Hack Education: The Business of Ed-Tech

ATN-300InsightaaS: Back in July, I started an ATN post by saying “Who doesn’t love a curmudgeonly cynic? Well, there are probably many people in that category, but Across the Net is cynic-friendly, and we tend to cast a kindly eye on curmudgeons as well, especially when they are tweaking conventional wisdom.” Today’s post, which is exemplary in providing deep insight on a subject that has very broad implications, merits the same introduction. Hack Education, a blogsite by Audrey Waters, recently published a post entitled Top Ed-Tech Trends of 2014: The Business of Ed-Tech” which delivers an eye-opening view into ed-tech company funding, ed-tech accelerators and business models, ed-tech closures, pivots and bankruptcies, ed-tech M&As, and ed-tech IPOs. All of this makes for fascinating reading, with Waters’ deep insight and acerbic POV helping to demystify the collision of these different market trends.

Where the post gets really interesting (or to be fairer, ‘even more interesting’) is when Waters turns her view to “the politics of the business of ed-tech.” It’s possible, of course, to find conspiracy theories and similarly non-mainstream viewpoints across the web, but the fact that they are common doesn’t mean that they are always without merit – and Waters combines insight and extensive market knowledge to draw some intriguing, and frighting, connections between Facebook, the US Department of Education, the Gates Foundation, Reid Hastings of Netflix, and even the spectre of a Jeb Bush candidacy.

There is real and reasonable debate over whether and to what extent ed-tech benefits students by supplementing live instruction, and even more reason to doubt whether technology can reasonably be expected to replace live instruction. And yet, the trends highlighted in this post suggest that there is a social drift in this direction: Waters opens by citing research showing that in 2014, “ed-tech was ‘on track for new funding record’,” but contrasts this with other research finding that “At least 35 states are providing less funding per [K–12] student for the 2013–14 school year than they did before the recession hit. Fourteen of these states have cut per-student funding by more than 10 percent.” Waters worries that the business and political connections fuelling ed-tech growth may exacerbate these trends. She closes by observing that “That’s how this powerful ideology about the ascendancy of tech innovation works, after all. It’s ludicrous. But it’s loud. And it’s rich as hell.”

Hat tip to Mark Kovarski for highlighting this post on LinkedIn. 

I usually end my yearly analysis of all the trends in ed-tech on the topic of “the business of ed-tech.” (See: 2013, 2012, 2011.) Because “the business of ed-tech” really (sadly) sums up so handily most of what has happened in education technology over the course of the past few years.

“The business of ed-tech” is also the “politics of ed-tech.” The business and the politics of ed-tech together dictate almost all the other trends that I’ll cover in this year-end series. MOOCs. Big data. Learning analytics. Privacy. Competency-based education. Buzzwords.

One way to identify the dominant ed-tech trends is to look at what venture capitalists are funding. Another is to look at what government policies are demanding. The state of Maryland, for example, said this year that it would need to invest $100 million in technology upgrades in order to be ready for the new online testing mandated by the Common Core State Standards.

New hardware. New infrastructure. New curriculum. New expenditures.

So… who benefits?

Who’s Funded? Who’s Funding?

For a long time investors purposefully avoided the education sector, but funding for ed-tech companies has been on the rise in recent years. According to the investment analysis firm CB Insights, 2013 “saw the highest amount of seed VC deals since 2009. Seed VC deal activity in 2013 jumped 11% from 2012 levels and a whopping 173% from 2010.”

The first quarter of 2014 was even better…

Read the entire post on the Hack Education blogsite: Link


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