Are There Unicorns in EdTech?

This is Future youe with Jeff Salingo and Michael Horn.

Hello to this episode of Future youe. I'm Jeff Salingo along with Michael Horn, and we're here at the ASU GSV Summit, the annual summit in San Diego. Beautiful San Diego, but chilly. San Diego, California. And with one of the founders of this great conference from gsv, Deb Quazzo. It's great to be here with you.

Thank you. Thrilled to be here.

So, Deb, one of the questions that we ask almost all of our guests who are on Future you is how did you get started in education? And why the passion for education?

Yeah, you know, gosh, it goes back 20 years and I look probably 21 years actually at this point. And I was an investment banker and actually began to work with my partner Michael Moe, who had begun to write some white paper research putting out the thesis that the education sector, which was actually not viewed to be an investable sector, had all the characteristics of an emerging important sector, a huge fragmentation, large chunk of gdp, dramatic inefficiencies, little touched by technology, et cetera. And I got taken with a thesis and then it became very clear to me and to us as a group that the ability to take advantage of education innovation and move it forward was sort of a key wedge to allowing all people to have access to the future, which is sort of our overarching motto. And so, you know, the further I got into it, the more passionate I became. It was not always a. The early days were tough because it was not a sector particularly ready for transformation. I think we were finally at a moment where things look to be happening in a very positive, with a very positive tenor, which is exciting.

And how does this summit play into it? And for those people who've never been to this thing, how do you describe what ASUG has been?

Well, I mean, the hgsv, we like to call it a strange cocktail of people. It's a. You know, what we are particularly proud of is that we pull people into a venue who would not necessarily be in the same room together. So it's pre K12 teachers and principal, really principals and school leaders and district leaders. It's higher education leaders, it's investors, it's over 400 CEOs of technology companies. It's very global. We have huge contingents from China and India and Europe and other places. It's grown a lot, will be, you know, over 4,100 people this year, up from 350 when we started nine years ago. So it's been a Pretty, pretty material increase in the attendees. And this year we've really worked hard to enrich the workforce, part of the community. So it's not an edtech conference, it is a talent technology conference focused on what we call the pre K to gray arc of learning and talent. Because if we're not focused on the workforce, if we're only focused on education and innovation without the workforce outcomes, then we're sort of completely missing the point from our view. So it's a unique place, it's very senior level people, people get things done. You can have lots of meetings with lots of different types of people, foundations, politicians, policymakers, media, et cetera. So we're really proud that we think we've just attracted a very diverse set of humans who all care passionately about the idea of optimizing talent. And so human talent. And so that's, I think that's the special sauce is this sort of strange cocktail that we're, we're very proud to have curated.

And as you said, it's just absolutely exploded from nine years ago when we were all huddled at Sky Song and asu. So you've had a heck of a perch to be able to watch higher education over that time period. How has it evolved in that time period and where do you see it going?

Higher education specifically?

Yeah, let's, let's. I mean obviously you wear a lot of hats, but let's, let's focus on higher ed for a moment.

Sure. We, it has been really interesting, the sector, we actually, the growth of the, the summit, you know, it's not causal, but the growth of the summit does sort of mimic the increased investment activity in the sector, which is interesting. I think the, from higher ed's perspective there is. The Moocs were obviously the first big story in 2011 in terms of just busting open the category from an innovation perspective. You know, there's a lot of skepticism about whether the MOOCs were what they were really going to do at the end of the day. We have a panel coming up, gosh, today or tomorrow with the CEOs of Coursera EDX, the Xinhua MOOC, which is fascinating.

It's like 12 million.

It's fascinating. They're a for profit actually heading to an IPO as is written on the walls of their office in Beijing in 2021, they believe so yeah. So we have all the udacity. So who, all of whom have developed really different and interesting sort of models for their businesses that are each individually wildly successful in my humble view. So I think that the higher education sector, we clearly need to, we have this perverse situation where you have declining enrollments in many traditional institutions, particularly in the middle. We have demographic trends that are working headwinds that are going to work against us. Coming forward, this terrific new book on the whole demographic challenge. And at the same time, we have 30% of our population with degrees and somewhere between 60 and 80% of our population is going to need to have some form of credential in order to be, to be able to participate in the future economy, even the current economy. So I think the positive pressures in the higher ed segment to, you know, how do we get bigger chunks of the population having the kinds of higher education skills and credentials that are going to allow them to work? And that may not be a degree per se, probably won't be a degree per se necessarily, that will be part of the package. But I think the innovation impetus for higher education has never been higher. And I think it's, it's, it's fascinating.

