This Week in Edtech with Ben Kornell, 3/11/22

exciting time. Alex, welcome to the show.

in the boardroom. 75% of classroom educators are women at the school principal level, it's 5050. But of the 800 Holon ed tech startups, these are the 800 kind of hottest ed tech startups that are on their radar. 20% of those companies have female founders and 13%, with female CEOs. And ultimately, as you go all the way down the pipeline to CEOs at IPO, it still 1% of IPO

CEOs are female. So a lot of work to be done in our space for gender equity, as well as from a business standpoint, a real competitive issue when the majority of your users or customers, if it's b2b, you know, it's educators. So 75% female, or if it's b2c, a lot of the home decision making is often by the women of the house, we really have an imbalance in terms of representation on our leadership teams, and connected with our field and our market.

So really interesting times, Alex, I know you saw some other articles and groups around edtech and female founders.

coding focus. So that was great news to see on this week, I was also looking at the supercharger ventures site, because they have a really nice ad tech female founders group, where they try to sort of bring people together who are those 13% and give them accelerators and ways to connect and build. So that was nice. And then the last thing that we were looking at was there was a really interesting article out of NASDAQ, actually about how the theme of International Women's Day this year is break

the bias. And the idea in this article was to break the bias for artificial intelligence and machine learning, which as we know, is such a big part of edtech. And basically the thinking was, we have 75% female ratio of all teachers in a 12, up to 54% of principals. But the ed tech world is going more and more into artificial intelligence, it's going to grow by 71% is the prediction over the next five years, and only a quarter of data and AI positions

are held by women. So the takeaway there as as Ed Tech becomes more and more connected to artificial intelligence and machine learning, there may be exacerbated issue with female jobs and leaders in the field. And one way to remedy that would be to start to think about how to bring more female representation into AI and ML as a way to get it into a tech so I thought those were all interesting angles on International Women's Day.

the classroom. And we need to find ways for educators, both male and female, to find successful pathways and careers in the classroom, and kind of connected the dots with gender pay disparity, teacher pay disparity, and then the low proportion of male educators. So it makes me wonder, you know, how are all these things connected, and later in the show we'll be talking about is that teacher Exodus happening or not.

And if we're thinking about the future of edtech, it seems like this should be the field that leads everyone in tech, around gender equity, as well as racial and ethnic equity, as well as diversity of backgrounds. So the whole on IQ report was kind of a sobering reality check.

of the show. But a couple of things happened this week with relation to Russia and Ukraine and education, specifically, a lot of colleges cut their ties and financial ties to Russia, the European University Association kicked out all Russian universities, and you're just seeing Russia become more and more a sort of pariah state is being boycotted, people are running away from Russia in almost every type of cultural institution in Europe and the

West. And that definitely includes education we saw this week, both Coursera and edX, remove all courses from Russian universities off their platforms. Basically, every company is looking at its own model and figuring out how to close the door on Russia, because it is where we're at as a world. And this is likely to remain true, as long as Putin stays in power. So it's just getting worse and worse, the war and I think Russia is isolating itself more and more and more.

Ben, what are your thoughts about the future of Russian education?

99.7%. It was marvel of the industrial world, and definitely a contrast to the US model, which is all about localized control, often emphasizing choice. The model in Russia was the kind of planned communist education ideal, and for many, it was a path to the middle class, it was a path to, especially in the STEM fields advancement. So how will the Soviet Union 2.0 that Putin is building? How will they approach education on the flip side, an educated populace might be the

biggest danger for Putin. So if it's the channel for propaganda, then great if it's a channel for free thinking and empowerment, that could threaten them. So it's going to be a lab experiment here for the next decade, unless something meaningful happens with Putin. And we should be watching because it's a huge country with many, many millions of learners. And they will be leveraging whatever resources they have to create a state run ad tech apparatus.

going to be very crazy. My hope, frankly, is that this is really the end of Putin's regime one way or the other, and we don't have to see a whole decade of this and Soviet Union to point out but obviously only time will tell. That's sort of a low note, but it's such a stressful topic and the news is so painful to listen to or why for everybody

who's watching it. So on a happier note, one of the interesting trends starting to take off this week is this idea of new models of training, especially employer based education. We've seen this for a couple of years with companies like guild, but there was an announcement this week that really caught my eye about a program called dev degree. It started by the prior head of learning at General Assembly,

