#14 - Our Children Can't Read

In a world captivated by criticism, it's easy to overlook the groundbreaking technologies shaping our future. Let's shine a light on innovators who are propelling us forward. As the most active venture capital firm in the US, we have an exceptional view of tech's real-world impact. Join us as we explore, celebrate, and contribute to the stories of those creating tomorrow. Welcome to The Tech Optimist. As a reminder, the Tech Optimist podcast is for informational purposes only. It is not personalized advice and it is not an offer to buy or sell securities. For additional important details, please see the text description accompanying this episode. Hello there. Welcome back to episode 14 of the Tech Optimist. We have a super cool conversation today for you lined up. between Mike and Andrea. They talk about how to gamify reading. Yep, you heard me right, how to gamify reading. So Andrea has a company called RallyReader, which in essence helps kids practice their reading. They work with publishers to get authors and exciting books to the younger generation to their platform to then make this process even better and more fun for parents and kids alike. They also use tools like AI and machine learning to build data maps for each child using their product to track and accelerate progress, which is super awesome. I think this technology and this way of teaching reading is going to be really insightful for just the education sector and schools around the country. Mike and Andrea have a really fun, really cool demo planned for you in this conversation as Andrea takes us through Rally Reader. So enjoy their conversation.

Okay, so welcome to this segment of the Tech Optimist podcast. I'm really pleased to be speaking with one of our portfolio company CEOs, Andrea Reisman Johnson, and her company Rally Reader. So Andrea, nice to meet you.

Nice to meet you too. Thanks for having me.

Where does this find you today?

Today I am in Colorado, where even in late May it was still snowing this morning.

Really?

Yes.

Love Colorado, heading there soon. Talk to us about Rally Reader. What do you guys do? What problem are you trying to solve?

Yeah, so we are a literacy solution for kids and for K-12 students. And the sort of problem we're addressing is that across the US, 2/3 of kids cannot read at grade level, including 80% of kids from underserved communities. And, 3rd grade is the critical test point. That's the change between learning to read and reading to learn. And so, if you don't make that leap, everything else becomes way more difficult. So, we are a literacy solution.

Yeah, it's one of those things where there's such a critical point there, there's a window. And, catching up if you miss that window is possible but really, really hard. So, You know, tools that can help that, very valuable and a big opportunity. Where is the company in its journey? This is a pretty early-stage company, I think, right?

Yes, we are early stage. This is a seed round that we just are closing. So, thank you for participating. And a few big pieces are done. The core platform is built. The distribution deals with all the 7 largest publishers in the world are done. We are in market, both in-home and in schools. And we just secured a pretty exciting partnership with Apple. So we are early, but there are some big, big pieces that we're excited about.

How about your background? I mean, how did you find yourself here? What led you to this position today?

So, I'm Canadian, which people always hear in my accent. So, when you get to the out or about or whatever it is, I'm Canadian and proud to be Canadian and dual citizen, live in the US now much of the time. But I have background in app development, so I have built and scaled on the consumer-facing side before. The last one was a cloud-based solution for photos and videos where we aggregated, deduplicated, laid things out chronologically, deep dive on facial rec, privacy wall, all the good stuff. We were lucky to have great investors and also competing acquisition offers. And it— that business has been sold to Shutterfly and is like a platform that supports about 10 billion photos. We could talk about that any other time, but I've done sort of consumer-facing applications before. Always the question is, who is the customer and how are you making their life better somehow? Yeah. The second of 3 pieces of background is my family operates the bookstores across Canada, the majority of them. My mom actually is the founder and CEO. My grandma was also an entrepreneur, which is She's gone now, but kind of nice. Yeah. And so through that, I have a lot of exposure in the book industry and unusually strong connections in the publishing world that I probably would not otherwise have had. And then just on a personal front, I have 3 kids and my youngest is super dyslexic and really, really struggled with reading. It was not— the irony was not lost on me that I come from a family that operates almost 200 bookstores and I would've had a kid who was functionally illiterate were it not for enormous intervention from the teachers and a really substantial parent participation piece at home. So it was kind of our own personal experience married with background in app development married with exposure in the book industry that kind of came together to motivate this.

I mean, we talk a lot internally here, you know, and people hear about kind of product-market fit, right? And, you know, something that's very, very important for us as investors is founder market fit. And so I think one of the things that our team was so excited about in supporting your seed round is we just, we just felt a really strong kind of founder market fit here. So.

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Um, so tell me, I mean, the obvious question I think in everybody's mind is, We get the need, we get the scale of the need, but we're also in a very interesting time now with AI and kind of oh shit demos that we're seeing every 3 months, you know, where it's like, you know, is this— how are you thinking about this as, you know, these, all these investments in AI being a tailwind and not just You know, you're, you're going to get caught under the elephant's foot and just get crushed by somebody. How are you, how are you managing and thinking about that?

So I'll just back up a drop just to give a little bit of framework, if that's okay. So all of us, regardless of our background, we all learn how to read in the same way. There's sort of 4 key steps. Can you hear the sound? Can you match it to what it looks like? Can you sound out a word? And then how many words can you read per minute and understand? fluency, which is really, can you read the way you speak? We all have those 4 steps. And the schools now, and there's a reasonable amount of controversy in the schools and the reading wars and a bunch of big podcasts and things, there are some different approaches in terms of how to read. Regardless of how you learn, you have to practice.

