Week in Edtech with Ben Kornell, 2/25/22

the end of March. We're also about to publish a really interesting web three podcast interview with Joe Mayra Herrera who will be a guest on today's podcast as well as a article from Daniela pico from outlier about web three. So some really interesting web three things coming as well.

education. And this is one of those where the unit of user shifting from the student to the family is of profound innovation and idea and I just love it. I've seen a lot of this in K 12. And so Paul Quinn, kind of making me smile with this great opportunity for parents. So online Ed looking awesome and inclusive. What's the headline that you've been watching?

he's introduced. So one thing that jumped out to me was the legislation that came out this this week about expanding Pell grants to shorter form, shorter form education options, but explicitly excluding some online education. And this was an Inside Higher Ed article that that really was a little bit of

a sort of mixed bag. Obviously, it's really great to expand Pell Grants, it's really great to give people more access to shorter form content, but online education probably because you know, people are just not sure about the consistency of quality or, you know, there's there's a variety of different takes on this has sort of been left behind. So then I'm curious, what do you think about that particular news item?

the next couple of years. It is also interesting, though, to see short form, like boot camps in person boot camps, starting to qualify. So it is an acknowledgment that, like more bite sized learning segments might be highly valuable, both for higher ed but for upskilling as well.

just good for the sector. But there's going to continue to be a little bit of a back and forth between a number of different players about how to make sure how to make sure we can open up access to online education for federal dollars without inviting bad actors into the scene or people who are just trying to get that federal dollars off of the backs of students without giving them the outcomes they

need. And that's that's been a conflict for years and where we clearly haven't quite saw Update yet, then tell us about what's going on in mobile education.

across. One is that games and language learning, and study tools all make a lot of money, even though school communication apps are the most downloaded of all the apps. And so it really raises this question of b2c versus b2b, everyone's downloading the school communications because, you know, we've, we're suffering through a global pandemic, but where the money is still in this gaming, I also, you know, was pre curious around the differences in geographies, and, you know, language learning

stood out. So that was an area that I was quite curious about, what were some of your takeaways from the report?

Google Classroom. And I think that stood out to me, because, you know, it's obviously pandemic related. But it also just shows that, that if schools really need to start using tech in on an everyday basis, which which they do, it actually can grow even faster than B to C model, you know, companies like Duolingo, which are selling directly to to consumers that stood out to me, the growth was really interesting seeing the growth in us and and in Europe

is was really interesting. And another thing that stood out to me is how a couple of apps that we don't often talk about on this show, and I think maybe some of our listeners may or not, may or may not have even heard of, are actually some of the top apps in the world for education, one that stood out as the app cake, which is a South Korean language learning app mostly focused on learning English. And you know, we don't we don't hear about that a lot.

But it is it is up there among in almost every list on on this report in terms of popularity and, you know, global reach and and language learning itself. I think that is interesting. It we're seeing a lot of interesting apps coming out of Asia that have spread like wildfire in those regions. We have not always heard of them here, but we may hear them in

the future. The other one that stood out to me is joy tunes, is simply a piano app from joy tunes, which is an Israeli a tech company, that is a music learning app that is consistently in the top 10. And it's been sort of crawling up the charts each year. And those are apps that you know, just very interesting to see their rise. And you know, we don't talk we haven't talked about either of those on this show. But they're I think they're really worth watching. What were your takeaways? Why

need to solve this problem. And you know, the utility players, which are really around connectivity, or I'm required to download this thing for my school, not a lot of monetization there, even though we know it's good to have good communication with the school. Speaking of enduring impact, Alex, tell us a little bit about bio Jews making some splashes this week.

groups. They also did announce something very interesting about doing brick and mortar tuition,

tutoring centers. So they're basically starting to look into almost like a Kumaon potentially style model where they're they have all these apps and they have all these edtech products, but they maybe want to bring people together in real life as As the pandemic wears down to do sort of intensive tutoring, and byjus was also sort of the headline in a in a really interesting economist article this week about the tech boom and whether it can last, you

know, outlast the pandemic. And that article mentioned that by juice has a, you know, it has the potential to go public at a $40 billion valuation. If that is true, that would be a huge feather in the cap of the tech sector of the tech India sector and abide US itself. What did you think about the report, Ben, by just moves this week?

