Welcome to This Week in edtech for the week of January 21, through 26. We've seen a couple of intriguing acquisitions this week, as well as the continuation of some of the patterns we've been talking about on the show, labor shortages, COVID disruptions, digital pivots, and more. We'll also talk a little bit about the tutoring landscape with our guests. Today, we'll talk about
ransomware in K 12. That's a crazy topic, we're going to play at ed tech current events quiz game, and we're going to talk a little about the craziness happening in the stock market around the country.
So let's just jump in with our first headline.
All right, first headline from the labor COVID Beat, almost half of all teachers are thinking of leaving their jobs. This comes from Forbes where unlike everybody else, teachers are thinking about leaving their job, oh, wait, teachers are going through COVID. Just like all of us, what I think is really alarming is this is not just thinking about leaving 34% are thinking of exiting their profession
entirely. And this on top of all of the reports of a labor shortage, it continues a trend that we're seeing where schools have been basically forced to go day to day in survival mode. And most educators are saying enough is enough. This is particularly hurting struggling readers, there's a new article and week that is showing that reading levels in particular are suffering. And all of this is coming to a head near February.
And that's the time when school districts and charter schools decide what their staffing will be next year, they put out offers, they find out who's coming. So be prepared in the next month or two for a collective freak out from principals across America, when they realize 10 to 20% of their staff are not coming back. And there is no one to replace them. You know, Alex, I know you are more in tune with the higher education. But are you seeing the same trends in higher ed?
And as you're thinking about this overall staffing crisis? Does it seem like more concentrated in the K 12 space? Or or is this broader?
And that's a great question. And from what I've seen, there are some labor problems in the higher ed space. But I don't think they come from the same direction. I think it's coming more from decreased enrollments, which we'll actually talk about in a few minutes. It's coming from a little bit of sort of financial stress on universities, that's actually leading them to cut
jobs. So you're hearing about schools that are eliminating departments or cutting, you know, sometimes pretty surprising amounts of teaching roles. So I've heard much more about that than about adjuncts or professors sort of throwing up their hands and leaving the education profession because of COVID. I think they've been stressed by the online shift, to
say the least. But I think it's a different dynamic there, where it's really about the job losses, I think, are coming more from the top down rather than the bottom up.
Yeah. And you know, I think this also comes in K 12. There are actually multiple jobs that schools serve. One is childcare. Second is social, emotional learning. And third is instructional. And so it's a huge childcare gap that we're facing. And you know, one of the highlights that's a like sub bullet of this entire topic is New Mexico, calling out the National Guard to fill classrooms. There's another group called dads on duty, where they're rallying dads to come
and be substitute teachers. And the question I always come back with is, is there an opportunity in this crisis? Is there a way to reimagine the roles of schools? So we'll keep you updated listeners on this one, but definitely a hot topic that's coming to a head right around the hiring and kind of renewal of contracts for teachers season. Absolutely.
And we've been talking on this show about how the labor shortage creates this sort of vacuum for edtech. And we don't know what it's gonna mean, I don't think anybody truly knows. But it's creates this, this opportunity where there's so much education to be had, and not enough people delivering it, you know, at the point of need, nobody knows exactly where that's headed. And our next headline, I think, is related to that, which is that some new numbers came out about
college enrollments. And it's basically looking like you know, college enrollments have been relatively flat for a few years, but this year, it looks like there are a million fewer students in college, and it's some of the lowest enrollment numbers in 50 years. It's the biggest drop year over year drop in 50 years. So you're seeing a lot of students opt out of going directly to higher ed during this period and a lot of that is
through community college. So community college enrollment is down 13% year over A year from fall 2019 to 2022, the latest numbers and undergraduate enrollment across the board outside of community college is down about six or 7%. Those are big drops. And I think, you know, college presidents are definitely looking at those
numbers. And that's on top of what was already sort of coming as a demographic crisis for higher ed. So there's definitely some stressors in terms of the higher end, sort of the future of filling classrooms in higher ed from the student perspective. And some other headlines that are sort of related to that just wanted to throw in is that some schools are starting to really adapt, and there's a few of changes starting to happen that are, we would consider sort of digital shifts to address this.
So for example, is a great article this week about UC Riverside. And they're doing this model where they have these really fancy new classrooms that actually are designed to be hybrid from the ground up, you can either attend in person, or attend remotely. And that's a
sort of a permanent state. And you can imagine that that may become a little bit of an interesting trend, you know, coming out of COVID, where people say, in the future, we can't expect every student to come in person, and we don't even necessarily want them to, if we have it as remote, we can have students on campus or off campus combined within Khan campus students and in person students.