Do you see existing institutions filling that void and innovating, or do you think it's going to be upstart institutions? We're obviously sitting here on the heels of General assembly just having been acquired for nice sum. So where do you see that innovation coming from?

Yeah, I think it, I think it's both. I mean, I think you have, you have the ASUS and the Southern New Hampshires and the Northeasterns and just, I mean, those are three institutions that you wouldn't, we wouldn't have been sitting here 10 years ago talking about in terms of, I mean, ASU had just begun, become our partner 10 years ago. People thought we were crazy because no one talked about ASU as a center of innovation or the kind of excellence that they have now. They have now clearly and preeminently established. So I think that, you know, over the last decade we've had some very material institutions come out of nowhere effectively. Those three are particularly notable with very, you know, large numbers of students to really create, you know, create new paths and new alternatives. So I think you're going to have, quote, traditional universities. Purdue will become certainly coming along with their Kaplan acquisition. Mitch Daniels is certainly hell bent on scaling that institution as well. So I think you'll have traditional institutions on the one hand, creating new and innovative ways to deliver, you know, larger, you know, President Crow's objective has always been to deliver more scale degrees at greater scale, both online and offline. So I think you'll see that and then you'll see the General Assemblies Adecco acquiring in the yesterday. Fascinating that a staffing company is going to move forward. You know the other one, the interesting one, we work buying Flatiron School. We're going to see all kinds of, I mean we work that makes so much sense. I mean they are the new form of work. So why shouldn't people be learning at work? They have to be. You know, we think this whole, the whole phenomenon of the workforce, the workplace becoming a place for educate, you know, a real place for. Valid place for education is critical.

So it's actually funny because when you first introduced General assembly to me and I think it was you that first told me about them several years ago, that's actually how you described it was the merging of education and work together in one place.

So, and I think that's where we're heading. I think, you know, you know, the AT and T's of the world who've really come out and said, you know, our workforce, I mean the vast majority of our workforce is not trained today to do the work that we actually need them to do today. And not to mention tomorrow is going to put huge pressures on enterprises and the gig economy workforces broadly to provide educational, you know, effective education so people can operate.

So Deb, as you look to the future, what are some of the broad themes that you think are going to emerge in terms of where the investment's going to go?

You know, and you still want to stick with higher ed or brought more.

Let's, let's stick with higher ed.

Okay, so I think that the, I think you're going to continue. Well obviously there's a huge amount of, you know, work around AI machine learning. I think people are, we're going to continue an adaptive platform. So I think we've still not really seen anyone break out effectively in the ASU is so fascinating to be to partner with because they've been such an aggressive tester of every product that's out there. So it's a great window for us to be able to talk to that team about kind of what's working and what's not working. So I think you'll continue to see people try to perfect the investment in truly adaptive digital platforms and whether that's integrating AI or deep learning for that matter, there's a lot of move afoot around how do we actually now move forward to deep learning and make some of the manual processes of these platforms eliminate some of the manual processes. So I think you'll see a lot there. I also think you'll continue to see really innovative alternatives. And Trilogy Education is actually a great example, a company I could shoot myself for not investing in. But you know, they've really taken, just brilliantly taken the continuing ed market, high brand universities and providing boot camp services in partnership with Northwestern and high brand universities at Rutgers, others all around the country and tapping into their continuing education population, which is, which is a stunningly large population. I can't remember the number I talked to the guy at Rutgers. I was, I was blown away by the number of students sitting in the continuing ed pool at Rutgers. So I think you'll continue to see innovators like that, Dan Summers, the CEO there, come around and creating brand new thoughtful, smart ideas that are really bringing efficacious learning into the adult market, higher learning into the adult market.