do this and do it well. It will be catalytic because it means that a company can have a major exit with an IPO. And if it doesn't go well, it could be really, really devastating for the prospects of our sector. Because ultimately, the ability to IPO translates back to valuations and series A Series B

and so on. And it was interesting that they speculate that buy juice might go via a SPAC merger for listeners who don't know what a SPAC is, at its simplest, it's this, you know, holding company that goes public raises money, and then merges with the company in order to help that company essentially facilitate going public. And the kind of use in the 1980s was for kind of junk stocks, and the ability to kind of get something

liquid fast. And then it had like this huge resurgence over the last three or four years, and it was hot, and people were going public vs backs instead of IPOs. And now it's kind of turned the corner back down. Again, many of these facts have not performed well. And the idea behind this back is that by going public vs back, you avoid the long drawn out IPO and

expensive process. But also for education companies, it's really painful sometimes, to have all of your information publicly available over a series of months, your customers are able to understand what your margins are and what your market share is. And you know, education is politically complex. So if by Jews does go first back exit, it will be highly risky. We'll be bringing it to you blow by blow here on at Tech insiders. But it has a big, big, you know, like

ripple effect in our space. So with that, I'm gonna go to our next topic, you know, AI has had so much promise in our space. But where is the reality? Well, we had a Hechinger Report article around Robo graders, it got me really excited. There's a proof points around a smarter Robo grader that basically uses Google algorithms to do a first line pass of grading student

exams. There's organizations like turning in out there that use a lot of AI for you know, first and foremost plagiarism checking, but also to provide some like pre formatted feedback. It does seem like the industry has evolved from an AI solves everything, mentality to AI can actually be a first or second layer that then leverages the human element more fully interested, especially from a product standpoint, in your view, on where AI is coming.

And, you know, eventually are all of our kids going to be getting AI report cards?

be fully fleshed out. And in the past, you know, edX was trying to build an automated essay grater years ago, and they ended up dropping it Pearson has been trying to do this for years for the LSAT, and I think they do use some Robo Robo grading for the LSAT essays. But the you know, it's been elusive. And I think the reason it's been elusive it's that is that it's been a problem that seems sort

of singular. And now I think we're getting to a place where the algorithms were really good natural language processing are getting so much better that, you know, this article was about to students who, without knowing a whole lot about education at all could sort of walk in and become runners up in this humongous contest. And I think you're gonna see more and more of that, because the tools are so good that you there'll be a lot of different players jumping in to create different Robo graders.

And the gold standard is you know how well it grades against human graders, I think we're gonna see it get very close. And if we keep the human in the loop, as you mentioned, Ben, I think we really might finally crack this idea and save 1000s of teachers millions of hours, you know, grading grading papers, I don't think it'll ever

be pure AI. But I think it can add a lot of value to a lot of people, including the ability for students to get feedback on their work instantly, many times before even submitting it, which I think is a really valuable use case for for Robo grading.

the grade. I mean, in my book, that actually is great as part of the learning process, but I can see, you know, the line between what's your final work and what's authentically yours versus not, you know, is getting more and more blurred. And second, I also think it's an exciting time, you know, these are Georgia Tech students. The these are not PhD AI scientists, right, Google Cloud. And I believe Amazon both come with AI

toolkits now. So if you're coasting on cloud, and either of those cloud platforms, you get, I think, with Google, it's like big query that they have built into it. So you no longer need that. Ai, you know, VP of engineering, now you could have a data analyst actually rebuild your AI protocols, which just makes it so much more accessible to the apps and tools that people are using.

good idea. But it you know, I can imagine a world where students submissions, just like they're if they're using Grammarly or tools like that now, you know, they don't have typos. They don't have run on sentences. They may aren't they're misusing commas or silly semicolons. And that actually frees up the teacher to read the ideas and give them more thorough, more human feedback that AI cannot do. That would be a beautiful vision, I think for the future of, of edtech. That's

my personal take on that. But

pretty safe. Like there's just a lot of humans. So let's embrace AI as like a stepping stone for the humans to be as awesome as they can. All right, speaking about awesome as they can. We had some bombshell m&a this week. Houghton Mifflin Harcourt Queen of the textbook dinosaurs is now a education technology company so says the press release as they are acquired by Veritas a private equity group, the the press release values the entire company in the billions, something like 2.7 to 3 billion

and very toss. Many people don't realize this, but Veritas also owns cambium and cambium. Is this incredible conglomerate of like 50 or 60 different ad tech brands. And so you know, cambium owns Voyager soekris which has acadiens Clear sights, numbers trans math Voyager passport, step up to writing I use that when I was a teacher. They own cambium owns Lexia, which is huge. And learning A to Z, which has Raz kids, which is like Nico's one of his favorite apps.

