of teachers and you won't sell much.

Your goal should be sound business decisions that are educationally appropriate.

The Solution

There are a few things you can do to reduce your risk of alienating teachers with a new product.

• Ask at every turn during the product planning and development "how will a teacher implement this and how can we make it easier?"
• Make sure you understand teacher's priorities so you can optimize your development options. Talk to a lot of teachers, visit classrooms, observe how things are done today. Dig into the details. Make sure everyone on your team has an opportunity to do this if possible. Don't extrapolate from a small sample - talk to as many people as you can afford to.
• Hire former teachers if they have the right skill-set. Sales, mar-com, and product marketing are all areas ex-teachers can thrive in.
• Many education companies encourage employees to volunteer in local schools partly because it is a good thing to do and partly to get exposure to the reality of the classroom.
• Develop an educator advisory board and challenge them to think about the average teacher (the folks who participate in advisory boards tend to be the same ones who would put extra effort in to use your product).
• If your budget and schedule permits, build a pilot phase into your roll out where you do a limited deployment to a handful of classrooms. Incorporate the feedback prior to general release.
• Watch the competition closely. Often something that wasn't required becomes so once a competitor is offering it. Better yet - make the competition respond to you by innovating.

In times of disruptive change the cutting edge is the safest place to be.

To many people this seems counterintuitive. If there is rapid change the inclination of most people is to circle the wagons around the familiar. But, when the market is moving, breaking camp and moving forward is actually a lower risk approach. If you are taking risks in your job and trying to invent the future you are actually in a safer position than those who cling to the status quo.

Education Market Forces

The education market is in a period of rapid disruptive change driven by multiple forces.

• Technology is upending traditional textbook markets
• State budgets are under assault from the financial meltdown
• The textbook industry has consolidated into three major players who are using global sourcing to drive down costs for an increasingly commoditized market
• Open source and Web 2.0 technologies are putting the tools of production directly into teacher's hands
• Content is atomizing and moving to the web
• Teachers are buying everything else on the web - you're next

"A" is an incrementalist. In a normal market she will prevail through a steady series of improvements in products and processes. The education publishing world is largely made up of A's.

"B" is an innovator. In normal times B's position is really risky but it is the safer place to be during disruption. Generally speaking there are more B's in Educational Technology.

Whose shoes would you rather be in today? An A trying to hold a position by doing more of what "always worked" or B who is already where the puck is moving?

Like all generalizations this doesn't do justice to the complexity of the environment but I think it speaks to the major trends we see going on in the market. The old line publishers are struggling to respond to the market changes because the balance of power still tilts to the "A" textbook publishing executives. Their incremental approach isn't working but they don't know any other way to tackle the problem.

Sources Of Innovation

Look to the small and mid-size companies - both print and technology based - for the innovations that will drive the future of this market. These companies are being forced to deal with the disruptions more directly since they have a smaller margin for error than the big guys. They are also scrappier in their general approach and more amenable to innovation. I also expect to see change sweep the supplemental market long before it comes to the basal materials market for the same reasons.

Consider the book - not all the innovation we are going to see will be technology based. Books themselves will evolve to reflect the new learning ecosystem. Publishers need to look at every aspect of books and consider what can go in the age of the Kindle, youTube, and Wikipedia. Will the textbook of tomorrow be shorter and have a fully integrated companion site where most of the content is created by students? Its possible. Are you waiting for someone else to try it? Why?

There is innovation going on in the large companies (e.g. Pearson's forays into blended tech/print products) but most of it is not life or death the way it is in the smaller players.

Innovation is needed across the entire business model - sales, marketing, editorial, operations, and support are all being affected by the explosion of information in the hands of our customers. This kind of systemic change is really difficult and will take several years to sort itself out.

So step out of your comfort zone, try a few things that scare you a bit. The first step is just to become familiar with the new technologies for your own use. Once I got started it was like going back to graduate school - it was a blast to be learning new things every day. You need to re-experience this kind of learning - because it is precisely what we should be providing today's students in school.

There is a global community waiting for you.

Related Posts

Here are several related posts which expand on concepts in this article.

Textbooks vs. Education Technology - Clash of Paradigms on the different management cultures and how they put the "fun" in disfunction.

Education Publishing - A Wave of Change Sweeps Over the Industry lays out the quantitative case for technology substitution finally happening at scale and what it means for publishers.

10 Ways to Build Instructional Materials for 21st Century Skills presents some ideas on what innovations to focus on if you want to make real change.

Can a new product enter the education market and generate organic growth in the market? Not really. This is one of the core issues new entrants have to wrap their heads around as they think about how to sell and market to schools. Education is (mostly) a zero sum game.

Today we tackle issue #3 in our series on selling and marketing to educators.

Part 1 - Obey the Calendar
Part 2 - Education is not a target market - it is an industry
Part 4 - Design for Teachers

In normal times education budgets grow at 2%-5% a year. Most start-ups or new products need to grow at a huge multiple of that - 30% to 300% or even more. Mathematically in order for you to grow someone else is must lose out. Normally in a market that is over $500 billion you would think that there is plenty of room for growth. There is - but it is less than you might first assume.

The Challenge

In a business market, if someone comes up with a new widget that dramatically improves productivity, growth can come from increased profits and/or rapid market expansion. Three underlying facts about education funds make this much harder to leverage.

1. Education funding comes from four primary sources. States provide about 46%, local taxes another 37%, the Federal Government chips in 8% and the final 9% is from private sources (mostly private schools). Over 90% of this is government spending which does not have the volatility (up or down) that one can see in a business or consumer market. Lower volatility is a good thing in bad times - kids still show up in school every fall no matter what (for more on my take on who will do well in the current climate follow the link).
2. Most of the $500 billion + that schools spend is for people and services. Education is people intensive business and roughly 80% of school district budgets go for staff. So take off $400 billion. Of the remaining 20% almost all of that goes for services - buses, food, athletics, accounting, etc. At the end of the day only 1-2% is spent on instructional materials and technology ($5-$10 billion). Another $1-$2 billion are spent on education enterprise systems and services (Student Information, Accounting, etc.).
3. Within the instructional materials market many funds are dedicated to a specific purpose - further limiting the scope of what you may be able to compete for. These are called categorical funds. Examples include textbook adoptions at the state level and Perkins funds for career education at the federal level.

What all of this means is that your amazing new learning widget or software is going to have to steal market share from someone else. You may be thinking to yourself - "this doesn't apply to us since no one else does what we do - we don't have competition." Wrong.

I once heard a Principal tell a technology vendor that he didn't need computers to teach - he just needed a pencil and a pad of paper. At the most basic level he was right. If you are selling instructional materials you are competing with a teacher simply talking. You are also competing for their time and effort. At a more practical level some other vendor or product is going to loose out if you succeed.

Lessons
There are three lessons to take way from this.

First - be clear about who you are going to take market dollars from and where those dollars come from. This will help you focus your product offerings so that they meet the specific requirements of the funding source you are are going to tap.

Second - you must do your competitive research - too many companies are so in love with their own products that they don't spend the time to understand why customers are already buying competitive/alternative products. Assume you are going to be in a dogfight. You might avoid this - but don't plan on it.

Third - this market grows more slowly than others but once you have customers it is less volatile. When you have grabbed a piece of the market it is often solid for years - if not decades (see Plaid Phonics at 50 years and counting). The downside is that some investors will push you to grow at an unrealistic rate given the time it takes to build a position.

Other Options

At the outset I said that education is (mostly) a zero sum game. The "mostly" is because there are a couple of extrinsic sources of growth.

One option is to bring in sponsorship dollars from corporations and non-profits - essentially making your products free to schools. Channel 1 and Whyville (client) are both good examples of this approach.

Another option is to lobby for additional government spending - earmarks. This is usually more opportunistic than deliberate - policy makers decide on a priority and companies work to bend it to their advantage. Voyager and Dibbels fueled a lot of their growth this way.

Foundation grants are a good way to get started - but with rare exceptions they do not provide a sustainable business model and in most cases they are restricted from overtly supporting commercial ventures. If your product happens to get purchased as part of a larger initiative that is fine, but outright support would be extremely unusual.

Conclusion

Once you have selected a target market (see #2 on the series) you need to do additional homework and determine how those customers are meeting their needs today and who your competition is. Driving the kind of rapid growth a new product or start up demands requires that you know who you are displacing. Your products and messaging can only be tailored to the situation when you have this level of awareness.

Part 1 - Obey the Calendar
Part 2 - Education is not a target market - it is an industry
Part 4 - Design for Teachers

The global economic meltdown is going to affect education budgets. States and School Districts will react to a drop in tax receipts and a credit freeze. This entry is an attempt to map out some of the possibilities for how the slowdown will play out in schools.

First - some good news. No matter what happens in the economy kids still show up in school needing an education. The market is not recession proof but it is also a core service of civilization. Unless we end up in some Mad Max dystopia there will be a market.

Second - any market will have losers and winners. There are several market trends that will be accelerated by a budget crunch and companies that are poised to take advantage of them will do just fine. If your strategy isn't focused clearly on core funded needs you will struggle (strategic focus is a service I provide).

Normally the education market lags the general economy by 12-18 months. This cycle has already been different - many of my contacts at education companies saw the market step back as early as the summer of 2007. My theory is that falling property values which drive 30%-40% of tax receipts, are much closer to education decision makers than the usual macro-economic trends that drive the economy. Several significant states also led the way with severe budget shortages (notably Florida and California). Educators could see this one coming and acted early.

In the survey of education executives I conducted last May on Education Spending & the Economy the consensus was that the impact would be mild.

But what has unfolded over the past 3-4 weeks has the potential to have a much more dramatic affect on spending for education across the board. The good news - if it can be called that - is that educators have already acted pre-emptively to address a downturn and so many of the hard decisions have already been made. The incremental impact of the most recent developments will not be as significant as they would have been on their own.

The most immediate prospect is for a dramatic slowdown in capital spending. This will be the result of a combination of voters rejecting new levy's and bonds because their own pocketbooks are strained and the credit freeze in the banking world. If your business is oriented around new school construction prepare to hunker down for a while.

States will have to make some hard choices. California - which has been in a budget crunch for several years - has seen dramatic increases in class sizes and an underfunded market for instructional materials. Categorical funds and lawsuits have kept the markets for basal textbooks supplemental materials that address specific populations healthy. Outside of these areas it remains a tough market. Florida has delayed adoption cycles - forcing schools to use older materials for a year or two more. If you are targeting specific states you should be building relationships with policy makers at the state level because their decisions will have a direct impact on your business.

Districts are going to be a tough sell. They will buy, but they are going to demand more proof that what you are providing will deliver benefits. They are also going to pull more decisions centrally to keep a tight rein on spending. Your sales force needs to be comfortable calling on district decision makers and you should be hiring for this skill.

In tight times districts are also going to prioritize keeping people on staff. Many states (but not all) have specific money set aside for instructional materials and these funds will still be available. But, districts are always pressing for more flexibility in how they allocate funds - and where they have the ability to shift funds towards salaries they will.

The Federal level is a bright spot - particularly for technology. It is doubtful that we will see significant cuts for education at the Federal level. In the past Federal budgets have funded up to 50% of technology spending, despite being only 10% of overall education funding. See my note below on the candidates positions or read this post on McCain vs Obama on education. Obama is still proposing a $19 billion increase in Federal education spending.

Meta Trends a budget crisis plays into

Technology for efficiency

If you can show that your products save time and/or money because they make learning more efficient you can make a case to budget conscious administrators. You will have to make a clear and compelling case - there won't be a lot of room for experimentation.

Since 70-80% of education spending is for staff anything that can improve productivity will help districts run lean. Products like GradeCam (client) which can save hours of teacher time while improving the feedback loop to students should thrive in this environment.

See this series of posts on technology substitution in the education market for more quantitative analysis on this topic.