So I like your idea about blending work and education. And we've talked about this previously on a previous episode of Future you. I've written a lot about this, especially when it comes to the gig economy. So if you're, if you're an employee working for an employer makes sense, right? But what if you're, you know, we know that there's been a huge growth in the freelance marketplace even among highly educated people. What happens when you're no longer more to an employer who might be providing that professional training, that education? How do people like that in this future economy, how are they going to be able to navigate, figure out where to get it, what to get and even how to pay for it?

Yeah, I think that, well, I think there's, it's the consumer, you know, the companies that are delivering in a consumer format, whether it's udemy pluralsight really started consumer now has really moved to the enterprise. But codecademy, I mean there's a plethora of, you know, companies that are delivering workforce learning to individuals in a consumer model and I think those will continue to develop. I met with a great group yesterday that's working on social emotional learning for the workplace. Actually we talk so much about it in K12 but working on, on a model for the workplace that could be delivered both as in a consumer and an enterprise model. So I think, I think that, I think the people, the content's going to continue to get better. You know, it's everything from the master classes of the world doing, you know, very high end, unique but being used by, used by people in the arts industries and other industries. So I think we'll continue to see great content being produced that you as a consumer can purchase and make you better, make you more qualified for your, for your work today or your work tomorrow or a new job you want to do. But I think the, and I think the great point on the how you pay for it. So I think that is the real challenge. I do think we've seen, we're seeing lots of companies take whacks at payment models and how we, you know, how do we, whether you're doing kind of an income share type arrangement where someone's going to be paid back for, you know, out of their future, their future income stream, or whether you're doing it in a placement model where people are taking courses and then that those courses are actually trilogy is a good example then making job placement for the, for that individual and actually the employer is paying for the learning that happens. So I think that there are going to be all kinds of artful ways for us to be able to finance folks who can't pay out of pocket to improve their skills. Skills. And so I think that there's a lot of, a lot of head space going into that problem and I think it should be a very big industry, honestly, because I think it's. If you really believe that that lifelong learning is now becoming, we've been talking about it for decades, but if it's really now essential, and I think it now is really essential and unless you're old enough like me that you're not going to have that, you don't have to do it. But my children certainly are going to, I think it's, I think it's really quite an exciting potential investment category now.

That's super helpful and I appreciate you joining us because whenever we're trying to figure out where the puck is going in this space, you've been a leading light of that really, you know, you've created this conference that has put a vision together, brought a bunch of us to the desert almost a decade ago, and then continue to shine that light forward. So thanks so much for joining us and thank you. And we'll be right back. Thank you.

This episode of Future youe was made possible with support from the Academy for Innovative Higher Education Leadership. The Academy is a partnership between Arizona State University and Georgetown University and is the premier training ground for those who aspire to senior leadership positions in higher education and those who want to lead organizational change at colleges and universities in the future. For more information and to apply to our next cohort, go to Georgetown asu. Edu. This episode was also made possible with support from the Entangled Group, where innovation meets operations. Entangled is a venture studio focused on helping the education ecosystem transition to support the knowledge economy. We build companies and nonprofits that support higher education institutions as they innovate to carry out their critical missions for society in the 21st century.

And welcome back. We're here live at the ASU GSA Summit in the ASU GSV Marketplace. So you'll hear a lot of background noise as people start waking up here.

And I was gonna say the conference is waking up.

Yes, we got an early start, but everybody else seems to be finally, finally waking up. You know, we talked to Deb about what this ASU GSV summit is. It's less than 10 years, but she said something like more than 4,000 people here this year. Michael, you've been coming to these right from the beginning. That first year when it was much smaller, it was in the desert at skysong. What, what was that like that first year? And how has it changed in the years you've been coming?

