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.

Bureaucracy has it’s place

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.”

Obliquity, Zen, and a Cultural Science of Schools

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Dominic Randolph, the head of Riverdale Country Schools, and Max Ventilla, the founder of AltSchool, have written a thought provoking series of letters on Medium, on the topic of “What’s the Point of School?

Randolph’s final letter, “Reimagining School,” contained two great concepts I wanted to especially highlight:

If schools took learning more seriously and aimed indirectly but intentionally, like a Zen archer, then I think they might be in quite different places.

This is an interesting way to phrase the principle of obliquity and pair it with the concept of social-psychological interventions! I agree strongly with Randolph on this. I tire of hearing leaders in education harp on shallow and direct sources of targets, such as test scores or standards or compliance rates, as if these are the ultimate drive or purpose in our work. Data and standards are only powerful when contextualized and analyzed from multiple perspectives, in consideration of the needs and interests of students and the curricular focus of the department and school. Compliance rates . . . well, that’s a baseline, not a target. Yet the messages I and other educators too often receive is that our focus should lie on such desultory targets.

How can we bring “applied anthropology” into schools so we can learn about how to more effectively construct the right culture of engaged and deep learning for our students, teachers, and parents?

People talk about the effect of a leader on a school environment or the way a particular class is difficult, but where is the science of the culture of schools?

Matt Candler’s ideas about “Tiny Schools,” in which small schools are begun as prototypical experiments, then brought to scale as they experience success, seems to be a great opportunity for such an expansion of “applied” science, most especially if the learnings from the failures of these experiments are shared transparently and openly.

I certainly hope there’s more thirst out there for such an education-specific science! I know I have this thirst myself. It’s hopeful that schools are pairing more often with academic researchers or design firms like IDEO, though I fear that such pairings end up focusing on schools and communities, like Randolph’s, that are already set up for success.

I’d perhaps be more interested in those pairings if they sought to expand the concepts of design thinking and character education to their broader community in the Bronx. How can school learning experiences build connections between students and schools of varying skills and backgrounds? And how can those connections be leveraged to actively overcome the physical and mental silos of our city and nation?

Let’s Change Mindsets About Both Business and Education

By Dipl.-Päd. Renate Henning (OSTO Systemberatung GmbH) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0)%5D, via Wikimedia Commons
In his most recent post, Will wrote about how the language we use to discuss education can impact our understanding. He wrote:

I hope that when we talk about schools and ecosystems, we can avoid the practice of using the vague, technocratic jargon of the business world to describe worlds where financial profit should not be the ultimate goal. The problems of schools and ecosystems are the problems of living things. Let’s talk about them in language that illuminates, rather than obscures, the complex and specific worlds that human beings inhabit.

Will raises an important point: schools are social institutions, not ones of profit. And while we must acknowledge and pay close attention to the operational side of running school systems, we must not lose sight of the most important function of education: to cultivate the character and minds of our children. While we can argue that a quality education has a long-run payoff in economic gains for our nation, the functional and everyday purpose of a school is not to profit off our children, but rather to instill and inculcate the values and knowledge we hold critical for citizenship.

When we talk about education, how easy is it to slip into language (I’m frequently guilty of this) of “human capital,” “social capital,” “achievement gains,” or other proxies of the mindset of business? As Will pointed out, this can obscure the complex and alternately beautiful and excruciating human reality that working in a school really requires.

Yet I also believe that schools should not be set so far apart from the realm of business that we can’t establish relevant and necessary connections between them, and that such isolation can even be damaging, given the amount of research and funding that goes into management topics such as leadership, accountability, training, diversity, relationships, and institutional/organizational health. When I was attending The City College of New York to obtain my Master’s in special education, I did a literature review on the topic of self-control, and found it remarkable that some of the most useful research came from outside the realm of education (sports is another area which has a lot to offer).

I also believe that when schools are so isolated from local economies and the realm of business that students graduate from high school with nearly zero skills or knowledge applicable to a career, this is highly problematic and especially damaging to students living in isolated areas with few opportunities.

