Articles Tagged with education technology

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384574407_2b4b7295ea_oHow 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.

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125x125This 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:

The panel members are operators which stood in contrast to most of the investor oriented agenda at the ETBF.

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865433_money_mattersWhat 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.

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highway-rainbow-nicklen-696533-xlWhat are the prospects for raising capital for education technology companies in the current financial meltdown? Last week at the SIIA Ed-Tech Business Forum a panel of investors tackled this question. The panelists presented some solid and detailed advice for investors and companies seeking capital during the recession.

Key Points:

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

The panelists were:

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

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

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

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

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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

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1068068_hortensia_leaf_with_old_key_1Rookies 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.

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618869_glass_ballAs 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.

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NECC08_logoISTE’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.

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Globe w $$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.”

I recently conducted an informal poll of 30 Education Industry executives on this topic. They expect that the impact will be far more immediate than past downturns but generally they expect it be moderate.

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DSC01549.jpgWhat 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.

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