Monday, January 12, 2015

Solving Problems, Not Drawing Lines

When it comes to education, there are a lot of arbitrary lines that are drawn.  Dividing neighbourhoods to determine who can go to which public school.  The difference between 3rd grade and 4th grade.  Income levels for receiving financial aid.  GPAs.  While I acknowledge that some of these delineations are necessary evils to create a system that scales, their often cruelly random nature can do more harm than good.  As a result, I am naturally wary of capricious classifications when people ask, “How do you qualify your education technology investments?  The problems in education are so complex, shouldn’t you narrow your focus to just K-12 products, or language learning, or educational gaming?”
I appreciate the need for focus and clarity in mission, but I prefer to work in the business of solving problems, not drawing lines.  That’s why we do not qualify education entrepreneurs by their end users (children, teachers, adults), their target markets (K-12, higher education, corporate), or their business models (enterprise, consumer, advertising, data analysis).  Instead, we remain driven by our mission of scaling  impact in education.  As a result, we classify edtech start ups based on the problem they are solving.  
To be clear, there are four key problem areas where we believe technology can meaningfully transform education.
1.  Limited access to content
In a world where over three billion people have access to the internet and there are almost as many cell phone subscriptions (6.8 billion) as there are people in the world (seven billion), the concept that high quality educational content is a scarce commodity no longer applies.1 
2.  Inefficient infrastructure
In the United States and other developed countries, it is estimated that teachers still spend over 50% of their day grading papers.  Given there are over 100 billion emails sent and received every day, any other business person how much of their day they spend handwriting letters and they will laugh you out the door.2 
3.  High dropout rates
Rigid pedagogy and a one size fits all system fails to account for different types and speeds of learning.  As a result, 30-40% of primary and secondary school students around the world drop out or fail to graduate on schedule.3  Higher and adult education similarly struggle with low engagement and completion rates.3  
4.  Lack of job relevant outcomes
In spite of the exclusivity and competitive nature of attending higher eduction, it is still largely not translating into job outcomes.  Youth unemployment is a global issue and yet 36% of employers worldwide struggle to find candidates with suitable skills.  This is even worse in Asia - 81% Japanese employers cite difficulty hiring4.  It won’t be getting any easier either.  The U.S. Department of Labor estimates that 65% of school children will be employed in jobs that don’t yet exist.5 
Our analysis of edtech start ups then involves the exact same filters for people, product, capital efficiency, scalability that we use for other sectors.  We find that this approach is not only empowering to the entrepreneurs and their businesses, it also leaves room for truly innovative solutions to expand beyond their initial applications in classrooms.  It’s not surprising that these challenges exist in other environments, too, and the most exciting investment opportunities in education often involve businesses that can be applied in multiple verticals.   If we or our teams are arbitrarily forced classify their business as "K-12” or “hardware”, we’d be thinking way too small.  Drawing lines tends to do that, and we prefer to be in the business of thinking big.