Speaking of language, there’s also something about the fanatical inveighing against “privatization” and “corporate deformers” in the education sphere that bothers me.  Perhaps because I’ve worked as a manager in both retail and hospitality industries, or perhaps because I think that markets do have a connection to schools, and that we are putting blinders on when we pretend that education can be something wholly pristine and apart from the influence and interaction of markets. It seems to me that the districts that seek to leverage markets to develop better schools, rather than ignore them, are ones more likely to be successful.

But the fact that education systems at the moment are most responsive and beholden to large investments of money from philanthropists and “Silicon Valley investors” also seems extremely problematic, let alone completely unsustainable.

So how to resolve this conundrum? Well, let’s take a closer look at the other side of things first: the realm of the marketplace itself. Is capitalism and entrepreneurship really only about profit? Perhaps we do a disservice to entrepreneurs to reduce their efforts to such banality.

Muhammad Yunus, who has done inspiring work with the Grameen Bank in Bangladesh and is a proponent of the concept of “social business,” makes the following point in a speech when he accepted his Nobel Peace Prize in 2006. He states that our current conception of capitalism and business:

“originates from the assumption that entrepreneurs are one-dimensional human beings, who are dedicated to one mission in their business lives — to maximize profit. This interpretation of capitalism insulates the entrepreneurs from all political, emotional, social, spiritual, environmental dimensions of their lives. This was done perhaps as a reasonable simplification, but it stripped away the very essentials of human life.

Human beings are a wonderful creation embodied with limitless human qualities and capabilities. Our theoretical constructs should make room for the blossoming of those qualities, not assume them away.

Many of the world’s problems exist because of this restriction on the players of free-market. The world has not resolved the problem of crushing poverty that half of its population suffers. Healthcare remains out of the reach on the majority of the world population. The country with the richest and freest market fails to provide healthcare for one-fifth of its population.

We have remained so impressed by the success of the free-market that we never dared to express any doubt about our basic assumption. To make it worse, we worked extra hard to transform ourselves, as closely as possible, into the one-dimensional human beings as conceptualized in the theory, to allow smooth functioning of the free market mechanism.”

Interesting how Yunus’ sentiment on capitalism so closely parallels Will’s statement on the mindset and language around education!

Perhaps Yunus’ idea of a hybrid “social business” is a potential solution to the conundrum of what the service that a school provides stands in relation to the marketplace. School districts need sustainable funding and investment, but their goal cannot be one of profit. The goal is to provide the highest quality education to all children in that district:

Social business will be a new kind of business introduced in the market place with the objective of making a difference in the world. Investors in the social business could get back their investment, but will not take any dividend from the company. Profit would be ploughed back into the company to expand its outreach and improve the quality of its product or service. A social business will be a non-loss, non-dividend company.

Once social business is recognized in law, many existing companies will come forward to create social businesses in addition to their foundation activities. Many activists from the non-profit sector will also find this an attractive option. Unlike the non-profit sector where one needs to collect donations to keep activities going, a social business will be self-sustaining and create surplus for expansion since it is a non-loss enterprise.”

A school as a social enterprise. Perhaps such a recognition of schools could help break down the unnecessarily ideological and political divides between charters and district schools? This is an interesting realm of hybridization that I’d like to hear about more, rather than the tired old debates between charter and district systems.

Economic Opportunity + Education

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I recently wrote about the need to provide options for children and families living in communities impacted by poverty.

Sometimes it can be frustrating as an educator to talk about poverty, because there’s a tone in the sector that this is something we shouldn’t talk about. “Keep your focus in the classroom,” some people seem to say, “don’t worry about what you can’t control.”

Thankfully, there’s educators and activists out there refusing to keep their heads down and ignore the problems of the community they work within.

Here’s an example of a teacher, Stephen Ritz, who’s not only helping to educate his students in the South Bronx, but creating economic opportunities for them within their community. Take a look:

What’s intriguing is that Ritz presents us with a way out from the polarization of poverty vs. education: we can tackle both, and turn the equation into the win-win of economic opportunities + education.

This is the kind of innovation that I’d like to see more of. Because the children are learning skills and knowledge that will empower them with more options. They are gaining capital: social, natural, psychological, and economic. And that’s the kind of wealth that we need to cultivate in all our communities.

Check out the Green Bronx Machine for more on this great work going down in the South Bronx.