I think Deb said It was like 300 people or something like that, is what she said. I remember it being a small, intimate gathering. It felt like a bunch of us out there to change the world. I remember Michael Crowe speaking, president of Arizona State, of course, and just being like, wow, he gets this vision of what education could be. This is exciting. But it was a small group of us. And I remember a couple years of that. And then Deborah and her partner Michael Mo, in creating this conference, we. We used to have these advisory gatherings after the conference where we would debrief and talk about themes for next year and think about where this was going. And I remember maybe three years into it, we said, gosh, it's feeling a little overheated. There's a lot more people coming here. It's probably like 900 people or something like that. And. And Michael said, this can be bigger. It's going to be even bigger. And I. I remember thinking, oh, my goodness, are you sure that's a good idea? And it's grown to 4,000 plus people. It's totally mirrored the investment in this sector. And I wouldn't just say that. I think the innovation from traditional institutions as well, and that's what's made it maybe work more than I had expected. When they said let's keep growing was. I think I had a skepticism that, you know, what would it look like if sort of it was barbarians at the gate style innovation. But it's evolved. It really is a conversation of pre K through gray, as Deborah put it. And it's really a conversation of employers and traditional institutions. Traditional educators being part of a conversation, asking themselves, how do we innovate to better serve individuals and society and not make those a false dichotomy.

Right.

I showed up in year three when it was at skysong at asu, and I remember meeting. I was in the process of reporting my first book, College Unbound, at the time. And I remember meeting people like Jake Schwartz from General assembly and Gunner Councilman who is now with Entangled. And so I remember meeting all these people for the first time and understanding, because I was still with the Chronicle at that point, that there was this whole new infrastructure, this whole new learning economy growing up around higher education that, to be honest with you, I think most people in traditional higher ed have never quite understood. So when I explain to people, and I'm coming to this conference, when I talk to people within the traditional higher education ecosystem, many of them haven't even heard of it, which I think is a challenge for this conference, is how do we bring in a traditional higher ed? Because my theory of change is that it's, you know, traditional institutions are still going to exist, even probably in 50 and 100 years. There'll probably be fewer of them, but how do we bring them into this conversation at a conference like this?

Yeah, and something that's always struck me is I like conferences that I know where I'm going to. And so the conversation here is very much innovation, investment. That is a key part of it. And I like a clear thesis around that because I know why I'm there. But I think where educators need to be at the table and it's been so important to have them brought into this conversation in this conference over the years is to really drive and inform that conversation. So it's not sort of innovation in a vacuum for its own sake, but toward a purpose with a respect for where we've been, why things are done the way they are, and a sobering reality, often of, you know, what this looks like, where rubber meets the road, if you will, of working with students, employers, and so forth. And that it's not just blow everything up style education, which I agree with you, you know, traditional institutions will clearly continue to exist into the future. They are clearly going to continue to play a very large role in shaping what education looks like and what society looks like. You know, it's direct reflection. And as we think about, you know, not just teaching, but knowledge creation and all these functions that universities play in society, I think it's been really healthy to bring those voices in and involve them. And I'm Struck. You know, I'm on a panel at this conference where I'm moderating a panel about personalizing learning in the K12 sphere. It's all districts on the panel. A few years ago it would have been all charters, and a few years before that it would have been no educators, period. Right. You know, maybe not fair, but basically that's the trend. And I think that's how much we've seen this conference evolve in just under a decade. And it's going to be very interesting to see what the next five to ten years of that looks like.

Well, and I think Deb gave us a little bit of a preview of that where she talked about this is not just an EdTech conference anymore. Right. We are talking about the future of learning and work and how they are blending together, which is something we've touched upon on this podcast before. I just finished this piece that appeared in the Atlantic this week around this idea of not only blending of work and learning, but also the idea of blending kind of face to face learning and virtual learning at the same time. Right. Kind of taking off on this announcement a couple months ago by WeWork, where they're bringing in 2U and 2U is going to provide their online courses to people in WeWork, and also allows people who are enrolled in 2U courses to go into WeWork, to do study groups, to take tests, and eventually, the way cher Pasek, the CEO and co founder of 2U talks about it, it will also allow them to maybe start new programs that require physical space. And this is kind of really an interesting development. You know, we kind of had these two silos of higher education kind of continuing to grow up side by side. Right. We had online only. You had face to face learning. A number of institutions were experimenting with hybrid education, but it seems that people are now kind of understanding what works online and what doesn't and what works face to face. And some people will always have to pick online only, and some people will always want to pick face to face only. But given what Deb was talking about in terms of the trends of this idea of continual learning throughout somebody's lifetime, a lot of that learning is going to be happening on the job. It's clear to me that that's not going to be able to just be online or just be face to face, but we're going to have to blend those worlds when we're learning on the job.

