More Than Enough

In-depth and edtech with Heather Gilchrist.

INTERVIEW | by Victor Rivero

Heather Gilchrist of Socratic LabsEducational technology companies don’t grow like other companies grow, says Heather Gilchrist, founder and managing director of Socratic Labs, the early stage New York-based edtech accelerator and collaborative community dedicated to the unique needs of education entrepreneurs. “You can’t throw a couple of thousand dollars at a couple of hackers and put them in a room for a few months and expect them to solve big problems in education,” she tells Project Grow, a feature program from the creators of Entrepreneur magazine. As a teacher, Heather Gilchrist considers herself a “translator” — her job, she says, is to convey to students and team members the simple from the complex. A test-prep pro for nearly a decade, she’s taught every national standardized admissions test through the graduate school admissions level, written curriculum, developed teacher training programs, trained teachers and content creators, and developed systems for other teachers and content creators to use in sharing their knowledge. She’s been more than a teacher, however, though in keeping with her teaching roots, here I ask probably too much and she shares perhaps more than enough about her own formative lessons, her startup experiences, all things edtech, and even a few words about an interesting tattoo – all in this in-depth EdTech Digest interview.

Victor: You describe yourself as a technophile. When did this start? Any formative stage in your earlier life when something just clicked? or when you made a decision about technology and life? what was it?

Socratic Labs logoHeather: I call myself a technophile because I can’t say I’m a developer or even a hacker, but I’ve been fascinated with technology since I was a kid. When I was four, we had an Apple II computer that I used to type out my Christmas list by myself when I was four years old — which my parents have hung on to for all these years. I remember pulling out the old giant Christmas catalogues that department stores and large retail chains would mail. My Christmas list listed items numbered in order of preference, and I listed the catalogue name and the page on which it could be found to make fulfilling my Christmas wishes as easy as possible for my parents. I wanted to optimize my Christmas gift total outcome, so I didn’t want my parents to be able to say, “We didn’t know what you wanted,” or “We couldn’t find it anywhere,” or “We couldn’t read your handwriting.” In retrospect, that might have been my first missed indicator that I should have pursued user experience design or something of the sort.

The next year, home VCRs were just becoming popular  — at least as far as I knew. I had no idea what a VCR was, but I had to have one. It was number one on my Christmas list. I started recording my favorite cartoons so I could watch them until the machine ate the VHS tape.

Two years later, it was the original Nintendo. I would play a game non-stop for sometimes two to three days straight  — excluding school and other hobbies or lessons — until I beat a game. A couple years later, I went to the Nintendo World Championships in Miami and made it I think to the semi-final round before I had a fatal encounter with a game I’d never played before.

Just a couple months later, Halley’s Comet was visible. In computer class at school, I had learned what seems like the most primitive ancestor of graphic design. We would program the color of each cell on a grid…was that DOS or BASIC or something? Whatever it was, I loved it. Likely another missed indicator. I used Print Shop all the time, which I used to make cards and signs for…well, everything. And there was some early computer graphics software whose name I can’t remember that had a spray paint feature. I did some computer art project that kind of resembled Halley’s Comet, and after my teacher entered it in the Broward County Fair, I won a ribbon of some sort  — definitely not first place.

In retrospect, it’s amazing to me that I was able to participate in so many activities— and I did participate in quite a few  — piano lessons, multiple sports, cheerleading, tee ball… — and still spend as much time as I did on the computer. Growing up in South Florida nearly as far from Silicon Valley as I could have been without leaving the country, I had no reason to suspect that anything computer or software-related was a possible career. Ahh, cruel hindsight!

I typed my high school composition paper on a word processor, but by my early college years, we were in the grips of the “a/s/l” chatroom days on AOL, and I wasted more than a few hours there. I did, however, start using the internet for productive reasons because I had an intense aversion to physically traveling to any library  — plus, I was a major procrastinator in college, so by the time I got to the library, the books I needed were usually already comfortably in someone else’s possession.

I cycled through five or six majors in as many semesters, from Pre-Med to Pre-Law and ultimately into the Liberal Arts. I never gave Computer Science a shot. As much as I wish I had dug into more technical classes, I loved my major program of study once I found it. I particularly loved interdisciplinary classes I took — and I took several — that integrated pure sciences, social sciences, arts and humanities, etc. I always wanted the 30,000-foot view of everything so I could understand how everything is related.

And it was that 30,000-foot view that helped me realize the potential technology could have in education. Finally, with Grockit, this philosophy really took solid root in my life.

So I guess that’s my incredibly verbose way of saying that I think I’ve always been infatuated with technology. I’ve always loved how technology can make things easier and more accessible. It just took me a pretty long time and lots of exploration to figure out how that all worked in my life.

