eilif trondsen ttu eia
TRANSCRIPT
1© 2012 by Strategic Business Insights. All rights reserved.© 2012 by Strategic Business Insights. All rights reserved.
Eilif Trondsen, Ph.D.Director
Innovation and Disruption in Education and Learning: Some Perspectives from Silicon
Valley and Implications for the Nordic region
Tallinn University of TechnologyJanuary 25, 2013
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VC investments in US EdTech
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Longer Term Perspective on US VC EdTech Funding
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Key Investors Helping Shape EdTech
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Selected VC investments in EdTech
Well-known "Blue Chips VCs" with small number of education and learning investments: Accel Partners -- Educreations, Mind Edutainment, and Knewton Sequoia Capital -- Mindsnacks, TutorSpree, Inkling, and Piazza Greylock Partners -- Edmodo, UniversityNow, Treehouse Benchmark Capital -- Edmodo, Minerva, and Grockit Khosla Ventures -- Littlebits Kleiner Perkins -- Codecademy, Courserva and Chegg Google Ventures -- Smarterer, and Stickery Founders Fund (Peter Thiel) -- Quora and Knewton
VCs and Investment Companies with small number of education and learning firms in their portfolio : Union Square Ventures -- Edmodo New Enterprise Associates -- Coursera Andreessen Horowitz -- LearnSprout Menlo Ventures -- Luminosity University Venture Fund -- UniversityNow WestRiver Capital -- 2U (ex 2Tor) Ft Venture Capital -- Voxy Felicis Ventures -- Piazza CrunchFund -- Codecademy Mission Ventures -- KidZui [80 other VCs identified with small investments in education and learning companies][
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US Education Landscape: Selected Drivers
K-12 Sector: Need for Major Changes to Address Existing Problems Forerunners Setting Examples Growing Perception of Significant Potential of Technology Greater Need for Student Centricity Growing Availability of Data for Design more Effective Learning . Recognized Need for Outcome Focus Need to Do More With Less
HE Sector: Growing Recognition of Needed Change in HE Also Greater Potential Role of Technology and Online Learning More Difficult Financial Environment Creating New Reality Growing Interest in "New Models" New Computing Models and Technology Solutions
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EdTech Startup Dynamics
© 2012 by Strategic Business Insights. All rights reserved.© 2012 by Strategic Business Insights. All rights reserved.
Buzz around EdTech
Growing availability of VC $s and investor
willingness to invest in Edu
Many factors now making startups
easier(incl. lower cost of
tech services) Growing number of incubators (some
focusing on EdTech)
Recognition of new EdTech
opportunities
Growing foundations money
available for EdTech
EdTech Startups
Startups that get funded
Startups that don't get funded
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Incubators With Major Focus on EdTech
4.0 Schools Based in Louisiana, it helps entrepreneurs start schools or education-related businesses in Southeastern US
StartL Emerged out of Stanford University to help students with startups--focused on digital innovations for learning
Socratic Labs NYC-based accelerator will select cohort of 10 companies in January of 2013
Center for EducationalTechnology Incubator
Israel-based incubator established to help advance the educational system in Israel
Startup Weekend EDU National organization in US that supports local communities of entrepreneurship
Learning Technologies NASA program to provide funding, tech tools and technology services for STEM-focused entrepreneurs
Imagine K12 Silicon Valley. One of biggest and most notable incubators for EdTech
SIIA Innovation Incubator Program1
Sponsors annual incubator program focused on EdTech. Participants must meet certain criteria
1 Software and Information Industry Association
Macmillan New Ventures In-house incubator for EdTech and company has already invested $100 million in acquiring startups
Stanford Learning, Design and Technology
Program at Stanford School of Education and provides support and assistance to budding EdTech entrepreneurs
Source: 10 EdTech Incubators Aiming to Change EducationForever; TeachThought; October 2112; Strategic Business Insights
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VC investments in EdTech--Selected Companies
Minerva (project) -- $25 million in April, 2012 by Benchmark Capital
"The Minerva Project is rethinking the role of an elite institution of higher learning”
Desire2Learn -- $80 million in one round of funding in September 2012 Has been self-funded and profitable for many
years and recently changed strategy to seek outside funding
2U -- $90.8 million over four rounds in 2009-2012; has a number of large investors 2U partners with universities to build, administer,
and market online degree programs
Chegg -- $195 million since 2005 in 7 rounds of funding; numerous investors Started as online textbook rental company but
rebranded as "social education platform” and now ow positioned as "Your Academic Hub"
Edmodo -- $40 million in three rounds in 2010-2012; has a number of large investors Company intends to "… help educators harness
the power of social media to customize the classroom for each and every learner.”
