Many executives love the idea of “merger math,” the idea that adding new assets will create a company whose value exceeds the sum of its parts (or, 1+1=3). But that logic didn’t work well for Amplify, which over the years cobbled together a collection of teams and tools that sometimes didn’t mesh well.
Now it appears spinoffs may create more value. On March 31, the company—which itself was sold by News Corporation last year—announced it is spinning off another independent venture, Fluence. This new entity offers digital assessment content and item banks in math and English language arts for students in grades K-12.
A team of former Amplify executives—Harvey Goodman (now CEO of Fluence), Sheridan Doerr (Executive Vice President of Educational Partnerships), Deryl Seale (Chief Technology Officer), Anne Kel-Artinian (Chief Academic Officer) and David Fraioli (Chief Operating Officer)—led the buyout. This management team owns a majority of the company; Amplify is a minority shareholder.
In some ways, the spinoff brings the core Fluence team back to where its journey started. “It’s been a bit of a roller coaster founding a company, selling it, and taking it back,” Goodman tells EdSurge in an email.
The five staff who now make up Fluence’s management team have been colleagues since their days at Intel-Assess, a company Goodman, Fraioli and Seale founded in 2006. The aim then was to create a bank of technology-enhanced test items—including questions, reading passages and other test-related content—that aligned to each state’s different academic standards. After developing test content aligned to California standards, company managers realized their venture would need more funding and sales support to build enough content to serve every state. Intel-Assess found a partner in Wireless Generation (before it became Amplify) that had these resources, and agreed to be sold in May 2012.
Goodman went on to oversee all product development under Amplify’s assessment division; his colleagues from Intel-Assess followed and developed more content for Amplify’s assessment delivery tool, Beacon. As the Common Core State Standards gained momentum, the team used these nationwide standards as the basis of its assessment content.
But Beacon’s technology struggled to compete against assessment providers, such as Illuminate Education and EADMS, which Goodman says “had more robust offerings” and a “longer list of features.” Compounding the problem, from his perspective, was that Amplify relied on one sales unit that prioritized selling other products—including the much-hyped tablet—and lacked the time and resources for Beacon. “Much of the focus of News Corp. and Amplify was on the curriculum and tablet business,” Goodman maintains.
By 2015, “we decided the best course of action was to cease the Beacon business,” Goodman recalled, in a follow-up interview with EdSurge. “We were gearing up for that when Larry Berger reached out [that autumn] and asked if we would be interested in becoming our own company.”
As part of the spinoff, Fluence inherited a set of Common Core-aligned assessment content that includes more than 35,000 test items for math and English Language Arts for students in grades 2 to 12. The offerings also include performance-based and constructed-response items, along with tests geared to students in kindergartner and first grade.
These items are now delivered through third-party assessment providers—which, perhaps ironically, now include Illuminate Education and EADMS. These partners will also help sell Fluence’s content to their customers. “By selling through these partnerships, we’ll be able to access a broader range of the market,” Goodman asserts.
These are “high stakes” partnerships: Fluence faces competition from companies such as Certica and Key Data Systems, which also offer assessment item banks. Even more pressing: Amplify plans to discontinue Beacon this summer, and Goodman is encouraging users to adopt one of Fluence’s assessment partners. “We definitely have not retained all of our customers,” he acknowledges, adding that Fluence currently serves roughly 75 districts and charter school networks.
Along with the management team, a handful of former Amplify employees who worked on Beacon’s content development have also joined Fluence, bringing the company’s employee count up to 14 employees. The company periodically brings on contractors to help develop new assessment content. One product expansion in the works is the development of science test items aligned to the Next Generation Science Standards.
Other Amplify assets are expected to leave the nest as independent companies later this year. (Last August, Amplify spun off its computer science MOOC as an independent company, Edhesive.) “Where Amplify struggled was that it shot a little bit too high,” reflects Goodman, “but that doesn’t mean it doesn’t have great assets. Now the goal is to get the pieces out of the ivory tower, and build them in a way that’s usable and sustainable.”