Victor: You’ve been involved with a number of startups. What are a few lessons or a summative lesson you learned and carry with you into your current work?

Heather:

Choosing Co-Founders and Investors

I hear people say that choosing a co-founder or choosing an investor should be like choosing a spouse. I disagree. Couples split up all the time. The process should be more like choosing a co-parent, and I think that effective communication is probably the single greatest indicator of success.

You don’t have to be in love with your co-founder or your investor; you just have to be confident that the other person is as committed as you are for the long haul to raising a happy and successful child — or, in this analogy, company — and that you agree what “happy and successful” mean, roughly speaking — hence the importance of communication. Building a startup is incredibly hard, and a team won’t survive the hard times if its key stakeholders aren’t deeply committed to a shared vision.

Knowing Who You Aren’t

To carve out your own niche in the world—in business or elsewhere—it is important to know who you are. But equally important — if not more so — individuals and companies should know who or what they aren’t. I think this is as true for a company while it distinguishes itself from competitors as it is for a founder in building an effective team.

Working in the startup world can — and, I think, should — be very humbling. Every day I learn more about my own limitations. I’m constantly honing my strengths, too, but more I learn about my own weaknesses and the more honest I am about those weaknesses, the better I get at recruiting to balance them out and at communicating them effectively so that we can all share the same expectations and vision.

Taking Ownership

I’ve heard mountains of great advice in my day, but (as you may have guessed from my many college majors) I’ve always had to make my own mistakes. Startup life is full of victories and failures, some large and many small. I think it is incredibly important to take ownership of victories and failures. If you don’t take ownership of your failures, then you won’t learn from them and you’ll be destined to repeat them. Accept them, learn from them, then move on; there’s still plenty of work to be done.

And it is those many failures (that I promise you will encounter) that make it just as important to really take in the victories, celebrate them, then move on; there’s still plenty of work to be done.

Victor: As a managing director at RAK, you sourced managed and executed seed stage investments in tech startups, developed portfolio architecture and advised portfolio companies – lightly speaking, what does this all mean? Were there directly education-related companies that were particularly interesting to you? What were you especially looking to encourage? Any formula at work in your work?

Heather: At RAK, I worked with a very successful real estate investor who wanted to invest in technology startups because of the potential upside and the declining costs of developing technology. He’s an incredibly smart guy, but he had basically no background in technology at all. I came to New York in the summer a few years ago, halfway through my JD/MBA pursuits at Georgetown, and I intended to go back to school in the fall and split my time between DC and New York.

Until I took a class on venture capital in business school, I didn’t really understand how incredible the contacts and friends I had from Grockit really were. And that was probably a good thing. And until I was immersed in New York’s startup and venture ecosystem, I didn’t realize how different the east coast and west coast cultures are.

I think I was incredibly lucky to have come to New York exactly when I did. A local startup scene was taking root and growing by leaps and bounds, and I came into it with a different perspective.

I “grew up” in the startup world in the tremendously entrepreneur-friendly culture of the west coast, and even among startups, Grockit—now Learnist—has been considered a great place to work. I brought with me to New York—and to RAK—my west coast appreciation of entrepreneurs, a really great and generous personal network, and some tech startup street cred. As the overwhelming majority of seed stage investors in New York are finance or consulting alums, it seemed to me that this combination was exceptionally rare at the time — and still is, though I think we’re moving slowly in the right direction, particularly in a — relatively —  young, outspoken, female package.

I noticed pretty quickly that what investors here call seed deals would largely be considered series A deals on the West Coast, and that there was a big hole in real seed stage investments, so we started making small investments where we were typically the first money in outside of friends and family — or at least in the earliest round.

I can’t say there was a formula at work, per se, but at RAK, everything started with the founders. Over time, we noticed that all of our companies either came from or went to top accelerator programs, and they got quite a lot of value out of their experiences, so that became part of our thesis over time, too. We only made one educational technology investment in a company called Tabtor, but working with Tabtor reminded me just how much I love education, educational technology, and edtech entrepreneurs, and just how much work there is to do in education and edtech. Oddly, working with Tabtor is what prompted me to leave so that I could focus on edtech full time again.

Victor: Grockit is quite a pioneering company. Why didn’t you stay on there? What prompted your moving on? Lessons learned there?

Heather: Grockit was amazing, and Learnist—its current iteration—is equally so. Ironically, it was precisely because I thought it was so awesome that I left to go back to school.