Tough times will force decision makers to focus their resources on the core subjects of Reading, Math, and Science. They will still spend money on other subject areas but it will be tight.

That said - accountability is here to stay. NCLB is a balloon payment coming due in a few short years and schools will continue to invest in resources that keep them ahead of that curve.

The Perkins renewal in 2006 has brought a renewed focus on career education and a real shift in the priorities in this area over the past few years. In an economic slowdown policy makers will place a budget priority on this area - and the affects will be felt in both secondary and post-secondary institutions. If your products serve this market you should be OK - but only if you are in sync with the new career clusters and priorities.

There is a great deal of innovation going on with business models (see the panel discussion on this I moderated at AEP this year). Schools may be more receptive to advertising and sponsorship driven models in this economy than they might otherwise have been.

This post is a starting point. If you have insights to add or disagreements with anything I've written here please respond in comments or submit a guest post. In the series on the economy and spending I did back in May Doug Stein and Charlene Blohm added a lot of value to the conversation with their guest posts.

Next up - who will thrive in a down market and who will struggle?

In my post about Barack Obama's focus on early childhood education I noted that the gap between low performers and high performers gets much more difficult to bridge as students get older. Obama's early learning proposals are pragmatic because they aim to close the achievement gap when it is easiest and most effective.

Michelle King, today's guest blogger, makes the important point that it is the relative gap not the absolute gap that presents a challenge to teachers. Michelle is an administrator at a large urban school district and a former 1st Grade bilingual teacher.

Michelle's insights amplify the urgency for intervening in the early grades. She also points towards a Response to Intervention (RTI) program that is addressing this challenge here in Texas.

The original post "Obama and Early Childhood Education" is here.

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Guest Post by Michelle King

As stated in Lee's post, oral language may be “hard wired” but it is still very much in development at the primary grade levels, especially for English Language Learners that are building oral language skills in their native and second language.

Retaining a student is never a decision that is taken lightly. The original post states that “When a student drops out in 10th grade the cause can be traced all the way back to 2nd grade or even Kindergarten”. The fundamental struggle faced by primary grade teachers is how to close the gap for a struggling learner lacking the foundations of literacy while still promoting him to the next grade level? Most educational research today discourages the practice of grade retention.

In Barack Obama’s backyard, a 2004 research study from the University of Chicago indicates students that were retained, regardless of the grade in which retention occurred, have a higher likelihood to drop out in 10th grade when peer pressure is at a particularly heightened level and academics are increasingly rigorous.

The gaps of struggling students at the K-2 level may seem small compared to the widening trend in the upper elementary and middle school levels, however, teachers in Grades 1 and 2 have real challenges in the achievement gap from day one. 

I taught students that didn't know how to spell their own name (or even recognize the letters) sitting next to students that were reading the latest Harry Potter book.  Couple that challenge with the fact that kids don't get naps or extra recess as they did in Kindergarten, they are expected to sit at an assigned desk with their assigned textbooks, and have nightly homework while still trying to learn how to tie shoes and keep track of their favorite pencil. 

Although I agree the primary focus in K-3 is on acquiring basic skills in reading and math, teachers in K-3 are expected to teach Science and Social Studies while promoting literacy and math skills development.  A good teacher knows how to integrate curriculum to get the most bang for their instructional buck (think Johnny Appleseed) but that means less time for rote skill building and core subject instruction.

With the focus on high stakes testing and AYP, the shift in public schools understandably moved towards reading and math intervention at the upper elementary level and middle school levels.  Yet what we are seeing now is the achievement gap is actually growing at the middle school level because the K-2 teachers were left behind to pull up struggling learners with limited outside help (aside from gracious volunteers and the occasional tutoring opportunity for the highest of high-need students).

Enter the state's Response to Intervention program.   Here in my Texas school district, our 2008-09 RTI efforts are in initially in the Language Arts domain with a particular focus on grades 1, 2 and 3 (with other grades and content areas being phased in over time).  This is coming not one day too soon.
 
It all starts with the basics and the amazing teachers in early childhood education.  These teachers may not be the data leaders of the school but they certainly play a major role in setting the stage for student success in the years to come.

The original post "Obama and Early Childhood Education" is here.
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Michele King is the Administrative Coordinator of Instructional Support for a large Texas urban school district. Ms. King oversees the district's instructional management system and serves as the C&I liasion for a variety of technology-driven district initiatives. She taught as a first grade bilingual teacher while earning her Masters in Education from Texas State University. Prior to entering the education profession, Ms. King spent ten years as a manager and consultant for a variety of technology-focused companies.

The views expressed in this column are the personal beliefs of Ms. King based on her teaching experience and do not necessarily reflect those of the district for whom she is employed.

Do you need to pick a target market when entering the education market? One of the true signs of a rookie is a business plan built on selling to all schools. Just because all schools should be using your widget doesn't mean they are ready to buy it.

Picking a target market is a discipline many people try to avoid - they don't like getting boxed in. Others don't understand just how big the education market is or think all schools are the same. If you are in love with your product you may resist the idea that some schools don't want it or don't need it.

Today we tackle issue #2 in our series on selling and marketing to educators. As a consultant in the education market I work with a wide range of businesses. This series covers the common execution errors I see with new executives and companies when they enter the market.

Part 1 is here.


Part 2. "Education" is not a target market - it's an industry.

Education is a vast enterprise. In almost every community the school system is one of the top 3 employers. Thats right - every community. In the US education is second only to defense in total spending.

A target market is a niche, an industry segment that is particularly friendly to your story and solution.

Picking a niche to target (which I've written about here and here) is not complicated. Schools vary widely in their infrastructure, politics, test scores, pedagogical preferences, and budgets. Your goal should be finding enough low hanging fruit to keep you busy as you build your business without overwhelming your capacity.

If you are selling education technology - find the schools that already have the infrastructure to run your product. Otherwise you have to first sell them a bunch of someone else's stuff.

If you have a hot new reading product find the schools with the lowest reading scores - they are motivated to look for something new.

If you are capital constrained limit yourself geographically to keep your costs down. Build out from there.

If you focus on a particular pedagogical philosophy the presence of similar or related products should be a green light.

You also want to make sure you go where the money is.

In many cases you will pick from all of these. Lets say you have a new reading intervention for middle schools. To keep your average sale high you might want to target large middle schools with bad test scores and funding to address it. If you are in Newark you may want to focus first on your home state to keep costs down.

How do you find the data to help you focus?

I use a tool called MarketView from MDR which makes it easy to ask questions like "how many middle schools in New Jersey are missing AYP and have more than 500 students?" The answer is 107. This is a critical number for business planning (market size, share projections, revenue projections, sale force capacity, etc.). I could also easily create a mailing list and a call list for a Rep from the results of this search.

Scholastic's QED division also has resources and services to help you answer these kinds of questions.

State DOE websites are a great source of data. For example California has lists that allow you to drill in deeply on test scores by school, district, or county.

These quantitative qualifiers are a starting point - you then start calling on these schools and asking the questions you can't get answered from a database (e.g. what pedagogical approaches do they favor?, is this issue a priority for them this year?, do they have complimentary products etc.). By narrowing the list and then qualifying further you spend the most precious asset wisely - your time.

You can do a lot of this yourself if you choose to - but in many cases a seasoned hand can shorten the distance between your product and the right customers. But please - no matter how you approach this question pick a market to focus on.

A side note - unless your product is specifically designed for private schools or the home school market don't prioritize them initially. They are relatively small and highly fragmented markets. Public schools are 90% of the opportunity. This isn't an editorial on the merits of either market - just a dollars and cents suggestion to maximize your investments of money and time.

School Sales & Marketing Series

Part 1. Obey the calendar. Schools buy on a regular schedule, design your business around it.

Part 2. "Education" is not a target market - it's an industry. No matter how great your product you need to pick a target market to focus on.

Part 3. This is a zero sum game. In order for you to win someone else has to lose.

Part 4. Teachers don't have the time to take the rough edges off your product. Teachers make or break a product.

Part 5. It's all about learning - mostly. You need to know the politics of selling to schools.

Rookies in the education market make a set of common mistakes. There are five concepts you need to grasp about selling to schools that will help you avoid execution error as you enter the learning market. Consider these the iron laws of marketing to public schools. Accept them, nay embrace them, and your job will be easier.

In my consulting practice I go through these topics with almost all clients who are entering this market from other industries or countries. In this series I will post my thoughts on each of these rules and I welcome your comments and reactions. We will cover:

Part 1. Obey the calendar. Schools buy on a regular schedule, design your business around it.

Part 2. "Education" is not a target market - it's an industry. No matter how great your product you need to pick a target market to focus on.

Part 3. This is a zero sum game. In order for you to win someone else has to lose.

Part 4. Teachers don't have the time to take the rough edges off your product. Teachers make or break a product.

Part 5. It's all about learning - mostly. You need to know the politics of selling to schools.

It doesn't matter what you are selling - 60%-70% of your sales will come in the months of May-July. There are two reasons for this. First - most schools want to install, organize and train on new products during the summer when the kids are off. Introducing big changes during the school year is just too tough. Second, most school fiscal years go July-June. This means that they either have money left at the end of the year to spend in June or they are spending out of new budget authority in July.

This ebb and flow affects the entire business.

Sales - The fall season is spent generating prospects, during winter you demonstrate and write proposals, and spring is time to close the business. Deals do happen outside of this window (30%-40%) but they are spread over 75% of the year.

Product Development - In order to meet your goals you need to schedule product releases so that you can demonstrate them starting January 1 and ship them starting May 1. It may be necessary to pilot products starting Aug 1. If you are shipping an update it needs to be ready by May.

Marketing - Marketing works 2-3 months ahead of sales - creating awareness campaigns in the summer to run in the early fall, sales tools during the fall months, events during the winter months, and then planning for the next year in the spring.

Support - This group will always have a spike during the May-August time frame and it is useful to have a cadre of trained part-timers who can step in during these months to help with installation and training issues.

Finance - Your line of credit also needs to carry you through the lean months - make sure finance understands this.

I've worked in computer hardware, enterprise software, textbooks, supplemental materials, and education technology and they have all followed this schedule. You are not likely to be the exception to this rule.

In many ways this is similar to the retail world with their huge annual spike at Christmas. The good news is that with decent pipeline reporting you can usually tell several months ahead of time what your sales are likely to be. Budgets for education are set at the start of the year so there isn't the kind of economic uncertainty you find in retail. Most of the companies I've worked for were able to predict within 10% what their annual sales were going to be by the end of the 1st quarter (usually January).

Part 1 - Obey the Calendar
Part 2 - Education is not a target market - it is an industry
Part 3 - Education is a zero sum market

Piping hot education related blog topics served here! The debate over formative assessment, the top 10 sites for educational games, crowd-sourcing the next great novel, controversy around Microsoft's new ads, the relationship between quality and advertising, and a hilarious spoof of Politicians all get the nod this week.

Education Week has a very interesting article about Formative Assessment. Given the burgeoning mantra that formative assessment makes the biggest difference in outcomes it is revealing to see how little consensus there is on what it really is. Is it a practice or is it a product?

John Rice has a list of the top 10 sites for free EduGames. It is worth a peek and linking through to get a sense of what kids are actually playing. This should dispel the myth that EduGames need to rival commercial games in graphics and sound. What matters most is fun game play.

HarperCollins launches Authonomy. The site uses crowd-sourcing to allow readers to vote on the next best seller. Springwise has a quick overview - Publisher Hopes Crowds Will Spot Next Bestseller. I'm working on a similar project for a client in education - should be interesting.

