On Venture Capital and Education

By Jim Gordon [CC BY 2.0, via Wikimedia Commons]
If you care about education, it’s worth paying close attention to what’s going down in Silicon Valley. The hyperdrive capitalism of venture investment, with its raw focus on the rapid scale of the highest performing and rapid failure of all the rest, parallels and in some ways informs edtech and charter models.

There’s certainly a healthy and necessary space in education for a private marketplace of rapid iteration, scale, and fail. But there’s also a necessity for the less efficient but robust, slow-growth, long-term models of public schools.

In The New Yorker there is an interesting piece on Y-Combinator’s Sam Altman relevant to this. It’s interesting purely as a biopic, but scattered throughout are insights into the driving mindsets and ethics of Silicon Valley. Let’s take a closer look at some quotes from the article with the frame of education in mind.

Altman, as he nursed a negroni after dinner, had his own warning for the timid: “Democracy only works in a growing economy. Without a return to economic growth, the democratic experiment will fail. And I have to think that YC is hugely important to that growth.”

Democracy needs a heck of a lot more than just a viable economy. It needs strong civic institutions and an active citizenry that has a shared understanding of how to engage with those institutions and of their purpose. Public education should serve the public in cultivating shared civic knowledge and values.

. . . In his book “Hackers & Painters,” Graham calculated that smart hackers at a startup could get 36x more work done than the average office drone—and that they would, therefore, eventually blow up employment as we know it. He made this sound patriotic and fun; how could an oligarchic technocracy go wrong?

Indeed? How could a focus solely on only the most productive and efficient members of society go wrong? In education, imagine if we only invested in the most gifted and talented. The rest would be herded into service professions or unskilled labor. A meritocracy! Wait. Isn’t that more or less how things used to be before the advent of a public education . . .

. . . And he told me, “It’s bad for the companies and bad for Silicon Valley if companies can stay alive just because they’re [associated with Y-Combinator]. It’s better for everyone if bad companies die quickly.”

This is a driving philosophy of venture capital and rapid scale that Silicon Valley pursues. Scale the few most successful ventures rapidly, and fail the remainder. With schools, we could only invest in and scale the ones that demonstrated strong academic performance — all the rest we would close. Sounds good, right? Kids should only be in schools that have demonstrated their worth.

But there’s a problem with rapid scale in terms of sustainability:

. . .The truth is that rapid growth over a long period is rare, that the repeated innovation required to sustain it is nearly impossible, and that certain kinds of uncontrollable growth turn out to be cancers. . . Every great startup—Facebook, Airbnb—has no idea why it’s growing at first, and has to figure that out before the growth stalls. Growth masks all problems.”

A school could be high performing, but not such a great place to be.

This isn’t to say that there isn’t a place for markets in the education system. A market doesn’t have to mean Silicon Valley style scale and fail.

A more sustainable model can be seen in an article in the NY Times about MailChimp.

…it’s possible to create a huge tech company without taking venture capital, and without spending far beyond your means. It’s possible, in other words, to start a tech company that runs more like a normal business than a debt-fueled rocket ship careening out of control. Believe it or not, start-ups don’t even have to be headquartered in San Francisco or Silicon Valley.

. . . You can simply start a business, run it to serve your customers, and forget about outside investors and growth at any cost.

Schools that do this work are the ones that get better: they put their focus on service to their students and families and adapt accordingly.

But there’s other ways that those who abide by the scale and fail model are investing in, recognizing the limitations of a brick and mortar approach.  Venture capitalist Marc Andreessen (you may have heard of AltSchools?) lays out the long-game for software and tech in the education industry in this Vox interview:

Primary education in the US is a monopoly. It’s a public sector monopoly with very little competition. Even the charter schools end up under sustained attack for violating the monopoly. You see this most recently in New York with De Blasio trying to shut them down. A government-sponsored monopoly is not easy to move.

. . . New technologies tend to vaporize on impact with those institutions. The last thing a unionized public school wants to do is to fundamentally change how they operate. Of course they don’t want to adopt new technology. It’s antithetical to the philosophy.

So the solution? Software!

