11 facts for Future Education Industry
In 2011, entrepreneurs and startup activity sprouted up everywhere. The millennial generation is proving it can create companies — and thus, jobs — that solve real problems.
Trends like these are quickly impacting how young people relate to and absorb education. These days, higher education is a dynamic and increasingly digital environment — and some are questioning the relevance of the traditional educational institution at all. Here’s a look at some of the big changes in tech and funding that have shaped education in 2011.
1. The UnCollege Movement Begins
Former CEO of PayPal and venture capitalist Peter Thiel maintains that entrepreneurship is best learned outside of higher education, through real-world experience. He created the 20 under 20 program to demonstrate that the best and the brightest students can find success without college.
One of the recipients, Dale Stephens, is writing a book and speaks about the idea that college isn’t the only pathway to success. Anya Kamenetz, journalist for Fast Company, followed up her book DIY U by publishing The Edupunks Guide to a DIY Credential, sponsored in part by the Gates Foundation. How soon will society and employers accept un-collegians as readily as they do grads?
2. The Ecosystem of Innovation Gets the Fuel it Needs
Sponsored by the Bill & Melinda Gates Foundation, Startup Weekend EDU seeks to launch dozens of startups that will benefit education. For instance, ImagineK12 and Startl have joined as seed incubators for education entrepreneurs, and New Schools Venture Fund has made seed investments in tech companies.
As a result, companies like EdSurge, a newsletter covering innovation in education, have been well-received and widely read. And Hacking Education, a dinner series hosted by Jon Bischke, brought together innovators in at least three cities. All the pieces are coming together to get talented entrepreneurs off the ground, and investors paying attention.
3. The Death of the Traditional Textbook
Etextbook companies Inkling and Kno are racing to see who can unseat the traditional textbook. Their interactive, multimedia experiences are so much more sophisticated than textbooks.
Flat World Knowledge, publisher of open college textbooks, received its fair share of funding and attention. Its textbooks are created collaboratively like a Wikipedia entry, and published online for free (PDF copies run about $20). Subsequently, traditional publishing giants are highly aware of the digital shift, and are acquiring and investing their way into the business.
4. Gates Foundation Backs Education as a Venture Investor
In the U.S. alone, hundreds of billions sit on the balance sheets of foundations, generally invested conservatively in traditional outlets. Meanwhile, only 5% of that money must be released as grants. What if some of that money went into mission-aligned venture investments? That’s a game-changing amount of capital.
The Gates Foundation, sponsor of the Next Generation Learning Challenges, invests in tech ventures. One of the foundation’s goals is to double the number of low-income and minority students who can achieve a valid credential. Thus, the Gates Foundation is looking toward new approaches, especially in terms of technology.
5. Private Equity Bets on Education Giants
Providence Equity acquired Blackboard for $1.6 billion. Hellman & Friedman took over Sungard Higher Education to merge with Datatel for $1.7 billion. Will these new owners achieve operational excellence and bring back a culture of innovation, or will they sit on a cash cow, only to be disrupted by new entrants like Instructure and TopSchool? Only time will tell. But for now, early stage investors can recognize that a culture of active private equity firms doesn’t necessarily mean decent exits for startups.
6. The Big LMS Gets Some Competition
An Instructure marketing video, modeled after the famous “Apple 1984″ advertisement, was a direct attack on the market leader in learning management systems (LMS), Blackboard. Education company Pearson released a “free” LMS called OpenClass, predicting it would disrupt the LMS market and monetize the company’s massive amount of existing content. Moodlerooms has also taken off, and Sakai has won over some large universities. New Blackboard owner Providence Equity had better have a plan up its sleeve.
7. New Tools for Early Adopter Instructors
Education management services Piazza and CourseKit are hoping to tap a new market of professors who want better online tools. On the K-12 side, Engrade, LearnBoost, ClassDojo and many others are enjoying strong participation from early adopter teachers.
8. Edmodo Builds First Whole Network of K-12 Users
With a user base approaching five million students and teachers, Edmodo has won the race in America’s K-12 education system. The big question is now that the company has secured participants, what will it do to change the game?
9. Chegg Buys Its Way Into a Network of Post-Secondary Users
Following its acquisition of Courserank, Notehall, Cramster and Zinch, social education platform Chegg has positioned itself to dominate the student-driven education services market, which would allow it to control a large portion of college student networks. While primarily focused on textbook rentals, Chegg is discovering other ways to be student-relevant around the clock. Can it integrate as well as it can acquire? We’ll see in 2012.
10. Professional Development Is Easy for Tech Entrepreneurs
With the increasing adoption of coding tutorials like Codeschool and Codecademy, it’s easy to become a self-taught programmer these days. These tools have made new programming languages more accessible than ever.
For instance, course provider Udemy is repositioning itself to benefit tech entrepreneurs. Nearly all you need to know can be learned on the cheap and at your own pace. Ideally, these models will expand, and therefore get professional development into the hands of the masses, no matter what the industry.
11. Schools Are Scaling, and so Are Professors
2tor showed the world it could democratize America’s top education brands by launching the University of Southern California’s Teaching M.A. and MSW programs online. The company also offered a University of North Carolina MBA program and a Georgetown Nursing M.S. program.
Professors are scaling too. Stanford’s Peter Norvig and Sebastian Thrun launched the first Massively Open Online Course on Artificial Intelligence. Over 100,000 people signed up, and almost 35,000 tried to turn in the first assignment. Now that the cost of distributing content is zero and the potential to reach anyone is limitless, all-star professors should be teaching every class. This is the first major event in that direction.
Best Wishes
Arjun
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