BORN YESTERDAY: The billion dollar question around the business of education amounts to this: who will control the buying power for information technology in schools? Historically that power has been wielded by the top, namely by districts and school boards. That control has shaped the entire selling strategy of the education industry, compelling companies to have fleets of sales teams to "build relationships" with the people leading the 15,000 or so districts and school systems in America. Most edtech entrepreneurs are betting, however, on a different model: convince individual teachers that their tools are compelling and useful--and then let those teachers drive the changes through their district.
It's a gutsy approach (and one, by the way, that EdSurge totally supports). An interesting test-case in higher ed may indeed be the fate of a startup like Coursekit.
Coursekit is a learning management system with the brashness to put itself up against industry leader, Blackboard. Their models couldn't be more different: Blackboard (purchased by an investor group led by affiliates of private equity powerhouse, Providence Equity Partners, in July for $1.64 billion) was started in 1997 and sells a complex (and expensive) learning management system to universities. Blackboard doesn't publish its license fees: others have groused.
Coursekit, which officially debuted its product yesterday, is run by a team of five, backed by $1 million in seed capital. The three cofounders quit college to start the company.
Between August and now, Coursekit ran a beta program of its software, winning over about 70 professors and their 3,400 or so students. The software has a slick interface. Best of all--from the professors' vantage--it's free.
There is another free approach, of course, namely the open-source Moodle. Moodle, too, harkens back to an earlier time: it's a stick-shift to Coursekit's smooth automatic.
Coursekit cofounder, Joseph Cohen, is reluctant to discuss what business model might support his firm. He's got his eye on scale--and is willing to see where the dollars could trickle out. "What do people spend money on at school?" he asks rhetorically. "Content, like textbooks. Tools. Peripheral campus stuff," like food, housing and the like. Couldn't Coursekit become an advertising platform? A lead generation platform? "We're commoditizing the LMS part. We don't believe that you should charge for the LMS."
In the K-12 space, Edmodo is contending with the same issue.
Of course, no one believed that Jeff Bezos could create a bookstore online or that Zappos could keep delivering all those shoes for free.