Future of Work? Rebranding EdTech
“What is education anyway but training for work and life?” my partner Kara Nortman mused. Nevertheless, EdTech conjures a totally different brand image (old, low multiples, slow moving, small exits) than the new buzzword, “Future of Work” (big, top of mind given the election, fits macro shifts around AI and robots). They are more similar than not.
Ever since I co-founded an EdTech startup five years ago, I’ve fallen in love with this space. I saw that a good education has outsized impact compared to other interventions at uplifting individuals and transforming societies. What’s more, I believe that this is the moment in time where technology can catalyze this impact, regardless of what term is in vogue.
EdTech has a branding problem
People define education too narrowly.
When I talk to most people about EdTech, they think about software that sells to K-12 or higher ed institutions. They see a decentralized system of schools that all purchase independently, lacking a standardized curriculum, catering to strong teacher unions, and being muddled in public policy debates. A headache, indeed.
As a result, many VCs state flatly, “I don’t do EdTech” — though they give philanthropically to education nonprofits.
Many entrepreneurs also shy away from EdTech — though they tell me that after they’ve made money, they would love to make an impact in education.
I believe there are a number of venture-scale businesses to be built in EdTech that are transformative in both their impact and financial outcomes. And, now is the time to build them. Let me tell you why.
What most investors don’t know: EdTech is exciting!
We think of education as confined by four walls and something that one does between the ages of 6 and 18 (or maybe 22).
But for children and youths, there are many more opportunities outside of the classroom where learning happens. Look at the myriad of toys, books, activities, or anything in the world. If schools facilitate formal learning, then these are conduits for informal learning.
Similarly, for adults, there are many opportunities to continue learning and adapting for career advancement and for leisure. They are corporate training, coding bootcamps, MOOCs, podcasts, conferences, and fun classes such as cooking and fitness. They surround our work and life.
We should define education more broadly to encompass any opportunity where learning could happen and where people could do something now that they couldn’t do before.
Education, broadly defined = Learning + Talent
Change will start at the periphery
It’s true: innovations targeting formal learning struggle with distribution and, therefore, viability. Although the overall spend on education is huge, in the US, it’s difficult to access the vast majority of the funds for structural reasons, leading to sub-optimal addressable markets.
But there is certainly no shortage of problems (and opportunity): in K-12, education spending per student has more than doubled over the past three decades, but outcomes haven’t budged. In higher ed, rapidly rising tuition costs have led student debt burden to balloon to $1.4T nationally, with one in six in default. College completion rate is at less than 50% — and most Americans don’t even go in the first place.
My bet is that disruptive innovation and transformative businesses in education will start on the periphery, tackling informal learning. Eventually they will influence the core of formal learning. Here are some examples of what this looks like.
Maker toys are hiding in plain sight
For example, I love children’s toys that look like candy to kids and vegetables to parents.
Traditional toys are built by toymakers who optimize for fun, while educational products are built by education folks who care mostly about teaching arithmetic.
We are finally seeing a convergence of the two worlds. “Maker” toys such as Makey Makey, LittleBits, and SAM Labs are not only addictive experiences, but also are the best conduits for learning STEM concepts around electricity. Learning STEM through playing with these toys is way better than using textbooks, because to create is to demonstrate the highest level of mastery.
Furthermore, there is a real market for selling toys directly to consumers. The toys market is $20B in the US and $90B globally. If you can achieve a mass price point, then they are also products that everyone loves to gift, further boosting the commercial viability.
Alternative models of higher ed are buzzing with activity
On the other end of the spectrum, I also love efforts to democratize higher education. Move away from the monolithic four-year, full time, high cost models to learn-as-you-go, learn anywhere, affordable, scalable, alternative models.
One set of alternative models is Massively Online Open Courses, or MOOCs. Though they have had their struggles initially, recent efforts at iterating on the product and at reinvention are more successful. YCombinator was the latest to launch a MOOC, Startup School, that helps them with lead gen. Udacity launched their Blitz program to further help their nanodegree graduates get jobs, to a lot of demand from both graduates and employers.
Another set are coding bootcamps, which are typically in-person, three-month crash courses to train junior developers. Today, 18,000 students enroll per year paying ~$11,000 tuition per head. This $200M market virtually didn’t exist five years ago.
These examples are just scratching the surface.
Our world is changing rapidly and, with it, the skills that are relevant are ever-evolving. It is no longer possible to expect to have the same job for forty years.
Developing alternative models for lifelong learning and enabling employment will become ever more critical. They will be some of the most impactful and biggest businesses in the decades to come. This is why I am as jazzed as ever about EdTech.
✌ I am an early stage investor at Upfront Ventures. I am passionate about the intersection of improving human potential and big, transformative businesses. If you care about the same things, drop me a line at chang@upfront.com.