I had tutored for a few years before I fell in love with teaching. It wasn’t until I was teaching test prep in low-income neighborhoods in Los Angeles that I really felt like I was “moving the needle.” Grockit was built upon that ideal, the ideal of democratizing learning, and on the idea of harnessing the wisdom of crowds, the belief that everyone had something to teach and everyone had something to learn. While we were at Kaplan, Farb and I discovered that belief was something we shared: as teachers, we both encouraged our students to teach one another as part of the learning process.

Farb (Nivi) did all of the heavy lifting for Grockit, and I have him to thank almost entirely for my career path. When we worked together at Kaplan, I knew practically nothing about startups or venture capital — which is pretty ridiculous, considering my love for my technology and the fact that my father was a professor of Economics. I didn’t even know enough to know that he did know about them, but I respected him tremendously, I trusted him, and I was having a blast brainstorming with him, so everything about Grockit felt right.

That’s not to say it was easy; in fact, it was downright hard for me. The startup world was entirely new to me, and I had long been a perfectionist, so employing lean startup methodology  — before it was cool to do so — was nerve-wracking for me, and I had long since forgotten any developer lingo, which made communicating what I wanted and needed to our engineers challenging. I learned so much, but I also realized how much more I had to learn.

I was living the experience of realizing a vision. I knew that educational technology was the means by which Grockit was helping bring that shared vision to life. And I knew that venture capital was what made it all possible. But I didn’t know what that was, and I wanted to know. Most importantly, I wanted to make sure that I could later intentionally replicate my incredible luck — or at least have a much better chance of doing so.

So once we were on a strong trajectory, I took leave to go back to grad school so that I could come back to educational technology with more skills to contribute. I wanted the legal foundation so that I could understand deals and agreements, and I wanted the business foundation because I had no finance background at all or anything other than a second-person point of view on the venture world.

I pursued my JD/MBA at Georgetown knowing that I didn’t want to practice law and that no one technically needs an MBA — there’s no certification exam equivalent to the bar to “practice business” — to perform a skill, so the degrees themselves weren’t the objectives, though I certainly started with the intention of finishing.

During that first summer in New York, however, I quickly learned that I had acquired the foundations that I sought that had led me back to school, and I remembered from my Grockit experience that when opportunity knocks, I shouldn’t hesitate to answer. Early that summer, my partner at RAK joked, “It’s a shame you won’t be able to go back to school this year!” I replied, “Are you crazy? I’ve already paid a hundred thousand dollars in tuition! Of course I’m going back to school!” By the middle of that summer, however, I had changed my tune: “Why would I pay another hundred thousand dollars to maybe have this opportunity again in two years?”

And with that realization, I submitted my request for deferral. As the school year I was skipping out on went underway, my longings to re-engage in the world of edtech grew. Grockit helped launch the Startup Weekend EDU vertical, and that October we hosted one of the first Startup Weekend EDU events ever at MSB — Georgetown’s McDonough School of Business.

I travelled to DC to help with the event, and that weekend—a strange one in which I was neither an active part of Grockit nor an active Georgetown student or alumna, but still clearly committed to and engaged in both communities—was easily the most perfectly fit weekend of my professional life. We all spent the weekend with entrepreneurs, educators, developers, and designers. I absolutely love working with smart, passionate early stage entrepreneurs, particularly those committed to improving education. It was in the mentor room at that Startup Weekend EDU, presented by Grockit at the Georgetown business school, that we — me, Farb Nivi and Rusty Greiff of Learnist née Grockit, and Trevor Owens of Learn Startup Machine —  agreed on the need for a program tailored to the needs of education entrepreneurs. It was then and there that the idea of Socratic Labs was born. And it was also then and there that I knew I wouldn’t be returning to finish my JD/MBA.

Victor: Anything from your Georgetown experience you’d like to share that’s influenced your current work — philosophy, professional development, interesting anecdote?

Heather: My experience at Georgetown was great! It was the opposite of startup life, which was interesting — and somewhat culturally foreign, but it was exactly what I needed when I needed it, and just enough of it.

At Georgetown Law, I was surrounded by absolutely brilliant classmates of varying worldviews. That community, although it clearly and quickly reinforced my desire to not practice law, challenged me to think differently about things, to appreciate well-founded dissent, and to articulate the reasoning underlying my own beliefs and principles. I learned that working closely with others who contribute a different perspective can be highly enriching if each can communicate those views effectively, and I learned that I can genuinely like people with whom I may fundamentally disagree. Those are lessons that have certainly stuck with me.