Microsoft's new ads - love 'em or hate 'em? Seth Godin thinks they are rot that won't fix what is wrong - What Ads Can't Fix. His thesis is that the company has a solid business serving the stolid core of the market, and ads are not going to turn it into Apple. Ben McConnel believes they are a great opening salvo in redefining who Microsoft is by reclaiming the definition from Apple. As a bonus all the ads are in his post if you want to see them. In this debate you could substitute mainline textbook publishers and come up with largely the same analysis - both posts are worth a 2 minute read and some reflection.

As always Indexed nails her topic. This graphic about quality vs. advertising is amusing and revealing. We know this is how the education market works - one teacher tells another when they like something. I think of her wry charts as Mad Magazine for grownups. There is no connection to the link above about Microsoft. Really.

The Front Fell Off. Perhaps because we are dealing with a financial disaster this comedy skit resurfaced recently. It is a drop-dead funny take on a Politician evading the truth and trying to sound like they have a clue when they really don't. It is non-partisan so enjoy.

Education Channel Partner published a story I wrote about partnerships for companies that serve the education market. Whether you are a textbook publisher, an education technology developer, a fellow management consultant, or a reseller/dealer I hope you will find some useful ideas in the article. Think of it as Business Development 101 for education.

Too many partnerships fail because the partners didn't work through all the questions they needed to address individually and mutually. This article attempts to lay out a process for evaluating partnerships and a partnership taxonomy to help determine what kinds of partnerships are right for your company. It draws on my experiences at Apple, Chancery, Pearson, and Harcourt.

From the blurb:

Why do some partnerships succeed and others crash and burn? In profitable K-12 partnerships, companies carefully structure the relationship and know exactly what kind of partner they need. Here’s a guide to the elements of a successful partnership and a taxonomy of the kinds of K-12 business alliances out there.

I'm really pleased to be working with the team over at Education Channel Partner. Later this year they are publishing another article from me on data driven selling. That article expands and develops the ideas noted in this post from last spring - Data Driven Selling - Quick Start Guide.

Link to the full partnership article.

EdNet turned 20 this year. EdNet 2008 is happening right now in Boston. A huge congratulations goes out to the whole EdNet team for forging one of the required stops for the Educati. Nelson Heller, Vicki Bigham, Anne Wujcik and the rest of the team continue to put on an outstanding event year after year.

I've been attending since the early 90's and it is wonderful to see so many familiar faces and so many new ones every year. It is always a delicious tension to juggle attending sessions and spending time out in the hallway conducting business. More often than not business wins - but either way you come out ahead. You can learn valuable insights in the sessions or you can make valuable connections in the schmoozefest out by the coffee.

Ever since 9/11 EdNet has also been a somber reminder for me of the events that day. We were all in a general session when it happened and we retired en masse to the bar (not open) to watch in horror and sympathy as the grisly events unfolded. We could see the smoke at the Pentagon from our rooms in the hotel. I remember walking in the park a couple of days later and the unsettling silence because there were no planes weaving down the Potomac to National. Every 15 minutes a lone F18 would circle overhead.

No one could leave Washington and no one really wanted to conduct business. Strong bonds of friendship were forged in those days of waiting and grieving. The people who were there that week have a special place in my heart.

I'm hoping I attend in 20 years. I'm optimistic for the future - precisely because I've seen the impact that people like Nelson, Vicki, and Anne can have. Thanks.

As print and technology products in education blend together the distinctions between textbook publishers and ed-tech providers are blurring in some very interesting ways.

A recent report by the Pew Research Center for the People and the Press on how on-line and traditional news media are blending together raises some provocative questions for how this will play out in education.

Several years ago schools bought technology and print products from completely different budgets and with very different purchase processes. As educators have become more sophisticated about what technology can do and what it can't do they are demanding that providers blend the best of technology with the best of print.

We are already seeing this play out in how people consume news and the Pew study sheds some valuable light on this topic. Here are four big ideas that came out of it for me.

1. The Integrators - the 23% of the population who are actively using traditional and new media - tend to be affluent, highly educated, and middle aged. They grew up with traditional media and are comfortable with it, but due to their interest in politics and sports are using on-line media to dig deeper and in more personalized ways than the general public. This group corresponds to the teaching corps in this country. If you want to sell instructional products to schools teachers are the gatekeepers - if they won't use it in their classroom you have no sustainable business. To reach their comfort zone you will need to blend the old and the new.

2. Net-Newsers - this is the most affluent and best educated group but also the youngest. 30% of them watch news clips on the web - only 18% of them watch the evening news on TV. They also are the heaviest consumers of news - digging in all day long. This group corresponds to students. While you may produce blended products in order to sell to teachers you need to make your on-line offerings rich enough to satisfy the younger users - it will be their primary interface to the content.

3. The use of print will decline - but not go away. The numbers in the report about newspaper usage are a wake up call to textbook publishers. In 1993 58% of the population read the paper daily, by 2008 this was down to 34%. Nightly network news saw an even greater drop - it went from 60% down to 29%. Meanwhile on-line went from 0% in 1993 to 37% in 2008.

The pied pipers of ed-tech who sing sweet songs about the end of print are going to have a wait a long time for that to happen. But - I do believe that just as newspapers and magazines are getting thinner and thinner our textbooks will slim down as more of the content moves on-line. The rise of the Kindle and other reading devices may also spark an evolution in how we consume "print" in the same way the youTube is changing how we consume video.

4. Politics and sports are a key drivers of on-line usage. Both the Integrators and the Net-Newsers valued the on-line tools for the insights into politics and sports. Social studies is probably the area where having on-line content that changes on a daily or weekly basis has the most value. Districts that want to bring parents into their own web resources might stress school sports - something that not even the most dedicated local paper can do for every school in their area.

Publishers can learn valuable lessons about how this transition is likely to play out in schools by watching what has happened in the news arena. This study is worth a look if you are interested in this topic.

Related Posts

Textbooks vs. Education Technology - Clash of Paradigms
The Future of Education Publishing
Web 2.0 and Education Publishing
Open Source and Education

Hot sizzling education publishing and ed-tech related links here! Obama's call for more teachers, kids media preferences, 2.0 de jour, and assessing 21st Century skills all get a nod in a short week.

Eduflack talks about Obama's call for an army of teachers. I confess that I worry about federalizing education too much, we don't need more Reading First scandals. Having 50 laboratories is better than 1. Another wag noted a contradiction on the right - if the free market knows best and if education is the foundation for economic growth why aren't conservatives fighting to pay teachers more? That would bring higher quality candidates into the profession via market forces.

Kids 10-14 prefer the internet to TV. AHCI Lunch has commentary on a New York Times article that revealed this finding about teens media preferences. Here is my question - why didn't TV take off in the classroom given the power it holds over our culture? One of the core arguments about why internet tools, social media, and virtual worlds should be in classrooms is that they are where the kids already are. The same could be said for TV at any time in the last 50 years.

I believe the reason on-line tools will take off is that TV is passive while the internet and social media are interactive and social. TV is a baby sitter, the internet is a tutor. But it could be that there are larger institutional barriers to technology diffusion in the classroom that we can learn about from TV's failure to penetrate deeply into teaching and learning.

Web 2.0 vs. Enterprise 2.0? Elearnspace does a nice job of mapping out the differences and talking about what it means for learning. K12 Education is most definitely in the Enterprise 2.0 camp which has implications for the kinds of products that need to be built and the speed at which they will be adopted.

Will Richardson has some great comments about Assessing Network Building and how critical this 21st Century skill is. It is related to the observations I've made about homing - the ability to vector in on the most important information in a sea of data. If you know of anyone doing interesting work on assessment in these areas post a comment. I've seen a lot of talk, but very little in the way of real solutions or products.

Fresh hot blog links to education topics here. These are some of the posts that caught my attention recently - enjoy.

Facebook for Teachers. This article is sad - lots of promise and money invested by people who just don't get it. One district can not support their own social network - it takes hundreds of thousands of users to make these communities vibrant. How about we look at what is actually happening on Facebook for teachers? I Am Teacher - a Facebook plugin from We Are Teachers - already has almost 10,000 active users and over registered 50,000 users.

Video Games Improve Cognitive Skills. The title says it all. Go read about it on Richard Carey's blog.

John Rice has a nice summary of Seven Question to Ask Before Using a Video Game in the Classroom. I do disagree with John on two points.

• I don't believe the majority of teachers want to modify games - even in the commercial game world modding is restricted to small group of devotees.

• I also don't believe Edugames need to match commercial grade production values. Look no further than the casual games kids are playing on the web by the millions for evidence. Game play trumps graphics (see the Wii too).

"I suspect a lot has to do with the principal - whether the school is together as a unit...I never believed you solved the problems with a better building."

A kid booted from Little League because he is too good? Eduflack has a suitably angry take on this. This story is "man bites dog" rarity - but the overall point is well taken. Punishing gifted kids is how you turn a country dumb.

The Ignite Presentation Method - this is a pretty cool concept. 5 minutes to present your idea and the 20 slides automatically change every 20 seconds. One idea per slide - razor sharp focus on your message. See my post Powerpoint=Billboard on a related topic. Imagine the power of teaching kids to communicate with this level of focus and discipline?

Videogames in the Library? Wouldn't installing a Wii or an xBox bring a lot of unruly teenagers into a refuge of quiet and intellect? It turns out that putting computer games in a library brings in a huge wave of new patrons and dramatically increases circulation - of books!

Two recent items support the thesis that games can benefit libraries and patrons. The most interesting aspect to me is that it may move libraries from being relatively static storehouses of knowledge to dynamic studios where knowledge is crafted, shaped, and extended.

The American Library Association is sponsoring a study to gauge the impact of games on learning and literacy. Why? The gamer blog 1Up has the money quote from Dan Barlow:

"...once teens come to library because of gaming, they also find time to study, to check out books. Most importantly, they also find time to learn. They learn about information technology, they develop research skills that will serve their life-long learning needs.

"Gaming in libraries? You bet! with an investment of about $900, (less than 1 tenth of 1% of budget) we have over 3,000 new young adult library users."

Maggie Hummel presented at this year's Games Learning & Society conference gave a detailed preesentation on how the Park Ridge Public Library outside of Chicago transformed their relationship with teens by incorporating games. She made several excellent points:

• Public libraries can't force kids in -they don't have the leverage a school does - but they share the same mission of learning.
• As a result they are freer to experiment and try new things (yes lots of innovation is going on in school libraries)
• This was a tough sell to the board - they feared that kids would only come to play
• Actual results - they doubled book circulation for young adults. Their summer reading program went from 280 to 420 in one year.
• They moved to sponsoring competitions - which has brought out whole families
• In a natural progression the library is now sponsoring game writing workshops and youtube movie workshops taught by High School students.

It is important to note that this is all additive - the existing role of the library does not go away. The library experience is richer not poorer when games are added to the mix.

Impact on School

What greater or better gift can we offer the republic than to teach and instruct our youth? - Cicero

If you can't convince the School Board to allow games in the library perhaps the Library Board will be more open minded - the evidence says they should be!

Additional Reading

Study on penetration of games in Libraries

Information is expanding exponentially. Applying database concepts to your information diet can mean the difference between overload and sanity, chaos and productivity. Database fluency is mandatory in a digital world. Students and teachers should be practicing and refining this skill so that today's learners can make the most of the sea of data they swim in.

Almost anything you encounter in digital format can be managed using database techniques. At their root Facebook (relationships), iTunes (music, movies, tv, books, etc.), del.icio.us (bookmarks), flickr (photos), Moodle (lesson plans, learning management), and We Are Teachers (referrals) share a common database DNA. Even blogs through their categories and tag clouds are databases.

Email is an example. Treat the sender's address as a data point. Then set up rules (database queries) to have all your boss's emails sent to a high priority folder and Aunt Mabel's political ravings sent straight to the trash. This approach allows you to target the urgent items amidst a sea of dross.

The Education Need

Educators and educational publishers have a vital role to play in our move to a database driven world. Why?

