Entrepreneurs have changed how we think about education reform in the past decade—dramatically transforming what and how instructors teach, students learn, and parents engage. Despite this transformation, we think education entrepreneurship is only in the first inning of its potential. This blog post is an excerpt from an essay where we discuss what we have learned from the last decade—and what trends will transform the next ten years.

1. Learning outcomes will matter above all—but what counts as learning outcomes may move beyond simple disciplinary words and skills. 

The defining goal over the past decade in education technology seems to be “engagement.” Companies have taken lessons from Silicon Valley to the classroom—for example, Facebook has created a vibrant online community, Edmodo. Yet schools, the leading customers of education technology, are increasingly valuing measurable learning outcomes—and we predict that evidence of promise in learning, will be a necessary for a technology contract with a district in a decade. You can see this shift in how large players are changing: Pearson and Kaplan have recently established Efficacy and Learning Science units, respectively.

 

2. Entrepreneurs should invest learning outcomes assessment early—but shouldn’t expect investors to pay for it. 

Entrepreneurs everywhere say, “we want to measure learning, but it’s expensive, complex, and difficult—and no one will pay for it.” Unfortunately, until technology purchasers in schools apply a more rigorous approach to assessing learning outcomes, private investors seemingly lack the incentive to measure learning. We predict that entrepreneurs, investors, and accelerators who plant the seed-corn today of assessing learning outcomes will yield outsized benefits in the next decade.

 

3. Entrepreneurs need to integrate, not disrupt.

In other words—pick a single problem to solve, rather than “fixing education.” Entrepreneurs should recognize that schools are first and foremost in the business of education, and have been burned in the past with expensive outlays on products and tools that looked pretty but failed to deliver. We predict that the entrepreneurs who understand and identify their place in the classroom (say, with curriculum, classroom management, and professional development)—rather than technology strategies—will be disproportionately successful.

 

4. Investors should look outside Silicon Valley for solutions. 

Education technology is a fundamentally different market than consumer technology. In the same way that effective Presidential campaigns are run from outside of DC because they eschew Beltway wisdom, many of the most exciting growing education technology companies are launching from outside Silicon Valley, building on local assets, such as Pear Deck in Iowa City, Iowa or Kickboard, from New Orleans, LA.

 

5. The business of higher education is changing.

A bachelors’ degree is no longer a guarantee of comfortable social mobility—student debt and a changing job landscape are throwing higher education into confusion. We predict that entrepreneurs who understand how higher education is transforming—and truly focus on improving student opportunity, rather than monetizing butts-in-seats—will build the best businesses of the next decade.

 

6. The days of “We don’t invest in education…sales cycles are too long” are over.

The decision-making in education technology purchasing is rapidly becoming more democratic. A decade ago, Pearson, McGraw Hill, and others had near-monopolies on content purchasing decisions, and cost-prohibitive hardware was a core barrier to entry. Today, teachers nearly everywhere have broadband, which enables direct-to-teacher communications between new companies, and much more rapid product improvement in response to teachers’ needs. If you’re a venture capitalist who says the above bold sentence, you likely haven’t looked at the market in about five years, and we predict the investors who look again will be more successful.

 

7. Don’t forget about the people (in the classroom).

Professional development is critical for realizing the promise of interventions–not to mention a tremendous market opportunity. A Gates-Boston Consulting Group study estimated that more than $18 billion is spent annually on professional development.  We see entrepreneurs, like Richmond base EdConnective, changing professional development through real-time teacher feedback. We predict, as a sector that technology has barely touched, entrepreneurs have more opportunity to make real progress in professional development than most sectors.

 

8. More funds, accelerators, and seed capital means more swings at the plate.  

In reviewing the past decade for this article, we recognized that the evidence of company outcomes is honestly far too limited to make any general assertions. Yet in the past five years ed tech financing has nearly quintupled, from $385 million 2009 to almost $2 billion in 2014.1   Because of sheer increase in volume, in the next decade we are far more likely to see one or two education entrepreneurs who will transform the industry the way Facebook and Twitter have transformed communications in the last decade.

 

9. Policy matters more than ever.

Most entrepreneurs have an agnostic, or even negative, approach to the government, but an understanding of policy and government partnerships in education is essential. We predict that the entrepreneurs who approach government collaboratively when building their companies, with a focus on the under-served—rather than seek to “disrupt” government, will ultimately take longer, but be more successful.

 

10. “If you want to go far, go together.”  

Entrepreneurs are impatient, and often ignore public collaboration in the name of speed. But innovations touch the lives of real people in real ways.  For entrepreneurs to truly succeed, they will need to make sure that the public feels they are part of the change. This means listening to concerns of teachers and principals, having patience in navigating the clunky bureaucracies of school districts versus rushing to implement, being tenacious on customer service, and, above all, adhering to lesson #1 and making sure their products work for students.

The reality is building an education enterprise takes longer, and is almost certainly more frustrating, than a Silicon Valley consumer technology companies, but the great companies will have loyal, long-lasting customers whose lives are transformed. The single biggest advice we have for education entrepreneurs: be patient, expect that change will take the entire decade, but the payoff will be worth the risk.

1 O’Connell, Ainsley. “Edtech Funding Soars To Nearly $2 Billion.” Fast Company. January 12, 2015. http://www.fastcompany.com/3040805/fast-feed/edtech-funding-soars-to-nearly-2-billion

 

By: Ross Baird (@rossbaird) Executive Director of Village Capital 

Daniel Lautzenheiser (@realdlautz) – Analyst at The Boston Consulting Group

Questions or interest in partnering with Village Capital’s Education Practice, please direct your email to Nasir Qadree at nasir@vilcap.com