Who Is the Theranos of Education?

column | Edtech Business

Who Is the Theranos of Education?

By Mary Jo Madda (Columnist)     Mar 14, 2022

Who Is the Theranos of Education?
TV shows including Hulu's "The Dropout" explore the story of now-disgraced tech company Theranos.

Over the last few months, biotech company Theranos has re-entered the conversation due to a slew of newsworthy happenings—the Elizabeth Holmes trial finally came to an end with four of 11 charges of fraud, and Hulu announced The Dropout’s debut while Apple Original Films’s Bad Blood is currently in production.

Throughout the years of coverage, journalists, bloggers and commentators alike have each taken to their respective channels and platforms to identify their own Theranos stories in different sectors, while investors reported that likely half of other startups prove eerily similar to the rise-and-fall storyline. There’s a unique opportunity to identify the dangerous side of the “fake it until you make it” argument, as Theranos not only wasted millions of dollars, but put some patients’ health in jeopardy.

But who was—or is—the Theranos of the education sector? In similar fashion, problematic edtech companies with grand visions and little follow-through don’t just affect the investors pouring funds into the space; they also potentially put learners into compromising situations.

After consulting a slew of educators, entrepreneurs, investors and other education professionals on the basis of Theranos qualities (a charismatic leader, startup venture capital that seemingly disappears, unproven claims, and journalistic coverage and hype followed by quiet), two major companies were mentioned time and time again. And though these companies haven’t actually been sued or accused or anything illegal, the question remains—was all that money worth it?

AltSchool: Big Money, Small Movement

When I started pouring into Theranos coverage, I got an eerie and familiar feeling. I found myself identifying with those journalists who had covered Theranos’ initial rise to fame. Specifically, during my former edtech journalism days, I covered AltSchool—the brainchild of former Googler and Aardvark founder Max Ventilla.

As John Warner referenced in 2018, AltSchool sought to create “technology-infused schools that would revolutionize education;” in brass tacks, Ventilla and his team sought to create a network of microschools buoyed by a technology platform containing self-paced courses and curriculum.

Money came flowing. By 2015, the company had raised $100 million in venture capital from investors like Andreessen Horowitz and John Doerr—the fourth biggest fundraising deal of that year.

But like Elizabeth Holmes in biotech, Max has almost no experience in the field of education. He came from a purely technical background, becoming interested in education upon becoming a father. Kemp Edmonds, an investor and entrepreneur, observed AltSchool’s mission like this: “Here’s technology coming to save this industry with its incredible promises that often lack an understanding of how things work in unique and specific industries, pedagogies and dynamic jurisdictions.”

Despite Ventilla’s lack of experience, VCs had no issue providing huge amounts of capital, including Mark Zuckerberg and Priscilla Chan, who invested through their Silicon Valley Community Foundation. In fact, all told, AltSchool raised $176.2 million—and yet, the company still charged students tuition, to the tune of $20,000 a year.

Like Theranos, AltSchool had a charismatic leader with strong Silicon Valley ties, a slew of press coverage (including in TechCrunch and Fast Company), and big, overarching promises regarding the “edtech revolution.”

Yet, fast forward to 2022, and AltSchool no longer exists.

Stanford professor emeritus and former public district superintendent Larry Cuban described in a 2019 blog the stark reality that AltSchool was “spending $40 million a year and taking in $7 million in revenue … a recipe for financial disaster.” Ultimately, Ventilla and his co-founders stepped aside, and AltSchool rebranded to Altitude Learning after a firesale to Higher Ground Education.

“The parallel worth drawing [to Theranos],” Edmonds describes, “is the idea that leaders in tech have an unadulterated hubris that they can solve complicated layered problems in extremely complex industries with many challenging stakeholders, [and] financial, bureaucratic and time constraints.”

Cuban expressed similar sentiments in his blog, suggesting that Ventilla’s lack of education experience contributed to AltSchool’s ultimate fate. He wrote:

“And what did Ventilla learn as he stepped aside as leader. Here is the lesson he learned after six years running AltSchool:

'People often ask what I wish I’d known before starting AltSchool and I say: However difficult you think working in education is…multiply that by 10. Life at a startup is hard, but education is exponentially harder.'

No kidding.”

Knewton: All Talk, Little Evidence

While AltSchool spent millions of dollars, few experts I talked to described the microschool model as having negative impacts on student learning.

But, don’t worry—they had plenty to say about Knewton.

The overarching story goes as follows: adaptive learning platform Knewton was founded in 2008 by former Kaplan executive Jose Ferreira, affectionately described by Michael Feldstein as a snake oil salesman. The company raised $182 million, but only sold for $17 million. Knewton received a bunch of early coverage in the first part of the 2010s decade (NPR described it as the “mind-reading robo tutor in the sky”), but that eventually died down. A similar story to AltSchool, right?

However, in Knewton’s case, this story parallels Theranos much more closely, in that its founders oversold the potential of their adaptive software, or as Audrey Watters described in 2019, “outlandish claims of a powerful piece of learning software [that] never matched what materialized.”

Former New York City special education teacher Melissa Corto describes the first time she heard Ferreira describe his goals for Knewton. At a presentation, Ferreira “claimed it would be transferable for groups like incarcerated youth and ‘change education forever,’” she recalls. But when she learned that “his products didn’t end up doing what they claimed to do,” she wasn’t surprised.

“[During that initial presentation], I sat there thinking, clearly, you’ve never sat and talked to incarcerated youth, never mind try to teach them,” Corto says.

Unsurprisingly, the highly-publicized plan to deploy Knewton’s technology in service of incarcerated youth never happened.

Mark DeLoura, who was serving as a Senior Advisor for Digital Media for the Obama administration at the time of Knewton’s rise to fame, also felt alarm bells go off back in the early 2010s—but not just due to the “hand-wavy and buzzwordy overhype,” as he describes it.

As someone involved with setting science and technology policy for the White House, DeLoura expressed concerns at how Knewton was claiming to crunch student data, much like how Theranos claimed to handle patient diagnoses with fancy tech while secretly using a more manual process for blood testing.

“Knewton needed to keep all students inside their system, for all subjects, sucking up all the data and finding ways to utilize it to improve learning. Machine learning was not where it is today so it was a significantly more manual process to deal with,” he explains. “It just seemed very far-fetched that they'd be able to pull off what they were asserting in any impactful way.”

Ultimately, Ferreira stepped down in 2016, but Knewton didn’t last for long on its own, acquired by Wiley in late 2019.

Since Elizabeth Holmes received her guilty counts, publications have speculated as to whether or not investment practices will change.

Either way, there is a moment of learning that anyone can take away from these failed fake-it-until-you-make-it storylines. The similarities between AltSchool and Knewton are telling—investors can and should focus on investing in former educators who understand what students and teachers really need—and hold higher standards for their education investments.

 

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