That's an interesting one, though. I mean, once you start putting classes in a hybrid way online, then you start opening up synchronous versus asynchronous participation, as well. And, you know, like a big challenge for colleges and universities is, is there enough room in the section to give credit, you know, for this degree, and so on. So in the subtlest shifts of, we're going to create a hybrid learning environment that actually opens up really new
opportunities. But going back to what you said about community colleges struggling in particular, that one surprises me, you know, I thought people would be moving down market from four year colleges, into community colleges with the idea that it's a like better value, they can do it largely remotely or, you know, low cost in person, and that they would do the two year plus the two plus
two plan. But what I think we're seeing is actually a widening of, it's kind of like a two humped camel here, where the people that are committed to four year colleges, they're staying put, they're doing the four year they're slogging through whatever hybrid needs to happen. And that might be a signal that the credentialing of the four year higher ed is still holding the value, even if the learning experience has maybe equalized with more of a community college type learning
experience. I don't know. And then that you've got a lot of people as wages have risen, you know, your lower income people are deferring the entry to community college, because it is a good time to like go get a new job, and it is less connected. So really interesting to watch that camel, is it going to be 200 or 100 for three homes? And what's the impact of that long term on equitable outcomes?
Yeah, I really agree with you. I think that the economic factors are a big part of this. And the idea that there's very low unemployment right now and higher wages. And a lot of people in the service industry are shopping for better jobs that are actually out there. I think it's creating an environment where it deferring Community College, which may be remote or sort of confusing anyway, right now, in order to make money in this environment
is a very logical choice. So we'll see if that starts to reverse. In future years. I want to jump down to the m&a Beat. Ben, do you want to kick us off with some of the mergers and acquisitions that happened this week?
Sure. thing on the m&a be one that I found really, really interesting is soapbox Labs, which is probably one of the most fascinating companies out there right now. They focus on they're like an Alexa for kids. And they're partnering with McGraw Hill to launch more voice enabled products. And you know, when you talk about what are the most exciting frontiers in edtech, people immediately go to web three, I actually think voice enabled has, we've just scratched the surface on what
voice enabled can do. And the second m&a event that I've been following is literati, acquiring Follet book fairs. So a lot of this podcast we talk about the big boys gobbling up the smaller companies, but this is actually where a small or mid sized company is acquiring a subset of Follet. And these are book fairs. These are literally in schools like in the school library. And literati is a subscription book service and literacy service for kids. So you get your like subscription
once a month. And I think it's really interesting. You know, we've talked about hybrid learning. These are hybrid business models where there's the virtual digital, there's the physical box that comes to you at home, and then there's this new point of sale, that literati is acquiring through these book fairs. And it's actually quite a
huge business. And if you think of scholastic, and you think of some of the other bigger companies that have grown over the last 25 years, they found great ways to create in person
sales events with schools. And so I just think it's a trend to watch one large companies getting more focused and spinning off subsidiary businesses that might seem small to them, but could be game changing for small and mid sized companies and to the realization that, you know, pure digital may not be enough for learners, and finding a way to create hybrid physical and digital experiences is a thing in the future. Yeah, it
is really interesting. And, you know, we're seeing some acquisitions almost every week, you know, on this podcast, it's often or partnerships in various ways, and he's really starting to see the tech landscape sort of, you have so many players, and I think they're looking around and saying, Okay, coming out of this, this COVID moment, and coming out of this change from the original big, big companies like both McGraw Hill and
Follet. How do we create new partnerships and new amalgams of offerings that actually, you know, take us to the next level? I
think this literati Follett one is a really interesting example of a very analog kind of company being potentially brought into a modern era. Yeah, and we're going to talk about the stock market and a little bit, but as valuations fluctuate that also drives m&a activity. And if we're headed into any kind of downward trend on valuations, you're going to have a bunch of companies that are underwater that are looking to sell or aren't able to raise their next round at a higher valuation and
become more open to m&a. So we just expect transaction volume here, given volatility to increase. What's headline number three.
So headline number three is about cyber attacks and ransomware and how they are increasing among school districts nationwide. And this is a story that I wasn't particularly familiar with. But there's been a flurry of really interesting articles over the last a couple of weeks, which will let you in our show notes about how school districts are particularly vulnerable to ransomware attacks. And they actually end up spending a lot of money when they are attacked.