Knewton -- $54 million in four rounds starting in May 2008; has number of marquee VCs as investors Adaptive Learning Platform that customizes
educational content based on student needs; also provides test-prep courses
Grockit -- $27.2 million in four rounds of funding started in July 2007; investors include GSV Capital, Benchmark Capita and Integral Capital Partners Grockit has built a social learning test prep
platform for license and direct-to-consumer products.
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NewSchools Venture Fund EdTech Map
Source: Michael Horn, Innosight and Anthony Kim, Ed Elements
(http://www.newschools.org/entrepreneurs/edtechmap)
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Education and Learning Markets: Large, Diverse and Complex
GSV Advisors eLearning Estimates
$90.9B
$48.8B
$25.5B
$16.6B
GLOBAL
us
Legend
Total
Higher Education
Corporate
K-12
$32.5B
$17.4B
$9.6B$5.4B
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Market Segmentation Perspectives
Type of buyers Needs/Challenges
K-12 (public and private)*Schools and school districts vary greatly in size and budgets
Higher Education Institutions (HEI)**
Many HE have larger tech budgets but under pressure to reduce their costs
IndustryNeed flexible and on-demand training offerings
GovernmentGrowing budget pressures drive their purchasing
Consumer Shorter sales cycle and growing needs
* New York City Department of Education: 1,042,277 students; 1,700 schools; 75,000 Teachers and annual budget of $24 Billion
Los Angles Unified School District: 707,627 students; 730 schools; 45,500 teachers; and annual budget of $7.3 Billion
** Almost 4,500 HE institutions in the US, with total enrollment of 18.2 million students; University of California has 10 campuses, with 235,000 students and California State University system has 23 campuses and 400,000 students
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Education and Learning Markets: Opportunity Segments
Users of Services: Students, Teachers, Administrators, Parents
Internet Access Devices
Resources and Applications
Education Resources & Services
(Open & Proprietary)
Digital textbooks ● Digital libraries
● Tutoring systems ● Simulations
● Augmented reality ● Interactive
Visualizations
Authoring, Editing, Disseminating & Content Management
Text processing ● Audio/video
capture/edit ● Programming
Platforms ● Blogs ● Wikis
● Instructional/course
management
Administrative
● Scheduling personnel/HR
● Plant/facilities
management
● Procurement ● Attendance
● Student records
Assessment and Reporting
Social Networking and Collaboration
Public and Private Network-connected Clouds--software services, data libraries & repositories
Source: National Educational Technology Plan, 2010; page 59; and Strategic Business Insights
Various federal and state initiatives
Analytics for adaptive learning
Pilots have demonstrated
major cost savings
Video use in education may follow explosive consumer adoption
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US and Global Education Landscape:Four Areas of Change and Opportunity
Data
Social
Mobile
MOOC*
A few major areas that will see significantchange and opportunity
* MOOC: Massive Open Online Courses
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Learning Analytics: Area of Growing Interest
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Next-GenerationLearning Analytics
Sophisticated Learning and
Technology Platforms
Data Warehousing and Cloud Computing
Data Mining
Predictive Techniques
1 See Enhancing Teaching and Learning Through Educational Data Mining and Learning Analytics: An Issue Brief; by Marie Bienkowski, Mingyu Feng and Barbara Means, Center for Technology in Learning, SRI International
Adaptive learningPersonalized learning
pathsInstructor Dashboards
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MOOCs: "New Kids on the Block"
© 2012 by Strategic Business Insights. All rights reserved.© 2012 by Strategic Business Insights. All rights reserved.