Look, there’s great potential for technology in the education sphere, and I think experiments like AltSchools and Udacity are well worth making. But Andreessen’s premise here is false. Having worked in NYC public schools for even the short length of time that I have, I’ve seen so many tech fads get readily embraced by educators and districts that it’s become ridiculous. Rather than “vaporizing on impact,” new tech fads rather seem to become desperately embraced and then just as hurriedly discarded. Harried educators and administrators would love it if a SMART Board or data system or robot would magically and rapidly improve the outcomes for their kids!

But I do think Andreessen makes a more balanced analysis and point here:

We can’t revamp the entire system. Nobody can. But I think more and more, there are gaps in what the current system can accommodate compared to what people actually want. There are opportunities to build on the edges, around the sides, parallel systems. And at the very least introduce choice. In the best-case scenario, it becomes a real challenger to the status quo.

I fully agree that there are massive gaps and many opportunities to better serve our nation’s students, and I for one welcome the evolution of edtech and tools and software, as well as the vibrant niches of effective charter models and networks. But we’re on a quixotic mission if we’re shooting for supplanting public education systems, rather than supplementing them.

The argument for why this is so can be viewed in statements that Barack Obama and Vox’s Ezra Klein have made about the function of public institutions vs. private ones (I’ve posted this before):

President Barack Obama at the White House Frontiers Conference:

The final thing I’ll say is that government will never run the way Silicon Valley runs because, by definition, democracy is messy. This is a big, diverse country with a lot of interests and a lot of disparate points of view. And part of government’s job, by the way, is dealing with problems that nobody else wants to deal with.

. . . sometimes we get, I think, in the scientific community, the tech community, the entrepreneurial community, the sense of we just have to blow up the system, or create this parallel society and culture because government is inherently wrecked. No, it’s not inherently wrecked; it’s just government has to care for, for example, veterans who come home. That’s not on your balance sheet, that’s on our collective balance sheet, because we have a sacred duty to take care of those veterans. And that’s hard and it’s messy, and we’re building up legacy systems that we can’t just blow up.

Ezra Klein in an interview with Tyler Cowen:

I will say one thing about both government and private-sector production, which is something that I do think is important is there is an advantage to being willing to do kludgy, difficult, somewhat unpleasant things.

. . . As you say, there’s an attraction — recognizing the government is inefficient — to just saying, “Well, let’s just do cash transfer for everything. Let’s go UBI for everything.” But there is a lot that government does, often not that well, that somebody needs to be doing, because a lot of the people you want to help are actually really difficult to help. This is something . . . this is one of the things I believe strongly in policy that we underrate.

A lot of what we’re trying to do in government is not help people who want “free stuff,” but is help people who are actually very, very difficult to help. This is particularly true in health care.

And particularly true in education. The work of education is a slow, complicated, incremental process that will benefit from new technologies, software, and schools, but that will not rapidly scale, and provides a public service that makes rapid failure of massive amounts of schools or students a nonviable option.

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Darwin, Disabilities, and Ecosystems

ecosystemWhat happens to disabled plants and animals? Do such things even exist? As Mark and I explore the concept of disability in education, I wonder if there’s any parallel to Mark’s notion of an “enabling environment” in the natural world.

The dominant view of pretty much every social institution rests on the Darwinian concept of natural selection: those beings best adapted to their environments will thrive and reproduce. According to this logic, those with disabilities will struggle and ultimately perish. If the species cannot adapt to its environment, its environment will most certainly not adapt to it.

This notion of nature as a cold, heartless place where only the strong survive serves to justify educational practices and policies, like high-stakes testing and Race to the Top, that are aggressively competitive. It’s natural, the logic goes, to place students and schools in competition with each other; such competition will bring out the best in all involved and will allow the truly gifted to thrive and prosper. (Incidentally, I’ve never been clear about what happens next in this narrative. Are the winners supposed to do something nice for the rest of us?)

In any case, this Darwinian approach to education consistently ignores students with disabilities. Such students, after all, present a difficult problem. If it’s natural for only the best adapted students to succeed, then we’re doing something unnatural by providing special education services.