At Georgetown MSB, I found a highly engaged community of learners. We worked in groups, we taught and learned from one another, and we collaborated. It was a genuinely global community with a strong sense of social responsibility and a spirit of entrepreneurialism. I use the word “community” repeatedly because it very much was one, and it was that sense of collaboration that permeated everything at MSB. I became conversant in the foreign language of finance, and I gained an appreciation for those who love finance in ways that I never will. I acquired the foundation I sought in venture capital from the investor’s perspective, and—perhaps most interesting of all—I realized that I learn best by doing, so I was ready to get back to the startup world when it came calling.

Victor: What have been some real highlights in your current work?

Heather: The highlights? Honestly, everything: Learning how to learn again. Being a teacher again. Tackling big problems that matter. Working with incredibly smart, passionate people who sincerely want to change the world. Changing (our little corner of) the world. Finding amazing team members who want to change the world with me. Seeing our entrepreneurs survive the hardest days. Watching all their hard work pay off. Working with people around the world who share in our philosophy but come from different perspectives. Being able to work with educators and policymakers and students and technologists and artists and business leaders. Brushing shoulders and sometimes breaking bread with some of the smartest people anywhere. Helping people do what they want to do. Realizing that making mistakes is not only okay, but good—as long as you learn from them quickly and move on. Getting better. Giving founders a safe space to get better.

I could go on for quite some time on that question, but here’s one last fun answer: Getting the Socratic Labs’ logo tattooed on the inside of my left wrist with half a dozen of our Alpha cohort founders in tow.

Victor: Let’s talk more about Socratic Labs. What prompted you to found it and what direction are you headed in the immediate (6-12 months) and longer term (2-3 year) future?

Heather: You wouldn’t think that being a passenger on a plane qualifies you as a pilot; you wouldn’t think that being a patient qualifies you as a doctor; yet, somehow, so many edtech startups are founded by people whose only experience in education is as a student.

Between sessions with participating entrepreneurs at that early Startup Weekend EDU event at Georgetown, several of us were in the mentor room. I was talking about how all of my companies at RAK had come from or gone to strong accelerator programs. Reflecting on our own experiences in education and edtech, we all kind of agreed that education and all of its idiosyncrasies — the user is often not the customer, long purchasing cycles, highly regulated industry, outcomes matter, etc. — make many edtech startups a poor fit for a traditional three month accelerator program. Edtech companies typically don’t get to an interesting inflection point in three months, and educators often lack the technical skills required by many accelerators and the savings reserves often required by entrepreneurship. Educational technology is still, even in spite of its recent popularity, dramatically underinvested, and I think that’s because most investors fear the long sales cycles and highly regulated environment. Many would prefer startups pursue commercial education, which leaves a great many big problems to solve in America’s schools. We committed that weekend to reimaging the early stage support ecosystem for edtech entrepreneurs. Besides, Imagine K12 is already taking the YCombinator approach — and doing considerably well at it. We believe a different approach is called for by those who don’t fit into the YC / Silicon Valley model.

I think that too many edtech entrepreneurs lack expertise in education, and that even teams whose founding team contains both educators and technologists, many lack a common language, which often indicates a fundamental under appreciation for the other’s contributions. Even with these fundamentals present in a founding team, other stakeholders hold great sway: students, policymakers, strategic partners, administrators, investors, service providers, and more. In education, it really does take a village to raise a child.

We’re building Socratic Labs to be that village. There are big problems to be solved in our schools, and instead of trying to work around them, we’re tackling them head on.

New York City has the largest K-12 district in the country and we have a wealth of post-secondary education options, so New York was a natural fit for location. We also have an incredibly forward-thinking district partner in NYC Schools — particularly the iZone’s Innovate NYC Schools — and a diverse district in terms of both student populations and school models. We aim to develop an efficient model for public-private collaboration that is both safe and effective and that other districts and organizations may replicate.

We have amazing schools of education—Columbia Teachers’ College, NYU, Bank Street, Relay GSE, Hunter College—and great support programs for new and veteran teachers (Teach for America, Teaching Fellows, TeachNYC).

We have a wealth of talent across sectors. NYC is an international city that has consistently attracted the best and brightest, and we want to engage them in a conversation about the future of education and show them that there is a great career to be made in solving big problems for our school-aged students.

We have more strategic partners available in NYC than anywhere else in North America. For instance, look at the publishing industry: there are 122 publishers in the NYC Metro area; the next most publisher-rich city is Chicago with 22 publishers. Beyond publishing, NYC is a mecca for content of all kinds, which dovetails nicely with the content needed in education.

We have innovative leaders who have supported education from the policy side and we have a robust investment ecosystem starting to take notice of the potential in the educational technology sector. What all of these stakeholders need is some foundational knowledge so that they may better understand each other, a community in which they can collaborate to better identify our schools’ most pressing problems, and an ecosystem that allows them to turn those big problems into big opportunities.

