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Why Ed-Tech Startups Don't Scale (2022)
- codingdave 2y ago"See, when you build an education product, you’re competing against two massive institutions: the formal education system (schools, colleges, state universities, etc.), and the laws and cultural expectations around that system." Well, there's your problem. I worked for years in those markets, cooperating with their needs, not fighting them. You succeed in such markets by helping them do what they already do... just better. Disruption happens at a procedural level, not by changing what they do. So does the monetization: "We just saved you $20K per year, and only charge $10K - everyone wins."
- grvdrm 2y ago> Disruption happens at a procedural level, not by changing what they do I love everything about this statement. I've seen this from both sides, as a seller of software and buyer/user of software. All of the stickiest changes happen procedural level, usually not through full-blown change but instead moderate tweaks and improvements. One way I like to think about it is this: if my software is all of the sudden unavailable, what will users do? Can they keep working? Will they keep working? Specific to education, I would hope that many core school functions like teaching would simply revert to simpler methods or alternatives rather than grind to a halt. But I assume that the process of convincing the buyers to use your software runs headfirst into confusion over how much work it will be to learn something new rather than stick with (mostly) status quo.
- skhunted 2y agoAnother way to make money in education is to make life easier for the teacher and have the students pay for the privilege. Automated grading with online quizzes and tests is an example of this phenomenon in higher education.
- authorfly 2y agoYou are right, institutions dominate EdTech. The UK had a number of competitive and teacher-led EdTech AI startups delivering lesson planning, like briskteaching.com & teachematic. They have some inroads with schools and colleges now. And probably would have disrupted up into the procedural level naturally. However the government decided to give £2m without any open procedure to a new company to build similar tech from scratch, and their PR acted as if this was groundbreaking, while the tech they promised, largely already existed and was in use by many teachers: https://www.gov.uk/government/news/new-support-for-teachers-powered-by-artificial-intelligence https://www.gov.uk/government/news/new-support-for-teachers-... Who wants to invest in teachematic or brisk teaching, when your competition can get millions from the government without process and launch the same ideas over a time frame to starve you out? With the market overcrowded, prices are forced to lower, and many companies will now go bust because of this kind of unnecessary government intervention. Brisk Teaching has already had to make most things free. You cannot really be more cooperative with the system than that, but tough luck they still won't get the £2m despite proving out the idea before those funded. Shortly we will likely see the institutions in control of education like Ofsted mandate, approve or limit the tooling used, and most startups will die out. Rather than several low cost startups bringing high amounts of value, tax payers have spent millions on salaries for people with no AI background to create duplicate products, and the net value to education for actual students is therefore lowered as a result. So you can't disrupt this procedural level very effectively when the government intervenes early on.
- jsavanna 2y agoI'm reminded of this podcast with Bart Epstein. https://podcasts.apple.com/us/podcast/is-your-edtech-really-effective-insights-with-bart/id1713365771?i=1000656401049 https://podcasts.apple.com/us/podcast/is-your-edtech-really-... We have a collective action problem.
- robertlagrant 2y agoI'm surprised it didn't do more than touch on probably the biggest reason: we already pay a huge amount for education out of taxes, so the educational budgets are allocated by bureaucrats, and not by education consumers (or their parents).