I’m wondering, though, if it’s entirely true that “disabled” species are always left behind. The natural selection narrative that we’ve constructed seems suspiciously neat and tidy to me. Nature is nothing if not complicated. So, if we have any zoologists, biologists, or animal buffs out there, maybe you can answer the following questions:

Endangered Species Watch: Louisiana’s Public Schools Going Extinct

It’s hard to believe that it’s been seven years since Hurricane Katrina laid waste to Louisiana and the Gulf Coast. At the time, the devastation was so overwhelming that it was impossible to zero in on any one aspect of the destruction and hold it in focus. Certainly, I gave little thought to the effect Katrina would have on Louisiana’s public schools. Not for a moment could I imagine that by 2010, a mere five years later, a Democrat-appointed Secretary of Education could call Katrina “the best thing that happened to the education system in New Orleans.”

That Arne Duncan quote is old news now. But the wholesale destruction of public resources in Louisiana remains very much on the agenda. On June 1, The New York Times reported that the state is bidding to privatize its public schools and “preparing to shift tens of millions in tax dollars out of the public schools to pay private industry, businesses owners and church pastors to educate children.” Public funding, The Times reported, will be offered to some schools that teach “bible-based math” and others that refuse to teach evolutionary theory because “all those things…might confuse our children.”

What does any of this have to do with ecosystems? Only two years after a disastrous, British Petroleum-funded oil spill ravaged the physical and economic well-being of the Gulf Coast’s poor and working-class, it’s hard to take seriously the idea that private companies are better suited than public schools to care for children. More than that though, many of the religious institutions that would receive government funding under the Louisiana plan have declared war on science itself— a frightening prospect for anyone interested in sustainable environmental policies. The Times described conditions and curricula at various schools eligible for funding under the privatization plan:

“The Upperroom Bible Church Academy in New Orleans, a bunker-like building with no windows or playground, also has plenty of slots open. It seeks to bring in 214 voucher students, worth up to $1.8 million in state funding.

At Eternity Christian Academy in Westlake…first- through eighth-grade students sit in cubicles for much of the day and move at their own pace through Christian workbooks, such as a beginning science text that explains ‘what God made’ on each of the six days of creation. They are not exposed to the theory of evolution… 

Other schools approved for state-funded vouchers use social studies texts warning that liberals threaten global prosperity; Bible-based math books that don’t cover modern concepts such as set theory; and biology texts built around refuting evolution.”

As I read these descriptions, I was struck by how miserable these school environments sounded: students sitting at cubicles or in “bunker-like” buildings without windows. For all of their rhetoric about standards and innovation, is this the future that corporate-minded education reformers envision for public schools? (If the connection with corporate-style reform seems like a stretch, keep in mind that Michelle Rhee and her StudentsFirst organization have been working with Republican governors around the country to promote school voucher and privatization plans.)

Shortly after Hurricane Katrina hit, Adolph Reed wrote a brilliant piece in The Nation that described the roots of the Katrina disaster. Reed wrote:

“We have to be clear that what happened in New Orleans is an extreme and criminally tragic coming home to roost of the con that cutting public spending makes for a better society. It is a shocking foretaste of a future that many more of us will experience less dramatically, often quietly as individuals, as we lose pensions, union protection, access to healthcare and public education…and as we are called upon to feed an endless war machine. ”

Seven years later, as Louisiana’s government sends the state’s poorest children to study bible-based math in windowless barracks, Reed’s words seem prophetic.

Unnatural Selection: Darwin and the Business Model

I’ve been thinking about natural selection lately. If schools are ecosystems and students are the species occupying those ecosystems, these student species must be constantly adapting to meet the demands of their environments. Eventually, some of these adaptations must harden into character traits, and these character traits, developed in response to school environments, must form some part of a student’s adult identity.

In a school based on our ecosystems model, we would hope to create an environment where successful adaptations might include taking intellectual risks, supporting one’s peers, pursuing long-term projects, and contributing to the school community outside the classroom. In the end, such adaptations would help students develop into adults who are well rounded, thoughtful, open to new experiences, and compassionate towards others.

