Morning yoga, evening karaoke. No, it’s not a spa vacation. Between those bookends, the ASU+GSV Summit, now in its 8th year, is fueled by nonstop mingling and convening. This is the edtech industry’s premier financial conversation, packed with more than 4,100 people and 350 CEOs.
Topics ranged from early childhood to lifelong learning. Shop talk was increasingly led by international participants from Paris to Israel—and especially from China, whose global ambitions are undisguised and undeniable.
Each year, the conference organizers try to broaden the conversation. Women entrepreneurs made up more than a third of the presenting companies. The Innovators of Color award was front and center. (Want to catch some highlights? Check out the GSV video archive here.)
Oh, and did we mention entrepreneurs, financiers and business types? Yeah, there were plenty of them, too.
The Biggest Deal of the Week…
...happened on the Sunday evening before the first day of the conference.
General Assembly, one of the pioneers of the “bootcamp” model for coding and technical-skills training, found a buyer: the Swiss HR firm Adecco Group. The all-cash deal: $412.5 million.
In an interview with EdSurge at the conference, General Assembly CEO Jake Schwartz said he was excited to continue to lead the operation, which will retain the brand and operate as a division of Adecco, and gain better connection to industry partners through the new parent company.
This was the biggest bootcamp sale at a time of consolidation in the space, riasing questions about the future of the once-hot bootcamp model. Asked how many bootcamps he thought will be around in 10 years, Schwartz said he hoped that by then people won’t even use the term “bootcamp” anymore, and focus instead more on broader efforts to connect workers, educational offerings, and employers.
“I hope that the greatest contribution that General Assembly made is not about coding bootcamps. I hope that’s not our legacy,” Schwartz said.
He’s more proud that he showed that an education provider could thrive without participating in the traditional system of federal financial aid. Borrowing a reporter’s notebook, he drew a diagram of the traditional system, where the dollars flow from the federal government to colleges, while debt flows to the student. Then he drew the bootcamp model, where students pay directly for education, giving providers more incentives to improve their education and services. “We provide some kind of example that you can survive outside that system” of federal aid.
Going Global
One the most prolific U.S. education technology investors is creating a new fund to support deals overseas. Learn Capital is closing on a seed investment vehicle dubbed “LearnStart,” which has already invested in a Finnish company, 3DBear. It’s led by a tandem of familiar faces in the edtech investing scene: Learn Capital partner-and-everyman Michael Staton, and Don Burton, who has built his own portfolio of dozens of startups through his time running the Kaplan EdTech Accelerator and EDGE Edtech Accelerator.
Also in attendance were European investors who’ve recently launched education-focused venture funds. Among them: Brighteye Ventures, a Paris-based group that’s looking to chip in €500,000 to €2 million to lead seed and Series A deals. One of its investments announced this week is in Aula, a London-based company that just closed a $4.2 million seed round to build a learning management system modeled after WhatsApp and Slack.
And rumor has it that there’s an early childhood fund in the works, too.
When to Buy, When to Sell
It’s only fitting at this conference that there’d be at least one session with this exact title.
“Great companies are bought, not sold,” noted Sam Shah, managing director of Macquarie Capital. He elaborated: “In the sales processes we run, many times the buyers are the ones who have tracked the asset for a long time, established a dialogue with the management team, and demonstrate that they can move faster than the market. The velocity of the M&A matters just as much as the valuation.”
Ron Huberman, the former CEO and superintendent of Chicago Public Schools who is now CEO of Benchmark Analytics, foresees a world when the K-12 industry is “going to end up with two big players.” As the market consolidates, “you will see single platforms that can own and manage all the data relevant to teachers and students. That simplicity is wildly compelling to school districts.”
“Given the consolidation happening in the mergers and acquisition,” he added, “it’s going to be hard to survive as a lone-point solution in this world. In K-12, so many companies have come in and just try to add that 14th solution.”
Land of the Rising Sun
Japan’s earned a reputation for being an insular country. But its education officials are looking for outside help. A representative from the government’s Ministry of Economy, Trade and Industry (METI) will be announcing an opportunity for edtech companies to test their tools in Japanese K-12 schools through pilots that will run between two to five years. “You rarely see the Japanese government opening up a budget in this manner,” said Norihisa Wada, a general partner at EduLab Capital Partners and chief marketing officer of EduLab, a Japanese education company.
