A vast amount of venture capital is flowing into the education sector, most of it toward edtech ventures that use digital technology to focus, refine, accelerate, or augment what happens in classrooms. The infographic below, from CB Insights, shows the nine largest VC players in the edtech space and the dozens of companies they are backing, representing more than US$1 billion in investment every year since 2010.
At the same time, this article, about a shake-out in the the coding boot camp field, from the New York Times, along with the well-publicized money and quality issues in for-profit online higher education programs, sounds a cautionary note about the prospects for commercial success in edtech. Nonetheless, all of this is more evidence that the education sector is being disrupted by forces on all sides.
As with other disruptors and start-ups, some of these ventures will fizzle, others will merge or by acquired by established organizations, and some may just transform the field. One thing is clear: the inflow of venture capital into education–a field in which many have found it difficult to wring a profit–is the new game in town.
Ari Mir, the founder of Clutter, suggests via the “20 Minute VC” blog that entrepreneurs should focus on building ‘sports teams’ rather than ‘families’. Sports teams are made up of players selected for a purpose and whose utility may come and go from time to time depending on what the team needs. It is time to make a change when a player no longer fits with the team, the style of play, or the position and role she plays. By contrast, families don’t cut or trade members; rather, they carry the weakest link almost no matter what may transpire
While reading Ari’s comments, I started thinking about the many, many schools that describe themselves as a family, either among the faculty or the community of parents, and am wondering whether this helps or hinders organizational effectiveness. On the one hand, it creates some amount of glue that holds families and teachers to us, but on the other it creates unrealistic and potentially dangerous expectations. Just something that heads and board members need to keep in mind when fomenting change at their schools.
When does a strength become a weakness? One answer is whenever the strength is overdone; e.g., perseverance is a strength, but when overdone it can become bullheaded and costly. The current situation at Sweetbriar College (yes, that Sweetbriar) may be close to a strength overdone. Sweetbriar is a now-famous case study of a small liberal arts college for women where the trustees opted in 2015 for closure due to declining enrollment and dwindling funds. The alumni network went ballistic and successfully lobbied the trustees for Sweetbriar to remain open.
As the Chronicle of Higher Education story reports, enrollment is still meager at just 325 students, and now the college is launching a bet-the-farm sort of enrollment strategy comprised of rebranding around women in leadership and a new tuition plan. Perseverance or stupidity? Time will tell, but we can’t help wondering whether the time has come to liquidate and contribute the remaining assets to another like-missioned institution while there are still assets to contribute.
We see many markets in the U.S. where demography is in a long, slow decline (overall population may be holding its own, but the number of school-age children drops year after year. This creates a structural enrollment problem that cannot be solved by better marketing, rebranding, new programs or anything similar. We think more boards should consider dissolution as a business strategy–just another way of advancing the mission when the proverbial writing is so clearly on the wall.
Tom Peters is one of my favorite management gurus–he has been since I first met and heard him back in 1984. His recent definition of management go me thinking about the division of labor between governors (boards of trustees) and managers (the head and administrative team):
“‘Management’ is the arrangement and animation of human affairs in pursuit of desired outcomes.”
Exactly! But what then is the board’s work? It is primarily the definition of the “desired outcomes” management will pursue; e.g., “‘Governance’ is the identification and delineation of the mission-congruent outcomes the organization (school) will pursue.”
Governors should engage managers in the outcomes conversation, just as managers should engage governors in a dialog about which paths to take in their pursuit, but trouble invariably happens when governors arrange and animate human affairs or managers identify and delineate outcomes. Staying within the lines is crucial here.
[N.B.: Peters’ manifesto linked above is a masterpiece and well worth reading beyond the quote.]
A story in today’s New York Times reports on housing starts thus far in 2017, and is revealing in terms of future school growth. New housing means more families and, eventually, more children, some of whom will become independent school customers. Large declines mean just the opposite.
This item from McKinsey about the pitfalls of a growth imperative in the corporate sector stimulated my thinking about schools and our tendency to add more and more programs without considering either the opportunity costs or potential for distraction from our core mission.
“Being ambitious means wanting to achieve more, not wanting to do more. Joe is graduating from high school and has exceptional talents. He is considering which career choice will benefit him the most. Because he is unsure, he plans to study medicine, law, physics, engineering, economics and computer science. That’s crazy, right?
“Companies may not have the physical constraints of one person, but their investment capacity, talent and management attention are all in scarce supply.
“While the student metaphor is of course too simplistic, it is good to stretch a point to preposterous extremes to highlight the human tendency for overconfidence and aversion to making choices.”
We see school after school, all with the best intentions, adding program after program without assessing whether it is a true mission-match. Next time, ask yourself what needle you are trying to move by adding something. If the needle isn’t integrally related to mission, don’t add!