opinion

The Most Dangerous Trap for Education Technology Entrepreneurs

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The most dangerous trap for any edtech entrepreneur is to believe that the market—dictated by old men in suits—is an accurate representation of what students and teachers need.

It starts with a misunderstanding of who the buyers are in edtech. While students, teachers and parents are the intended beneficiaries, they rarely have a say on what they need or want to use. The true customer is the school, network, campus or district dictating what these end users need to accomplish. It’s a sobering realization for first-time edtech entrepreneurs trying to scale a product or service.

And then there’s the slow-moving education marketplace. The same agile and iterative processes used by consumer-tech entrepreneurs do not apply in edtech. Mired by outdated regulations and procurement policies favorable to large companies, edtech adoption and implementation remains a high-stakes event with little appetite for feedback and improvement.

This slow, conflicted and fragmented marketplace often leaves entrepreneurs with few financial support options other than philanthropy and venture capital—two games played by different rules and metrics. The danger in this lies in losing sight of true north: the students and teachers.

Zvi Mowshowitz, former CEO of Peter Thiel-funded and now-defunct MetaMed, describes this phenomenon as a messy signaling game of perception over progress. His main assertion is that raising money is the strongest signal to employees, potential partners and other funders that potential profits are coming in the future.

For many education technology companies, it’s easier to control perception through dollars and fundraising, rather than discussions around engagement, efficacy and implementation. Student or teacher "progress" is simply a difficult signal to generate. Mowshowitz warns that the art of entrepreneurship lies in managing this perception while actually making progress in building a company:

"Founders who understand the dynamics involved will be hill-climbing in order to send the best signals possible and raise the most money, so it is very important that their doing so results in actual companies that hopefully do actual valuable things for people."

It’s a solid piece of post-fail wisdom for any startup founder, but especially poignant for entrepreneurs "hill-climbing" in edtech.

So what signals are we seeing?

An EdSurge analysis of fundraising for K-12 edtech startups in 2014 suggests that communication, data analytics and assessment tools are in high demand. Ostensibly, because mobile and social communication has become the norm beyond school walls, and a call for better accountability measures is becoming the norm with every ESEA reauthorization.

But there is very little funding for products and services that don’t serve the institution. Perhaps it’s no surprise that savvy edtech founders would rather piggyback on funding trends than spend scarce resources trying to untangle a web of regulatory and administrative hurdles —spread across 50 states and 16,000 districts—that define the status quo. The irony is that many entrepreneurs are trapped playing a game that they know is inefficient.

Reinforcing this conundrum is Kentaro Toyama’s Law of Amplification, which predicts that “technological effects follow underlying social currents.” Under this law, edtech startups should fully expect to produce outcomes that mirror the people, processes, programs and yes, problems that comprise the system in which they operate. As the associate professor at University of Michigan observes:

"While technology helps education where it’s already doing well, technology does little for mediocre educational systems; and in dysfunctional schools, it can cause outright harm."

Altruistic intentions—especially in education—often get sidetracked by the Law of Amplification. Nearly every entrepreneur starts with a noble mission: to serve teachers and learners. But there are simply too many stakeholders to placate and partners to impress. After mentally “pivoting” to create the right perception for legislators, investors, foundations, nonprofits, districts and schools, how much energy is left to address the unique needs of students and teachers?

More than half of US K-12 students receive free or reduced lunch. Roughly one-fourth of students are immigrants or children of immigrants. There are an untold number of students unfairly labeled as troublemakers and suspended due of "subconscious bias." Some 16% of teachers leave the profession or change schools each year. And the end product is 36 million adults living each day without basic literacy skills. However you want to paint the picture, it does not reflect an institution chock full of excellent education systems ready to take advantage of the latest data analytics and assessment technologies.

It could be that the world of edtech innovation is much more interested in building the future than addressing the present. And in such a case, ambitious edtech entrepreneurs—the naive agents in a system that has never been equitable—are shrewd to continue developing great solutions to low-hanging problems that marginally affect students. The remaining question for new or recent edtech founders is whether or not they can bear the cost of success.

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