I saw all of these needs and all of these disparate elements as an opportunity to do something great, and that’s the big idea behind Socratic Labs. The grand vision was always to be accelerator + community + campus, but we didn’t know exactly what that would look like in full form when we started out. We had to run one cohort so that we could get the process started, and we knew we would learn a ton from that first cohort.

As we approached our Alpha cohort’s demo day at the end of May, I imagined the time between cohorts would be restful. Quite the contrary, we’ve been harder at work than ever, but I can honestly say that I’m even more excited now that we’re building out the full vision than I have ever been — and anyone who knows me and knows Socratic Labs would be shocked to think that I could be any more excited about this all.

As we roll out Socratic Labs “v.2” beginning with the Beta cycle in October, the accelerator is just one part of up to fifteen months of support, and it is only one of the ways in which someone can engage with us. We’ll be launching “Pre Accelerator” intensives on education and startup best practices open to anyone in the earliest stages of exploration or merely looking for professional development, opening a collaborative coworking space, kicking off classes and community events aimed to authentically engage all the different viewpoints we need to do great things with edtech, and providing longer-term options for entrepreneurs who graduate from our accelerator program. We’ll be working more closely with schools, major strategic partners, and researchers to ensure that we’re building effective tools and that they’re getting into the hands of those who can benefit most from the tools.

We’ve built relationships some amazing partner programs across the country and around the world for our Edtech Passport network, so this year we will be collaborating more meaningfully with those partners to ensure that we’re thinking about education and educational technology on a global scale, beginning as early as our community and Pre-Accelerator programs.

We’ve also been expanding the Socratic Labs team with the. Most. Incredible. Talent, and I’m sleeping more and better than I have in years! We’ll be announcing the new team on our new website, which will be live in September.

This stuff should keep even our newly bigger and better team busy for quite some time, but there are bigger things on the longer term horizon. In NYC, we’ve gotten better at aggregating the tremendous amount of activity in educational technology, but there is a growing amount of activity and we still have a way to go in organizing and messaging that activity. We’ve talked to several of our local partner organizations about a few different mechanisms that could make it easier for members — or would-be members — of the NYC ed and edtech ecosystem to “self-select” into the community, more readily find the best collaborators and resources, and to share the activity with the broader edtech ecosystem beyond NYC. We hope to have something fun to announce in about a year’s time.

Slightly further out on the horizon, I have my eyes and heart set on one other location for Socratic Labs, partly because it has so many of the factors a community like this needs, but really because it’s my favorite place I’ve lived.

Victor: Socratic Labs has adopted an interesting approach in social good, collaboration and in open-sourcing its curriculum for a networked program. Could you talk more about zero-sum and edtech passports?

Heather:

Reminder here that you said long-form was okay!

The Edtech Passport network is built upon three pillars:

(1) More smart people > fewer smart people. Crowdsourcing curriculum among a network of smart, passionate people means that each program’s startups get more and better quality content delivered. It also reduces development time and delivery costs so that more of that time and money can be spent helping startups (aka “doing our jobs”).

(2) We will host graduates of other Edtech Passport programs as long as they host our teams. This helps keep all Edtech Passport cohort companies’ costs of scaling down while simultaneously increasing the odds of scaling, thanks to local networks and knowledge. Lower costs and higher odds of scaling make the model work financially.

(3) For programs that make follow-on investments, we may syndicate deals with one another. Again, this speaks to the economics for the participating programs, but it also is incredibly helpful to participating companies, as it helps them fund more development from investors and mentors who know and understand education and can add value beyond mere dollars invested.

In order to answer this question, it’s equally important to look at how we think about investing. If the economics don’t make sense to people, then no one will believe that we’re genuinely committed to the social good of improving educational outcomes via technology and that we take a genuinely collaborative approach in working with partners.

First, the economics:

In terms of either volume — absolute number — and frequency  — percentage, there aren’t very many billion-dollar businesses to be built in education. We absolutely want to see a few of our cohort companies attack major pain points in huge addressable markets, but we also think there are quite a great many more strong education businesses to be built that will end up in the $20, $30, $50, or even $100M range. To the average educator or even the common man, these sound fantastic, but to the average venture capital firm, businesses this “small” aren’t worth the resources it takes to manage what are such “small” investments in comparison to their other portfolio investments. Businesses this size can return enviable returns even for VCs, but only if these businesses don’t take on extraordinary amounts of investment.