- VHRanger 2y agoI think you're missing the fundamental mechanic here. Spence signalling[1] won the econ Nobel back in 2001. It says that the cost of signalling in a market for imperfect information ends on the one emitting the signal. For education and jobs, the signal is your degree (hence the huge career difference between dropping out one week before getting a degree and completing). The cost of the degree will fall on the student. The employer can easily diminish the hiring problem by pre-sorting applicants by education. Students know there is a large difference in career outcomes between university education required jobs and the ones below that. Colleges want to extract as close to 100% of this lifetime earning difference as they can. The main question at this point in education research is "how much" signalling is a component of education versus actually teaching skills. For tech, almost no certificate provides a comparable signal to a real degree. 1. https://en.m.wikipedia.org/wiki/Signalling_(economics) https://en.m.wikipedia.org/wiki/Signalling_(economics)
- dsugarman 2y agoI think another huge factor is that you are making a prediction on the future value of your degree over the next 40-50 years as a 17 year old who is probably more focused on succeeding socially and sexually. You add in the student loans that may or may not be forgiven at some time in the future and the free market is not in play. Same with Healthcare, insurance clouds all free market mechanics. I'm a huge capitalist and I think we need to be honest about where capitalism isn't working. It's always due to free market mechanics being removed from the equation by layers of obscurity. I don't know the right answer but this shit is not working
- neaanopri 2y agoA 17 year old focusing on succeeding socially and sexually is still really incentivized to go to college! People have tons of friends and sex at even the nerdiest college.
- deleted 2y ago[deleted]
- Guthur 2y agoSo you want to maximise economic rent on the education of the masses and you wonder why societies are resistant to that, plainly because the outcome is horrendous.
- calderwoodra 2y agoSolving a problem and asking someone to pay for it doesn't have to be "rent seeking". If you want a service to work well and continue to, it's in your best interest to pay for it.
- Guthur 2y agoWho is getting the service here the individual or society. A neoliberal world view might assume there is no society but that is patently absurd. If society wants too have a functioning and prosperous economy it should provide education as a utility not something that's geared towards profit. If anyone thinks neoliberal solutions will bring anything other than economic rent seeking you've been living under a rock for the last 40 years.
- klingoff 2y agoHorrendous educational products are probably better than every institution in some regions, the median community college in other regions, etc.. Academic institutions, even very poor ones, have a lot of local leverage through employing academics who are integrated in the community and that is largely lost in distance education. If you go and try to make an awful school somewhere I think you will get a great deal of assistance compared to if you offer a much better online education to the area built somewhere else.
- mangecoeur 2y agothere is also not that much money in the state run that the majority of people education follow. Teacher salaries are already squeezed. Its ironic, everyone says get a good education, old grumps complain the kids don’t know anything, but when it comes to actually paying for it its crickets. Software could help make teaching more efficient but requires up front investment that no one wants to make. State run software projects tend to suck because they are based on minimising cost. Maybe if the act and job if teaching had the same social status as doctors and lawyers it would be different.
- rahimnathwani 2y agoMy local school district has fewer than 48,000 students, and an annual operating budget of $1.2bn. This money is used to pay for 13,500 adults (government employees). Their total compensation is higher than you'd think. You can look it up on the Transparent California web site. Paying those people seems to be a higher priority than children or learning outcomes. The problem is not a lack of expenditure.
- BlueTemplar 2y ago(School)teachers used to have that kind of social status, not even a hundred years ago. It would be interesting to understand how that changed into the current situation (up to the worst case of the parents calling out for the lynching of a teacher).
- em-bee 2y agogoing out on a whim here, i think it is lack of trust. in the past teachers and students came from the same community, so everyone knew each other, and had the same beliefs. but now school is more distant and the education curriculum sometimes no longer reflects what parents expect. just look at the popularity of homeschooling. "we have to send our children to that school because the government demands it (and we can't afford homeschooling), not because we think that this is a good school."
- noodlesUK 2y agoI think this really depends on your definition of EdTech. I don’t think anyone would contend that turnitin or Ellucian haven’t scaled well. Tools that cater to the organisations that have money can absolutely do well, but trying to sell to people without the means to buy your stuff will always be unsuccessful.
- shortrounddev2 2y agoYeah canvas and blackboard were are one point startups, I'm sure there's some products that can scale, but the market is probably driven by bureaucratic compliance more than a genuine desire to improve the quality of education for students
- noodlesUK 2y agoI only have experience of the university side of EdTech, but in my experience people were extremely interested in anything that would make it easier for lecturers to do their jobs, improve student experience, etc. What they weren’t interested in was anything that changed the general dynamic of the university or replaced their core business. Marking tools, stuff that helps deliver lectures, anything of that variety was all in-bounds, and lots of departments were happy to explore new things. What would not sell was anything that required selling directly to students, because they simply won’t spend the money.
