By John McDonald and Kevin Berkopes
A crisis in education is underway, which, like many things, was accelerated by the pandemic. Much has been written about this within the education world, but we look at it from a different angle as innovators and startup creators. In our world, we first isolate and study problems, then look for ways to solve those problems in better ways for the buyer. This points the way to opportunity.
The problem in education seems to be based on at least three sources, each of which would be difficult to overcome alone but have instead conflated into a perfect storm.
First, schools can’t innovate fast enough alone to prepare students for the future. All companies begin with processes or technologies upon which entrepreneurs seek to build businesses. These technologies have a lifespan, and at a certain point, every company must reinvent itself around new technologies to endure. When the compulsory K-12 education system was finally adopted in all states in the 1930s, and even when it was further standardized by the 1965 Elementary and Secondary Education Act, the useful life of a skill set was relatively the same or even longer than the average working person’s career. Slower technological changes meant that the education system could provide workers with all the skills needed for their working life in 13 years, or perhaps 15 or 17 years if a college degree were obtained. Since then, however, the pace of innovation has continued to accelerate such that the average useful lifespan of a skill set or expertise in technology is much shorter than the average career. Indeed, it’s often shorter than the time it takes to educate a student using K-12 and post-secondary methodology. That means many jobs built around technologies in use when a student enters the education system will be gone by the time they exit, and a student entering the workforce today will need to be re-educated multiple times over their career. The 1930s school system was not designed for that need and wasn’t created with continuous reinvention in mind.
Secondly, opening new schools as platforms of innovation can be costly and risky. National school facility support organizations like Building Hope and ExEd recommend budgeting $20,000 per student, which means a new 500-student school would need to raise $10 million in capital – just for the building alone. The additional costs of outfitting the building and purchasing materials and curriculum can balloon those costs by twice or even three times, and in urban areas, the cost of facilities can be significantly higher. Furthermore, such investments often don’t succeed. A 2020 report from the Network for Public Education studied charter school success rates between 1999 and 2017 and found that about 18% of charter schools closed within the first three years, about 25% by the five-year mark, and 40% after 10 years. This means opening new schools as drivers of innovation can be a costly and risky methodology with significant barriers to the massive scale required for education innovation.
Lastly, there is currently an unprecedented teacher shortage. According to research by EdWeek and Merrimack College, one in three teachers say they’re likely to quit and find another job in the next two years. Kansas State University published a 2021-2022 school year study and found 36,500 vacancies in the 37 states they collected data from, which then grew 45% in a single year to 49,000 by the fall of 2023. The same study found that states often fill those jobs with instructors with fewer qualifications – who then leave the profession at an even greater rate than trained educators. Multiple sources report the obvious effect: depressed student achievement, often distributed along highly inequitable socio-economic and geographic boundaries. Students need to adjust to changes in teachers, styles, and methods before they can get down to learning, and it’s clear that the industry cannot attract and keep enough teachers to hire their way out of this problem.
Additionally, at least two other major contextual shifts contribute to the problem and point to the need for a different approach.
As enhanced by its connection to everyday devices through the Internet of Things and later through the quantum leaps in the ability to understand and harness data offered by Artificial Intelligence, the Internet continues to be the great creator and destroyer of business models. Because of the instant and widespread availability of nearly unlimited amounts of data, knowledge, expertise, and technology, old business models centered on controlling access to the same have primarily been destroyed and replaced by open networks of individuals in communion with each other across great distances around common goals. Examples exist everywhere, ranging from social media for exchanging ideas to marketplaces for exchanging goods and services to the process by which the COVID-19 vaccine was created with astounding speed by researchers collaborating across the globe. At its heart, the Internet is the “great disintermediator.”
Yet, the industry that created the Internet – education – has yet to be fully disintermediated by it, though that is already well underway. Historically, the unit of change, or the place of action in education, used to be at the school district or a school level, which controlled access to data, knowledge, expertise, and technology while providing a safe building to conduct these operations while parents worked. But it is increasingly becoming the learners themselves. That is the true outcome of the shift towards school choice – empowering the student (and their parent as agent and advocate) to seek the best individual outcome for themselves. What we used to think had to be done on a school-by-school basis can now be done on a person-by-person basis because of the Internet and AI. It is an understatement to say this is a profound shift.
At the same time, the school choice movement is also at an inflection point. Advocates for school choice have had enormous success in certain states where there is an aligned political perspective, such that in many places, there is widespread eligibility for “follow the child” school choice funding (or “vouchers”). These programs are overwhelmingly popular: A recent RealClear Opinion Research poll found that 71% of registered voters favor school choice vs. 13% opposed, up 7% in just three years. It’s popular across the political spectrum, as 66% of Democratic voters support it, 75% of Republicans, and 69% of Independents. It’s also popular across race and ethnicity lines, with 71% Hispanic, 71% White, 73% Black, and 70% Asian voters expressing support. Politicians ignore those numbers at their peril.
But this widespread eligibility reveals another context shift: even when school choice programs enable parents, they are sometimes presented with few available school choices. Outside of their “default” school district, often the only other realistic options are neighboring districts (which usually require self-transportation to and from), and a limited number of private or charter schools, which often have waiting lists in the hundreds. Research by EdChoice reveals that while 40% of parents want to send their children to private schools, only 5% do, and while 10% want to homeschool, only 3% can do so. Meanwhile, 83% of children attend a public school, though this is the preference for only 36% of parents. Indeed, as EdChoice points out, where parents want to send their kids to school and where they end up sending them don’t match up.
