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Transforming The EdTech Ecosystem: A Checklist For Investing

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With contributing authors Leslie Broudo Mitts, Ph.D., and John Wendel, Ph.D. 

In 2016, the news from the world of edtech investment is that the number of deals is down, capital is drying up, and a higher percentage of both volume and capital is moving into later stage investments. However, these quantitative metrics do not tell us how these investments are qualitatively altering students’ educational experiences. Instead of being concerned primarily about the valuation of edtech investments, we should be concerned about the value of edtech investments to communities, school systems, and teachers - and especially to the students themselves.

We offer a checklist for edtech investing that puts this qualitative value goal as a central consideration to ensure that investments address problems and opportunities that are essential to the core “business” of education rather than simply those that are of interest to investors and entrepreneurs. 

Our perspective is informed by our experience as practitioners, educators, and researchers, not only in the education space, but also in areas such as healthcare and consumer packaged goods innovation where technology has often been applied with mixed results. Similar to edtech offerings, the fundamental issues in these areas are often left unaddressed. What we see instead and in large number are edtech entrepreneurs who develop apps that address periphery problems rather than problems that are at the core of teaching and learning.

For example, consider apps that aim to help teachers and administrators measure student attendance or discipline, assist parents with tracking homework assignments, facilitate new networks for tutoring, mentoring, and admissions or gamify reading and time management. We do not mean to suggest that these types of apps are not useful. However, they do not truly challenge the broken social and cultural framework of education that has existed for decades, and instead assume a structured, disciplined and hierarchical framework rather than innovate the pedagogy.

Such solutions work forward from the existing technology rather than backwards from the desired outcomes. Where are the innovations that will move us beyond an education system that was developed to serve an agricultural society?

These issues are important for several reasons. Existing solutions involves resources, including time and capital that crowd the edtech market and give the false sense that the edtech community is "working on the problem." In an informal experiment we conducted, we found that edtech entrepreneurs described the intended end results of their ventured using metrics related to school adoption and student/teacher usage. Using these metrics, ultimately such would-be solutions would be self-referential, justified by achieving their own end result. In no cases did entrepreneurs’ metrics include implications for the lived experiences of students and teachers or address how the solution would change students’ lives or impact their communities now or in the future. These were not the questions that the entrepreneurs with whom we interacted could speak to, and in some cases, had even considered.

‌• Address the whole child: Entrepreneurs will miss opportunities by pretending that challenges related to education do not exist. Edtech offerings need to account for how related challenges in health care, housing, and family care could impact their solution to ensure that their solutions can be successfully implemented. How would the offering help a student who has moved between homeless shelters for the past six months?

‌• Do your homework: Not being aware of the existing literature is not an excuse for developing a solution that fails to address the realities of education. Entrepreneurs need to understand the theoretical models underlying their proposed solutions and “stress test” it through the lens of other theoretical models. Explore or seek out experts in the areas of user experience, linguistics, or anthropology to ensure that no innovative “stone” is left unturned in developing, testing and strengthening the proposed offering. What is the research basis for the solution, and is the interpretation of that research consistent with the proposed solution?

‌• Innovate to transform the ecosystem: Avoid focusing on technology “widgets” that bureaucratize what is already being counted and instead re-conceptualize and re-imagine what is possible but has yet to be created. Be mindful of proposing an innovation that merely uses technology to do what is already being done without technology, such as counting attendance using an electronic system rather than using paper. Would the solution be easily understood by a teacher or student in a one-room schoolhouse in 1835? If so, it isn’t transformational.

The components of this checklist are essential to consider given the high price of failure in the edtech space. Failure in edtech is not simply wasted capital; failure produces clutter, noise and confusion and, most importantly, lost time for students who only have one opportunity to receive an education.

The field of edtech has not seen a great deal of creativity and ingenuity in developing solutions that will “move the needle” for students. We believe that this is a result of many factors. First, edtech entrepreneurship attracts teachers who have rich classroom experience but who lack business experience. In addition, there is a huge amount of capital in the edtech investment market, which potentially results in a lack of discipline in who enters the edtech space and what kinds of solutions they bring. We also understand that education lends itself to be understood - and addressed - in black and white terms, totalized either as a "union problem" or posited as multiple opportunities for control that simple apps can satisfy.  

Too many U.S. high school graduates are functionally illiterate or innumerate. Unlike the legerdemain of product innovation, we can't address issues in education simply by re-branding, re-messaging, changing the formulation, or pitching to a new market. It is therefore important for edtech solutions to follow the value chain backwards by using technology that works backwards in a transformative way from shared end goals. Taking another look at the checklist, we offer this comparison:

Emphasizing the change metrics above will help drive edtech ventures that are “gamechangers” and that are integrated solutions to education problems. We do not mean to suggest that such “gamechangers” do not currently exist, but we believe that they are not widespread. We must take steps to shift the emphasis of edtech investments away from the reification of the entrepreneur and towards the merit of the problem that the solution seeks to address. Our checklist is a first step in a needed reset in edtech investing not only because it maintains a focus on outcomes that are qualitative rather than quantitative, but also because the metrics emphasize the imperative that the proposed solutions effect real transformation in students’ lives.

Leslie Broudo Mitts, Ph.D., serves as Project Faculty at The Wharton School of the University of Pennsylvania.

John Wendel, Ph.D., is an anthropologist at the Practica Group, a global research and innovation consultancy.