And there are a number of districts all over the country with Albuquerque, buffalo, Hartford, Newhall, California who are having to, you know, close schools because of ransomware attacks, and then often pay exorbitant amounts just to get the attackers off their back and protect their students data and
their systems. Cybersecurity is not my strong suit, it is not what I wake up thinking about any day, this is a heart of the tech landscape that I think is probably going to grow. There's a lot of very interesting stuff happening, we just passed a K 12 cybersecurity law very end of of 2020, which is designed to sort of enable K 12 schools to protect themselves more easily against this type of
attack. There's a lot of IT companies trying to push multi factor authentication and other types of protections for school districts. And, you know, we had 51 districts reporting
disruption last year. And I think we're going to, you know, get to a really interesting moment relatively soon, where certain edtech companies either start focusing on cybersecurity as a differential advantage or become specialized cybersecurity and ransomware, protectors of schools, and other providers might just have to have their story a lot straighter in terms of cybersecurity, because I think it's raising to a much higher level in principals and district coordinators minds.
Well, and you know, we're seeing a lot of race to the bottom in terms of RFPs. You know, whoever's cheapest wins. And that might have to change as we think about the security
infrastructure. It also just goes to show that the vulnerabilities of a school or school system are really hard to navigate one because we've got a lot of educators logging in every day where one mistake with their login password, and malware could be that open gate, but also students and parents trying to access all of these things. And we know if we put gates around their access, it lowers the utilization of products and tools. So it's
going to be a balance. I would also just say, if you wanted to build a great business, like going around with a legal team and suing school districts or ad tech companies, there might be the ambulance chasers coming for cybersecurity, like data breaches, I think, are far far more common than people realize in the tech space. And you know, once that legal engine spins up, you know, the response of school districts will be to take it super super seriously. So you
know, something to watch. GDPR is a great example of a policy collective action that could improve cybersecurity. But as an ad tech entrepreneur, it's almost impossible to break into Europe right now. Because you have to have a full team with all the data natively based in continental Europe. I mean, that's just, it's a huge bar to entry now, whereas pre GDPR, you know, is much more like us.
Absolutely. I think that balance between security and ease of use and ease of installation and not having to worry about, you know, training every person to keep all their passwords safe. And all these things is going to be increasingly on people's minds. And, you know, the education sector, I just don't think has been on the forefront of cyber security measures as a whole, it's often ranked very low in terms of the relative preparation of different
industries. But I think, you know, with all of these attacks in this new law, and you know, Georgia just bought a cybersecurity platform for every school district in the state. You're just going to hear I think more about it. And it's going to be more of a deciding factor in purchases. And we'll see how that pans out. Then what is our fourth headline?
All right, number four, the tutoring space race is underway. stimulus funding is starting to hit the school districts. And boy, is it the wild wild west. Later today in our show, we're going to have Jacob kantoor from varsity tutors talking to us a little bit about how the tutoring space has changed. But taxpayers don't fret we are going to be sending $122 billion to schools over the next three years. And a big portion of that money is going
to tutoring. I think the headline here is how fragmented the tutoring space is and the number of different entrance from like local tutoring companies that are heavily human base to large national tutoring organizations to upstart startups, ultimately, the research has shown a paid train tutor who has a personal relationship, ongoing personal
relationship is the best. And that sessions that happen during the school day, or that are even coordinated by the school are best and three times a week is best. But we're seeing all sorts of models. And I would also just on the side note, note that the labor shortage is also hitting the tutoring industry. And so how do you scale up with the idea that, you know, technology can be assistive, but this relational aspect for tutoring
is core. So something to watch, also something that is really driving fundraising right now. And we will see how that has an impact both on the business of edtech, but also on the impact? Yeah,
there was an interesting article in The New York Times this week about how schools are beginning to use their online, you know, their stimulus funding for online tutoring, rather than in person tutoring, and how that's actually throwing some people for a loop because it felt like the last couple of years have seen so much virtual schooling, and the learning loss that's come out of some of the ramifications of that, or you know, come out of that implies that to some people that they
really want to do more in person learning. So
they're surprised that the tutoring money is going to virtual vendors. But you know, I think there's been research for years about the impact of tutoring. And it is not a decided fact, in the EdTech literature that in person tutoring is significantly better than virtual tutoring. It's just that tutoring really works much better than almost any other type of learning, especially when the relationship is strong and is consistent interactions.
But I think you know, there's going to be more scrutiny about where that tutoring money goes and whether it goes to in person or virtual tutoring. That's right. And we talk a lot about like business models that thrive
in the education landscape. And one thing that has made investors cold on b2b sales in K 12 Is that the customer acquisition cost is often so high, but what we're seeing is 12 $14 million contracts, when you've got an LTV lifetime value in the millions, you can spend a lot of money on customer acquisition. And so the kinds of business models that are going to that are most likely to succeed here are actually like high dollar marketing spend high dollar sales teams and then
really large contracts. So you know, to connect that to the labor shortage to you know, something like 20 or 30% of superintendents are turning over. Don't be surprised when your local superintendent shows up as a salesperson for a tutoring company. That ROI could be quite incredible for these
companies. And it does make me worry that it could be another pendulums swing type of bubble where, you know, good people are doing good work, but a few bad contracts poison the well for edtech public private partnerships. And so, you know, to our listeners out there, please make sure your product is doing great stuff for kids before you sell that multimillion dollar contract. Absolutely.