- mnky9800n 2y agoUnless it's textbooks. Then the students will spend spend spend (if you are in the USA).
- shortrounddev2 2y agoThey have no choice though
- mnky9800n 2y ago
- ahaucnx 2y agoI second that. Originally we were targeting schools as our main customers but found it incredible difficult to sell too. The main reason probably that the beneficiaries (the students) are not the decision makers (the school admin) and that our product (air quality) is also not a core aspect of a school. There also seems to be a run to the bottom regarding quality of products in many schools and no appreciation for sustainable and long lasting products. We moved on in the meantime which is a pity because we would have loved to work more with students on air pollution and climate change.
- KineticLensman 2y ago> the beneficiaries (the students) are not the decision makers (the school admin) This is an example of a standard problem in enterprise computing where the people with purchasing authority are far removed from the actual users.
- mlinhares 2y agoHey, but I got a great pricing deal to run our apps at this cloud provider no one uses and we have no experience with so you’ll have to migrate everything there!
- notarobot123 2y agoIs this perhaps a general failure mode of private investment into civic institutions? Centralized decision-making has inevitable blind-spots and, as a general rule, doesn't work well for larger scale resource distribution problems.
- williamcotton 2y agoI’d want to see extensive research on the benefits of Ed-Tech products before they are unleashed on classrooms full of actual students. “Making things easier for teachers” is often not the case and simultaneously creates costs for training and support at these institutions along with the exponential growth required to administer these new roles. And then of course are the students themselves. How do iPads compare to textbooks? Do we trust LLMs to grade essays? How effective has multiple choice testing ever been? There is surprisingly little thought put into bringing tech into the classroom. Most of the drive seems to come from a fear of being left behind, as if learning to use a consumer electronic device is somehow synonymous with learning how to maximize productivity with a computing device.
- victorbjorklund 2y agodo you also demand extensive academic research for benefits of tools for developers, business etc? Yes, there is an issue with tools and software that creates more problems that they solve (just as in business) but that doesnt mean all technology is bad.
- tdeck 2y agoThe environment of a school is much more rigid and authoritarian than many workplaces (e.g. everyone must use this exact thing in this exact way all together right now), and students don't usually have much choice in their school. The tools are often taxpayer funded as well. Not to mention the fact that those affected by ed-tech are often minors. So I think it's reasonable for there to be some extra scrutiny surrounding a lot of ed-tech.
- victorbjorklund 2y agoplenty of employees cant pick and choose their tools. Many working in service jobs etc have to use exactly what their employer tells them too.
- tdeck 2y ago
- hiAndrewQuinn 2y agoI'm not holding my breath on edtech until we see teachers teach their students about Anki in school, personally.
- james-revisoai 2y agoSome of the teachers I have worked with do this; and there are some great teachers(lecturers) like Martin who teach effective studying techniques: https://www.youtube.com/watch?v=IlU-zDU6aQ0 https://www.youtube.com/watch?v=IlU-zDU6aQ0 Flashcards and Anki were incredibly effective for me. I am building a study tool which automatically generates them from lecture slides. Beyond that, it applies other psychology of learning techniques - It breaks up content into manageable chunks you can see your progress on (to boost your confidence of exam coverage) and has an exam-conditions like mode where it shows you relevant slides, then asks you questions and to freely recall by blurting onto a blank page everything you remember. It's then able to give you a realistic judgement of your learning and this way of learning by actively recalling freely is, though more intense, ultimately more effective than either reading, watching or quizzing in the long term. The part of learning that other flashcard apps miss, even Anki, is that students must be motivated. They must enjoy, visually engage, and be confident as they study. They must feel they are on a sustainable realistic path as they gather knowledge when on the way to their goals. And they don't have to study every day to do that - they just need to genuinely learn and be able to see the state of their progress... I am excited to be working on EdTech now[Revision.ai] which unveils and detects misconceptions to aid the student in eliminating them. Misconceptions are a massive opportunity - as much as spaced repetition itself [https://www.youtube.com/watch?v=eVtCO84MDj8 https://www.youtube.com/watch?v=eVtCO84MDj8]. We believe they will genuinely learn, feel comfortable and see their progress, when they overcome misconceptions with tech. Other tools really aren't identifying misconceptions; answering is still a "scale of wrong-to-right". And that's a big opportunity. To truly reduce Test Anxiety by studying and building your confidence. I think Tech can be useful in this way, even without teachers intervening, if enough of the learning content is there.