So, we've reported on the impending roll up of our space. This is it like it doesn't get any bigger than Hmh for 2.8 billion being acquired by Vera toss, combined with the cambium, these guys are going to be a huge player in content. And what it also shows though, is that, while these are big companies and like big deals, it's actually a conglomerate of like 50 to 80 companies, all leveraging similar sales and

marketing channels. And my view in this space for a long, long time has been that the biggest challenge in edtech is customer acquisition costs versus LTV. If you can add together all of these different products and companies and push them together through one channel to increase your lifetime value. You've got a winning combination here. So you know, normally we're heavy on the ad tech startup space.

These are the big guys, the Giants, they are adding up, they're loading up, it's going to be really interesting to watch what Jack Lynch and the Hmh team are able to do under the umbrella of Veritas. Now, a lot of oxygen there. Alex, what are some of the other deals that you're watching this week,

others coming out of Germany. I believe I should confirm that, but I believe it is in Germany. And they are, they're off to the races. That company also was named as a finalist in the GSB cup, that one of the 20 finalists in the GSB cup this week along with 19 other terrific edtech startups. So that's a company to keep our eye on how much you

figure out which is the lie. So number one, according to hold on IQ, Israel, 9 million population Australia 26 million Canada 38 million and the entire continent of Europe 747 million, all have the same number of Ed Tech unicorns, that statement one, start calculating if that's a truth or a lie statement to In an August 2021 survey, parents on both sides of the political aisle all agreed that social emotional learning, growth mindset, whole child development and the development of soft

skills were the most important priorities for K 12 schools. That's two, and three is the top teacher printer on teachable in 2020, who was once an assistant elementary school principal, earned over $10 million on that platform, teaching something that has nothing to do with elementary school education. So well 123 What do you think Ben, which is the I am

Europe has go student which has been going well, I'm trying to think it so I'm assuming this these are not publicly traded companies. Is that right? Because if it's publicly traded, there's a lot of

regard. And you as a school board member, I am often getting emails from constituents on both sides of the aisle, and they're really not seeing things in the same way. So I'm a little skeptical around growth mindset, whole child, but maybe they're agreeing on that, because CRT and all this other stuff is so controversial. And then the third one, teachable 10 million from an intrapreneur. Gosh, that's a lot but that's probably their total revenue. I wonder what their take is on that

revenue. But it's possible I'm gonna go with the Republicans and Democrats and growth agreeing on anything. I think that's the lie. But like social emotional learning growth mindset, I do think we have a ways to go to really help people from all parts of the education system understand the importance and value of that. So I think that's the light.

are the same number. And yes, the top teacher printer on teachable Her name is Terry Ijeoma, was an assistant principal. And she quit her job travelled around the world while doing day trading, or trading, and has a class called travel and trade and has built a an empire worth over $10 million on the teachable platform. What's interesting about number two, is that the you're absolutely right, that slide. And the

reason it's a lie. This was comes from a fascinating Hechinger Report this week, and said that basically, parents do agree that the components of social emotional learning are important, but they all rebel against all of these terms. So they do not there's negative acceptance on the idea of the actual term social emotional

learning. They hate the term soft skills, whole child development, which is a you know, a lot of philanthropy, philanthropy is aimed towards that parents just don't buy it and growth mindset coming from Carol Dweck at Stanford and others. They just don't like it the term that they did like, and the thing that they didn't think was an important priority is what they call life skills. So that like a very interesting, you know, possible reframing of some of these psychological

aspects of teaching. But you got it exactly right. terrific job. And

It's a very complex topic, but we're going to try to get some really interesting insights. So Myra, welcome to the pod

on the internet. And the way that you interact with the internet is more around ownership as opposed to just purely read and write and you know, more of a passive relationship. And so the reason why it matters and I think the reason why you're We're seeing such kind of a cultural excitement around it is that unlike in web two, where you saw a lot of the value that was created across the internet, really funneled to a few key

players. So Google, Facebook, Amazon, you know, like the fang companies, the way that we think about web three is actually you're going to distribute the value creation, across a much broader set of what people are describing our network participants. And so you can imagine a web three marketplace, think about it, like think of it as like a labor marketplace of

fiber, and Upwork. But in web three, instead of all of the value of the vast majority of the value being created, actually going to the platform itself, it's going to the supply side, that's actually creating the value for the network. Also the demand side, the people that are actually participating and making the overall platform

volleyball. And so at the highest level that kind of describes why people are excited about it, why people are talking a lot about it, I will say all of web three is full of a lot of noise right now. So if you chose to just look very quickly on kind of the headlines, or on the Twitter feed, what you'll see is a bunch around million dollar JPEGs that people are buying and selling and trading, you're seeing a lot around fraud and scams. And so it's very easy to become disillusioned with web

three right now. But if you take the step back and say like, what is the underlying technological shift? And what does that mean for how people interact with the with the internet, it becomes a lot more interesting.

platform. And none of this is legal or like, necessarily what you have to do, but it's becoming kind of standard practice. And then the other 50% is split among what you would describe are the insiders, which includes the founders, the team and the investors. And so there is still a way to actually get value as the company starts to

increase. Now whether or not at exit, you get 20 or 25% of the company, that's a different question you might own much less, but the way that folks are kind of thinking about it is the outcomes are going to be larger than ever before, because you're actually going to be able to increase the market more so than ever before. And so if that is true, owning a smaller piece of a larger pie, you end up netting out to still be totally fine.