“We are turning to education as a way to fundamentally change the social structure [in Japan],” which is wrestling with an aging and declining population,” added Daisuke Asano, director of the education services industries office at METI.
They’ve tapped Boston Consulting Group to organize a pitchfest this summer where interested companies can apply. Asano says his team is looking to select up to 40 projects to pilot, with a focus on tools that support STEAM education, project-based learning and help assess non-cognitive “21st century skills” like creativity, collaboration and grit.
Getting the 4X Multiple
No, that’s not a financial ratio. The California Community college system currently supports 2 million students. But across the state there are 8 million working adults without a credential, meaning the system needs a jolt, says Eloy Ortiz Oakley, chancellor of the California Community Colleges.
Michael Crow, President of Arizona State University asked how Calif. schools can scale to educate 8 million adults. Oakley’s answer: “Full authority to implement what I think we need to do.” On his wish list: a tech-enabled college with its own governance structure that can serve a much larger number of students.
Getting Gritty
Angela Duckworth gave the morning keynote Tuesday, describing her popular research into what makes some people more persistent in the face of obstacles—a habit she calls “grit.” She described her quest to “reverse-engineer high achievement.”
In a small group conversation after her talk, Duckworth talked about her efforts to make sure grit isn’t just an empty slogan on motivational posters or Pinterest cards. After all, the natural question raised by her research is: What can a teacher do to consistently encourage students to become grittier?
“There has to be something beyond self-awareness for change to happen,” she said. “I don’t really have an idea yet.”
She is working on possible answers at a nonprofit she runs called Character Lab. The group’s website notes that its mission is to create “playbooks that translate scientific research on character development into daily classroom practice.” But she admits that developing those is “really hard,” calling it “the ultimate design-thinking challenge.”
Movers and Shakers
Kim Taylor (former CEO and co-founder of Ranku, which sold to Wiley) is back with another new company: Cluster, which aims to connects talent to manufacturing companies for senior level roles as well as apprenticeships. The manufacturing industry needs an injection of young blood as baby boomers retire, she says. Expect to hear more after Taylor closes a funding round in the coming months.
Maia Sharpley, who spent 9 years as vice president for strategy and innovation with Kaplan , is now a full partner with Learn Capital. She becomes the fifth Learn Capital partner—and the firm’s first partner who is female and a person of color. Most importantly, she brings more than 15 years of education sector experience, including a stint with the New York City Department of Education.
McGraw-Hill Education has appointed its king of the hill: Dr. Nana Banerjee, who will officially take over as president and chief executive of the company starting April 23. He’ll take over from Lloyd “Buzz” Waterhouse, who has been interim CEO since David Levin left the company last October.
Cooperate or Compete
What happens when legacy publishers and OER upstarts meet in the same room to talk about a buzzy phrase like the “Netflix of Higher Ed”? A desire to collaborate—and egos to compete.
Wiley President Brian Napack suggested students and faculty would really benefit “if we could get these bloody things to work together.” Countered Cengage CEO Michael Hansen: “Collaboration is what people say they want to do, but [then they] go out Monday morning and optimize their own business model.” Mixing up higher ed and consumer entertainment may not yet be ready for prime time. And the education companies still have some work ahead to meet the needs of today’s students.
Awesome Awards
Two leading Innovators of Color were celebrated on center stage this year: Jaime Casap, Google’s chief education evangelist, and Phyllis Lockett, founder and CEO of LEAP Innovations in Chicago.
“I believe that education disrupts poverty and can change the destiny of a family in one generation,” Casap said. (He’s recently co-authored a children’s book, “Our First Talk about Poverty.”) Added Lockett: “We’ve got to invest more in the people who have sat in the classrooms and lived in the neighborhoods.”
For several years, Deborah Quazzo has hosted what she calls the “facetiously named ‘Ladies Lunch.’” It celebrates the significant number of women and leaders of color heading up edtech companies. More than a third of the entrepreneurial companies presenting at the ASU + GSV Summit are led by women. Sari Factor, CEO of Edgenuity, received an award for “impact at scale.” (Nudge to event organizers: Time to move recognition of women to center stage, too!)