• Students need to develop database fluency if they are going to get the most out of their digital lives. Learning Management Systems (LMS), social networks, and on-line research are all core tools for 21st Century education. Database fluency should become part of the curriculum along with textual, numerical, and visual fluencies.
• Teachers need access to networks of peers, experts, and content to be able to deliver on the promise of individualized instruction.
• Administrators and Policy Makers need to measure results across groups and efficiently allocate resources.

The Goal

The end result should be personal growth, valued relationships, and effective organizations. But in the first flush of widespread adoption we are losing sight of this. Consider the statement "I "friended" 1,000 people on Facebook therefor I have 1,000 friends." Wrong. Many people are confusing the database with their relationships.

A teacher could take the Facebook example above and build an interesting set of discussions around the meaning of friendship, how to find a small network of people who are interested in the same things you are, what you can do to contribute, and how to manage the relationships that emerge. It isn't creating huge numbers of meaningless connections that matters - it is finding the needles in the haystack of humanity that you want to build bonds of friendship with.

Database Fluency

What is database fluency - what are the core skills proficient users need to master?

• Ubiquity - See every digital file you touch as a potential data point. Emails, MP3 files, Word documents, student records, and your photos are all potential data points.
• Searching - Understanding how to craft logical questions that return useful information takes ongoing practice ("and", "or", "greater than", "before", etc.). Learning to to harness the advanced search features almost all applications have is another part of this skill.
• Homing - The ability to find what is meaningful and valuable in large data sets by asking the right questions at the right time. Is this a reliable source? How recent is the data? Does this address the question I set out to answer? Is it usable or a tangled mess? How does it compare with other results?
• Tagging - Users tag data elements to personalize them. This can be through formal taxonomies provided by the database author ("Male, Female") or informal folksonomies created on the fly by users (flickr tag clouds). Since tagging is so open-ended having some basic rules in place can help insure you are able to use the tag cloud later to search the data.
• Cleaning - Any collection of data gets messy after a while - knowing how to clean your data just like you clean your room is an essential part of working with large data sets. Without maintenance your searching and tagging get bogged down.
• Reporting - Creating clear usable reports that make the point you are after is an important part of turning data into information and eventually into wisdom. When is a table better than a bar chart? Should I focus on 5 or 500 names?

How these elements appear in different applications varies widely - understanding the underlying dynamics helps harness their power across many environments.

RSS readers click through to see the full article - 3 detailed examples that bring these concepts to life and some suggestions on where to start.

Continue reading "Database Fluency - Core Skill for the 21st Century" »

Schools are inundated with paper and instructional materials at this time of year. Those of us who build education products and create marketing collateral should be cognizant of is how wasteful so much of this is.

In our personal lives many of us go through the "more shelves or less stuff" debate all the time, and all too often we end up at Ikea with another Sbrorg shelving unit strapped to the top of the car.

Please stop.

If you think you need to ship that much crap into schools to compete you need to look at your business model. They don't want it, don't need it, and won't use it. Somewhere someone in your organization has not made some choices about what to create. They punted and tossed it all in.

I recently had lunch in a restaurant that bragged that virtually everything they used was recycled or composted. The only things that go into the trash are coffee cup lids, salad dressing packets, and tea bags (metal staples). This is a fast food BURGER joint. Their prices were in line and as a consumer I appreciated that they had put that much thought into their processes. I'll be back - and not just because the burgers were great.

The thought and care you add to your products will come back to you, but sometimes it means taking a little more time to think things through and a couple of hard decisions about what is truly essential in your products/materials. You will have to push hard and hold firm for this to happen - the pressure and temptation to put more in will always be there.

"I did not have time to write you a short letter so I wrote you a long one instead." Mark Twain

In the end less stuff is the only sane way forward.

Why can't teachers buy lessons like people buy songs off of iTunes? Are publishers at risk of irrelevance if they don't proactively solve this problem for their customers?

I have noticed that my music habits have changed dramatically over the past 5-6 years. With the advent of iTunes I was no longer bound to buying albums - I could sample and just buy the songs that sounded good to my ears. Most albums have 2-3 good songs, several so-so songs, and a couple of clunkers. I only want the good stuff thank you very much.

Musicians put a huge amount of energy into creating albums that presented a sweep of music in just the right thematic sequence. Decades of practice dictated that this was something that customers wanted. Only - once they had a real choice - they didn't. It was vanity not reality.

Are textbooks and other "comprehensive instructional materials" the same? Teachers have "lifted the best and ignored the rest" since the first textbook was published, so anecdotally they are very similar.

But publishers pride themselves on providing a "coherent" schema in their materials. They regard this as a huge part of the value they add to the process. Like musicians they can fool themselves because there are no affordable alternatives (in time or money) - yet.

Will textbooks suffer the kind of profitability collapse that the music industry has gone through as the business model shifted? I honestly don't know. One thing the textbook publishers have on their side is time - education moves more slowly than the consumer market. But that shouldn't lull publishers into thinking they can avoid the central question through the usual lobbying, legislation, and front list development. It just means they may have time to adapt before they become irrelevant.

Here are some links for additional reading on this topic.

Links:

iTunes U is Apple's foray into this - but it is mostly at the lecture level for students - from what I can tell it is not optimized for teachers to collect, manage, and share - yet. Apple is probably the furthest along with this - which given their role in transforming the music industry should give all the publishers pause.

Hotchalk is taking a stab at this with their site.

McGraw-Hill has experimented with iTunes University.
MyScribe claims to be iTunes for textbooks - but you still have to buy the whole dang book.

Adaptive Curriculum (a client) is providing atomized content - they have hundreds of science and math activities that can stand on their own and be integrated easily with other materials. Their business model is to sell a subscription to the whole collection rather than the individual bits.

If you know of more projects in this area please let us all know in the comments.

(FYI comments are moderated to filter for spam - they will appear within 12 hours of posting.)

Education technology bloggers have been a busy lot with NECC 08, end of school year, and lots of new products to play with. Here are just a smattering of some of my favorite posts from the past few weeks. Enjoy.

John Rice flagged an article showing that putting games in libraries increases reading. This jibes with a presentation I saw last week at Games Learning & Society - a public librarian started doing game nights and they saw their youth circulation double - for BOOKS. This is going to make several people in my house happy - Mrs. Education Business Blog is a middle school librarian and the EBB spawn are avid gamers and readers.

Danah Boyd shares some meaty insights on status and online behavior for teens. The money quote:

In his book "Geeks, Freaks and Cool Kids," Murray Milner Jr. suggests that teens' particular obsession with status is because "they have so little real economic or political power" (2004:4). He argues that hanging out, dating, and mobilizing tokens of popular culture all play a central role in the development and maintenance of peer status. Just as these activities take place in school, they also take place in networked environments.

Continuing in the meme of bad marketing that I've been on lately David Armano names several bad habits marketers fall into. Funny and instructive at the same time. My personal favorite - shiny object syndrome. Let me know yours.

Want to have your pre-conceptions about school challenged? David Kirkpatrick compiles a list of provactive questions nobody dares to ask about education. I don't agree with everything on the list - but it it made me stop and think.

If you come across something interesting in your web perambulations pass them along!

ISTE's NECC 2008 was a success by any measure. The sibilant susurration of schmoozing and selling suffused the show space. Attendance was high (12,250), sessions were well attended (over 924), and the show floor was constantly busy. Even the San Antonio weather cooperated by being a bit cooler than usual.

If you landed on the planet on Sunday and came straight to NECC you would have no sense of the pressure on education budgets that the economic downturn is creating.

Some of this is attributable to Texas, which as an oil producing state is having a milder downturn that many parts of the country. Typically 50% of attendees at national trade shows are from within in 200 miles (double that for Texas). But that doesn't explain all of it since according to the official numbers Texas attendees only made up 25% of the total.

Since budgets for instructional materials remain relatively static what is going on? Don't be fooled by the calm surface waters, there is turbulence down below in the niches that make up the total. Companies that are producing standards based education technology resources and tools are booming. Textbook publishers continue to commoditize and consolidate.

The evidence is piling up that education technology does work - even if it is just at the level of engaging today's digital natives more effectively than print. Given the costs of textbooks ($35-$75 a copy) it is getting easier to justify digital resources ($2-$10 a year). Good teachers know what works even without Scientifically Based Research (SBR) and they are voting with their interest for digital resources.

But some of the same old complaints were heard. No School Board asks the Instructional Materials folks to prove that textbooks are being used in the classroom, but they demand this all the time for education technology. It isn't an unreasonable request - but the standard should be applied equally. If teachers are only using 50% of a textbook that is a lot of useless atoms being shipped and schlepped around. As for SBR and skepticism about technology consider this - if the textbooks were working as claimed we wouldn't have failing schools....

NECC remains the premiere education technology event of the year, the launch pad for the following school year, and the best place to do business with your customers and your partners.

Having said that I am increasingly skeptical that the amount of money spent on these shows is justified. Thee were at least a two companies that spent over $500,000 on this event. It showed in their presence on the floor and around town. But what could they have done with that amount of effort and cash on more plebeian but long lasting efforts like sales force training, new product innovation, or web 2.0 based marketing (which delivers new customers 365 days a year)? For half of what they spent they probably could have achieved the same result and been ahead in other parts of their business.

I'm advising my clients to dial back their investments in trade shows. To be clear - I'm not advocating abandoning trade shows - but I think they need to be relegated to a more junior position in the marketing budget given how much more effective other programs can be.

NECC 2009's Washington DC location drew a mixed review from the vendor community. It will be useful to be in the capital in what is shaping up to be a transitional year for educational policy. On the other hand DC is one of the most expensive places to do business in the country with hotel rooms even at third tier chains going for $250/night. It will also be the height of tourist season - plan for busy and expensive flights as well.

A Few Corrections

Yesterday in my impressions of NECC piece I made a couple of errors.

There were computer vendors on the floor including Dell, Gateway, and RM. While Apple was not exhibiting they were engaged behind the scenes in sponsoring events and providing equipment for registration and other activities (although it was amusing to see IBM monitors hooked to Macs in the reg area). But the overall computer vendor presence was subdued. Even Microsoft had a relatively small space.

I underestimated the number of people Promethean sent - it was over 100. Times are good in whiteboard land. With Nettrekker and Atomic Learning they threw a hell of a party for their customers last night (thanks!).

ISTE's National Education Computing Conference (NECC) 2008 is in full swing in San Antonio.

The Education Technology maven's tribal gathering is bigger than ever. A sign over the entrance reads "The Worlds Largest Education Technology Exhibit." That's a Texas sized ambition.

Here are a few impressions from day one. I'll write a more detailed analysis after the show closes.

There is a huge amount of energy here. The show floor was thronged until closing and sessions are well attended. Even the Press Suites are jammed. Oddly, the scene on the Riverwalk tonight was a bit subdued (I don't know if that is because people were tired from a long day or if we just missed the big party).

The electronic whiteboard guys rule the roost. It appears that Promethean (who has the most prominent exhibit at the show) is spending well over $100k just to have staff here. Smart has a big presence as do RM and all of the players in that space.

Meanwhile the computer companies are largely AWOL. Apple doesn't even have a booth.

Who is making the smarter decision? Are the whiteboard companies making hay while the sun shines or are the computer guys moving all their spending to the web where they can reap the rewards year round rather than over 3 days?

There are still lots and lots of really interesting little companies springing up - ed tech is a lively sector. While education funding may be static or down slightly the ed tech niche is up considerably. This is based on both the number of attendees and the word from vendors.

Am I getting older or is the hall getting noisier? It seemed to me that the noise level is getting ratcheted up as more people do booth theaters with mic'ed presenters. Part of this is just the high level of activity on the show floor, but some of this is an escalating problem that will spell trouble in the long run. Vendors need to have consideration for each other and for their prospects. One large whiteboard vendor that had a huge staff presence (ahem) was making so much noise for most of the day that it was hard to conduct a conversation two aisles over. Ultimately this will drive people outside for some peace and quiet. Oh, and you kids stay off my lawn.