The Correlation Between Craft Brewing and the Craft of Teaching

A recent post up on Fast Company by Shawn Parr recently caught my eye as I skimmed through the headlines:

How Sam Adams Founder Jim Koch Is Helping Entrepreneurs Brew The American Dream

It caught my eye firstly because Sam Adams beer just so happens to be one of my perennial favorites, and secondly, because I strangely find some of the ideas from entrepreneurial activities to be transferable to education reform (perhaps not so strange: disrupting the monopolies of ed publishing companies is an important movement currently taking place in the field. Furthermore, teaching itself is arguably akin to managing a business).
As I read Jim Koch’s insights and wisdom from his extensive work in craft brewing, I was not disappointed. In fact, I found his insight quite tangibly applicable to the craft of teaching. Here’s how:

When you start a business, you have to do everything and it’s important to focus on the activities that provide the best return on time invested. Yes, our bookkeeping was a mess in our first year, but I decided that if we failed, the IRS wouldn’t care about us, and if we succeeded, we would be able to afford lawyers and accountants to straighten things out.  So we focused on the things that did matter: making great beer and working hard to sell it.

I can’t tell you how many times as a newer teacher, I’ve grown incredibly agitated by things like endlessly accumulating piles of papers on and inside of my desk and closet. But Koch’s point here — to focus on the things that truly matter — is critical to a beginning classroom teacher. How often do we focus our energy and time on bulletin boards, door displays, or the formatting of our lesson plans? These things are inconsequential in the long run. What’s important is making great lessons and working hard to deliver them. And as a teacher in a high needs school, I can’t tell you how much time and money is wasted on things that won’t provide much return on the investment.

We empower and challenge our brewers to find new beers, new ways to brew, and unique ingredients. I enjoy pushing boundaries with extreme beers, interesting ingredients, as well as the brewing and aging processes. It’s my life’s work, to elevate people’s thinking about beer and push the boundaries of traditional brewing to offer beer lovers an inspired drinking experience. . . 

We experiment, we have fun, and often the outcome is a truly great beer.

This empowerment for risk-taking, fun, and innovation is key to fostering great teachers and dynamic and positive learning environments. Empower and challenge our teacher leaders, o ye principals and district leaders and policymakers, and the outcome shall be truly great schools.

And to this day, I taste a sample from every batch of Boston Lager and meet every Sam Adams employee. You’ll never see me on Undercover Boss, because at some point during the year, I work directly with just about everyone in the company. . .

. . . I make decisions based on the beer, not the bottom line.

Koch would make a great superintendent of a school district. The majority of communication and accountability feedback right now in public school systems is driven by compliance based regulations from afar, all determined by the bottom line of test scores. This form of accountability does little to nurture positive professional learning communities, and is in fact detrimental to learning environments. But real, face-to-face accountability from leaders who are deeply immersed and steeped in the everyday practice of education is invaluable to developing quality schools. Our district leaders and state leaders should be visiting schools daily, stepping foot in classrooms, talking to students, talking to teachers, talking to principals. There is no other form of accountability, no checklist, no policy, no regulation or law that will change the culture of schools otherwise.

My main goal is to help fellow entrepreneurs get a leg up. Our commitment to the community goes beyond the walls of our brewery. Brewing the American Dream is intended to support business owners by providing them with the ingredients to become financially independent and see their American dreams come true. Our goal with the craft brewing component is to support small business owners in our industry who are facing the same hurdles around starting or expanding their nano- or microbreweries that I faced when I started brewing Samuel Adams.

Wait, what? Koch is actively giving money to other craft brewers to establish their own businesses? Isn’t that counter to the success of his own business? Well, no. Koch recognizes something that businessmen and reform leaders still immersed in the industrial model fail to comprehend: healthy, stable relationships within a given ecosystem are developed through collaboration and interdependence. Businesses benefit from cooperation and collaboration with other businesses. Schools benefit from cooperation and collaboration amongst their teachers and between other schools. But right now, teachers in many schools are competing with one another in negative environments notable most for closed doors, gossip, and backstabbing rather than open doors, professional conversations, and collaboration. And this is traceable directly to the impact of accountability based upon high stakes value-added models.

The interview contains more great insights within it, such as Koch’s thoughts on microfinance, and is well worth perusing. Here’s to craft brewing, and here’s to the craft of teaching.