McGraw-Hill also offered up its own trio of prizes: The higher-ed award honors Timothy Renick, (Georgia State University); the Learning Science Research prize to Arthur Graesser (University of Memphis) and the pre-K to 12 prize to Reshma Saujani, Founder and CEO of Girls Who Code. (Saujani chats with us here.)
Still to come: On Wednesday, John Katzman, who started Princeton Review, 2U and Noodle will receive GSV’s lifetime achievement award. And several venture-based companies will get commended for having great short presentations.
‘Personalized Learning’ is Not an Algorithm
Higher education and K-12 may hold different views about what personalized learning is—but at the very least, they agree what it is not. It’s not an engineering model and it’s most certainly not an algorithm, noted a panel that included Larry Berger (CEO of Amplify), Joel Rose (CEO of New Classroom Innovation Partners), Nick Gaehde (President of Lexia Learning), Phil Regier (CEO of ASU’s EdPlus) and Phyllis Lockett (CEO of Leap Innovations).
Much of the hype behind personalized learning, said Berger, has been driven by a belief in the power of technology to scale better instruction and learning, along with research, such as Benjamin Bloom’s study, about the outsized results stemming from 1:1 tutoring.
Celebrity Sightings
President George W. Bush, although no journalists were supposed to be in the event. (Tweeting happened anyway. And it was livestreamed.)
Musician John Legend: “The fight for educational equity is tied to a system of mass incarceration. I believe we can break that cycle. Giving kids paths to succeed when they're young and helping adults find their way out of incarceration.”
Former Secretary Arne Duncan for a short talk here and there. (No Betsy DeVos sighting, unlike last year.)
A Different Kind of Unicorn
Although investors love the billion-dollar type of unicorns, the more dominant unicorn this week was Project Unicorn, which supports data interoperability among different edtech products. Over the past year, more than 400 schools have signed a pledge to ask for products with interoperability standards. Now about 20 companies have signed, too.
Go Down Under-Employment
Sure, people worry that automation could destroy, say, 5 million jobs across 15 developed nations by 2020. But there’s an equally troubling and less circulated trend: underemployment.
Ryan Craig of University Ventures claimed that 50 percent of U.S. college graduates are “underemployed,” and the statistic is even worse for those without a college degree. No silver linings here, either. A report from Strada Education’s new Future of Work Institute notes that “Workers initially underemployed are 5x more likely to remain so after five years than those who were not underemployed in their first job.”
In the past, as journalist Jeff Selingo noted, the answer has always been “more education” meaning more high-school diplomas, more college degrees and recently more master degrees. But the future answer is far less certain. Strada’s Michelle Weise, who moderated the panel, suggested the future of learning is likely to be more frequent and episodic. Ryan Craig reiterated that he believes in the power of creating “competency marketplaces.” Peter Smith, from the University of Maryland University College, suggested that the government should step up, and called the federal government’s shrinking social and financial responsibilities in education “a disgrace.”
They agreed, however, on at least one core skill for adult learners—and for new college graduates—for that matter: The ability to explain how their skills can benefit a future employer. Workers can re-skill, add a microcredential or even get a new degree, but they must be able to communicate what they know and what they can do.
Rural Cocktails
What do early-afternoon cocktails have to do with edtech “saving” rural America? Ah, we’re still wondering. That was, however, the tantalizing title of a session organized by the Center of Education Reform (CER).
Some of the talking points were more humdrum. “There is an inundation of rules and regulations in rural communities you’re not aware of,” said John Hage, CEO of Charter Schools USA. “What’s happening in these places is that they’ve been ‘helped to death’ but nothing much has been effective.”
The audience tried to spice up the discussion. Nate Davis, CEO of K12 Inc., wondered why telecommunication companies were not represented on a panel discussion about internet connectivity and the digital divide. “What’s not in the room are the telecom and tech companies,” he noted. And CER’s Jeanne Allen urged that any emerging coalitions must include Native American and local workforce representatives.
Deborah Helms, a project director at TNTP, raised another heartburn topic based on her experience of trying to bring career and technical education programs to rural regions. Local communities “want what’s best for their kids,” she noted, “but there’s a sense that the children will be taken from them” because the jobs they learn to do are often not locally based. “How do you address the needs not just of students but of the entire community as a whole?” she asked.
No one offered an answer.
And, come to think of it, the magnitude and complexity of those kinds of problem might just be why ed reformers were looking for stiff drinks at 3:00 pm on a Monday.