Unfortunately, our schools are led by reformers who believe that a corporate model, rather than an ecosystems model, will produce the healthiest adults. What sorts of values do these reformers promote? As The New York Times recently reported, David Coleman, an architect of the Common Core Standards, articulated the business reformers’ values quite clearly last year:

“In progressive education circles, Mr. Coleman is often criticized for his emphasis on ‘informational texts’ over fiction, and his push for students to write fewer personal and opinion pieces. Last year, he gave a speech making that point in strong terms, asserting that it would be rare, in the working world, for someone to say, ‘Johnson, I need a market analysis by Friday, but before that I need a compelling account of your childhood.'”

Under the corporate model, an account of one’s childhood is superfluous fluff, while a market analysis is a text of value. Let’s look at the skills required to produce these two types of texts.

To write a “compelling” account of one’s childhood, a writer must first engage in thoughtful, critical reflection. The writer must identify themes that run like threads throughout the events of their childhood, and must convey these themes to the reader. Using imagery, metaphor, and a variety of other literary devices, the writer must evoke the world of their childhood for the reader, allowing the reader to visualize, empathize, and ultimately experience that world vicariously. Finally, the writer must edit and proofread vigorously, with an eye for both minute detail and broader meaning. The writer’s goal is to share an experience with the reader, to guide the reader through that experience, and to help the reader learn from that experience.

Now, I’ve never written a market analysis, so I did a bit of research to find out what that process requires. Apparently, a market analysis is a text of such complexity and sophistication that it’s written every time someone has a proposal for a new business. Thankfully, unlike with compelling memoirs, the folks at about.com were able to break down the process of writing a market analysis step by step. Here’s are the highlights:

“To define your target market, you need to ask the specific questions that are directly related to your products or services. For instance, if you plan to sell computer-related services, you need to know things such as how many computers your prospective customer owns. If you plan on selling garden furniture and accessories, you need to know what kinds of garden furniture or accessories your potential customers have bought in the past, and how often…

You’ll write the Market Analysis in the form of several short paragraphs. Use appropriate headings for each paragraph. If you have several target markets, you may want to number each.

Remember to properly cite your sources of information within the body of your Market Analysis as you write it. You and other readers of your business plan will need to know the sources of the statistics or opinions that you’ve gathered from others.”

In other words, a market analysis involves doing research on what sort of things different types of people like to buy, putting that information into paragraphs (which you may or may not label with numbers), and citing your sources. Oh, and the purpose of this text? To convince investors to give the writer money.

To be honest, I think Coleman’s crazy for preferring this type of reading to a good memoir. Then again, the business model is a bit crazy. Literally. As The Week reported a few months ago, the business world is “full of psychopaths.” Specifically, according to the CFA Institute (“a global association of investment professionals that sets the standard for professional excellence), one out of every ten Wall Street employees “is a clinical psychopath…compared with one out of 100 people in the general population.” The CFA report describes these “financial psychopaths” as people who “generally lack empathy and interest in what other people feel or think,” and who possess an “unparalleled capacity for lying, fabrication, and manipulation.”

What does all this have to do with our students? Well, when folks like Coleman argue that schools should be promoting the skills and values of the corporate world, they’re talking about a world that’s disproportionately composed of psychopaths. Instead of healthy participants in sustainable communities, reformers like Coleman want schools to produce adults who are incapable of empathy, but skilled at writing market analyses.

Am I being too harsh on the business reformers? Here’s Mayor Bloomberg, champion of the business model, describing the methods he used to achieve success (I’ve added the bold):

“Among old McDonald’s hamburger wrappings and mouse droppings, we dragged wires from our computers to the keyboards and screens we were putting in place, stuffed the cables through holes we drilled in other people’s furniture—all without permission, violating every fire law, building code, and union regulation on the books. It’s amazing we didn’t burn some office or electrocute ourselves.”

You can judge for yourselves, but running electrical cables through a firetrap littered with rat feces in violation of health, safety, and legal regulations for the sake of personal financial gain sounds pretty nuts to me.

In a school system run by people who hold these values, students who display kindness, generosity, or any of the other fluffy virtues that generally fall under the umbrella of “goodness” will be failing to reach the standards. As our schools fall increasingly under the sway of these corporate reformers, is it any wonder that cheating scandals are on the rise? Students, teachers, and administrators are simply adapting to their values of their new, corporate-minded environments. It’s unnatural selection: survival of the sickest.