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Why Ed-Tech Startups Don't Scale (2022)

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Re: Why Ed-Tech Startups Don't Scale (2022)

#11

Post by VHRanger »

robertlagrant wrote: post #4

I'm surprised it didn't do more than touch on probably the biggest reason: we already pay a huge amount for education out of taxes, so the educational budgets are allocated by bureaucrats, and not by education consumers (or their parents).

I think you're missing the fundamental mechanic here.

Spence signalling[1] won the econ Nobel back in 2001. It says that the cost of signalling in a market for imperfect information ends on the one emitting the signal.

For education and jobs, the signal is your degree (hence the huge career difference between dropping out one week before getting a degree and completing). The cost of the degree will fall on the student.

The employer can easily diminish the hiring problem by pre-sorting applicants by education. Students know there is a large difference in career outcomes between university education required jobs and the ones below that.

Colleges want to extract as close to 100% of this lifetime earning difference as they can.

The main question at this point in education research is "how much" signalling is a component of education versus actually teaching skills.

For tech, almost no certificate provides a comparable signal to a real degree.

1. https://en.m.wikipedia.org/wiki/Signalling_(economics)

Re: Why Ed-Tech Startups Don't Scale (2022)

#12

Post by KineticLensman »

ahaucnx wrote: post #10

I second that. Originally we were targeting schools as our main customers but found it incredible difficult to sell too. The main reason probably that the beneficiaries (the students) are not the decision makers (the school admin) and that our product (air quality) is also not a core aspect of a school. There also seems to be a run to the bottom regarding quality of products in many schools and no appreciation for su…

> the beneficiaries (the students) are not the decision makers (the school admin)

This is an example of a standard problem in enterprise computing where the people with purchasing authority are far removed from the actual users.

Re: Why Ed-Tech Startups Don't Scale (2022)

#13

Post by klingoff »

Guthur wrote: post #7

So you want to maximise economic rent on the education of the masses and you wonder why societies are resistant to that, plainly because the outcome is horrendous.

Horrendous educational products are probably better than every institution in some regions, the median community college in other regions, etc..

Academic institutions, even very poor ones, have a lot of local leverage through employing academics who are integrated in the community and that is largely lost in distance education.

If you go and try to make an awful school somewhere I think you will get a great deal of assistance compared to if you offer a much better online education to the area built somewhere else.

Re: Why Ed-Tech Startups Don't Scale (2022)

#14

Post by williamcotton »

I’d want to see extensive research on the benefits of Ed-Tech products before they are unleashed on classrooms full of actual students.

“Making things easier for teachers” is often not the case and simultaneously creates costs for training and support at these institutions along with the exponential growth required to administer these new roles.

And then of course are the students themselves. How do iPads compare to textbooks? Do we trust LLMs to grade essays? How effective has multiple choice testing ever been?

There is surprisingly little thought put into bringing tech into the classroom. Most of the drive seems to come from a fear of being left behind, as if learning to use a consumer electronic device is somehow synonymous with learning how to maximize productivity with a computing device.

Re: Why Ed-Tech Startups Don't Scale (2022)

#16

Post by shortrounddev2 »

noodlesUK wrote: post #8

I think this really depends on your definition of EdTech. I don’t think anyone would contend that turnitin or Ellucian haven’t scaled well. Tools that cater to the organisations that have money can absolutely do well, but trying to sell to people without the means to buy your stuff will always be unsuccessful.

Yeah canvas and blackboard were are one point startups, I'm sure there's some products that can scale, but the market is probably driven by bureaucratic compliance more than a genuine desire to improve the quality of education for students

Re: Why Ed-Tech Startups Don't Scale (2022)

#17

Post by dsugarman »

VHRanger wrote: post #11
robertlagrant wrote: post #4

I'm surprised it didn't do more than touch on probably the biggest reason: we already pay a huge amount for education out of taxes, so the educational budgets are allocated by bureaucrats, and not by education consumers (or their parents).

I think you're missing the fundamental mechanic here. Spence signalling[1] won the econ Nobel back in 2001. It says that the cost of signalling in a market for imperfect information ends on the one emitting the signal. For education and jobs, the signal is your degree (hence the huge career difference between dropping out one week before getting a degree and completing). The cost of the degree will fall on the studen…

I think another huge factor is that you are making a prediction on the future value of your degree over the next 40-50 years as a 17 year old who is probably more focused on succeeding socially and sexually. You add in the student loans that may or may not be forgiven at some time in the future and the free market is not in play. Same with Healthcare, insurance clouds all free market mechanics.

I'm a huge capitalist and I think we need to be honest about where capitalism isn't working. It's always due to free market mechanics being removed from the equation by layers of obscurity. I don't know the right answer but this shit is not working

Re: Why Ed-Tech Startups Don't Scale (2022)

#19

Post by mlinhares »

KineticLensman wrote: post #12
ahaucnx wrote: post #10

I second that. Originally we were targeting schools as our main customers but found it incredible difficult to sell too. The main reason probably that the beneficiaries (the students) are not the decision makers (the school admin) and that our product (air quality) is also not a core aspect of a school. There also seems to be a run to the bottom regarding quality of products in many schools and no appreciation for su…

> the beneficiaries (the students) are not the decision makers (the school admin) This is an example of a standard problem in enterprise computing where the people with purchasing authority are far removed from the actual users.

Hey, but I got a great pricing deal to run our apps at this cloud provider no one uses and we have no experience with so you’ll have to migrate everything there!

Re: Why Ed-Tech Startups Don't Scale (2022)

#20

Post by cushychicken »

Maybe as a venture funded startup they don’t. I run a modestly successful edtech business that I have line of sight to making my full time gig in a few years if growth continues.

www.reportcardcomments.com

I think consumer edtech that makes products focused on making individual teachers’ lives easier has a niche. Maybe not as a 100x unicorn, but as a one person business, there’s plenty of opportunity yet out there.

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