4 Characteristics of a Good Investment
According to the panel’s investors, there are four characteristics of a good investment that ed-tech companies should consider–but these considerations can also apply to institutions:
1. It includes mass-market technology components: “A good question to ask is, ‘What innovations in other sectors are applied to this technology?’” noted Davis. “For example, does it include social media collaborative options, like Twitter and Facebook? It’s not about reinventing the wheel, but more applying other wheels to your wagon.” For institutions, take the example of an LMS: Does the LMS include tools and functionalities that allow for online collaboration within course units?
2. It should be independently tested: “Any good technology should be able to provide independent studies on its value and effectiveness,” emphasized Davis. “These outcomes should also be measured by the university; and the outcomes that should matter most are those for engagement and grades.” However, Pianko quickly noted that at the institution level it’s incredibly hard to test the effectiveness of a solution in even five years. The LMS example: Make sure the platform has been independently tested, and preferably piloted within multiple institutions, before purchasing.
3. It should have great branding and distribution: “Most of education’s best products never win,” said Pianko,” because it’s notoriously hard to get K-12, and in some respects higher ed, to take a risk on a new product due to resource and accountability pressures. However, if a company has partnered with another brand name, or is literally going from district-to-district and institution-to-institution, it has a shot. The solution should have a great distribution plan.” The LMS example: Has the company partnered with, or acquired, any other known education-oriented company?
4. It isn’t too innovative: Though this characteristic may seem ill-advised, investors agreed that if a solution is too outside-the-box, it often won’t succeed. “This isn’t because it’s a bad product,” explained Pianko, “it’s because if you stick your neck too high, you’re going to get shot at—by accreditors, by researchers, by skeptics. In the same vein, it’s also good to have a plan B in your business model when considering regulation.” The LMS example: It’s critical that the platform, at its core, is about providing the functionality of a good LMS, and doesn’t instead focus on functionalities that faculty and admin won’t actually use frequently in their day-to-day tasks.
The Technology to Invest in Now
According to investors, MOOCs were an unfortunate mistake for many institutions, mainly because it was the only answer presidents and deans had to their board’s question of, “What is your digital strategy?”
“Presidents and deans were like deer in headlights, but they’re coming around,” said Pianko. “It’s important moving forward not to be short-sighted but to see the bigger picture of providing the best ‘product’ in higher education; and that means looking beyond just online learning to personalized learning and simple data.”
“It’s not about ‘how can I analyze Big Data to predict everything,’” said Davis, “but instead ‘what simple data can I use today (that may not be perfect yet) to improve outcomes?’ It’s the data that can tell you things like: how many times a student engaged with a professor and how often a student engaged with the material. This simple information can then measure an incredibly important outcome, such as a student’s likelihood of passing a course.”
“The data doesn’t have to be perfect,” he continued, “it just has to be good enough now and able to be improved upon later.”
Going a step further, Roger Novak, general partner of Novak Biddle, said that any personalized learning platform that has the ability to use Big Data to make predictions is a worthy investment.
“Big Data has the potential to predict pathways of successful people, but any data that can pinpoint a way to improve outcomes is useful.”
As for specific companies that Novak said could soon become “billion dollar-type platforms,” he mentioned:
- 2U: An ed tech company that partners with universities to offer online degree programs. Read the eCampus News (eCN) article on 2U here.
- EdCast: A personal learning network that aims to enhance the ability to collaborate and learn across educational materials, instructors, students and employers. Read the eCN article on EdCast here.
- Fidelis: A tech startup company that developed the Learning Relationship Management (LRM) system that “does for learning what CRM did for sales.” Read the eCN article on the LRM here.