It’s no secret that the public sector edtech industry is hard to work in. Some of the brightest minds in technology avoid it, but why is that so? It’s incredibly rewarding to help students and educators succeed, funding is massive (and almost guaranteed in most cases through the federal government), and it’s not hard to innovate beyond the tools that are commonly used. Of course, there are several well-known downsides including GTM difficulties, procurement, RFPs, and so on—but my theory is that it’s almost entirely tied to a misalignment in innovation.
The simple component of innovating in the private sector, particularly when it comes to B2B solutions, is that everyone is aligned in success criteria –improve dollars in either the top or bottom line. Both vendors and buyers know that without saying a word.
In the world of public sector edtech, it’s not that simple. The industry measures innovation in new products using an evidence-based metric. This means that your product is proven to produce an outcome. Seems logical, and rightfully, buyers hold most vendors to a very high standard of being evidence-based. The crux is that there is a core misalignment in the outcomes to be proven and what students, educators, and vendors want to actually improve. Examples of outcome expectations could be attendance rates, standardized test scores, arbitrary grades, or other siloed measurements. Note that none of these metrics support personalized learning, which is universally agreed on as the North Star for public education. You will notice that they all have to do with how funding is obtained for the school, though. Here’s your core misalignment: Funding is not aligned to innovation or to the right outcomes. Regardless of the tool you build as a vendor or the student-centered goals for which you designed it, your product will be expected to improve one of those evidence-based metrics. Letting product-market fit be controlled by such antiquated metrics puts a massive glass ceiling on innovation to improve the outcomes that really matter, like a student’s readiness for life after graduation. This also means that the tools that are fiscally successful in the space under these criteria are only broadening the gap between innovation for users and what is “purchasable”. Most of these companies that have tools in classrooms at scale today are also backed by private equity, targeting a private equity acquisition, or operate in PE-style models. While there are some exceptions, this primarily means that there is little to no investment in R&D to improve the tools, or even build them well to start. Compare this to the most successful B2B & B2C technology companies in the private sector where R&D is the highest cost-center of most P&Ls—and stashing cash if you had slowing innovation would be laughable.
If we want to improve the education system, particularly its intersection with edtech, we need to realign the outcomes that we’re expecting tools & solutions to improve. Brilliant minds will find their way back to edtech companies if their success isn’t limited to correlated improvement of arbitrary symptomatic outcomes. There are core changes to enable personalized learning that only technology can provide. Supplementing classrooms with enhanced cognitive ability is feasible today, but the fiscal realities of funding the tools to make it happen are not possible in today’s procurement processes. One of the only positives of Covid is that it has shaken up ancient, tightly held beliefs of what a classroom should be. I have hope that amazing educators and administrators are seeing that opportunity and finding and purchasing excellent tech that wouldn’t have had a chance before.