Studying these problems leads us towards an obvious solution: building upon school choice to enable more school choices. That means that within any school or school context, we want to empower families with more choices that are tuned to the needs of each learner – their abilities, interests, and passions – as well as tuned to accelerating successful outcomes.
That’s what has led us to create EdVenture Labs, a new venture studio organization focused on bringing forth the people who understand the problems first-hand: educators in the classroom. They have been innovating in context in small ways, and we want to catalyze them with business model creation expertise, technology, capital, and strategic support to help grow and spread their innovations that enable more school choices.
Here’s how the model works. We begin with a philanthropically-funded accelerator program that is focused on finding, unlocking, and shaping ideas directly from the classroom that might provide new choices in how we educate and learn. Cohorts of educators participate in live online and in-person workshops drawing directly from the startup world to help them build business models, market strategies, and communication tools for sharing their ideas. The cohort model creates connections and collaborations between educators who might have felt isolated and lacking support in their home environments. It builds confidence in the innovation and themselves as entrepreneurs and business creators. Then, to help those ideas scale, we combine funding from the for-profit world to help scale in well-defined distribution channels and markets in education to propel the new choices into widespread use.
This model has been incredibly valuable in other industries, like healthcare, where doctors and nurses with new techniques or technologies regularly receive the support they need to move those ideas into real products and sustainable businesses. A robust funding ecosystem surrounds and supports that process, which often starts with grant-funded research and then moves to for-profit-funded trials and into the marketplace. This is not a new model – it’s just not a model that hasn’t existed in a big way in education.
One early success of this model is the Indy-based Mathtrack, which began as an alternative delivery method for mathematics instruction. They pioneered a strategy called second access to content, which focused on providing students with the training and learning spaces necessary to build high-quality, blended learning environments with their peers engaged in collegiate-level mathematics courses. The students became the focus as agents of change for mathematics instruction. The Bill & Melinda Gates Foundation and others provided seed funding to expand the model into the K-12 mathematics classrooms to improve the inequities of access for low-resourced students, which resulted in scale, research, and impact that moved quickly across Indiana.
COVID-19 forced MathTrack to adapt its product to accelerate the creation of math teachers, which reached a crisis level throughout the US markets. With support from EdVenture Labs, they were able to accelerate and strategically focus their operations and cash flow on solving this problem while fundamentally shifting the capacity of their products and company. They obtained the ability to license and train mathematics teachers for 5th through 12th grade, unlocking a new way for K-12 schools and districts to teach math and build teachers. They then addressed a significant barrier to developing new teachers: obtaining a bachelor’s degree and licensure for those choosing to teach was too costly in terms of time and resources. In response, they were awarded national accreditation as a registered apprenticeship and then designated as an accredited institution of higher education. Now, MathTrack is leading the US with a job-embedded, apprenticeship-based bachelor’s degree program that removes the barriers of time and resources. This pathway to teaching while working full-time costs only about $10,000 and two years to finish. The professional apprentices obtain a Bachelor’s Degree in Applied Mathematics and a State license, all while actively earning income as a teacher in the classroom.
Where we do this work geographically matters. In America, our concentrated innovation zones are often perceived to be anchored on the East and West coasts, where entrepreneurs can find concentrations for access to capital and the talent to grow teams to build their innovative models. But this is different in education. Education innovation is happening across the country, as the market demands both a flexible and scalable model while also understanding nuances for local design and control of systems and public funding. Innovation often happens close to the learners who need it most but need access to the support and capital to extend it beyond an isolated classroom or school. It’s also happening more in geographies where the public policy toward education enables innovative models and student and parent choice.
There is an opportunity here for the Midwest to lean into its strengths to be a hub for education innovation. Our home city of Indianapolis has been a hub for education innovation organizations for over 30 years. Among others, EdChoice, the Strada Education Foundation, the Lumina Foundation, Project Lead the Way, the Mind Trust, and the tenth-largest charitable foundation globally, the Lilly Endowment, all call Indy home. This rich history provides an enormous talent advantage directly from our community. The costs of creating and operating a business in the Midwest are also relatively low, which enables more capital efficiency when starting and scaling up a new venture and better matches the abilities of schools and parents to pay for the resulting products and services.
Our bold objective is to create 100 new startup companies offering new school choices over the next five years. To do this, we’ll need $10 million in capital support divided into two cohorts of education founders per year. Each of the 10 cohort participating teams would receive $100,000 – about half of which would be philanthropically sourced to pay for the programming costs, and the other half would be sourced from for-profit venture capital to offer seed stage funding to the founders to launch their companies.
At the same time, we’re not waiting around to raise this capital – we’re already wrapping our next cohort of founder teams using this process, thanks to the initial support of our partner EdChoice. As with any startup endeavor, it’s vital to build and test your initial “minimum viable product” or MVP in the marketplace to learn how it solves a problem in a better way – something that’s also already well underway.
Unfortunately, there is not a moment to lose. Each year, semester, and class ups the challenge on all of us who claim to be catalysts of a better way. We cannot stand by as observers expecting or hoping someone or something will deliver the changes we seek. It is an unavoidable effort if we seek to better the future for ourselves and our children.