Melissa Jones. And it's basically a model where Shopify, the non edtech company that does online retail is investing millions of dollars a year to help people get Cs degrees in this very particular way. It's basically a full time CS degree for four full years. But for all four years, the students are working for half of the day and learning for the other half of the day. So it's like entirely work integrated, where students are both learning and working at the same time for their entire

college experience. That's a really interesting model. And so far, they're seeing 92% completion rates for the cohorts that have graduated 90% find full time engineering roles before graduation, and almost all within six months of graduation. So early data is showing that this is a pretty promising model. And that's been really exciting to see there. Before we move on on other employer models. I'm curious what you think of this type of degree model. But what does it speak to for you? Well,

else, right. And what I find really interesting about this model is that you actually get four solid years of part time work, and ultimately to if you add it all up, and does seem like a large number of these folks do end up transitioning to work at Shopify. So is there an employer model where rather than them going to a third party like guild, we're actually Deb degree essentially helps them set up

their own custom program. And with that intentionality around their apprenticeship, you are getting output from that apprentice workforce, but also a pipeline, the numbers here, I believe it was, like 115 students, right, these are not going to be game changing for

the entire workspace. But if you look at what Shopify is doing as kind of the cutting edge of what's to come, you could really see a world in which government subsidy for higher education stays flat or declines and employer subsidies leaning into these kinds of blended models increased rapidly.

skills. And instead of always assuming that those can only come through traditional education institutions, they're starting to look at companies that can give mobile education can provide stackable credentials, or skills based credentials, or a lot of different types of learning that are a little bit more sort of fit into the flow of life a little bit more. And I think that model you're mentioning of employers being able to offer meaningful educational experiences directly is starting

to feel realer and realer. And I think more and more companies are going to dip into it. One other thing that stood out to me about the STEM degree program is that it's so explicitly not a bootcamp. It's a four year CS program with part time work attached for all four years, as you mentioned, and that's four years of part time work, but also a much longer timespan to learn in, compared to the bootcamp models, which tend to

be six to 12 months. So just the idea of four years of apprenticeship is really not very common in the US. Well,

potential. So a lot of people use the university that you go to as a stand in for measuring your competency for a job. Are these programs actually going to be branded in a way that I did the Shopify four year apprenticeship At that might stand out relative to I completed XYZ bootcamp and worked at XYZ company. So there is a way in which people are building careers in this stackable and generally short form way. And some of these long form programs over four years

might actually stand out. That's a really interesting way in which the principles of higher ed might be applying in the workforce, education space.

degree. And it was a I mean, the majority in that survey, and it felt like a watershed moment for the type of branding that you're mentioning, traditional education brands versus bootcamp brands versus corporate brands, I think there's going to be all sorts of interesting changes there. And in terms of the long versus short, in an ideal world, that's where stackability comes

in. You can imagine a world where people can take a year of computer science, apprenticeship with Shopify, walk away with a meaningful certificate from that, and then decide whether to sack that into a full degree or to transfer it to another program. So all of this is blue sky space in the US, we really don't do much of this, but it's exciting to see big and well branded companies like Shopify jumping into it.

particular state. So do you see these as separate trends are intersecting?

as well. My instinct, from everything I've read and looked at for this is that what these programs have in common, what the alternative sort of mega University competency based models and the corporate models of education have in common is that they both see employment as the absolute core goal for the students and make decisions make major educational and pricing decisions, for example, and a lot of decisions based on that assumption that they know that students are coming to them to

get a fulfilling and meaningful and lucrative enough job in the shortest possible time. So I would think that these paths are in parallel, and they should intersect. And it would be very easy to see Southern New Hampshire, for example, accepting prior credits for people who have done an apprenticeship and giving them a year of credit towards their degree or two years or three years, based on this work, integrated learning. If I were Southern New Hampshire, I would

do that tomorrow. You might also see it going the other way where people are going to innovative universities and gaining skills through a traditional school, and then they want to move into apprenticeship. They can accelerate through the apprenticeship and move to full time work faster. I don't know if these will actually happen. Transfer Credit is always an enormous mystery in this space.

But I think that the incentives are, are pretty well aligned for places like Southern New Hampshire and WVU, and Shopify and General Assembly. So I definitely think these models are going to intersect in the future. Ben, tell us about what's going on with the government. Oh,

agreements. Colleges have a lot of requirements about how they're able to promote or not promote loan agreements. And so I think this has like a two sided impact. One is it gives the clarity so that isa providers aren't in this gray zone. But to it means that there's quite a bit more regulation on how an ISA is set up. What happens if there's a default But what are the rules in terms of colleges marketing and promoting them, and puts them more alongside traditional

loan providers for college. The second piece is really around the forgiveness of such loans. The Education Department announced that it has identified 100,000 borrowers with 6.2 billion in loans that will be erased by a public service loan forgiveness program. So just doing the math 100,000 borrowers have 6.2 billion in loans. That's insane. In January, there were 70,000 borrowers with more than 5 billion in debt relief.

