3 Ways Ed Tech Startups Are Different from Most Startups
We see the education system begging for software and technology that can teach, that can augment both the classroom and dense, static textbooks. For those of us working on ed tech, the future is wide open. Why?
1. Strong purpose, by default.
The best work is done by the best teams, and the best teams come together over a strong, mutual sense of purpose. The purpose-attracts-talent cycle is self-perpetuating but easy to underestimate. “False purpose” doesn’t retain good talent, which compounds the fact that people seeking work trust their most talented friends’ assesment of a company’s purpose.
Where does that purpose come from? You can’t market or brand your way into it, it derives from the magnitude of the problem you’re working on. In YC’s list of requested startups, spanning everything from biotech to space exploration to energy, they recognize that “If we can fix education, we can eventually do everything else on this list”.
Let that sink in — improving education is foundational enough that its current less-than-stellar state bounds the set of things people can build to improve the world. At Volley, we feel the significance of that in our bones.
If that’s as nice as it sounds, then, why aren’t more people working on education problems? One reason comes from a simple consequence of the availability heuristic. For those who aren’t students, or those without school-aged kids, formal education is out-of-sight, out-of-mind. Years of our lives are spent being full-time students, and once we graduate, there are few outside factors that remind us of the problems we faced when we were students, despite hundreds of millions of new students being added to the top of the funnel every year. At Volley, we’re fighting this, and building solutions for students first.
We were all students once, and are all learners still; we know we can’t create software to teach if we don’t put real thought and energy into analyzing how we as ourselves learn best. This self-analysis and self-awareness is the foundation of our purpose at Volley. There’s a myriad of problems to latch onto: from limited available time to study to long and lossy feedback loops that demotivate students, to required textbook content that’s stuck in the dark ages, to emerging markets that employ even more rote memorization and are struggling to move past culturally ingrained archaic education systems.
At Volley, we realize that a strict focus on compound KPIs is critical to not only our success as a business, but in taking account the perspectives of our actual users: the students. We focus particularly on measuring the amount of time we can save students and an important signal of the manifestation of our purpose — in fact, we believe we can save your average high school student an hour of study time a night. For students, time is motivation, and less time spent means more motivation. More motivation leads to meaningfully improved efficacy, outcomes, and enthusiasm. We’re fighting student apathy built up by years of inadequate study tools. We’re building a better way to learn.
2. Heavy-tech approaches are still rare, and have outsize impact
In education, knowledge engineering is the next frontier — but it has been for many many years. Why is the timing right for not only edtech, but Volley in particular?
Bioinformatics, ad tech, business intelligence, and other industries have long enjoyed the benefits of proven technologies for organizing and analyzing knowledge at scale. Now, recent advances in Natural Language Understanding (NLU), ontology learning, machine learning, and semantic search are making such technologies more widely applicable. The future of educational content will largely be powered by analyzing the vast corpus of existing content to deliver (and sequence) the best resources for learners, in a context-aware, cohesive, and coherent way that avoids specific curriculum lock in and incompatibilities. Curious about the misconceptions of applying machine learning to knowledge engineering? Read 3 myths about machine learning in education.
If knowledge engineering is a critical underlying fabric to meaningful future EdTech and personalized learning applications, mobile is the medium students will experience their learning. Observe how 14–22 year olds learn today. Their mobile devices are usually 5 inches away from their homework materials, and often used as a “tutor” to their problems while studying. Swipe, type, search, and repeat. Once you realize how obvious — almost second nature — it feels to this new generation, you will see how important it is for us to prioritize building better user experiences for the advancement of the next generation. Making content more readable and to-the-point, cutting down mobile load times, building buttery smooth interactions, helping learners share and discuss about content with their peers, and most importantly, delivering targeted resources.
3. Education is a human necessity, despite the whims of the market.
Though it’s obvious, it’s easy to overlook the fact that the necessity for education is never going away. Absolute demand is only increasing as more emerging markets come online and modernize their curricula. What, though, does that mean for education as a business?
Despite the prevailing negative climate since early 2016, EdTech startups are in a unique position of strong and growing VC funding. New York based venture capital firm Union Square Ventures (famous for its investments in Twitter, Zynga, Twilio, MongoDB, Zynga, StackExchange, Etsy, Codecademy, and more) doubled-down in its new investment thesis stating: “Education is a high value niche that is differentiated and defensible, partially because they are domain-specific. These networks generally have more subtle or less obvious network effects, precisely because they involve something more specific and tight.”
In 2015, investors poured over $1.85B into EdTech companies, a whopping 135% growth over 2014. Even that, though, is a drop in the bucket compared to public funding and philanthropic giving, two huge spouts of capital that few other startup verticals/sectors have access to whatsoever.
What’s fueling EdTech growth?
- A significant portion of EdTech dollars are bleeding into non-school, non-academia markets. For example, investors are particularly bullish on skills-oriented learning services like Udacity, Udemy, and Lynda.com (acquired by LinkedIn). These companies focus on teaching skills or career advancement both for individuals and within corporations, including Udemy (of whom an executive is an angel investor in Volley) and Udacity. This phenomenon isn’t isolated to professional development but is becoming more popular in the target ages of 13–22 with the emergence of models such as competency based learning (such as MasteryConnect, a fellow Zuckerberg Education Ventures portfolio company), and micro learning courses for learning skills like driving (Aceable).
- Teachers are powering bottom-up growth for EdTech: Companies such as Remind, Instructure, Nearpod (a fellow Reach portfolio company), etc. which start with teacher adoption and leverage that usage to sell their products to schools.
- Parent spend on educational services children in primary school and late high school has never been higher. An Ernst & Young’s Parthenon study done Volley’s investor GEMS Education suggests that 20% of US parents buy supplementary educational services for their children (especially in late high school) and their average spend is $400/yr on 3–4 supplementary services. A strong example of this B2C trajectory is Chegg’s (NYSE:CHGG) Chegg Study product which charges students $15/month to provide textbook exercise solutions, answer commonly asked questions, and give them access to on-demand tutors. As of Q4’15, Chegg Study had 800,000 users growing 33% quarter-over-quarter projecting >$120MM in Annual Recurring Revenue.
- Emerging markets are skipping archaic infrastructure of yesterday (think LMS’ designed in 1999) and jumping to the most advanced personalized learning systems available today. In fact, mobile adoption is catalyzing EdTech growth in China which saw a major spike in VC investment (a 500% increase in one year!) in 2015.
- Schools are focused on adopting blended learning instruction to deliver personalized learning for students. EdTech companies are rebuilding various infrastructures such as communication (Remind), content creation (Nearpod), 1:1 to tutoring (Instaedu), and context-targeted content (Volley).
— Volley (volley.com) is on a mission to computationally understand and teach the world’s academic knowledge within 10 years. Current work centers on a “magic lens to learn anything” or “personal learning assistant in your pocket” that layers proprietary NLP over existing content to extract important concepts, infer relationships between them, and map them to targeted resources from across the web. Based in SF, Volley is aggressively hiring: volley.com/careers
