The Lone Ranger Rides Again at ASU+GSV

The ASU+GSV conference in San Diego—where more than 4,000 people gathered this month from the education, edtech, publishing, venture capital and private equity sectors—is a hard conference to describe to typical education professionals, or to teachers who are on strike in states across the country.

That’s because the conference is mostly about the competition and success of private equity venture capital, about established and rising vendors, angel funders and start-ups—and not directly about success for learners or annual improvements in school performance or bachelor’s degrees production. Rather, the critical measurement for the conference is deal flow, investment and financial ROI.

Conference participants skew white and male, and egos tend to be outsized. The atmosphere is festive. Meanwhile, in the everyday world of schools, colleges and training programs, multitudes of students are struggling, educational institutions are challenged and employers are straining to find or train the workers they need.

Yet each year as the conference grows and deals flow, completion rates and other performance metrics are not rising, and certainly not in proportion to the amount of private, foundation and government capital invested. Why is this?

The reason might be cultural, and calls to mind “the Lone Ranger,” which endured on early TV from 1949 to 1957. American profit and revenue are often attributed to the outsized efforts of strong CEOs, lead financiers and highly-competitive companies. This culture of capital is alive and well in the education market, where solo operators routinely try to beat the odds of financial success. Maybe there are too many Lone Rangers, all focused on landing the big one, getting the pat on the back and moving on.

Without better education and economic outcomes across the socioeconomic frontier, we all lose

—Gordon Freedman

In the U.S., education and training involves a mix of institutions, agencies, foundations, corporations and financial institutions all working independently, each trying to make it. While revenue generation and the nonprofit sector funded by it are indeed exceptional mechanisms, they are not inherently about moving the needle for the millions of Americans who need to succeed by getting a mind-expanding education or skills-expanding training.

Without better education and economic outcomes across the socioeconomic frontier, we all lose. We are already suffering from a lack of new people coming into or being helped into the workforce—a result of poor education and training outcomes. And we are going to experience a devastating demographic shift that will result in a larger proportion of retirees and fewer, less well-educated wage earners. This is a cliff we can go over one-by-one, or we can find ways to collaborate.

In Europe, Russia and Asia, education, training and work exist in a much more holistic system, with greater cooperation among the various participants and more focus on the whole, connected culture of education, training and regional economic success. In those countries and regions, there are key agencies that champion a more-cooperative, human-capital approach driven by organizations such as the Organisation for Economic Co-operation and Development and the European Union. The OECD is a case in point. The U.S. makes the largest investment in this human capital capacity-building agency, but utilizes its output the least.

We Americans are much more likely to try to innovate our way out of social, economic, education and labor issues. But there is an inherent problem with this strategy, and it is on view at each ASU+GSV gathering.

To make it as an ed tech start-up, to grow into a successful online institution or company or to maintain a dominant position, sales must rise, and do so quickly and constantly. The targets for growth must therefore be the low-hanging fruit, the largest opportunities, and those most ready to buy. That’s business.

Unfortunately, in the world of education, purely commercial targeting cuts out those who need it most: school districts, community colleges, workforce agencies in economically challenged neighborhoods, prisons where most inmates are high-school dropouts, and four-year colleges in economically depressed, or in ethnic and racial depressed communities.

Many in the commercial and lending world feel that foundations and nonprofits, the beneficiaries of excess revenue, can handle the underserved areas, including urban centers, rural outskirts, tribal nations and the rust belt, freeing up the companies to go after the more lucrative and easier markets. But this is not the case. The best of the foundation and nonprofit programs routinely fail to spread deeply into the communities where we need to produce tomorrow’s workforce and strengthen the social fabric. We are yet to mint a nonprofit business model that does this complex, heavy lifting.

Is it possible to compete and cooperate in education markets? Could there be incentives for the Lone Ranger to hang up his spurs and cooperate more broadly and effectively?

Most everyone who attends ASU+GSV does care about educational outcomes, but they also need to get funded, grow and succeed. What could be done to reward cooperation to assist in solving real problems? Is there a type of measurement that could capture outcome performance as well as bottom-line sales and growth rates? Maybe those who report earnings that use a combined index of moving the performance needle as well as financial growth would be perceived as better investments in future deals. Or maybe they can invest a percentage of their growth into substantive research on effectiveness.

Some already do this. But education is not like medicine, where clinical trials and hard evidence are routine. One thing ASU+GSV could easily do is to encourage or incubate impact measures and get the for-profit, nonprofit and foundation communities to help. Imagine the top ten companies or foundations making a real difference in their markets (i.e., institutions producing jobs, products raising completion metrics and startups showing early gains in both). Imagine gathering together the best of the Lone Rangers in sessions where they work with state governments and others to measure impact year-over-year along with financial success, and help state governments heavily invested in raising their human capital scores to promote business growth.

A few sitting governors and legislators at the next ASU+GSV would be a welcome sight. They could help answer the question, “Is it possible to win on two fronts in the education marketplace, not just one?”

Gordon Freedman is president of the National Laboratory for Education Transformation, a nonprofit focused on building cross-sector teams to produce better outcomes in the PreK to Work continuum. Freedman was in the edtech and online learning space from 1998 to 2012, when he left his position as vice president of global education strategy for Blackboard, Inc. to establish NLET.