The reality is, and we reported on this about a month ago, this idea of free college for all or eliminating all loans, and all college debt, that really hasn't gotten the political traction it needed in Washington. But through this public service loan forgiveness program, when people are postgrad doing work that qualifies, that could be things like AmeriCorps, there is an avenue for forgiving those

loans. And I will remind everyone that another form of loan forgiveness is serving in the military, which through military tuition programs, you can get a free four year degree. And then you do National Guard or full time military service. And so this is an extension of that two community service programs. So really exciting to get some clarity on isas exciting to see that loan forgiveness is in action. And of course, many of these people who are doing public service,

they're in education. Any comments that you have or thoughts on that one or other news items that are coming up in your government news feed?

tell you why. I mean, I think the impetus behind this is really noble. I think the government is saying, you know, Isa spread very quickly after being sort of popularized by what was once called lambda school now Blum Institute of Technology in a couple of other boot camps, they spread like wildfire, there were over 70 Boot Camps offering them, they were starting to make their way into all sorts of different

kinds of programs. And I think the fear there is, well, if something spreading really quickly, and it's dedicated to what sounds like a great idea, which is not charging students until they have work and then taking a percentage of their income. In practice, in some cases, it was becoming

potentially predatory. So I think that it's noble to try to protect students from predatory loans, of course, predatory lending, but I assays were one of the only really innovative financial moves in in higher education and an alternative education. I think we've seen in quite a while. And I think this is going to have a huge chilling

effect. I mean, I think most of the boot camps that offer this now we'll just shut them off immediately, rather than go through the regulation and red tape to become official loan providers with all the scrutiny that entails. So in a way, this sort of puts the kibosh on one of the alternative financing models and potentially hopefully puts a little bit of fire under people's heels to come up with other ones that may not be turned predatory or that might

not be seen as predatory. But it's a little bit of a shame to me that, you know, I was waiting for colleges to start offering isas because what an amazing idea to be able to tie tuition to outcomes. But before that can even happen, I think this thing is going to be all but dead in my opinion. The other piece of news that caught my eye was in K 12 schools, which is the title one funding for high poverty

schools. We had large promises from the Biden administration, when they first got into office of the increase was relatively muted this week, and it was about 6%, which is lower than was promised. I think this is just a result of government gridlock. But it's worth noting that there's not a huge increase for high poverty schools, especially in the wake of a pandemic with enormous learning loss, especially in high poverty populations.

from COVID. And what we're seeing is that the current conditions in government, the current state of the economy, there's not the political will to really deal with the long term impacts of COVID. Coupled with all of the additional spending that has to do with health and safety. Now, because of COVID recurrence, we're actually seeing less money net, go to the kids that need it the most. On the ISA front, I could see a couple ways that it plays

out. One is I could see web three and crypto solutions coming up faster. Because the ISA retraction gives more room for learn to earn where people essentially gain equity or gain tokens for their learning that then could be cashed in or they could essentially create some sort of barter system where they need to repay back through their

own efforts. The other area is that just like loans, there's a consolidation in the loan industry of people who service loans, you could imagine that, in aggregate, the ISA solution could be solved by a few middlemen, who could figure out how to get all of the regulatory pieces together, and could offer an ISA platform that multiple schools could get involved in, and also de risking it for each individual one of running their own Isa. So don't give up on

isas just yet. Ultimately, though, we need more kids that are ready for post secondary education. And the chilling news from the Biden administration around title one funding is just one piece of funding downsides that we're hearing even on a state by state basis. So Alex, we did our government B, which is definitely ending on a low No. Let's talk about up into the right. Are India B, can you share a little bit of what you're looking at? Sure. So

interesting to think about. We saw upgrade, which is an Indian unicorn ad tech company, committed to a large scale 15,000 Women learner scholarship called the Vidya Shakti scholarship, basically encouraging women to pursue learning and employment opportunities at scale that's really exciting, including female NGO workers, police, women, female journalists, all sorts of people and blue collared women across the state of Bharat. And then we're starting to see some consolidation in the Indian

market. So Ben, talk to us about consolidation. Well,

And if you can imagine the kind of growth rates of these companies having a content engine that's creating video, they have something like 250 million daily users on don't memorize this content platform. It's really interesting, this battle over the kind of core components. This is one of the trends that we've been seeing 2021 by Jews kind of kick things off, they bought great learning for 600 million, they bought epic for 500 million, and they bought Akash educational

services for 1 billion. So something like 2 billion in deal flow from by Jews alone. And then in November Hoonah Academy which is also a unicorn bought swift learn, and then minder acquired, immerse. So you know, it's this rapid fire of acquisition, acquisition acquisition. One thing that I do think is interesting to watch is that it started with the unicorns and the big companies. And now we're seeing deals that are likely in the 50 to 100