Yeah. And I was so excited you wrote this piece and want to geek out on it from an innovation theory perspective where Obviously my roots are. It's really interesting if you look at, forget about higher ed for a moment, but the disruptive innovation in consumer retail,

which is what the headline was, right? How higher education could be like retail. Which I think when people read that headline they were a little worried they're going out of business.

But so, so, but you have Amazon.com etc. Disruptive relative to full service department stores like Macy's and things like that. And what's interesting is so Macy's obviously has an online store, Macy's.com but it's what we would call a hybrid innovation actually. It's taking the new technology and putting it in the old business model. Whereas Amazon now is starting to introduce brick and mortar stores. But they don't have inventory, they don't look like a Macy's, they don't have the same service and fully staffed apartments in the same way that a Macy's would. Much lower infrastructure, but it gives you that personal touch that a face to face experience does. And so in my mind we always say disruptive innovations start as primitive and then they get better and better over time and they start to lock in more and more features and be able to solve more complicated problems as they go up market. That face to face interface, if you will, is that upmarket approach and you can see it with Bonobos, Warby Parker, et cetera. So what I think is happening in higher ed now is the same thing. We've seen a lot of higher ed institutions create hybrids and clay Christianson and I wrote about this for the New York Times in 2013, I think where just similar to sailing ships, they just stacked on steam engines on the top of it. And that's what a lot of institutions did was just put online learning and layer it on top of the business model. What I think with the 2U announcement with WeWork, which I thought was just a brilliant move, is that they're saying online is starting to put face to face components for the same reason that you said this is how we have to get better, drive better engagement, do things we couldn't do in the online environments, create communities. But more interestingly, from my perspective, the way that they're going to do it is not going to look like a traditional college campus organized by department, organized by, you know, physics is over here, I go over here for humanities, et cetera. But it's really going to be a co working space where that blending of learning and work happens and you have people from companies sitting alongside of learners creating community, solving problems together. Getting to apply the learning and create new programs, I suspect almost real time for needs that those people in those communities have. And so I think it's going to look very different from what some of those hybrid programs on the other side look like. I think it's fascinating.

And I also think it could be, as Rich DeMillo put in the article from Georgia Tech's center for 21st Century Universities, it could really be the storefront for the university. Again, if you're using the Warby Parker or the Bonobos model. And even really, it was Apple that kind of started this is this idea of curating products.

Right.

When you walked into the Apple Store when they first opened, it wasn't like walking into Best Buy where they have

like stacks of everything and a huge warehouse in the back.

And if you think of a traditional university in that way, that's what you do, right? You walk in and you have everything. But what if we had kind of a storefront for universities where you can go there, you can take a master class, you can meet with advisors, but you don't have everything that traditionally comes with a legacy university. So the other thing that I was interested in, what Deb talked about is kind of where things are going and wanted to see what else you thought about her, especially on deeper learning and AI in particular.

This is something I think we're going to have to geek out more on a future episode of Future youe, But deeper learning, artificial intelligence, adaptive learning to personalize. This has been a topic, obviously, Jeff, that's gotten a lot of investment over the years. There's been a lot of hype cycles around. It kind of feels a little like solar energy for a long time. It's, you know, it's been seven years away for, for 40 years. We're not obviously at that stage of adaptive learning, but there is something that's extraordinarily complicated. And I'm working on a piece right now, actually, about how sort of this Netflix for education has been this phrase that people have been dreaming of for a long time. And maybe it's the wrong phrase because, you know, Netflix and Amazon, they're great at giving you recommendations, but they're wrong at least 50% of the time. And that just might not square in education when you think about it. And education is a vastly more complicated endeavor than just what movie do I want to watch next?

Yeah. And so this is something we're definitely going to have to look more closely on. I noticed the Chronicle of Higher Education, just a special issue, mostly focused on AI and I think it's kind of a hot topic now, so we definitely want to look at that in the future. So it's been great to be with you here from the ASU GSV Conference. We'll be here also with you next week with Michael Crow, the president of Arizona State University and for Michael Horn and I. Please rate us and subscribe to us wherever you're listening to this podcast, and we'll see you next week.