So our last headline of the week is about the stock market, as mentioned, and you know, anybody who's been watching the stock market through any, any lens over the last week has seen some pretty unusual movement, it was the worst start of a year in history. And there have been several days of sort of massive shifts in the market, especially among tech stocks. And that certainly has affected at tech stocks. We don't usually talk much about stock on this
podcast. But it is, I think, worth noting that in this sort of semi post COVID pandemic, and starting in the third quarter of last year, there's been a significant devaluation and decrease in the stock price of almost all public ed tech stocks. You're seeing, you know, to you Coursera, Chegg varsity tutors, nerdy Udemy, and Duolingo, all down at least 25 and up to about 50%, since the beginning of the year. And, you know, I am not a financial
analyst. But this is something that, you know, you can see this in one of two ways, either the world is a little feels like tech is overvalued, and tech is part of that, or you can see it as people have no idea what's coming next. And they are trying to pull out of the market and sort of hedge their bets. And maybe these ad tech companies are going to rebound. But nobody knows. What do you think about what's going on in the stock market?
Yeah, I think it's probably a little of both of what you've talked about. And there is this question. So from pandemic, to endemic, so there's not really, I think people are starting to realize there's not going to be a post COVID per se, it's going to be like What does New Normal with endemic COVID look like? And that overall has a depressing effect on you know, economic outlook. But on the Ed Tech side, in particular, I think people are seeing a larger rejection of pure tech solutions
for education. And this like harkening back to some form of in person, you know, learning. And so the companies that I think will be enduring and have longer term value, have the ability to thrive in a hybrid future, rather than a purely
online future. So like, what actually are the investors responding to is really the growth rates of these companies flattening out, and the ones that have most flattened, are the pure online, because, you know, in person has come back, and the ones that are still growing, but maybe a little muted in their growth are the, you know, the hybrid ones, like big picture it also, Rationally speaking, this should tamp down
valuations, right? If, if your public markets are going like wildfire, then the series B that you know, last week would have been at, you know, a $50 million pre might be at a $30 million pre or something like that. But we've seen before, like valuation rounds, being actually oddly disconnected to what's going on in the public markets. So I think that's something to watch. Is there a follow on effect? And how long does this trend last? And also, are people
going to stay private longer? Or are they going to try to IPO Now, generally speaking, people will stay private longer if they feel like it's a dip, but it's coming back. But it could be if this extends, you know, we're gonna have to watch this week to week, if it does extend, we might actually see an acceleration of a tech IPOs, who might think, oh, man, like we've got to get some liquidity here. And also, you know, beef up our cap table, because it's going to be a rough five or six years
ahead. So that will be really fascinating. I think Spax are kind of off the table now, for ad tech, given how poorly received stocks have been. So your ability to move quickly in an IPO will really you know, you kind of have to launch your IPO process like 912 months in advance. That's really going to make some tricky boardroom conversations right now at the big tech players. Absolutely.
So there was one headline we didn't get to today, but I think it's worth mentioning just in passing, which is that the LSAT announced that it was going fully digital by 2024. It'll be online only it'll be an hour shorter than the current test and it will be enabled for for tablets and you know, designed to really be in the flow of of edtech, which is very interesting. And that got me thinking about college application process, which is going to be the first question
of our game today. So what is our game today?
Our game today is the quiz. Alex is going to ask me three questions, and I will try to get the right answer. And then I will ask Alex, three questions, and we will see who the winner is. The style is rapid fire. And unfortunately at the end, there's no crying loud, Alex, we invite you to play at home. So Alex is going to ask his first three.
Absolutely. So then what new form field was added to the Common Application for colleges this week? I'll give you three choices. Is it parent's highest level of education? Was it preferred pronouns? Or is it citizenship status?
I'm going to go with preferred pronouns for 20. Alex?
Yes. I have the perfect name for that. It sounds like Jeopardy. So yes, that's exactly right. Ben, well done. preferred pronouns were added to the Common Application this week, which I'm sure will cause some culture wars at some point. But it's an interesting sign of the times. So our second question, so we'll keep going. Right, Ben? Our second question is, we're talking about cyber attacks. What was the average cost to a school district to recover from a ransomware? Attack in 2020? What was the
cost for a school district? And our choices? Are? Was it $900,000? Is it $1.8 million dollars? Or is it $2.7? million? What's the average cost to recover from a ransomware? Attack?