MOOCs
cMOOCs Characteristics:About harnessing the capacity of participatory media to connect people and ideasBuilt around lateral, distributed structures, encouraging blog posts and extensive peer-to-peer discussion formats. About discovery and generating knowledgeMore experimental and user-driven than xMOOCs
xMOOCs Characteristics:MOOCs offered by Udacity, Coursera, edX and others "Exist at the intersection of Wall Street and Silicon Valley" More "top down" and instructor-driven and more based on traditional teaching modelTypically little integration with external resources and media
cMOOCs
xMOOCs
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Table source: The Crisis in Higher Education; by Nicholas Carr; Technology Review, MIT; September 27, 2012http://www.technologyreview.com/featuredstory/429376/the-crisis-in-higher-education/
In December 2012, Open University launched its FutureLearn MOOC platform together with 11 other UK educational institutions
University of California, Berkeley, University of Texas (UT), Wellesley, and Georgetown are also part of edX. UT says "there will be degree and certificate and professional development and training programs for health care professionals."
At end of 2012, Udacity was offering 19 courses
211 courses offered by end of 2012, from 33 universities
Who is Doing What?
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Learning Management Systems Providers
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Education-focused "Incumbents": Blackboard Desire2Learn Pearson Moodle Sakai
Education-focused "Emerging Contenders":
Instructure Epsilen Loudcloud Lore Schoology Edmodo
Industry-Focused Players: Saba SumTotal WBT Systems Skillsoft NetDimensions ElementK LearnShare
Selected LMS Industry Characteristics and Developments:
Incumbents: Becoming more learner-centric and looking beyond
managing learning logistics Improving UI and usability Involved in growing M&A to beef up capabilities and
competitiveness
Emerging Contenders: Taking advantage of new tools & tech Often more web- and cloud-based More social media friendly More flexible Testing new business models
Industry-focused Players: Many LMS systems building up talent management
capabilities (to serve broader HR functions) Plateau acquired by SuccessFactors which in turn
was acquired by SAP
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Other Major Players in Education: Google vs. Apple vs. Microsoft
© 2012 by Strategic Business Insights. All rights reserved.© 2012 by Strategic Business Insights. All rights reserved.
Devices/HWChromebookNexus 4 smartphoneNexus 7 tabletNexus 10 Tablet
Services, SW & ContentChrome OSAndroid OSGoogle Apps for EducationYouTube/YouTubeEDU Google Plus
+
Devices/HWiPads MacsLaptopsiPhonesiTouchiPodsAppleTV
Services, SW & ContentiOS & Mac OSiTunes & iTunesUiBooksiAuthorApple app store
+
Devices/HWSurface (tablet)Xbox Game ConsoleRoundTable video-
conferencing device
Services, SW & ContentMicrosoft 365MS OfficeWindows OS (8 is radically new OS)Kinect (for gesture-based navigation)Xbox gamingSharepoint serverOthers
+
Google in Education:Gaining strength as player in education, especially through its Google Apps for EdSeems to see education sector as becoming more important customer segmentMore "open" philosophy compared to Apple
Apple in Education:Has long had strong presence in education with its HW and SW productsRecent efforts to leverage the "Apple eco-system" in education more effectivelyMany feel Apple has wasted opportunity by not focusing more on its strengths in education sector
Microsoft in Education:Has long had many education and learning initiativesBut has never had "cache" of Apple and has been seen as more "enterprise focused"HW and/or SW design has lacked intuitive appeal of Apple, in particularWarming up to open source but still mainly developing proprietary tech
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Cisco in Education and Learning
© 2012 by Strategic Business Insights. All rights reserved.© 2012 by Strategic Business Insights. All rights reserved.