San Antonio's exhibit hall has a weird layout. It is so long and twisty that it takes forever to get from one end of the show to the other. This didn't seem to hurt booth traffic, but it did make finding people a real pain in the rear.

So far it is shaping up to be a great show. All Y'all come back and read more about it later.

How are education publishers reacting to the economic downturn? Guest blogger and PR maven Charlene Blohm shares some concrete examples of steps companies are taking to trim expenses.

Part 1 - Education Spending & The Economy - Survey Results
Part 2 - Education Funding Market Dynamics - By Doug Stein

By Charlene Blohm, President C Blohm & Associates

District budgets are tight - many schools have already lost the music teacher, the art teacher, the band teacher, the librarian. Left with few other places to cut, two elementary schools near us will be sharing a principal next year. Districts seem to be delaying major purchases and upgrades, especially with administrative or support systems (those that aren't directly tied to student instruction).

How are companies reacting? More than one company has adjusted its sales forecasts down based on decreased spending. The major sales they were hoping to close yet this school year are being delayed, with the forecasted income moving to the next school year.

As a result here are some of the cost saving actions we are seeing across the market.

• Booth sizes at trade shows are a tad smaller - I've seen some movement where last year's 80x80 became a 60x60 this year, or 40x40 became 20x20, etc.
• Also, fewer staff are working trade show booths. Travel is down no matter how you look at it - flights are dang expensive, and often hard to find depending on where you need to go. And that applies to vendors as well as educators.
• There has been an up-tick in direct mail - people weren't getting the results they wanted from what I bet they thought were going to be "free" email campaigns. Even with the postal rate increases, people are blending the two more now than they were a year ago.
• People are stretching advertising dollars with more online purchasing. In fact, some folks are now online-only advertisers.
• There seems to be less money being pumped into product development, and the time for a product to prove itself in the marketplace is getting shorter and shorter. That's been happening for awhile now, so this is not necessarily related to the current recession.
• We're getting more phone calls from overseas prospects. I'm not sure if that's a function of our reputation (we've been doing that for years) or the economy - but I think it's safe to say that foreign companies aren't afraid to spend money on product development and marketing.
• In recent weeks, it seems that people are finally starting to think Web 2.0. I've had more conversations about keywords in the past two months than in previous two years. That signals to me that people are keen to make sure their name is up in bright lights - meaning they need the leads and visibility in a way they didn't before; I don't think there's just a sudden interest in Web 2.0 on its own merits.

Today a look at education funding in the current economic crisis from guest blogger Doug Stein. Doug details how the market will react over the next two years and then lays out an interesting theory about how districts will bifurcate into factory and craftsman models on the rebound. Doug is one of the smartest thinkers in the business. His consulting company is Memespark.

Link to Part 1 - Education Spending and the Economy

By Doug Stein

Education budgets will go through three phases in this business cycle.

Phase 1 - In response to a rapid decline in local property taxes, K12 spending will pull back significantly. Everything outside of basic literacy (and possibly Math) will drop pretty hard for about 2 years. It's possible that "oil/energy" states will invest more, but those investments will depend on visionary leadership at the state level.

Phase 2 - The next administration will make significant changes (possibly even "scuttling/gutting") the NCLB regime. This will lead to a bifurcation of the market into two big pieces:

a) Districts dependent on Title I (mostly urban) which will revert-to-form and do what they had always done (use comprehensive basal textbooks to compensate for uneven teacher quality). Teachers will generally teach to the text/test. As always, there will be pockets of innovation, but for the most part, the faculty will hunker down and wait for retirement.

b) Districts that don't need Title I will be able to redirect their efforts away from Average Yearly Progress (AYP - which was a bit of a distraction for them). Many will leverage their investments in data-driven decisions and move to a "growth model" - trying to measure value-add for each student (because the parents and local taxpayers will demand proof that the investment is being well-spent).

In states where local taxing authority is restricted based on "equity" arguments, there will be major battles to keep K-12 funding from sagging. As the funding slips, so will the central state control of curriculum. (No pay, no play.)

Phase 3 - As funding returns (2010+), the schools and districts which have had some success will be empowered to try new curricula and new technologies. In particular, some companies are going to figure out how to apply social networking tools to enable the formation of "practice improvement networks". Some of these will be accredited professional development - usually a blended model. Some of these will be content creation focused - similar to a blog with an authorial voice and community participation.

Maybe someone will learn from what Flat World Knowledge is attempting in higher-ed (whether FWK succeeds or fails) and figure out how to build a profitable business where "tentpole authors" attract a community that develops and increases the value of new educational content - and where the community is truly a "community of best practice."

In short, I suspect that after a big dip in funding, we'll see market bifurcate into "factory" and "craftsman" models. Factory districts will look to big publishers and demand complete solutions (SIS + LMS + content); craftsman districts will look towards more "Web 2.0" horizontal collaboration with "just enough" data management to generate metrics that substantiate value-add. Content will come from the more innovative supplemental publishers (if they can adapt to a world of "users not units"); we'll also see a growth in user-generated content (with a revenue share model).

Why do I believe this?

I''ve seen clients serving the "must have" content areas growing quickly when they deliver a complete solution (content + data management + PD). Clients delivering "nice to have" or "innovative/unconventional" solutions are already seeing flattening sales.

In both cases, the sales cycles are growing longer and customers are having to cobble together money from more diverse sources. On the educator side, there have always been excellent craftsmen, but they are scattered across the US and have had a hard time receiving support from their peers (whom they couldn't find). They are starting to find each other.

Relevant Links:

COSL
Global Scholar
Wright Group

The Obama and McCain campaigns squared off at the Great American Education Forum sponsored by the Association of Education Publishers (AEP)* in Washington DC today. Educational policy experts from the campaigns addressed a wide range of positions the candidates are staking out from vouchers to the federal role in education.

Jeanne Century, Director of Science Education, University of Chicago represented the Obama campaign and Lisa Keegan, former Arizona Superintendent of Public Instruction represented Senator McCain. A panel of publishing industry experts** posed questions followed by a press conference. This is the first head to head discussion of education priorities between the two campaigns.

Given that Education is consistently rated as one of the top 2-3 issues (Pew May 29th) it is surprising that it hasn't been more visible in the campaign trail so far. The forum was valuable because differences in approach, philosophy, and policy emerged during the discussion.

On most of the issues the differences between the candidates positions are more matters of emphasis. Generally speaking the McCain position is that we already know what works, we just need to let the states sort that out and help them do more of it. Obama wants to take a more pro-active and comprehensive approach to addressing not just K12 but lifelong learning. Both camps support helping teachers be more professional and helping them follow best practices that help kids prepare for the 21st Century.

Follow below the fold for a detailed look at the positions of the campaigns. RSS readers click through for the full article.

Continue reading "The Great Education Debate - Obama vs. McCain at AEP" »

Yesterday I moderated a panel at the Association of Education Publishers meeting in Washington DC on innovative business models for education companies. The panel was made up of:

• Martin Knott, President Moodlerooms.com
• Joe McDonough hotchalk.com
• Mark Tullis, Learning.com
• I represented two of my clients - WeAreTeachers.com and Whyville.net.

The slides from the presentation are in the attached file (3.7mb download)

AEP08-Pricing Models.ppt

How will the economic downturn affect education budgets? How are executives at publishing houses and education technology firms planning for the recession?

Education Week noted a couple of weeks ago:

"...states across the country are confronting deteriorating budget conditions that have tied the hands of legislators and governors hoping to spare K-12 education...Altogether, the 2009 budget gaps—the difference between what states are expected to collect in revenue and what they’re expected to spend on services—will exceed $26 billion, the NCSL says."

Most of the respondents are President or Vice President level executives. They come from a nice mix of large and small companies and a combination of print, education technology, and companies that serve those companies. This is not a scientific survey, take it as a directional pulse of what people are thinking as they do their business planning for the 2008-2009 school year.

In today's post I share some of the high level findings. In the next few posts we'll hear the detailed comments from some of the respondents to give you a more nuanced view of the data.

Across the Board - Pessimism

The is an almost universal expectation that the downturn will affect education budgets. 23 out of 30 expect a negative impact on business. Not a single respondent expected an increase in spending and only 7 said the market would remain flat.

Immediate Impact - Something New

Perhaps the most significant finding is that 63% expect the impact to be either immediate (they are already seeing it) or in the next six months. This is a big shift from past downturns where it took 18 months for the downturn to flow through tax receipts to school budgets.

In part this is attributed to the heavy reliance of many districts on local property taxes. With housing prices dropping across the board it is clear locally what the impact will be. Because schools will always try to avoid laying off people if they can many companies saw cutbacks as far back as last fall as districts anticipated lower 2009 budgets.

Another interesting insight is that ed-tech companies think the impact will be longer term while the print companies expect it to be more immediate. My guess is that seeing a couple of adoptions postponed really rocked the print world.

One additional reason cited for a more immediate impact by several people was the impact of increased prices for fuel and food.

Several respondents noted that Federal spending will remain constant or increase after the election in the fall. The downturn will be concentrated in the 88% of education spending that comes from state and local taxes.

Impact Will be Mild

The good news is that the general expectation is that the downturn will be relatively mild. Only 8 of the respondents expected it to be a significant downturn. Several people noted that the impacts are being felt in 23 states this time as opposed to 48 in 2001.

Folks who thought it would be mixed expected to see some areas of their business doing better (e.g. supplemental) while others were challenged to make the number (e.g. big ticket items).

This is one area where there was a real divergence between the largest companies and the rest of the market. 6 of the 8 people who think the impact will be significant are with very large firms.

Districts Will Delay Big Decisions

One explanation for the pessimism of the large companies is that people are seeing districts delay or defer large new projects - even adoptions. This would have a disproportionate impact on the largest companies. Smaller company's products fill in gaps and are easier to justify right now (as long as they target an urgent need). Several respondents noted that they are already seeing this in the decisions districts are making today about the 2008-2009 school year.

About the Respondents

I contacted 74 people on my LinkedIn network and 30 responded.* 67% are Executives with a specific industry focus, 23% are consultants who look across a wide variety of companies and the other 10% were Line Managers or Sales Reps.

Responses came from a wide variety of companies.

Industry Services includes management consultants, list providers, market research, and executive recruiting.

We also got a nice mix of company sizes.

*If you are interested in participating in future straw polls lets get connected on LinkedIn.

What do large school districts need from ed-tech providers? Michael Casserly Executive Director of the Council of the Great City Schools spoke at the Software Information Industry Association (SIIA) conference this week in San Francisco. The speech was direct, honest, and well balanced in tackling some difficult issues like NCLB.

Towards the close of the speech he made the following 10 requests of the Ed-Tech community. I've added my perspective from the industry's side of the conversation.

1. Provide tools that build academic vocabulary and develop high order thinking skills. I found this an interesting request given that all the major publishers and several mid and small sized publishers have materials that do all of these things. Either we are not meeting the real need with our products or we are not getting the word out effectively. This should give all of these providers cause to reflect on their offerings and their go-to-market strategies.

2. Provide targeted intervention materials for Special Education (SPED) and English Language Learners (ELL) - specifically age appropriate materials targeting different ability levels. This is a similar problem to issue #1, there are a fair number of existing resources in the market already, but most of them are print based. One area where technology could make a huge difference is flexibly scaling basal textbook content to the student's ability level. Doing this with print presents two intractable problems - the sheer number of variations needed is prohibitively expensive and the stigma associated with the lower level books causes kids to resist using them. On-line everyone is in the same application and the number of variations is limited only by the sophistication of the software engine.

