edcrunch

As I begin to explore the EdTech sector more deeply, my first goal is to figure out what efforts have been successful and what are some of the key challenges around product design and implementation. Larry Berger and David Stevenson’s piece, “K-12 Entrepreneurship: Slow Entry, Distant Exit,” from 2007 is one of the most helpful resources that succinctly captures some of the structural, cultural and systemic issues that have prevented large-scale results from initiatives that have been working to improve education through technology for the past 20+ years. While I attempt to provide a quick overview of the 11 Barriers below, I highly recommend reading the full 22-page chapter to digest their examples and suggestions for overcoming these barriers.

1. The Education Sector Does Not Invest in Innovation- Out of every dollar spent on education in 2005, only 3.5 cents was spent on materials, tools, and services.
2. Oligopoly- “Big Edu” (the three dominant educational publishing companies) that control 85% of the K-12 textbook market
3. Decentralization- With 50 State Education Agencies, 16,000 districts, intermediate units in most states, and 65,000 schools, there are a lot of decision-makers.
4. Vicious Sales Cycles- Slow sales cycles make things hard for entrepreneurs who need capital to keep operating, and who need to prove to investors that they have created something worth supporting.
5. Pilot Error- Many promising start-up companies have been killed by early interest in their product from people who were not quite ready to purchase it at a scale that is economically viable.
6. No Return- The return on investment mindset that drives other sectors to replace expensive labor with technology, and that sees the logic of scaling such efficiencies rapidly, does not come naturally to K-12.
7. Viewing Teacher Time as a Sunk Cost- But even if the education sector is not interested in reducing headcount, it would still be good for the teaching profession, and for the ability of entrepreneurs to articulate their value propositions, if the education system started to quantify the value of a saved teacher hour in terms of its increased instructional output, including the impact on retaining good teachers.
8. Short-Lived Superintendents-  The tenure of superintendents in large districts, while not as brief as has been popularly reported, averages fewer than five years.
9. The Vendor Wall-  There are no “business development” people in education, and this sort of close partnership is rare indeed.
10. Start-Up Capital-  The barriers to entry described in this chapter constrain the size of a potential return in the sector, and education companies require too long – 5 years, at least – to garner a meaningful return. (Because venture capital funds are measured by their internal rate of return, the timing of the return matters a lot).
11. Free Things – The dual status of education as both a public good and a private industry leads to uncertainty about what aspects of education should be addressed by market forces and what should be addressed by government or philanthropic funding.

This is a slightly longer post than usual, so thanks for reading! If you have experienced and/or overcome any of these barriers, I’d love to hear from you.