I'm gonna go with 900,000. But trending upward? I think we're just in the dawn of ransomware attacks,
you would think but the average cost is actually 2.7 million. Oh, yeah. So this is I think it reflects that the schools are quite unprepared, and they have lots of information to protect, and they have to pony up to get the ransomware attackers off of their back. It's a pretty scary number to hear. All right. And our last question, last week, the GSV, elite, 200, edtech companies were released, that's 200, sort of high potential
edtech companies. And we ran the numbers this week, and 60% of those companies were based in the US, but which global region had the second most companies on the GSB? List? Is it Europe? Is it Asia and the Middle East? Or was it Latin and South America? Why is India included in Asia in the Middle East?
Yes, I'm gonna go with that be Asia and the Middle East?
Oh, I would have guessed that as well. But actually, it was Europe, we had 30 companies from Europe. That's 15% of the list. 27, from Asia, India, and the Middle East. So I was surprised to see that and very few from China, as you might imagine. So yeah, it's a little bit of a sign of the times of the rise in European edtech. And that's a number we hadn't seen in past years. All right.
Now, my turn, I can't believe I've got only one out of three. So I've got to make this stuff. All right, Alex 3.2 million high school students graduated last year, how many dropped out in 2020 900,001? Point 5 million or 2.3? million? Oh, my goodness. So if 3 million graduated, are we looking at? What percentage would drop out? I'm gonna go with the middle number with 1.5 million dropping out. It was 900,000. It was actually the lowest drop out
year we've ever had. And you know, I wonder whether that's because online learning meant that kids who normally might have dropped out wouldn't have or is it that schools were a little bit more open in terms of their grading, but only 900,000 of 15 million total high school students dropped out last year. At the same time, we can't celebrate good news. That's 900,000 kids dropping out. But previous years were more like
1.3 to 1.5. Okay, a second question, what is the highest tuition for college in 2022 23? So a single institution, what was the highest tuition that they've posted for next year school year? I'm gonna let you guess anywhere between $0 and $100,000. And if you're within $5,000, you get two points. And within 10,000, you get one point. So what do you think is the highest college tuition for 2022 23?
Fantastic question. I know that most schools have continued to sort of eke up their tuitions over the years and I have seen at least I believe, I remember at least 160 1000 tuition, so I'm gonna go a little bit higher than that. I'm going to say the highest tuition for one year of college is $66,000.
Wow, you are incredible. Well, you've already crushed me. It's 63,000 and some change. Wow, Columbia. A university coming in to top the charts for 2020 to 23. And you were within $5,000. You get two points. Yeah, and I'm already crushed. Okay, on to the last question, what edtech company has the largest market cap? This is the fill in the blank answer. So walk me through your thinking Alex, which edtech company has largest market cap?
Boy, I feel like I'm going to embarrass myself with my lack of financial knowledge in this. So I think I'm gonna have to guess by Jews. And maybe that's a very silly guess. But that company has sort of eaten the world and it's working in one of the biggest markets on Earth. I think it's accelerated past many of the old school tech companies and even the newer ones. And that's going to be my best guess. Oh, my God, am I way off?
Well, you're not super off. The only thing I would say is on market cap. I tend to track you know, publicly traded and by Jews by Jews has a valuation of 16 point 5 billion so I'm going to give you the points by Jews 16 point 5 billion. Yuan Phu Tao is valued at 15 Point 5 million and that's a K 12 online courses in tutoring. This is all basically as of December, so I'm not following all that minute to minute Chegg. Chegg is up there.
And if you consider Bright Horizons, which is a childcare center company, they're at 7.7 5 billion in market cap. But to be honest, the true answer is Google. Google has 1.7 billion or trillion market cap. And Google is the largest edtech player, but I'm gonna give you the points on bite us based on their valuation. Thank you for playing Alex, you crushed me, you ended up getting three points there. And like, you're gonna have to give me some sort of humiliating thing to do as
the loser. So we've
been talking a lot about virtual tutoring today, both pre and post COVID era. And we have a phenomenal guest today for our deep dive. Jacob Cantor, Director of school partnerships for nerdy, which is the parent company of Varsity tutors. Jacob, welcome to the program.
Hey, thanks for having me. Good to be with you guys.
Jacob, it's so great to have you on the show. You are clearly an OG like us when it comes to education. And more specifically, you have been really deep in the tutoring space. I'm just curious, you know, the landscape has changed so much. How would you characterize the pre COVID? And kind of during COVID eras of tutoring? What has changed?
Great question. So pre COVID, it almost kind of falls into multiple buckets, right? You had a lot of families doing in person where a tutor would come to the house, sit at the kitchen table, and work with Johnny and Susie on math or science or test prep, whatever they were working on. And then this other bucket of students that were getting services at school, right, either during a class period or after school,
right? They partnered with somebody like Princeton Review, and they would come and do a class. And that's actually what I did in high school. Right. My mom signed me up for a class and it was after school on Saturdays, and I played football. And that was the worst experience for me personally.