- amelius 2y agoThe problem with Edu-Tech is that here are so many good free resources already.
- cushychicken 2y agoMaybe as a venture funded startup they don’t. I run a modestly successful edtech business that I have line of sight to making my full time gig in a few years if growth continues. www.reportcardcomments.com I think consumer edtech that makes products focused on making individual teachers’ lives easier has a niche. Maybe not as a 100x unicorn, but as a one person business, there’s plenty of opportunity yet out there.
- spoonjim 2y agoThis is not an “edtech startup.” It’s a side hustle
- Two4 2y agoThe comment didn't claim it was a startup, but besides that: there's a number of successful startups that have began life as "side hustles"
- mr_coffee 2y agowhats the startup purity test?
- SkyPuncher 2y agoBy strict definition it is a startup. By practical definition, this is just a small business. Startups typically intend to scale. In my mind, I think of it as the “farmers market test” * small or hobby business - you personally make and sell your items at the local farmer market. * startup - you might sell at the farmer market, but you also have a factory that distributes and ships.
- aidanlister 2y agoThat’s not “scale”. That’s the opposite of scale.
- amw-zero 2y agoHow does this make money? It says it’s free, and I don’t see any ads.
- freddie_mercury 2y agoIsn't this just a subset of "all educational innovations don't scale". Education is chock-full of things that looked great at small scale and then fail to replicate at large scale. Given that long established reality, which is well known within the education field, the alleged scaling nature of software no longer seems like some great win, since you're likely just quickly scaling out something that doesn't actually work.
- authorfly 2y agoAre there some examples of this from the past few decades?
- em-bee 2y agothere is that, but that's not true for all changes. the problem is that even innovations that do work and can be replicated successfully do not scale because the system as it is is highly resistive to change and that is what limits the potential to scale for any change. take a look at montessori. an often praised and proven system of teaching and learning that absolutely revolutionizes education, if we could only convince those in charge to adopt it.
- brigadier132 2y agoIt also doesn't help that there is massive yearly churn.
- dboreham 2y agoThe software equivalent of don't work with children or animals is: don't work with teachers or doctors.
- toolslive 2y agoK-12: from kindergarten to 12th grade Had to look it up,
- mtVessel 2y agoCommon term in North America for elementary (usually ages 5-12) and secondary (age 13-18) education. What do you call it where you live?
- washadjeffmad 2y agoThe more common nomenclature is P-12. Pre-school has been accepted and included as "school" for a while under public education funding in many areas.
- em-bee 2y agoin the united states the terminology is reversed. "kindergarten" starts at age 5 for one year before school. "preschool" is everything before kindergarten. so there it's pre-school as in not-school, whereas elsewhere it's pre-school as in the year just before school.
- whb101 2y ago> See, when you build an education product, you’re competing against two massive institutions: the formal education system (schools, colleges, state universities, etc.), and the laws and cultural expectations around that system. What you’re competing against is the natural tension between these things and the demands of the market. You get a good sense of this after 5 years at a math tutoring startup that’s always grappling with the dual expectation that you give the kid the answer quickly (“the customer is always right”) vs. you patiently sit with them until they learn (the goal of formal education).