For instance, let’s say early stage investors put in $6M into a company’s series A for a 25% stake, which means the post-money — post-investment — valuation of the company is $24M. It takes the company 18 months to get its product right and another six months to pilot, so the team didn’t make its first sales until it was two years old. Because it lacked a distributed network, it took another eighteen months to scale its sales, and another six months to negotiate a sale to a strategic acquirer, which they had to pay a boutique investment bank to shop around. Even this scenario would be a rather generous one to the company.

Even if the company raises no additional capital and sells four years later for $50M, the VC firms only get 25% of that $50M. It has taken them four years to get a whopping return of… twice their investment, and only a 1x profit on the investment. Sounds great to most of the world, but the VC firms only get a small percentage of the profits — typically 20% — and the rest goes to their investors, typically endowments, wealthy individuals, mutual funds, etc. Considering the costs—real costs and opportunity costs—it took them to make that money, a return that  — relatively — small is a wash for VCs.

Now let’s imagine that same company has a very different experience. Let’s pretend it enters, for argument’s sake, Socratic Labs’ Beta cohort and continues in the ecosystem for the full 15 months. By doing so, it is able to develop its technology twice as fast for half as much money  — rent savings, service providers, mentors. It is also able to leverage existing school partnerships to pilot its initial product within its first nine months and is able to make its first sales before the annual purchasing cycle closes. The team raises a total of $200k by the one-year mark, but don’t need to raise much since they already have signed contracts that will become operating capital within six months. The fact that they have signed contracts makes them more attractive to investors, so they only give up 20% equity  — a $1.25M valuation.

Over the summer, the company scales out its team and technology, and begins leveraging Socratic Labs’ distributed network to scale its sales rapidly. By its third birthday, the company has $15M in signed contracts, and has been regularly in touch with folks from several potential acquirers who were mentors for the accelerator program. The founders have sent quarterly updates to those mentors, and the strategic acquirers have come knocking. They are offered and accept an acquisition offer of $50M. The accelerator’s investment returns $10M on a $200k (50x), and the company makes even more money in less time. Everyone walks away happy.

As a percentage of capital raised, accelerators run at much higher operating costs than do venture funds, due to the fact that we are much more high-touch than a venture firm. But it is precisely these operating costs that we incur that both (a) justify a relatively high equity stake  — typically 6-10% — in exchange for a relatively small initial investment of capital — often between $15 and $30k — and (b) allow companies to grow more quickly while burning far less capital.

But we accelerators still generally operate relatively small funds when compared to the average venture fund, so in order to see compelling returns for our investors, it is important that we invest early where both risk and potential return are typically high and then do everything we can to de-risk out investments. Getting into a quality seed stage deal before the company’s series A is a great opportunity for any investor, so access to such deals is a perk. By sharing access to pre-series A deals, we reduce the strongest competitive stimulus. Sure, the program that accelerated a company will have a larger stake than those who invest post-accelerator but pre-series A, but that program has certainly earned it.

Now consider the domain of education: some districts are run by the mayor’s office of a major city while some are run by district superintendents; each contains a unique blend of potential strategic partners; each attracts a different talent pool and each has a different pool of potential follow-on investors. Rather than trying to become an expert on every district in the country—let alone the world—it just makes sense to collaborate.

Besides, an accelerator program is compelling to strategic partners, customers, and investors specifically because that program, if it is of any quality, has “de-risked” the companies it accelerated. Schools and strategic partners are often reluctant to purchase technology from or collaborate with a young company for fear that it will go under or pivot, while investors fear the young company may not be able to successfully navigate the long purchasing cycles and high regulatory barriers. In a domain such as education—one that is compelling as a subject but inspires skepticism on the part of outside stakeholders—being endorsed by multiple accelerator programs can serve as a strong positive signal that encourages schools to adopt, strategic partners to collaborate, and investors to inject capital. So co-investing in follow-on rounds post-accelerator is good for the companies not only because they onboard many more value-added investors with a direct stake, but also as a signal to important onlookers.

Now, the philosophy:

So while we absolutely want to see some companies shoot for the moon if they’re doing so to attack big problems for schools that have represent big market opportunities, we also want to solve the longer tail of problems in education more efficiently with a model that works for both entrepreneurs  — by keeping their costs down and helping them reach their goals more quickly —  and for investors.

There is no scarcity of problems to be solved or elements to be improved upon in education. As the world becomes increasingly technical and continues to innovate in every industry, new problems will emerge. Always. Forever. Until the end of time. Scarcity engenders competition. Where there is no scarcity, collaboration makes for greater output with lesser input. And where collaboration may lead to fewer LMSs and more literacy tools targeting learners of different profiles, I’m all in favor of it.