3. Develop virtual environments to stimulate inquiry based learning when the real materials would be too expensive or dangerous. This is an exciting area with a lot of activity. My article in Cable in the Classroom covered this very ground. Virtual worlds do present a challenge in districts with high poverty around equity of access to technology. The path of least resistance here may be cell phone based interfaces similar to what is happening in Japan and Europe.

4. More group learning resources using technology. Honestly - I was writing like crazy and missed the substance of this request. If you were there and recall please explain in the comments. [Update: see Charlene Blohm's take on this in comments.]

5. Clarity from publishers on what our materials do and don't do. There is a feeling that technology vendors have either over-promised or omitted important product shortcomings. Fair enough. The temptation is always there for vendors to do this - but in the conversation economy it can be deadly. Trust is the coin of the realm. Sales Management has a responsibility to set the right tone of integrity and honesty.

6. Provide clear alignments to standards in a deep and meaningful way. They would also like to know where we don't meet the standards - don't force them to figure it out on their own. Vendors might be more inclined to do this if we feel that it is more than a check-off item. The cost of doing correlations and maintaining them is significant and yet from what we can tell once they are submitted they are never used again. We do this little Morris Dance around the standards and then districts buy the book with the prettiest cover.

7. Stick by them - they are in it for the long haul and they need business partners to trudge that road with them. This is a legitimate request but a hard one to implement due to the management turmoil many large districts suffer from on an ongoing basis. It can take years to position a sale in a large district only to see it derailed by a reorganization or funding re-allocation. Only the largest publishers can make this kind of sustained commitment which limits the range of innovative solutions that the large districts see.

8. Longitudinal follow up with effective professional development. He also requested that we bundle PD into the cost of the products - if PD is an add-on option there is the temptation to skimp in this area. This request is consistent with the thesis that we are going to see a Negroponte switch to districts paying for PD and getting the materials for free. Of course, the easiest way for districts to insure that this happens is to issue their RFPs with PD bundled in. Until that happens vendors who are competing on price are going to leave it out. Amplifying this temptation is the fact that PD is frequently the item with the lowest contribution margin at publishers and ed-tech vendors.

9. We should resist customizing our products for one district - too many districts have had been left behind on legacy code as a result of this. I'm really not sure that the vendors are at fault on this one. This usually happens when a large district flexes their market power by demanding special attention. I've known vendors who have walked on these deals because they see the problems down the road, but there is almost always someone willing to bid it exactly the way the district requested it. See my comment below on how the Council itself could play a positive role in these situations.

10. Provide software tools that help them use data more effectively. This includes longitudinal tracking systems, dashboards, and benchmarks. This is an area where lots of companies are doing important work. Student Information Systems, Data Warehouses, Assessment Reporting Systems, and Learning Management Systems are complex software systems that are evolving rapidly. This is also one of the areas where technology, used effectively, can provide real tools for change.***

On top of all this he added a bonus request. He asked that vendors resist selling products when the district wants to use them in an inappropriate way (wrong age level, insufficient infrastructure, etc.). This is related to item 9 above. If a vendor feels they are being pressured to do something like this it is hard to push back, particularly in a competitive situation. Responsible vendors will walk away - but there will always be someone who will make the promise to win the business. I think there is an opportunity for the Council to be of service in this area. If the responsible vendors felt they had place they could go before these deals were sealed it might make a difference. The Council could put a word in with the district that they were headed in a risky direction.

Large Districts (and States) need to resist the temptation to use their market power in ways that ultimately hurt their own interests. There are perfectly legitimate uses for that market power so I'm not advocating unilateral disarmament - just suggesting that some restraint is needed on both sides. Districts shouldn't make unreasonable demands and vendors shouldn't make unrealistic commitments.

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***I'm working on the Data Driven Decision Making Report that will be released in the next few weeks. It is an in-depth look at the SIS and Data Warehouse market and is a follow on to the 2003 report. If you would like more information please use the contact us link and reference the report.

Don't miss Gary Stager's scathing take down of No Child Left Behind (NCLB) over at the Huffington Post.

He cites a recent review by the Department of Education's Institute for Education Sciences that stated:

“The program did not increase the percentages of students in grades one, two or three whose reading comprehension scores were at or above grade level.”

"The failure of Reading First represents more than a course correction for a well-intentioned attempt to benefit the nation's children. Reading First was rife with politics, contempt for professional educators and conflicts of interest from the outset. It is particularly ironic that an administration insistent that every classroom practice must adhere to "scientifically-based research," to the exclusion of research it did not like, continues to insist that Reading First should be the law of the land, despite its own evidence to the contrary."

Expect to see more of this as the Bush term winds down and we head into reauthorization of the act.

What this may mean - if people are emboldened to take NCLB on like this it may be a bigger battle than many have been anticipating.

Link to the DOE report is here.

NY Times Article on the DOE Report is here.

By Randy Wilhelm, CEO Thinkronize - Guest Blogger

Did George Washington's dog play multiplication math games with Abraham Lincoln's animals during the Civil War?

I would guess the answer is a resounding no. However, a new Index reveals the most popular keywords that K-12 students are searching for on the Internet. It includes these terms in the top 15. netTrekker d.i.’s quarterly “Top 15 In-School Search Index” for spring 2008 will be announced on Wednesday, with Games coming in at #1, Dogs at #2 and George Washington, at #5.

Search engines like Google™ and Yahoo® frequently pull together lists of the most popular keyword queries, underscoring our nation’s interests and fixations and showcasing trends and patterns. This index, however, offers a different view—a real-time school-based mirror of what our children are searching for—both for academic purposes and out of genuine curiosity.

With five school age kids of my own, an academically curious wife and wireless-device-addicted me, I think our humble family averages about 50 searches a day. And, as my sons are crazy about electronic games and occasionally pine for another dog – I can certainly understand the top results of the netTrekker d.i. ranking. Although it would have been heartening to see more academic search terms in the top 5, it is comforting to know that kids will be kids, whether at school or at home.

Every day, across the nation, our digitally native students are punching search terms into their school’s Internet browsers. Now, with this first-ever quarterly index, we have new insight into what our nation’s students are learning about, care about and want to know more about.

Following are the top 15 most active keyword searches in schools for the spring quarter, from February through April, 2008:

Rank Keyword
1 Games
2 Dogs
3 Animals
4 Civil War
5 George Washington
6 Holocaust
7 Abraham Lincoln
8 Multiplication
9 Math Games
10 Weather
11 Frogs
12 Fractions
13 Planets
14 Sharks
15 Plants

About Thinkronize - They are the creators of netTrekker d.i. the #1 K-12 safe search engine.
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Lee's Comment

For publishers, teachers, and students who are building on-line activities this index will be a great asset. By using these popular search terms as starting points for long-tail keyword phrase mining you will be able to find phrases that are easy to rank high on.

The Dig function in Wordze is one place this would be invaluable. For example - if you start with "George Washington" you can find 3094 phrases that are possibly related. While George Washington" would be extremely difficult to rank for (30,000+ searches a month and 18,700,000 pages) "George Washington Biography" has much less competition (3,899 searches a month and 440,000 pages). Quantitatively this means the second phrase has 10% of the search volume but only 2% of the competition. With web savvy writing you could create content that would surface at the top of that list much more easily than plain "george washington."

Big kudos and thanks to nettrekker for creating this index.

The reaction of many parents and educators to the idea of playing games in school is horror. School is supposed to be serious hard work. What these people don't know is that in modern video games doing tasks repetitively to slowly build skills and status is the norm not the exception. These games are all about "hard" play.

Gamers have a term for this - grinding. Grinding is spending two months getting your mining skills up so that you can make a special suit of armor for your friends. Grinding is repeatedly doing some menial chore for a faction so you can earn status with them and get access to skills they can teach you.

Educators also have a term of art for this kind of activity - they call it building fluency. We learn most of the hardest skills in life through a slow process of accretion that amounts to building fluency. According to reading experts a child needs to read several million words in order to become a fluent reader.

Accelerated Reader is essentially a game about reading that is a long steady grind. Like a game you get rapid feedback, frequent promotions, and status from completing the tasks. It didn't get to be "the world's most widely used reading software" by mistake.

But the concept of fluency goes far beyond reading. Learning to play an instrument, writing, using a knife, flirting, skateboarding and thousands of other human activities all share the need to grind it out over time to develop that effortless fluency that is the mark of an expert.

This raises the question of why a child would engage in the grind to fluency? My theory, based on gamer culture, is that it is a critical part of building identity. Players will do routine and menial tasks over and over again to build the story line of their character in the game. It is a fundamental building block of identity - if it was easy there would be no status associated with becoming fluent.

How does this apply to school? Many (not all) low performing students don't have a story thread in their lives that helps motivate them to grind in school (doing homework). Students who are high achievers generally have a story line that is central to their identity that gives the grind meaning and a purpose. Without that story line much school work is just tedium.

If this is true (a big if) what is role of publishers in helping educators and parents guide students to the stories that will motivate them? I believe our role is to bring new tools and approaches to bear that have more story embedded in them, stories that students can appropriate and make their own as they build their identity.

If you want clues on how to do that - you only need to head down to your local Game Stop.

It has been a while since I did a round up of blog articles, time to clean a few items out. Rather than dump a long list I've picked four articles I've found particularly interesting in the past few weeks.

Matt Mihaly over at The Forge notes that MMO's/Virtual Worlds are some of the most valuable private tech firms in the world. I would add to Matt's observation that 3 of the 4 firms he cites in the top 20 are for kids. Silicon Alley Insider's original article is here.

Chris Anderson over at The Long Tail has an interesting take on the decline of the newspaper industry that is directly relevant to education publishing. Sure, readership is down, but at $45b it is still twice as big as Google and Yahoo combined. The money quote:

The truth is that the newspaper business is still a huge industry and will be around in one form or another for the rest of my life. That is not to dismiss the declines, but only to note that there's still a lot of money there and what is required is strategic change, not giving up the ghost.

The Happy Worker Kit - coming to an office near you soon. Funny.

Here is some food for thought from Seth Godin on how social networking can help us organize. His main point - the side in an argument that is better organized usually wins. Whether your issue is education reform, textbook and software adoption, privatization, highly qualified teachers, NCLB, or any of the other issues of the day there is a worthy nugget of wisdom in his thinking.

What Happens When We Organize?

As Seth points out these tools upset the power dynamic and if harnessed can lead to positive change.

On caveat - once you engage be prepared to go on forever. These issues are never permanently resolved - and that is probably as it should be. In an arena as complicated and nuanced as learning no one has a monopoly on the truth.

Another caveat - organization is just a tool for change, not necessarily a tool for doing good. Witness email - the spammers are better organized than the rest of us and they are killing it. So - be the change you want to see and find others who want the same things you do.

Here are a couple of places to start:

Classroom 2.0 - For all of us
EduCon - For educators
We Are Teachers - For teachers
AEP and SIIA Education Division - For publishers

Come on - join the conversation!

A family member - who works in a Texas middle school - forwarded this bit of wit and wisdom to me today.

A teacher dies and goes to Heaven. When she gets there, she meets Peter at the pearly white gates.

Peter says to her, 'Welcome to Heaven. Let me give you an orientation first.'

So, Peter takes her to some beautiful mansions. The teacher asks, 'Who lives here in these beautiful houses?' 'These are for doctors. They did a lot of good on Earth so they get a nice mansion,' replied Peter.

Peter takes the teacher to some more mansions. These were more magnificent than the first. 'Wow, who lives here?' 'These mansions are for social workers. They did a lot of good on Earth but didn't make a lot of money so they get a better house.'

Peter took the teacher to some more mansions. These were the most gorgeous homes she had ever seen. They had huge columns, well-manicured lawns, beautiful stained glass windows; the works! 'These are the most beautiful homes I have ever seen,' exclaimed the teacher, 'Who lives here?'

'Teachers live here.' said Peter, 'They did much good on Earth and received very little money so they get the best houses in all of Heaven.'