Cisco-WebEx Integrated Communication and Collaboration Platform
Cisco TelepresenceHigh-end audio and video communications systemUsed by Duke University and University of South Carolina, among others
Cisco Video-ConferencingCisco product line strengthened by acquisition of Tandberg productsUsed by many universities
WebEx Social1
Facebook-like, social network (behind firewall) designed for educational institutions with intuitive UIEnables easy asynchronous and real-time communication and collaborationProvides personalized dashboard, displaying calendar, activity stream, and "watch list" to help users keep track of posts and activitiesPlatform integrates chat, audio, video, desktop sharing, whiteboarding, and community-based sharingSearch capabilityTries to address the problem of the current system being de-centralized, fragmented, confusing, highly dependent on email
UI: User Interface 1 Product launched at EDUCAUSE annual conference in November 2012
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Media Companies: Growing Interest in Education Sector Opportunities
"Discovery (the cable TV company), News Corp, NBCUniversal, and Walt Disney are media companies dipping into the education business"
" Education is emerging as an answer [to challenges the Web has presented to current business models of media companies], largely because executives see a way to capitalize on the changes that technology is bringing to classrooms."
"The current education business focus of these media companies appears to be the K-12 market, but how long will it be until these same media companies look for a slice of the $4.5 billion dollar higher education textbook market? Beyond textbooks, annual higher education spending is somewhere north of $475 billion a year."
" The market for edutainment will much larger than we realize. Consumers will pay for learning experiences that retain the production values and narrative drive of the best games, movies, and television shows. The growth of open online learning will also open up a larger market for exclusive learning experiences. Media companies are well positioned to serve this high end."
" I could see large media companies getting serious about the educational space via strategic investments in edtech startups. It is possible to buy into the educational space at much lower multiples than in other technology sectors (say gaming) - opportunities abound."
Selected quotes of Joshua Kim, Inside Higher Ed, August 20, 2012, from his article about "Media Companies, Seeing Profit Slip, Push Into Education;" New York
Times, August 20, 2012
Content
Services
Tech Others starting to make moves into education/learning:
Amazon, Netflix, and others
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The Digital/Virtual Game Landscape
Videogames MMORPGs* Virtual Worlds** Casual Games*** …
Types Intent
Entertainment
"Serious Games"
Game-Based Learning
• Global Video Game Industry: Varying revenue estimates but likely ca. $70-75 Bill in 2011 [US: Total of $17.5 Bill (down 8%): Content ($9.3 Bill); HW ($5.6 Bill) and Accessories ($2.6 Bill) acct to NPD Group]
• Forecasts vary: $81B by 2016 by DFCI* while Gartner estimates $115 Bill. by 2015 (driven mostly by mobile gaming)
According to Atos Group--a large British consulting firm--Serious gaming industry is expected to reach revenues of Euro 10 Bill by 2012
According to Kzero*** the vast bulk of VW users are in the age brackets of 8-15 years of age. One of the largest VWs catering to this age group is Habbo Hotel of Finland (with average of 10 mill unique visitors monthly); Eve Online has over 400,000 subscribers in older age groups.
Gamasutra** reported on study that estimated global MMORPG market would reach $8 Bill by end of 2010, up from $5 Bill in early 2009
* DFCI= DFC Intelligence (Video Games and Entertainment Industry research company); NDP Group: Marketing research group
** Gaming media company; *** British marketing and research company that tracks virtual worlds trends;
According to Ambient Insight--a research and consulting firm focused on technology-based learning--the US Game-Based learning market reached $232 Mill in 2010. The company expects the market to grow to $413 Mill in 2012.
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Implications for Nordic Entrepreneurs
What are similarities and differences between US versus European and Nordic education and learning sectors? Very different structure and funding systems--and role of central vs local
governments Problems in education sector (much?) less severe than in US, resulting in
lower perceived need for changes and tech? Less receptive sector for for-profit startups in Ed sector in Europe/Nordics? Much less "buzz" about EdTech in Europe/Nordics than in US, at least right
now? Tech in Education:
Will also penetrate Ed sector in Nordics--but in different ways and with different speed? What will be major differences?
Much tougher to find adequate venture funding in Europe/Nordics Smaller and more homogeneous markets make comparisons to Singapore
more appropriate than to US? Adoption of best practices can see more rapid adoption in Nordics Training of teachers for EdTech can be faster and less painful than in US Great opportunities to build Nordic EdTech Forum or Community of Interest
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Contact Information
Eilif Trondsen, Ph.D.Strategic Business InsightsTelephone: +1 650 859 2665E-mail: [email protected]: etrondsenTwitter; eilifThttp://www.strategicbusinessinsights.com