million, much smaller range. And so people are racing to aggregate into the three or four big players in that space. And it's reminiscent of the kind of publishers grab for content and dominance in the US in the post war era. So it's happening much faster, but what we're seeing is really infinity learn trying to step in and say, Hey, we're going to be one of the big players alongside the IGs of the

world. I also do want to say that one that we're watching really closely is area data's air you It is, I don't know if I'm saying that's right or rude notice, they, I think error Unitas they got 350 million in debt funding for m&a. And there's a rumor that they're buying a European company that provides courses to non English

speakers. So two things. One is, how does that news get out that somebody is raising debt to acquire a company in Europe, like, normally, that's the stuff that's really, really quiet and closely guarded. So it must be viewed that publicly, it's strategically advantageous to talk about debt financing for m&a. And then the fact that people are issuing debt for Indian companies to acquire

European companies. So think shows how real the Indian surge as a dominant player in the tech space is, yeah, and so this reminds me a lot of China when China the growth started in the major cities of Beijing, Shanghai, Hong Kong, Shenzhen, and then move to second tier and third tier cities. And I think what we're seeing in India is the ad tech phenomenon is real, and it's moving outside to second and third tier cities in

rural areas. The newspaper, the news media journal startup rot, has an article about a tech startups bridging the gap in non metro cities. And based on that data praxis, IBCA is reporting that the EdTech market in India is projected to double from 117 billion in 2020 to 225 billion by 2025. So that's $100 billion gain in just five years. And it's just another reminder that if you really want to be on the cutting edge of what's going on in edtech, move to Delhi or Mumbai.

is huge. Discovery Education is one of the biggest education companies, players publishers, they spun off from discovery, I don't know, five, seven years ago, something like that. They were owned by Francisco partners. And so when a PE firm buys from another PE firm, you wonder, is it a they're recapitalizing and ready to go on an m&a spree or B are things not going well, and someone else is stepping in to fix it. Given that they're keeping the entire

management team and the CEO. I think that Discovery Education is likely to be a big player with clear like behind them. They're huge, and they have businesses and all sorts of sectors. Discovery will be their anchor education partner. So really exciting to watch. And amongst all of this m&a. Don't be surprised if you see Discovery Education popping up again. Yeah,

investing. And I think it's one of perhaps a number of mental health, behavioral health sort of non academic startups that I would guess are going to start growing over the next couple of years as we pull out of the pandemic. Then you just got back from South by Southwest edu, one of the big education conferences. What were your takeaways from the conference?

in partisan politics. The second one that was really profound was a look at climate change and the intersection with education And normally I think about climate change and education about curriculum content, helping students learn about climate change. But it was really actually about the infrastructure of schools and the billions of dollars of

energy schools consume. And from an infrastructure standpoint, there was one really salient point a school buys an H vac system once every 30 years, the moment they buy it, they're locked in for 30 years. And many of these H vac systems when you buy the cheapest one, they are not energy efficient. And so we're essentially making purchasing decisions today that make it impossible to meet our

climate goals of tomorrow. And there's a role that schools, school boards and communities can play in that as well as universities. My bigger takeaway, though, was really this question around what is the future of education conferences, attendance was a third of normal SXSW, organizers did a great job. But the exhibit hall was pretty sparse. There were a bunch of companies there, but no one going around to the booths. The sessions were not well attended, educators outside of

Texas did not show. And that's not surprising, given everything that's going on in schools. I particularly enjoyed the in person networking, it was such a refreshing moment to get out from behind the zoom camera and in person with people. But the conference industry has been a backbone of business and deal making and the spreading of new practices in education. And what's clear is, it's not back to where it was before. And so how will it evolve with virtual and online? What is the purpose

of a conference? And is that better constructed with a fully virtual or hybrid virtual in person? Setup? We'll be asking that question over the next year, I'm guessing.

with huge investments in it. And they eventually had to cancel it, and then obviously had to cancel it the year after, and this is the first year back. And we're just at a time when people are beginning to travel again. So I think next year will be the real deciding point. If they can get back to full or even close to full attendance next year, we have a chance of getting back to normal. But if they don't, it might not be economically feasible to do conferences like this. Gotcha. Thank

interesting. A company called sketchy which does storytelling and visual aids for medical and pharmacy students and a company called our I D I do not have to know how to pronounce that which is making AI based tutoring for international English exams, the to EIC exam and has done some really interesting work raising students scores through adaptive and AI based tutoring. So congratulations to all the companies that made the list and edtech like, Ben, do you want to take us out?

on our LinkedIn page. It's ed tech insiders at LinkedIn, or send Alex write a message. We'd love to know what you're enjoying and ideas for guests topics, or any other ways we can improve the show. Thank you all for joining us and have a great day.