Now, the question is, and I think it's one again, that we're all grappling with is what percentage, you know, should investors really own and if investors own part of the platform, is that really community owned and network owned? If Andreessen owns 15%, of a community? Or any investor right owns 15% of a community? Like is that truly web three or crypto native? I think those are questions that people are asking every day. I don't think we have an answer yet to be totally

honest. But it is one that will start to get answers over time as as the space starts to evolve and starts to mature, we start to see exits, because we're not really close at all in any way to starting seeing, like real assets in the space. So as that starts to pop up, I think we'll have much more clarity on what that what that should look like. But today, it's a lot of

experimentation. I will say the other thing, which is like an interesting thing for VCs is that now if you're holding tokens, those are very liquid asset. It's not like equity, where it's not where you're holding for seven to 10 year period. And then you know, the exit is either m&a or or going public. When you're holding a liquid asset, you actually have to think about when do I

distribute? How long do I hold, like, it could be a one year time period six month time period, it is a hot more of being an active investor in terms of your holdings. And again, it's something that everyone's actively grappling with, I would say that there's maybe I don't know, 1015 funds that like had are a little bit more mature in terms of investing in the category but the vast majority are still fairly new.

know this is a focus for you. So tell us about some of the models of how this web three technology and sort of philosophy actually weaves into education use cases and how and what we can sort of look towards to understand where this is going to go when it relates to education, specifically,

in the space. It's a lot more on the economic mobility, programmability side, because there are some very easy places where web three can disrupt existing eco ecosystems on education and learning, I would say we are so early in terms of applications, especially compared to gaming or financial or even economic mobility. And that's not a surprise, we're used to education moving, no one ever lost money, you know, assuming education will move

slow. And so I don't say I don't think we have any existing viable, like real applications or business models that we can point to and say like that's been operating for at least 12 months, and it's showing some promise, everything is super

early. Now what we are seeing in terms of interesting use cases are one, we're seeing the rise of learning dowels which are basically how do you create learning communities that folks within the community are incentivized to actually contribute and add value and create quality content in the

community. So there's one called crypto crypto culture and society, which I'm actually a part of for semester two, that started last year with semester one in terms of a cohort, they create quality content, it's live online, they have some insane asynchronous, like written content. And the idea started off with a lot of the content that was out there was focused on, you know, the house of web three, but not much was actually focused on the why like, what are the implications

for society? Like, why are we moving to web three? And so that's how crypto culture and society started. And the community itself played a really large role in terms of deciding like, where do we go content wise? Like, where do we spend

time? How do we think about semester to, and they're incentivized, because they have a token related to, to the community, they're incentivized to actually make sure it's high quality, unlike you can imagine a traditional university like I, you know, I'm nice to Stanford alumni, not because like I get some benefit out of it, actually, I'm still paying off

my student loans. But I'm nice to Stanford alumni out of pure altruism, when you add a financial incentive there, you know, I might be responding to more of that, like cold outreach that I get from current Stanford students. But in terms of critical children and society, they're about to launch semester

two. And from what I understand, like, there's a piece that's actually like consumer education and consumer learning, but they're also thinking about service servicing other doubts, like creating content and education for other doubts. So now you have like, a doubt a doubt revenue stream that didn't exist before. And a Dow for those that are listening that don't know what it is, it's called a decentralized autonomous organization, which is like the weaponry equivalent

of an LLC. And so like, that's a current example that we're seeing in the education space. One other one that I saw that was fairly interesting was called Let me speak, which is effectively Duolingo for web three. So it's saying, hey, learn English. And while you're learning English, you can actually earn points on our ecosystem. And the way that that works is you purchase an NFT, a

non fungible token. I actually like I feel bad because I'm like, there's all these words that I should be explaining throughout this

into fiat currency over time. So it's like this plane earn concept, the ecosystem works because in order to keep playing after a certain period of time, or like, they call it your visa, your visa expires, you have to buy a new NFT. And so like it's like this new ecosystem that kind of feeds into itself. And so like, that's another kind of example of the way that you see learning and, and web three

intersecting. But again, the the examples are very, very early, nascent, and, you know, they're very few compared to some of the other applications.