'But where are all of the teachers?' inquired the teacher.

Peter answered, 'Oh, they'll be back soon. They're all in Hell giving a TAKS test.'

An instructional monoculture is a world where all children are expected to learn the same things, the same way, at the same time.

Are we building instructional monocultures in our schools? By we I mean publishers, policy makers, and district level decision makers. The forces of conformity are driving hard against the need for instructional diversity.

More importantly in the Web 2.0 world is it even possible to assert this level of control? Is it an effort doomed to failure as Citizen Marketers invade traditional publishing and turn it on it's ear.

What may save us all from ourselves is the emerging Web 2.0 culture of mashups, collaboration, open source, and people empowered as digital publishers. As publishers this directly threatens our current business model and the short term temptation is to dig in and try to protect it. But as many other industries have already learned the forces at play here are inexorable.

Agricultural monocultures are an efficient way to drive up yields in the short term. In computer science monocultures are universally used platforms (like Microsoft). In both cases the by standardizing (recognize that word?) you gain significant efficiencies. But you also create fragility and susceptibility to catastrophe. The Irish Potato Famine is an agricultural example. In computing almost all viruses are on Windows.

Just as genetic diversity in a population decreases the chance of a single disease wiping out a population, the diversity of software systems on a network similarly limits the destructive potential of viruses. - Wikipedia

Policy makers, in a vain attempt to assert control and drive standards, have become increasingly strident in their push to have every moment of every school year scripted and directed by a committee of designated experts. To abet this some have deliberately bred a mistrust of teachers - "we can't have them making decisions..." In an unholy alliance with adoption committees we have seen attempts to drive a single direct instruction product across an entire state (CA) and by design drive all other approaches out of the classroom.

District decision makers, under the gun to deliver on the promises of NCLB have seized more and more control from school sites in selecting supplemental materials. Even when they know teachers need some latitude their fear of failing AYP drives them to assert more control.

But what students really need are individual instruction plans - and plenty of people are working on making that a possibility. But until we change how we create materials, how they are adopted, and the decision making process that select resources we won't make much progress on this promise. Also - if we are going to individualize instruction we are need to empower teachers to make decisions.

In a world that is changing rapidly having a monoculture is a recipe for disaster. We need to be able to adapt to quickly shifting priorities and needs. Biological systems do this by promoting diversity - the more options you have to respond the more adaptable and resilient you are.

Does this mean that standards don't have a place? Absolutely not. There are clear taxonomies of knowledge and logical ladders of learning that are efficient. But - how we move through those should be open to variations in learning style, timing, context, culture, and sometimes just whimsy.

There - I feel better. Rant complete (for now).

Here are a few suggestions for publishers on how to build products that fit into the Web 2.0 culture rather than fight it.

New York, Texas, California, and Florida have opted out of No Child Left Behind (NCLB) and will be abandoning all high stakes testing. It is unclear at this time if other states will follow, although indications from across the political spectrum are clear there is strong interest.

In a joint press conference the Chief State School Officers for the big 4 expressed a commitment to move the money they are currently spending on high stakes testing into Art, Music, and Intramural Sports.

"Frankly we were not seeing real gains. We kept tweaking the tests and measurements to give the illusion that progress was being made - but at the end of the day it was the same old same old" stated one Chief. Another added that it was difficult to measure whether the tests were really making a difference. As he pointed out - "the mortgage crisis was driven by people educated 15-30 years ago, it is hard to see how today's students could be dumber than that."

In related news Pearson announced that in response to the announcement that they have added Video Professor to their eLearning line-up and are excited about the opportunity to start adding the Pearson portfolio into the beloved late night cable advertorials. "We think NovaNet and Pearson Inform will be big hits with this audience and we are excited to be extending our elearning reach into new markets."

They plan on rolling out new video products targeted at the revived art, music, and drama markets. The announcement stated "Schools have thousands of laserdisc players in their inventory and we are proud to offer them a new use for this technology. Think of it as Gray-Ray and we all win!"

In response to these developments a spokesman for Houghton/Harcourt sniffed that this was a clear sign that it is time for Pearson to drop out of the race for dominance so that the nation can come together for the fall back to school season. He then added that if Pearson was as experienced as they keep claiming to be why did they buy the now moribund testing side of Harcourt? He added "Books, books, books - thats where we see all the action and growth over the next 15-20 years. Glad we dodged that assessment bullet in the Harcourt acquisition."

Information Overload and Education Publishing Marketing penned (keyed?) by yours truly was published today on the AEP blog. This is a summary of the longer series I did last year on information overload. If you want a quick introduction or need a refresher hop over and take a look.

While you are there bookmark the blog or better yet drop it into your RSS reader - on a regular basis senior people from the publishing industry will be writing about the business.

Curious about how Web 2.0 is going to affect education? Steve Hargadon has distilled into one blog post an excellent summary of the trends that are leading us there and what teachers can do to help their students thrive in this new environment.

Much of what Steve talks about has been part of a vision for education long before computers were going into schools. There is a clear link from Dewey, Piaget, Vigotsky, and even the constructivist critic Mayer to the ideas Hargadon lays out.

Both the technology and the culture that surrounds it have matured to the point where this vision can transform into the dominant paradigm. Quantitative and anecdotal evidence backs this assertion up.

He describes in some detail the following shifts that are taking place:

• "From consuming to producing
• From authority to transparency
• From the expert to the facilitator
• From the lecture to the hallway
• From "access to information" to "access to people"
• From "learning about" to "learning to be"
• From passive to passionate learning
• From presentation to participation
• From publication to conversation
• From formal schooling to lifelong learning
• From supply-push to demand-pull"

"We've spent the last ten years teaching students how to protect themselves from inappropriate content – now we have to teach them to create appropriate content. They may be "digital natives," but their knowledge is surface level, and they desperately need training in real thinking skills. More than any other generation, they live lives that are largely separated from the adults around them, talking and texting on cell phones, and connecting online. We may be afraid to enter that world, but enter it we must, for they often swim in uncharted waters without the benefit of adult guidance."

For publishers I've outlined similar ideas about what is happening and what you can do to participate in this movement in the following series of posts.

Information Overload Series

Part 1 - It’s all in your head - really

Part 2 - A cure for “a poverty of attention”

Part 3 - 10 Ways to Build Instructional Products For 21st Century Skills

Part 4 - 10 Ideas to For Marketing & Selling In An Age of Infinite Input

Summary - Closing Thoughts and Resources

What is the future of publishing? I moderated a distinguished panel at the IIR Education Industry Investment Forum in Phoenix last week that tackled this question. The general thrust was that publishers need to adapt to a new environment or they will be left behind.

Nader Dareshori CEO of Aptius Learning and former CEO of Houghton Mifflin addressed the real business of publishing – spreading ideas.

Reid Lyon (bio) the architect of Reading First and CEO of Synergistic Education Solutions tackled the question of context – how materials are used matters more than the materials themselves. Publishers need to think build this into their products and business models.

Hakan Satiroglu CEO of xPlana covered how new tools are changing the structure of what is offered and how traditional publishers are struggling with this new paradigm (see my post on this topic here).

Bobbie Kurshan CEO of Curriki talked about how the Open Source community is going to play in the creation of content and how publishers can benefit for participating in the community. (see my post on Open Source in Education here).

As moderator I discussed how publishers need to move away from trying to recreate the book experience on-line to leveraging experiences only the technology can provide like virtual worlds and video games.

Follow the “keep reading” link to find an extended description of each panelist's key points and some notes on the Q&A portion of the session. (If you are on an RSS reader you may need to click through to the original article to see this link).

Continue reading "The Future of Education Publishing - Panel Report from the Education Industry Investment Forum" »

Why don't textbook publishers use more humor? Humor frequently plays a critical role in revealing truth and puncturing pomposity. Textbooks should be a path to the truth - and they are frequently so pompous they could bore a narcoleptic sloth to death.

As an example the "You Suck at Photoshop" series on YouTube is pure snarky genius. Our guide and teacher is the hapless Donnie Hoyle. During serious lessons on Photoshop we learn about Donnie's unfaithful wife, his lame World of Warcraft buddies, and his egomaniac boss at Phebco (motto: Innovation, Vision, Waste). He uses the mesh tool to paste a copy of his marriage certificate in the windshield of the boyfriend's car, compound paths to paste his wedding ring into a barren dessert scene, and pucker and bloat to reveal his bosses inner piggishness.

View episode 1 to get a taste of the series (warning - strong language, adult themes, and snark).

Something this edgy would never work in school where a wide range of moral codes should be respected. But I share it anyway because I think it brings out some interesting insights into how humor can support teaching.

1. There is a story line. The humor works partly because it builds over the videos. The tools he shows are all very different, but the reason he is using them (revenge!) provides a thread. We want to learn what is going to happen next to his marriage and job. It provides a real world context for how you can use the tools - although one with tongue firmly in cheek.

2. There are easter eggs that draw us back in. A lot of the humor is never stated, it is in the images that flash by while he narrates (the titles of his friends photos for example). This leads to repeated viewing to get all the jokes. Every time you watch it the underlying Photoshop lesson is etched a little deeper. It provides a motivation to review the material.

3. The humor itself is a mnemonic form. To recall the techie Photoshop tool you just have to recall the joke, which is much more accessible to most human brains.

4. Snark is the new black. We live in a Mad Magazine culture that is a reaction to the spin and hype that we swim in. It is a defense mechanism against the 4,000 ads a typical urban dweller sees in a day. If we want to connect with youth culture we need to take this aspect of it into account.

If you are interested in learning more I recommend an academic paper titled "Using Humor In the Introductory Statistics Course." No joke.

Humor is hard and as an art form it is risky. But that doesn't mean it shouldn't be used where it can help engage, motivate, and anchor new learning experiences.

But I don't harbor any illusions - the risk averse world of textbook publishing is not likely to move in this direction any time soon. On the other hand, that risk aversion creates a business opportunity for carving out a niche for someone brave.

Thanks to Donnie I now suck slightly less at Photoshop.

In Japan novels are serialized for cell phone delivery and published as dead tree editions only after they are hits. John Rice has a great post on on this at his Educational Games Research blog.

While this works because of Japan's rather unique commuting environment the central point that any reading helps build fluency is well taken. Here is the money quote:

"It boils down to literacy events in the life of a child. The exposure to text, in whatever venue, increases the reading and writing skills of children. If children read a book, a comic book, or the story line in a videogame, they are reading. And that makes all the difference."

Second, the Japanese are not fighting the new tools but finding ways to use them effectively. Cell phones can be disruptive in schools and there are definitely places they don't belong. On the other hand the blanket prohibitions that many schools have in place show that they haven't been provided with products like this that take advantage of the new technology for learning.

Products like Amazon's Kindle and Sony's eReader are interesting and may be better platforms for delivering educational content but they cost almost as much as a laptop. On the other hand, most kids have access to a cell phone today at no cost to the schools at all.

It would be interesting to see an ed-tech company partner with a publisher to reach out to students here in the US with something similar.

What do Web 2.0 and Social Networking mean for Education Publishing? On February 7th I was on a panel at the Association of American Publishers (AAP) in Sacramento that tackled this question.

Ann Flynn Director of Education Technology at National School Boards Association (NSBA) reviewed the excellent study they released last fall that explored how these tools are being used in schools.

Sheryl Abshire CTO from Calcasieu Parish School System in Lake Charles, Louisiana talked about they are handling the very real complications that come with introducing these disruptive technologies into schools and classrooms.

My talk focused on why these tools are so wildly popular. If Web 2.0 tools are solutions - what problem are they solving?

In a nutshell - we have moved from a world of information scarcity to a world of information overload. People are adopting these tools because they help them focus their scarce attention on things that are relevant to them, and they know they are relevant because they have been vetted by their collaborative network of peers.

Regular readers will recognize many of the themes from the Information Overload series I did last fall.

