“New Things in New Ways”

In order for a startup to be truly disruptive it must fundamentally change how society approaches one or more of the following areas: curriculum development, organization, architecture, teaching methods, student assessments, parental influences and administrative procedures. Much like blogging changed the publishing market, disruptive EdTech ideas must approach one or more of these areas in a way that drastically changes how users and the market as a whole (students, teachers, parents, administrators, etc.,) approach education.  There are several great examples of VC backed startups that are doing “new things in new ways.”

Edmodo is an example of a “new things in new ways” startup that has is trying to change both the organization and teaching methods of the education system. Edmodo promotes learning at anytime and anywhere via its online platform. It strives to close the gap between how students live their lives socially and how they learn in school. In doing so, Edmodo utilizes the power of social media to differentiate instruction for all types of learners. The toolkit has allowed for its user to learn in new places and ways that never existed before in the traditional classroom environment.

Another example of a disruptive “new things in new ways” startup is Verbling. Verbling gives students and other language learners access to native speakers in a quick and easy way. Research has shown that the best way to learn a language is by talking to a native speaker. Verbling makes learning the language via online “language immersion” trips a possibility that never before existed in the confines of a school. It is disrupting the way in which people learn to speak foreign languages with extremely positive results.

A final example of an EdTech startup doing “new things in new ways” is Udemy. This startup disrupts the world of education by enabling anyone to teach and learn online. The Udemy platform makes it fast and easy for anyone to build an online course centered on any subject or topic. This grassroots toolkit has the capability to empower potentially millions of experts around the world to teach and share what they know—either for free or for profit. In doing so, Udemy has democratized teaching and made so that anyone can be a teacher.

Conclusion

In the span of the last 3-4 years EdTech has become an under followed, yet increasingly attractive sector for both entrepreneurs and VCs. That being said, it has become increasingly necessary for those in venture funding to hone in on investments that will make returns for their funds and for society as a whole. While the investing theory discussed here is certainly not all comprehensive, it seems as though the wisest investments in EdTech are those ideas that fundamentally change our perception of learning. Those startups that do “new things in new ways” seem to be the strongest choices for both VCs building a portfolio and society re-imagining education.

“Old Things in New Ways”

The majority of EdTech startups receiving venture funding are channeling their energies towards using technology to enhance or simplify long-standing teaching and learning practices—i.e. doing “old things in new ways.” In these settings, technology simply enhances usability and makes learning slightly more entertaining, rather than fundamentally disrupting the way education has been done for decades (i.e. doing “new things in new ways”). At the Venture Capital Summit in Education (in June 2011), 10 up and coming startups showcased their products and services to a large audience of angels, VCs and other investors. The table below shows the startups and the type of idea they developed.

As seen in the table above, the majority of the startups (7/10) at the summit are “old things in new ways” startups. It seems that most of their goals as entrepreneurs are to add value by enhancing the user experience of traditional methods of learning rather than bringing new methods of learning altogether.

To illustrate, Brainscape is a modern flashcard toolkit. It takes the “old” idea of using flashcards to study, adds a user-friendly interface and complex flash card algorithm to enhance the traditional flash card experience. Undoubtedly, this is a nifty application and something that may enhance the user experience significantly. It may even make a solid return for any VC firm backing the startup. Nevertheless, the startup is not a disruptive player that has the potential to fundamentally change how society learns.