And part of the way the coop would work is we parents would show up on our days, and we would help provide the supervision for the kids. And then we also would do work around the school to keep it up. And we would in exchange for the amount of work that you get did, you would actually get money off your tuition. So there was like, a way in which we never

exchanged a token per se. But we exchanged our labor for a value in creating this community that supported our learners and Dows are, in some ways, a form of a co op, in which the community itself is creating the value. And where I grew up in Indiana, for example, coops are really common around agriculture. You know, you'll often actually pay for things with your kind of coop token or ticket that says, you know, I stored the grain. I

haven't cashed it out yet. But here's the promissory note of my portion of the coop. So these are all ways in which, you know, analog or non digital things are now moving into the digital space. And crypto and web three is actually a way to make those systems work when the relational connection is like, I guess a big question that I get is really around the concept of Metaverse, first like Metaverse, or virtual worlds, they've existed for a long time in like

video games and so on. And so, so there's a world in which Metaverse actually functions independent of web three per se. But where why do people talk about Metaverse in regards to web three? And will we have you know, Metaverse, universities last week, we reported on an Indian company, founded by Twitter exact that is Metaverse university like, will we see when three Metaverse institutions popping up to educate us and our children?

increasingly growing. And that view is you're going to increasingly see these virtual worlds that are interoperable. So you can imagine taking an asset that you have in one world and taking it to another because again, in web three world, you own your assets, you own your data. And so you're gonna see these worlds that are actually interoperable, and you can

communicate across worlds. And then all of a sudden, it starts to be an actual, like web three economy, as opposed to kind of be siloed virtual worlds that that exists today. And so in terms of the question like will we start to see these web three Metaverse, universities, I think we will, to a certain extent, in fact, like we're already seeing a lot of that happening today. There's a charter school in

Florida. That's right now experimenting with 1400 students, I can't remember if it's middle school or elementary school, where they actually spend four hours of the day in headsets. So during this from from their home, 14 hours a day on headsets, and the rest of the day is actually spent outside of

the headsets. And the way that they use the headsets is like if you're learning about Ancient Greece, like you're actually put into the world of ancient Greece, and like you're experiencing that in an immersive fashion, you're worrying about it in this virtual world. And so this is happening today. And it's happening with kids, like it's not a question of if this will happen, it's more of a question

of how will this happen? And how can we do it in a way that we feel it's ethical, it leads to good learning outcomes, and it actually transforms education, like, the age old question that we always ask is like, and we always know is technology is not a silver bullet. And sometimes technology is not always like the best answer to a question. But when we do have it, how do we use it in a way that actually transforms, practice? And transform what you otherwise

would be able to do? And so do I think like the metaverse and gaming and learning are going to be intersecting and come closer and closer together throughout the next few years. Absolutely. I think like the traditional silos of the way that we've thought about those things are

gonna start tumbling down. Now like the question is, how do you do it in a way that you feel good about it because I don't know how I feel about kids and headsets for four hours a day but like, you know, one hour a day to Are they like, maybe that feels right? I don't know, you know, and I think that the research is early in terms of in terms of what is right,

and education. And I'm curious how that might flow down to the idea of, you know, students owning part of the classes, they're in, like, what's happening in CCS, or teachers owning the material they create, or professors owning the material they create, you know, how might ownership and the sort of change in the consideration of what ownership is sort of disrupt or even just make people question how our normal education system works?

Teachers. And the problem with that is like, often, you know, someone will download something, and then like, distribute it for free. And they don't get royalties off of that in a web three world, because you have that sense of like provenance. Anytime something exchanges, hands on the internet over and over again, like you will get a royalty, if you decide like you want to actually implement that

into the blockchain. And so like, all of a sudden, you know, you start to maintain that, that ownership over time just on like teacher materials, in terms of ownership on on the student side, I think it's less ownership of particular content or causes, and it's more so ownership of the actual network that you're providing value to, right, like, by nature of us going to the schools that we went to the universities, we went to, we have provided value

to those schools, right. And we actually paid to provide value for the schools. And in this web three world, like you might pay, but because you get a token back, you can potentially realize the value of the provider of the value offered to the school over time. And so that starts to change incentives in terms of like, how do you interact with that community

over time. And you know, something that I think the education community has talked about for a long time as one of the most important assets or assets of university is actually the network that you create. And what happens in a world where you're actually incentivized to make the network as valuable as possible. It might actually strengthen any network effects that currently exist in this model. And I know it's four o'clock and I also have to hop I have a hard stop.