The whole accelerator equation falls dramatically out of balance if we don’t have the right relationships with schools, researchers, strategic partners, researchers, investors, etc. The success of Edtech Passport programs depends on the programs’ ability to efficiently source problems from schools and other stakeholders, which means that these programs and their entrepreneurs have to listen to the needs of schools; listening, in turn, requires understanding the language of school-side stakeholders. Trust is also essential in growing a distribution channel, which requires that programs be thoughtful and purposeful about product recommendations to valued stakeholders. In order to be thoughtful, we must ensure we are recommending only quality solutions, so we need relationships with researchers who can measure outcomes.

Edtech Passport programs, then, have to first facilitate startups’ education on… well, education; cultivate a culture of trust with educators, administrators, and parent groups; foster efficacy studies — to de-risk and for the sake of efficiency; and build a growth pipeline for their portfolio companies. Just as a startup must understand the needs of school-side stakeholders, each program must understand the needs of strategic partners. Finally, the program must be able to communicate all of this to investors who will provide the capital vital to accelerator portfolio companies’ growth.

Why This Matters

Teachers are smart. They can smell a salesperson a mile away—especially the most technology-forward educators. Listening is hard to fake, and trusting relationships take time to build (another impetus for a collaborative network of local programs). If you don’t really care, there are other ways to make money. If we weren’t committed to solving the long-tail of problems in education, we could start a traditional venture fund and invest in a bunch of local-mobile-social apps. But we’d see diminishing quality in those apps, declining ranks in international education, and eventually systemic failure. If we can’t educate our students more effectively and more efficiently, if we can’t better prepare them to be successful in a world that we can’t yet imagine, then it doesn’t really matter what we do between now and the not-too-distant point in the future where it all turns to crap. We might as well go enjoy the beach.

But if we want to solve big problems; explore the world, the seas, and the cosmos; cure pandemics and cancers; end social ills; and more; then we must find ways to deliver better learning outcomes more quickly and less expensively. It makes financial sense. It also makes me feel good. And, most importantly, it is incredibly important.

Victor: Where do you look for the current atmosphere, what do you read, what circles do you mingle in, talk to – and what indicators (economic, social, trends) do you keep an eye on? why those?

Heather: I love talking to people. I take as many meetings as I can fit into my schedule  — which results in a pretty challenging schedule and a bit of email overload, so to anyone reading who emailed and did not get a reply, please accept my apologies. I pay attention to how many people are looking to get into edtech and their backgrounds. I ask educators and administrators about their biggest challenges. I ask students what their favorite classes are, and what they’re studying and doing in and for those classes. I ask people what they want to do. I ask startups who is on their founding teams and what they’ve done to get where they are. I like prime sources whenever possible, but other than that first-person preference and a bias toward new perspectives  — I take a Mae West approach to meetings when possible, my filtration process is relatively light.

To diagnose the ecosystem, I host Startup Weekend EDU events. It’s a great way to “take the temperature” of your local community. By seeing how many people register, how they register  — as educator, developer, designer, or business, and how quickly, you can get a good sense of how robust and how organized your local ecosystem is. By listening to the quality of Friday night pitchfire and comparing it to Sunday evening demos, you can get a strong sense of your local ecosystem’s level of sophistication. It’s also a good test for me: better participants, mentors, judges, and sponsors mean that we’re probably doing something right.

Finally, I get quite a lot from twitter. I like the openness of twitter and the fact that I can search by hashtag if I want to reach beyond my (pretty robust) network for a topic. Twitter delivers such a variety of perspectives and sources, and I love it for that very reason. I’m big on clicking through, too, and I usually bite off more than my schedule permits me to chew, so I often end up having to save folders of articles to read later.

Victor: A broad question now: What’s your take on the state of education today? What makes you say that?

Heather: I’m bullish on education.

I’m encouraged by what I see as many positive indicators in education today. We’re experimenting with new school models and implementing new technologies. We’re  providing a variety of professional development options for teachers and creating incentive programs for them to grow as educators. We’re looking beyond traditional education for solutions to our biggest problems. And maybe it’s just me and my echo chamber, but I feel like the rancor is dying down a bit.

I am not ready to say that we’ve found many—if any—solutions to our biggest problems in education just yet. But the first step is admitting that there is a problem, and I think that, by experimenting with different models, we’re implicitly acknowledging that we have to deliver better outcomes for today’s and tomorrow’s students.

That, to me, is a very big step forward.

Victor: What’s your advice to edtech startups everywhere? What makes you say that?

Heather: Make sure you have an educator on your founding team, and listen to him/her.

Victor: Future of education? What’s it look like? Where is going now? What are some directions you’d like to see it going in? Anything interesting on the immediate and perhaps 2 year horizon?

