September 15, 2014
By Roger Novak
In my 25-plus years as an early-stage venture capitalist investing in education technology, I have been fortunate to fund several successful and important companies. This experience has given me a unique perch from which to notice emerging patterns in the ed-tech world. While pattern recognition is imprecise at best, I subscribe to the analysis made in the Malcolm Gladwell book Blink: The Power of Thinking Without Thinking: You know it when you see it. I think we are about to embark on the third, and probably most transformative, wave of ed-tech companies and new learning technologies.
The first transformative phase of revolutionary ed tech (not including computer-based training) was driven by the wiring of the campus, first with cable and later by connecting everyone to the Internet—or, as the process was called back then, a port per pillow. It started in earnest in the 1990s and is essentially complete today. This wave enabled learning-management systems like Blackboard, WebCT, Angel Learning, Desire2Learn, and several open-source projects, like Moodle and Sakai, to emerge. That wave was all about connecting students, teachers, and the university.
When my company, Novak Biddle Venture Partners, backed Blackboard in 1997, its co-founders, Matthew Pittinsky and Michael Chasen, were already talking about the web and its potential to change the way education and learning could be delivered. My partners and I often fantasized about an end state in which professors would be free agents and education could become “unbundled” from the traditional campus setting and offered more freely as a consumer service, or commodity, by other providers.
The second ed-tech wave was enabled largely by a confluence of technologies that burst upon the scene one after another. This wave brought increasing wired and wireless bandwidth and speed, very smart devices, social platforms, and, more recently, cloud computing. It gave rise to exciting companies like 2U and UniversityNow, along with MOOC platforms like Coursera, Udacity, and edX. These companies have, in fact, driven the unbundling of higher education. In some cases this trend allowed universities to increase access and revenues without a commensurate rise in costs. In others, it managed to reduce the cost of a degree. And it has improved access for all by providing a way to deliver education to almost anyone, anywhere, to any device at any time. The second ed-tech wave also gave a big boost to lifelong learning.
hile the first two waves helped improve educational delivery and access, it has been well documented that they came with some pedagogical weaknesses. It became clear that growing numbers of new college students were arriving on campuses unprepared—academically, socially, and emotionally. Whether it was because of inadequate schooling, shifting demographics that have led more financially needy, first-generation, and minority students to apply to college, or other factors, many colleges have been unable to provide the support those students need.
During this time, we experienced a mini ed-tech wave—I call it Wave 1.75-2.5—of companies that developed early-warning systems and new types of technological support to reduce retention problems and improve poor achievement levels.
This was not a transformative wave but more of a prescriptive wave, and is still in effect. It has included companies like InsideTrack, Starfish Retention Solutions, and Civitas Learning, which provide coaching and data analytics to assess which students are at risk and offer interventions to keep them on track.
At the same time, another set of companies, which offered adaptive-learning engines, began focusing on personalized learning. Among them were Carnegie Learning and, more recently, Knewton and Smart Sparrow, as well as online tutoring companies. All of these worked with the existing learning platforms.
Though our portfolio selection has not been flawless, our firm has been fortunate to have its share of ed-tech “winners.” Besides backing Blackboard, which then bought WebCT, Angel, and others, we have invested in 2U, UniversityNow, Starfish, Parchment, and Fidelis Education. (I previously served as lead director at Blackboard, and currently serve on the boards of Fidelis, Parchment, and UniversityNow.)
I now believe that a new wave is appearing on the horizon and is going to be even larger and more transformative. I think this third wave could help drive a re-engineering of the university, leading to what the late W. Edwards Deming, a guru of quality management, might have called a systems approach to student success. If the second wave was about the unbundling of colleges and providing learning as a service, the third wave of companies will be involved in reassembling educational component pieces from various sources to help make students’ learning portfolios more meaningful to both individuals and employers. While we are starting to see colleges taking similar steps to become more student-centered, private-sector companies can act nimbly to fill gaps and create new technologies to help accomplish these goals.
With a nod to all the caveats about pattern recognition, I am seeing the development of a new set of traits that I believe will typify the next wave of ed-tech entrants. I think the most successful companies will offer technologies to reach goals like these:
- Put student achievement and learning outcomes at front and center. Factors like seat time (time spent in the classroom) and instructor credentials will be less important to a student’s academic career, and in some cases meaningless. This could lead to new forms of courses and institutional accreditation.
- Help students develop a personal learning plan and set of goals aligned with their vision for their education and their lives.
- Provide tools to help students develop relationships with multiple mentors. Connective systems will blur as students have better ways to find mentors, who might include professors, peers, experts in their field of study, alumni, and even potential employers. These mentors can help monitor students’ progress, offer suggestions for course correction and improvement, and help establish expectations for lifelong learning.
- Develop new kinds of global credentials that can be used to find talented people to fill jobs. These credentials will be managed by the students themselves, through secure sites and exchanges like Parchment, which helps students, employers, and others send and receive education credentials online.
Such developments could improve cooperation between colleges and the business sector by closing gaps in education skills and encouraging new partnerships. All of this will occur on a more global scale, as the projected demand for talented workers grows in the coming decades. An early-stage company that has embraced many of these traits is Fidelis, which provides a platform that allows students to manage learning relationships with their college, mentors, and others. There are probably many more such companies in the ranks.
As a gray-haired ed-tech investor, I can only say I wish I were 20 years younger. Because from where I sit today, the future looks extraordinarily exciting.