And then, you know, it was really kind of hyper focused tutoring wise at, you know, the test prep side of the house and, you know, tear note on you know, during COVID It was the world really shifted to virtual right, so everyone who hadn't experienced anything to do with virtual learning, ever taken any class on Khan Academy and never gotten any of like, the Stanford online learning, you know, you were really thrown in, like, with no experience on Hey, this is how you're learning now.
Right? Here's your Google Classroom. Here's what's expected of you, you know, you're logging in, and this is life now. And, you know, I don't know if you guys have seen some of the stats, right, like at LAUSD, there was a high percentage of kids that never even logged into one session during the entire 2020. Right, or some kids did. And for the entire year, their teachers never even saw their face, because they didn't turn on the cameras, right? So that present is its own set of problems,
right? Some kids with all of the resources in the world, their parents got them extra help, you know, they were thriving, and other kids literally never even had an experience of school, right? Because maybe they live in a rural area and they don't have the best Wi Fi or maybe there's a couple of kids at home and, you know, all three students on Zoom classes at the same time, just you know, is not
possible there. So lots of different kinds of experiences, right for every single student based on where they live based on the resources they had and based on kind of the districts that they attended.
Yeah, this is also something I've been observing is that there's not like a uniform experience of COVID Education moment. And that makes it really hard for insiders like us to spot the trends. And it's actually more like three or four overlapping trends that you see concurrently. And one that you hit on is that hybridization. And, you know, that being like a core capability experience. And Aha, I also just think about tutoring in terms of how is this meeting the needs of kids that
have huge gaps. And so, you know, the use cases for different segments is also quite interesting to see in the tutoring space. Yeah, I
agree. And it's interesting to hear you talk about the different use cases, because it feels like almost exaggerated versions of that split in tutoring pre COVID, where you had tutoring for the neediest students, the students who are far behind remedial tutoring, tutoring that was sort of mandated, and then tutoring for accelerated learning for the kids or families with resources or with this educational, you know, hyper growth, and they wanted to get their kids into college, you
know, two years early. And now, you look at this COVID era, and it's sort of exaggerated certainly exaggerated the sort of learning gap side, because I have a question for you, Jacob. When you think about the future of virtual tutoring, you know, where's the going from here? What gets you most excited? And what's a concern? You
might have? Great
question. So I think, you know, the thing that gets me most excited is we're kind of living in this era of unprecedented funding at the schools, right and at these districts, so that gets me really excited, right, and making sure that the kids actually get services that are going to push the needle into the right direction, right, I was on with a district just I want to say last week, or even earlier this week, where their data is showing them that students are behind two years to
grade levels. And there's some immediate need there, right. So the neat thing is a lot of these districts have funding for learning loss type programs, or whatever you want to call it, right growth, mindset, remediation, RTI, whatever the term is, right? But there's some funding, and it's really how are these districts going to make decisions for those kids, right?
And some are going to say, hey, you know, we have programs in place already, we're going to, you know, put a bat signal out and have teachers really respond and say, hey, I want to take on this responsibility to make our students get up to speed others, you know, for years have been doing some kind of tutoring programs right after school at
lunch during the school day. So it's going to be quite unique to see how it all shakes out where some districts are going to say, Yes, I need a partner to do this, because of the sheer manpower right? And others are gonna say, Hey, we got this, we're going to do this in house
and see how this runs. And you know, there's no clear right answer, right, some are gonna get it right, some are gonna go back to the drawing board and six months, but you know, as long as the kids are getting the services, they need to really get them up to speed and, you know, back to thriving. I think that's what gets me really excited. As you know, I'm an immigrant kid out in LAUSD as a student that, you know, started school not knowing, you know, a single word in English, right?
So I'm forever fighting for those kids that, you know, go to school every single day, not just for babysitting. Right, but to really learn and help their families and really kind of excel at this American Dream. Right.
You know, as you're talking about it, one, I resonate with tutoring as an accelerant for opportunity for all kids. What's also interesting is you're talking about partnerships with school districts as like a primary vector to reach that. And I think a growing concern for those of us in edtech, is that we see b2c models actually accelerating the gaps, and the affluent families being able to afford at tech products and services, but less affluent
families not having access. So you know, from an equity lens, how do you view the b2b work? And is that like, Do you believe that going forward? That's a focus area for the tutoring industry, or tutoring industry will be mostly b2c, and just some b2b where they can get a contract?