Heather: I think there’s a shift in its earliest stages away from school as a building or institution where you go to receive a thing called education, wrapped up neatly and delivered to you on graduation day, and toward the idea of school as a state of mind or a state of learning. I think it’s good, and I want to see more of it.

We can’t possibly provide a set of facts in a particular order that will prepare kids today for the world they’ll be in charge of tomorrow. But we can help them learn how to learn, and we have to help them learn everywhere, all the time.

I played in puddles as a kid and I’m not dead, nor do I have some fatal puddle disease. I ride the NYC subway frequently, and while I thought I might die during my first few months here while I built up my subway immunity, again, I didn’t die, nor do I have some fatal subway-borne disease. I think we need to stop thinking of schools as these sterile environments where none of the outside world can be let in, lest it corrupt The Education Taking Place Inside, and think for a minute on the Hygiene Hypothesis. If we treat young humans like these fragile creatures who can’t make any sense of the world, then that influences how we position them in the world and it becomes a self-fulfilling prophecy: they become legitimately unable to deal with the world.

But if, much like a vaccine, we instead use schools as a place to introduce the outside world in a controlled setting that encourages kids to think critically about media, science, technology, the arts, then they become capable of extracting education from all of those sources independently of schools and educators. Then access to technology becomes a vanishing barrier, as each and every person alive is surrounded by influences of all kinds, all day, every day. I think we see this starting to happen with educational technology, I think it is one of the most promising trends in educational technology and most fundamental and universal objectives among societies worldwide: that citizens can think critically about and respond appropriately to the world.

Victor: Anything else you’d like to add or emphasize about education technology, or anything else for that matter?

Heather: I think I’m going to take this rare opportunity to hold my tongue!

Victor Rivero is the Editor in Chief of EdTech Digest. Are you an edtech leader, trendsetter, or the creator of a cool edtech tool? The 2014 EdTech Digest Awards Recognition Program closes September 30, 2013. There’s still time to enter. For full details, write to: edtechdigest@gmail.com

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4 Responses to More Than Enough

  1. I couldn’t agree about having the right technologists and the right subject matter experts on your team, Harry. Glad to hear you’ve got a formula that works for you all. However, I’m pretty sure I did enough blabbing without adding more detail for Victor!

    Our goal–myself, my partners, and our collaborators–is to build ecosystems that support education entrepreneurs throughout their lifecycles; we just have to get there one step at a time. Reach out if you’re ever in NYC and need a community to plug in to or if we can be helpful in any other way: heather@socraticlabs.com.

  2. harrykeller says:

    I knew that I left something out — law. You must have contract and IP attorneys.

    My team includes the first, and my daughter is a high-level practitioner of the latter.

  3. harrykeller says:

    Ed-tech may be the most challenging start-up business option a person has.

    It **looks** so easy. It’s not.

    Heather has outlined a number of the problems you must face. She has one solution for those with an idea. What about those who have an idea, a product, and revenue?

    Heather has focused on having an educator on your team. (We did.) I guess she’s assuming that you have the technology people. However, they have to be the right technology people. I’ve seen ed-tech software that looks like it was created by someone in the third grade with awful graphics and horrible response times. Your technology people should be seasoned professionals in a tiny organization. There’s no room for wannabees.

    If you’re building learning software, as opposed to administrative software, you must have subject matter experts, real ones, not just someone who teaches the subject. Here’s a real hole that Heather did not address. Too frequently, an SME is just a subject teacher who knows the book. You will encounter many challenges in building your company. Among these are some requiring deep understanding of a subject. Teachers may think they have this understanding because they’re never challenged by their students or put them down if they are.

    You also must have business and marketing expertise.

    In my case, I work on science education. Here’s what is necessary for my company.

    1. Educational philosophy and practice.
    2. Science expertise, including all fields of science, science philosophy, and science history.
    3. Software expertise, including a wide variety of languages and platforms (GUI, database, and middleware) plus system management.
    4. Management expertise, including product, project, and people management experience and ability.
    5. Financial knowledge, including taxes, bookkeeping, reporting, and fund raising.
    6. Marketing and sales experience and expertise, including the latest high-tech vehicles for marketing.
    7. Educational market knowledge — how to reach your intended market, how to know which segments to approach, how to generate excitement among overworked people who are to be your customers.
    8. Business expertise — have had experience with at least one and preferably more than one start-up before.

    I may have left something out, but you can see that your team might require as many as eight people at its core, some can be outside consultants, even friends. Most start-ups begin with two-to-five people. Clearly, some must wear more than one ‘hat.’

    We were fortunate to have all of this expertise in three core members plus an outsider family member.

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