For those who are interested here are my slides AAP Lee Wilson-1.ppt (3.8 meg file - lots o' graphics). [Update - Link Fixed]

Related blog posts:

Information Overload
Web 2.0 Education Marketing
Textbooks vs. Education Technology - Clashing Paradigms

What tools do teachers find useful for learning and teaching? The Centre for Learning & Performance Technologies out of the UK conducted a survey in 2007 that asked people to submit their top 10 tools - they then came up with a list of the top 100.

This survey is very unscientific, 107 self selected responses. Take it with a large grain of salt. On the other hand the questions it raises are fascinating.

• Could it be that the age of education specific software is coming to an end?
• Are educators embracing general productivity tools as the solution?
• Will they need scaffolding to bring these tools into the classroom effectively?
• What will be the business model to support this trend - will it be Professional Development instead of Software Systems?
• Will schools tolerate or even encourage "free" products that are advertising or sponsorship driven?
• If schools do move to a sponsorship model what implications does that have for traditional media like textbooks?

Hype alert - Web 2.0 Marketing is a paradigm shift but only a portion of the market is using it today. In Part 1 I argued that market trends should be pushing you to use social networking, blogs, wikis, and the other tools of Web 2.0 in your marketing mix. Given the uneven adoption of these tools in your customer base you will be managing a mix of the old and new for quite some time. So think of it as expanding your paradigm.

Before we go on I want to add to what I said in Part 1. There is one additional reason for doing all this that is specific to the education market. Most teachers are isolated in their classrooms - they yearn to have their voice heard and to be part of a larger community. The asynchronous nature of most social media are ideal for meeting this need. It is one of the reasons there are so many education groups already on Ning.

So what does this “paradigm expansion kit” look like? Here are five ways of thinking like a Web 2.0 Marketer that you can add to your toolkit.

Idea #1 - You can’t do this on your own. The value from Web 2.0 is other people talking about your products. For people to do this they need a context where they are comfortable interjecting their voice. Many companies believe that they can build their own walled garden so that they can control it. But customers want Switzerland - a neutral zone where they can get useful information - not company controlled spin. Your first goal is to become a trusted player in the larger on-line community. Join and support the networks that are out there and blend your network into it rather than trying to go it alone.

Idea #2 - Web 2.0 Marketing is a process not an event. You manage it the way you would any other process - with a sustained commitment to continuous improvement. This breaks the paradigm of a lot of event driven marketing. You don’t manage your personal relationships this way (“I sent my wife an email last week - don’t need to worry about talking to her for a while....”) and you can’t build on-line relationships with customers this way either. This is a budgeting challenge because you have to dedicate resources to managing your on-line presence. My suggestion is to look at some of the most expensive items in your budget (trade shows, advertising, etc.) and dial back on them as you dial up on Web 2.0 activities. Smaller newer companies should start here and add the other elements as they can afford them.

Idea #3 - It is about authentic conversations. When you engage on-line speak as yourself. This is not a new and improved way to push your spin into the world. People will sniff out on-line phonies and expose them. Ridicule is not going to help your brand identity - particularly if it shows up in Google. A positive example of how to do this is Randy’s Journal - the blog of Boeing’s CMO. He speaks from a personal rather than corporate voice. Marketers are welcome to the conversation if you add value and contribute expertise. Oh - and don’t spam bloggers with press releases - it just annoys them. Make comments on their articles or phone them up and talk.

Idea #4 - Web 2.0 should be embedded in your products. Seth Godin in his latest tract - "Meatball Sundae: Is Your Marketing out of Sync?" - makes the point that most companies try to graft Web 2.0 approaches onto existing products and services with predictably disappointing results. Consider this - on-line gamers spend 1 hour reading about the game on companion websites for every 2 hours playing. That is because the companion sites have been encouraged to develop as part of the games’ ecosystems. Imagine what your customers would be saying about your curriculum content if students were showing similar levels of engagement. For more ideas on how to do this see my article 10 Ways to Build Instructional Products for 21st Century Skills.

Idea #5 - Set your expectations correctly. Social media sites are hugely popular as measured in total traffic, but fewer than 1% of your customers will probably be contributing participants. If you expect everyone to comment and contribute you are going to be disappointed. You are trying to reach the influencers who will help spread the word. Overhyping the participation rate in order to get a project funded is a time honored tradition at many education publishers - but in this case since actual participation is so easy to measure it will ultimately undermine your project.

Some of this probably looks like common sense, some of it may look a little weird. My strong suggestion is that in order to understand how to use these tools for your company you need to first use them for yourself. Next in this series we’ll look at some ways you can get started with social media.

Part 1 - Web 2.0 Education Marketing

Education marketers have been slow to adopt wikis, blogs, social networks, and virtual worlds. There are valid reasons for this (see below), but it is time for us as an industry to begin embracing these tools. In this series I'm going to explore the industry context, the gestalt, and some concrete ideas to help you get started down this path.

Over the past year I have been asking people "what is the first thing you do in Amazon after you make sure you have the product you were seeking?" The almost universal answer is that people scroll down to look at the user generated comments. This is the power of Web 2.0 at work - what your peers have to say on a subject is far more important than anything a company might say.

There are two primary reasons the education industry should be employing Web 2.0 tools:

1. The education industry is going through huge change driven in large part by technology substituting for older ways of doing things. In this time of transition staying close to your customers and their shifting priorities is going to be a requirement. Web 2.0 tools are some of the most effective ways to create a real two-way dialog with customers - what I have elsewhere called Socratic Marketing.

2. Our customers are becoming accustomed to using these tools everywhere else in their lives. If we don't keep pace we run the risk of becoming irrelevant.

There are some good examples of people working with these tools like here, here, and here. But they tend to still be the exception not the rule.

So if these clear needs are out there why haven't we seen more of this in education? There are three reasons that come to mind:

1. A key factor is the concentration of decision making at the district level that we have seen in the past few years due to NCLB. Without a need to reach broad numbers of teachers companies simply see this approach as a lower priority.

2. Some of it has to do with the inherent conservatism of education and the spillover of that mindset into the companies that serve them.

3. Finally, most of those setting budgets and priorities at the larger education companies are digital immigrants to the world of Web 2.0 - it is unfamiliar, vaguely threatening, and will require learning new ways of thinking and acting. It is easier to keep doing what you are already doing.

Of these three reasons only the first is a valid "marketing" reason not to do it. The other two are just excuses for holding back. If your product truly touches just a few people at the district office then this may not be the path for you (on the other hand with 14,000+ districts it may still make sense). But if your products are in the classroom or serving a broad network of people across a district then you should begin to think about how you can tap into the power of that network.

Next in this series - 5 core concepts for marketers for working in a Web 2.0 world.

By Guest Blogger Randy Wilhelm


Educator's love the internet but they have valid concerns about using it in the classroom. Thinkronize’s study, “Schools & Generation ‘Net” uncovered compelling insights from nearly 1,000 principals and library media specialists. Relevancy, commercialization, information literacy, instructional validity, and children's safety were all significant issues. Today we look at 5 ideas that can help you rethink your on-line offerings to fit into today's classrooms.

1. The Internet is a Valuable Instructional Resource
First the good news. Our survey confirmed that educators value the Internet, with 90% rating it as an “excellent,” “very good,” or “good” educational resource.

2. Concern over Relevancy and Commercialization of the Net
The study found that educators are worried about the quality and relevance of sites students find on the Internet with the following ratings:

• 79% expressed concern about useless or irrelevant search results.
• 78% percent expressed concern about students being redirected to commercial or pay sites.

3. Information Literacy is Low
When it came to information literacy, there was concern over students’ ability to judge online information sources critically. Our study results showed:

• Only 4% “strongly agreed” that students were equipped to think critically about the accuracy, authority and possible biases of the information sources they encounter, with the rest expressing responses in varying degrees of uncertainty.
• When asked about the teacher’s role, 88% “strongly” or “somewhat” agreed that teachers need additional professional development in this area.

4. Web use for Instruction/Curriculum
We asked about teachers’ use of the Internet and student searching being integrated into the school’s curriculum. Our findings included:

• Over one-third of respondents (35%) reported that “almost all” teachers in their schools use the Internet regularly for instructional purposes.
• 81% “strongly” or “somewhat” agreed that student searching on the Internet has been integrated into the curricula.

• Installing filters – 97%
• Giving students instructions on safety – 79%
• Giving faculty instructions on safety – 75%
• Providing parents with tips and information – 56%
• Purchasing special search engines – 32%

The bottom line – educators believe there is significant room to improve the Internet as an educational resource. And, in order to keep the Internet a valuable resource, tools like filters, training, and safe and contextually relevant search engines, like netTrekker, are critical.

Link to first article in this series.

Sometimes in the rush to finish a chapter on deadline or to get six copies to Paducah by Friday we loose sight of the essence of what we are doing.

Thich Nhat Hanh, a Vietanmese monk, writing about how everything is connected expressed it this way:

When you look at this sheet of paper, you think it belongs to the realm of being. There was a time that it came into existence, a moment in the factory it became a sheet of paper. But before the sheet of paper was born, was it nothing? Can nothing become something? Before it was recognizable as a sheet of paper, it must have been something else - a tree, a branch, sunshine, clouds, the earth. In its former life, the sheet of paper was all these things. If you ask the sheet of paper, "Tell me about your adventures," she will tell you, "Talk to a flower, a tree, or a cloud and listen to their stories."*

Now, you may be saying to yourself "he's gone a little woo-woo on us" - and you may be right. We still have to make a buck to stay in business. I believe that how we make a buck matters, and frequently in ways we never see.

Pass it on.

*

"The Heart of the Buddha's Teaching" (Thich Nhat Hanh) p 137

Barbara Russell, founder of Options Publishing, was honored at the Association of Education Publishers (AEP) awards breakfast this week in New York. She spoke about entrepreneurship in the education market and why it matters to those of us who care deeply about providing schools with innovative high quality instructional products.

When multi-billion dollar companies like Pearson, Houghton / Riverdeep / Harcourt, and McGraw-Hill consolidate much of the business we need entrepreneurs driving change at the margins. Without pressure from this dynamic source our industry will collapse under its own weight.

She began by outlining the four characteristics that she believes entrepreneurs share.

They are hands on with customers. - You have to be fully engaged and listening. All the successful entrepreneurs she knows worked their trade show booths - hearing ideas and issues directly from customers and prospects. She mentioned Tom Milano , Rachelle Cracchiola, and Bill Evans as examples of this ethic.

They adapt to changing markets - Successful entrepreneurs turn their companies on a dime when a good idea comes their way. They are able to deliver product while the big companies are still debating whether to do it. Years before formative assessment became the rage Barbara cooked up the Comprehensive Reading Assessment at Laguardia Airport with a couple of customers. Six months later it was released and went on to deliver $2m in revenue its first full year in the market.

They are more focused on doing than planning - In her experience you don’t plan on becoming an entrepreneur. After 19 years in the classroom she started Options and within 12 years had build a $19 million business. I believe she meant that there was an element of leap - then look.

They find and nurture partners - She mentioned people who were her trusted partners throughout the construction of Options. Some came on as employees who started answering the phones and proved themselves, others were business partners who drove product innovation. The money quote:

“You are only as good as the people around you. You can’t do it alone.”

Congratulations to Barbara and the other award winners - it was a great event and a nice way to honor those who have contributed to our common welfare.

Open Source culture in K12 Education will have a profound impact on our industry over the next 10-15 years. Open source already touches instructional content, classroom management, student information systems, and IT services. Where else will it find a purchase?

Ironically, the attempts by the old guard industries to protect their traditional interests in a digital age are accelerating the change. The more restrictive copyright and trademark laws become the more incentive there is to create open source content. Many education publishers are going to find themselves in a Chinese Finger Trap - the more they struggle the worse the problem will become.