Yeah, great question. So I think equity is you know, the name of the game right now, right? It's partnering with districts to really see which students need the most amount of help. And a lot of the times as you guys know, right, it's those students that were ready behind even before COVID started, right. So it's really how do we get services into those kids hands
that are most impacted? And to your point, right, there's always going to be districts where the high fires and the overachievers you know they're overachievers because maybe they're in a household with both parents have college degrees right. Or both parents believe in tutoring and they get tutoring outside of the home or they have an older sibling that helps him with homework, right?
So there's already those systems in place and further There's other kids that might be kind of on the cusp of potentially accelerating, right. That's where you know the neat thing about all of this extra funding that's available, right? This money is really supposed to be put towards those students that
are really struggling. And a lot of time, it's exactly the kind of the same students that are in this equity space and feel one thing I read yesterday that was like, as I was thinking about our conversation today, it hit home. I think it was Craig Clemens wrote, your customer cares, literally zero about your company, your story, your brand, or even your product, what they care about is what you can do for them. Don't fight this
embrace it, right. So thinking about the partnership model, right, you can have the most amazing marketing, you can have the most amazing pitch deck, you can have the most amazing anything truly, it's, you know, is your product gonna solve their pain point, right? Are you going to be able to help them with whatever they're struggling in on? And you know, that's one thing I take into all of my conversations with districts, right? It's Yes, Hey, um, Jacob, this is who I am at my company.
But like, tell me about yourself. Tell me about what's going on in the district. Like, if this is a one hour vet session, and you treat this as me being a therapist, like, no problem, like, that's a good use of my time, like, how do I help you and I think that's, you know, resonates with district leaders, because, you know, I'm here to be their partner, I'm here to establish a relationship. And like, one of the quotes that came to mind was like, if you make a sale, you
can earn a commission. But if you make a friend, you can earn a fortune, it was like, just Jeffrey Gitomer. And like, that has always been my kind of, you know, shooting era, right, as we're all in this together. And these kids are going to be the kids that are eventually as we get, you know, gray hair and older, right, these are going to be the kids that are running the country, right and doing a lot of the jobs that we're doing
now. So let's make sure we get them the right resources to really be successful, and not just, you know, catch them up with whatever they're struggling in, but really kind of take them to the next level, right, like challenge them with, maybe there are going to be kids that are in AP classes next year. Right. And maybe they never thought about AP classes before.
Yeah, you know, I just want to jump in one more on this. Thanks, Alex. You know, Jacob, one thing that you said, I feel like is a huge takeaway for our listeners. And it's that all education is local. And one of the things that you know, early on in the charter space we learned is that when you open your second campus, the people at the first campus hate it, because it means you're not paying attention to their kids as much as you might be to that second campus, or third campus,
and so on. And so there's like an inversion of value to scale in education in a way in which that the larger you are, the more potential there is for you not to pay as much dedicated attention to my child, my learner, my educator, my school, and so on. And so the degree to which you can scale with the ability to customize and make it really feel bespoke is a critical challenge in our ed tech context, it reminds me of healthcare, no, in healthcare, they say all healthcare is
local. And we had a phrase at altitude called no one washes a rental car, this idea that if you don't own it, you don't take care of it. And it goes all the way down to the learning. Like if, if there's a tutoring relationship, they're using varsity tutors, and that child is connecting with the learning and that tutor and feeling like it's responsive to his or her learning journey. They're going to keep coming back, they're going to be, you know, engaged.
And, you know, when I talk to AI, tutoring companies, they struggle, because, you know, ultimately there is this human layer or this bespoke layer that makes education work in a way that it's hard to scale. So really great insight for our community.
Yeah. And I think you hit kind of the nail on the head, right? The social emotional side of learning, right? And making sure the student is working with somebody who's saying, Hey, these are the expectations that are put on you, right? Here's your expectations of me as a tutor. Here's your expectations of me
as a teacher, right. But you also have expectations as a learner and that kind of social emotional, and, you know, it brings me back to a couple of weeks ago, the California State Superintendent, I think it's Tony Thurman was on and talking about all the new initiatives for this year. And, you know, his one of his main goals is like, you know, for them to hire 10,000 new counselors across the
state is awesome, right? So that that in itself speaks to this dynamic of making sure students have somebody to, you know, knock on their door and see somebody in person and say, Hey, I'm working on getting into this AP class or, Hey, I'm working on my application to Cal State Northridge, Gugu Matadors, you know, just so they have somebody to really be able to steer them
in the right direction. And you know, for all the leaders out there and all the listeners, right, if you're not keeping up eye out on what's going on in your state what's going on nationally, you know, what different webinars there are with, you know, superintendents coming to talk about their
different pain points. There's a lot of neat resources out there that can really kind of help shape the conversations you're having out there, right with like, hey, those are a lot of just building rapport moments, right? You talking about being on webinars with other superintendents or learning about what the state superintendent is talking about, that kind of paints you as the professional and the thought leader in the space. And that's
important, right? Being at an organization when you're talking with district leaders and getting, you know, the trust built from them to say, hey, like, put your trust in me, and your students will be better learners or students will catch up or whatever then go is,
it's really interesting to think about that interplay between what's happening in the school and what's happening virtually, and how the social emotional learning can come together. I wanted to ask you, Jacob, you know, as you go talk to districts during this COVID era where, you know, classroom educators have been on the frontlines following all sorts of policy changes, but some of them are also overwhelmed and
starting to burn out. What have you heard from the districts when you know, when you come in as a virtual tutoring vendor? Are they saying, Oh, are teachers really need support? Or are they sort of saying, Wait, are teachers want to do this? And this is sort of takes away from them? I'm curious, you know, what kind of reaction you get there?
