If you follow the news in education, you’ll probably come across lots of announcements about new education and edtech companies.
Many of those announcements talk about those companies as the single most important innovation that will disrupt and redefine education in the coming years.
I get it. Journalists want to attract more eyeballs and they probably know they are exaggerating. But I feel that this is not just a result of overzealous journalists.
I believe we need to rethink the way we assess the value of an innovative company in education when investors are pouring money into it.
I’ve raised half a million dollars in the past from investors for a software company I founded and I know for a fact that raising money from investors, doesn’t make a company important or worth our attention.
The impact a company can have on education is relative to thousands of variables. Money is not one of them. Otherwise anyone who has $30M could make magic happen in education. Yet this is not happening, and sophisticated successful investors understand that education is a complex ecosystem of people, organizations, and government authorities.
The impact of a single company is by nature limited. And yes, I know, most people will say “what if this is the new Google or the new Apple of education?”
For a company to reach the size of Google or Apple and to have the impact such companies have on the world, there will be 100,000 others that will fail. It’s how innovation works and I love that.
But this proves that until we see the right signals, it would be premature to publicly identify every new funded startup as the “disruptor” who will shift global education in 10 years.
Tesla for example, had a huge impact on the car industry and how we see mobility. Yet Elon Musk, founder of Tesla, publicity stated that they won’t change mobility and transport on their own. He said they need multiple stakeholders to work together for this to happen at global scale.
I feel that education has a lot of similarities with the transport industry in that respect.
One innovative organization can have a huge impact on many students and families. But they can’t change the world on their own.
When an education company raises money (even when it’s tens of millions of dollars) the only valid assumption one can make is that the specific investors believe that when the company gets sold in 5–10 years to another company or to other investors, they will make a good profit.
Will that impact positively 100 students or 100M students? Will it reach just 3 or 3M communities? No one knows. There are a ton of failed education companies that raised a lot of money from investors and didn’t survive their first years.
I strongly support investing and I love it when people support an innovative individual who teams up with other great people to create what they think will make the world a better place. I am one of those people.
But we have to look at things from the education perspective as a whole. Not just focusing on 7-figure checks and how cool a platform is.
I’d love to hear you thoughts on this :-)