Good question. So kind of runs the gamut. Sometimes it's Oh, my gosh, my teachers are stressed out beyond belief. And we need this starting yesterday. What do you got for me? Other times, it's, Hey, you know, we're really putting a feeler out there and vetting a lot of companies and seeing who has the best solution. And maybe we'll pick more than one right? Other times, it's, you know, hey, I agree to talk to you for you to just leave me alone and stop
emailing me calling me right. So I can't say that any meeting is like the previous right. And that's what makes it fun as well
being in that tag, right? Like, it's constantly a treasure hunt, to really see which different districts, which different education leaders, you know, are raising their hand to say, like, hey, we need to try something, you know, the things we've had in place, maybe they've worked before, maybe they haven't worked before, but in this new time, and this level of unprecedented funding, like why don't we try some things that
might benefit the students? And really, you know, it takes me back to my publishing days, right, like, pilot it, see if it moves the needle, then invest heavy if the pilot works, right brings me back to like McGraw Hill buying, you know, textbooks when I was at a rep running around visiting all the LA schools.
Okay, so I've got the last question here. We talk about m&a all the time on this podcast. But we don't often talk about partnerships, even though there are so many that should happen. I mean, I can't count the number of times I talked to someone and said we should work together. And then it just doesn't come together in the education space. Maybe there's something unique, I don't really know, why do you think it's so
hard? What are the keys, you know, you lead partnerships at varsity and love to understand what you see as the keys to great partnerships.
Yeah, I think the thing we all have to remember is district leaders, school leaders are super busy, right? They could have the best plan, they could have a mapped out scope of work with you. And they might have an emergency on campus, right? Or they might literally have a fire drill, like an unplanned fire drill. So those best laid plans and meetings, always sometimes go to the wayside because other things are happening, right. I've been on that with my role of Varsity and
pre COVID, right. I've flown to districts to talk about intense programming and contracts. And the person I'm going to meet got sick and isn't there. And I'm only there for one day, right? So all of these things happen. And I think, you know, as a ad tech person, you just have to say, Okay, no problem. Like, you know, maybe it didn't happen today. Maybe it'll happen three weeks from now. But you know, we have a solution that might be a
good fit for the students. And that's why we initially started the conversations. Let's pick this up when the time is right, right. It's finding the need, obviously, if there's a need, and you have a solution that can fit that need, building up the trust building a relationship, right? When the time's right, everything will come together.
And it's really making sure that you're seeing as you know, a thought leader and a partner versus somebody who's just trying to sell something quickly, because it's the end of the month and you need to hit a quota. I love that.
It's on perseverance. And you know, you're doing it for the students. So you want to keep knocking on those doors and making those partnerships happen. So thank you so much for your time today, Jacob. This has been a fascinating insight into the virtual tutoring landscape at this pivotal moment. We really appreciate you being here,
of course, thanks for having me. Thank you guys for all the work you do and hope everyone and enjoys the conversation.
Thank you everyone for joining. Thank you, Jacob kantoor for coming and being our guest today. It was great to have him on. And please stay safe. Please stay sane in these endemic COVID days. Thank you for listening. See guys.
Thanks for listening to this episode of the EdTech insiders podcast. If you liked the episode, remember to subscribe on Spotify, Stitcher or wherever you get your podcasts. And if you're listening on Apple, please leave a rating and review so others can find the podcast. For more ed tech insiders content subscribe to the Ed Tech insiders newsletter at edtech insiders.substack.com. One final note for our podcast listeners.
The E assessment association in the UK is putting out a call for input on a research project looking at the future of digital assessment following the COVID pandemic. Sounds like an interesting project and the greater the global input, the more valuable the report will be to the education community. We'll have a link in the show notes if you want to get involved in this initiative.