Mm-hmm.

We are that practice piece. And there are a series of products in the market, a little bit like a kid can be lucky to get great piano lessons. That's awesome. If they don't practice,

Right.

Yeah, I mean, I don't play the piano. I was lucky to get lessons. I don't play. Guilty. But for the fluency piece, it really is about practice, like it would be for piano, and then even more so for reading, because the more you read, the more you encounter new vocabulary and build background knowledge and other things. There are a series of products that have been in the market for a while, not necessarily AI-driven, But where they have constructed content that they try to get kids to read to build fluency because it's totally separate from the AI world. Constructed content doesn't have a royalty fee to an author, so it's cheaper. They're boring. It's a lot like C-SPAN. It's not bad quality. It's just dull. Boring.

Yeah.

And that's just the problem. It's boring. If you want to engage a kid, You have to give them content they're excited about.

Yeah.

And we have full catalog partnerships. That means, in their parlance, backlist, which isn't bad, it's just older, and frontlist, like published today, we have it today, for all the big publishers. We've got the good stuff. We've got the stuff they're actually excited about. Like, you know, Wild Robot's going to be a big movie this summer.

Yeah.

Wild Robot, like whatever it is. And so I think part of it is real content. And it makes a big difference to have things they're excited about. And then for us, where the, where the real sort of machine learning and AI opportunities are, are behind the scenes. We build a full word graph, like a data map for each kid. What are all the words in English? What have they encountered? How many times? How many times they read correctly, incorrectly, not yet encountered? So that we can really start to understand, not just track progress, but accelerate progress. So you can find and fill the holes in their foundation in reading the same way we have traditionally thought about finding and filling holes in math.

Yep.

Does that make sense?

Absolutely.

So, for us, the content is a huge hook. The publishers only want to work with people they really trust. And the opportunity is really to accelerate the reading skills.

Now, we have a big network out of, you know, other entrepreneurs, obviously, you know, tens of thousands of investors and community members. A lot of them really like to support entrepreneurs and startups. What— how could they help you? What are your asks?

First of all, if you like to support entrepreneurs, that's awesome. Thank you. 2 pieces. One, if you are interested in literacy for any reason, let me know, please. And separately, if you have— if you are connected into schools, where you feel like this would be beneficial, again, please let me know. We are actively working in private schools, public schools, schools that focus on kids with learning differences, schools, districts where a high percentage of kids come from backgrounds where parents are not speaking in English. We kind of go across the board. So if you're connected in at the school level and you think this sounds interesting, please, we'd love to talk to you.

Ever wonder how the ultra-wealthy invest their money? They often back startups before they go public through venture capital. Now, individual investors like you can too with Alumni Ventures. Visit av.vc to get started. How about a little demo? Can you give us, you know, um, this is a podcast, but we also put this up on YouTube. So, um, yeah, why don't you give us a little taste of, um, the experience?

Okay, sure. Give me one second. It's pretty cool. So I have to say, for us, Apple looks at— Apple has an education division. They look at all the apps under the sun, however many zillion are in the App Store. They pick one or two for every major division. Like there's, I think, two for math. We are one of two for reading. And then they help on the sales cycle, taking you into schools. When we do demos with them, this is how they do it. They like to use this. Yep. Anyway, okay. So, part of what people see in Rally is that there's a huge selection of books, popular books, all kinds of books. There's a great search function. And then, if I go into sort of the books that have been downloaded into this account, the magic here is that, first of all, it's 50,000 books. at your fingertips, kind of like no shelf space required. And then kids can read silently like you might on a Kindle, or you can read out loud. And then we will catch quite a— we'll catch a meaningful percentage of errors and help you in real time so that your kids aren't just skipping the hard words or reading incorrectly and not knowing. So I'll show you some of the reading piece, and then I'll show you the dashboard, which is really what the kids get excited about. Okay. So what's happening is if I'm making mistakes, it is stopping and giving me a chance to try again because we want to encourage persistence. If I get it, great. If I don't get it, I can press play and have the word read to me. And then ideally, I read it back. I can also tap on any word and get a definition that is basically the same grade level as the book. And then what the kids are excited about is this, the dashboard. What they want are streaks, just like they would in any other app.

Gamify it, right?

100%. 100%. So what kids tell us is that they want streaks. And if they don't have access on the weekend, they want some way to freeze their streak or restore their streak. Like, this is what they care about. And from our standpoint, so many other things in their lives have been gamified. Whatever tricks and tools we can use to get them to read more.

For sure.

Thumbs up.

Yeah. I mean, we've gamified investing through Robinhood. So, you know, we know it works, period. Right?

Exactly. And like, as one example, one of the things that I hear all the time, especially in like 4th, 5th grade focus groups, is something like, okay, if I do my 15 minutes of reading today, but you still want me to finish the chapter, what do I get? Which might sound direct, but for anyone who's spent time with a 4th or 5th grader, it will also not be surprising.

Yeah, transactional. Yeah.

You got it. Exactly. And so, basically, what they got was a word counter, the same way we as adults know that walking is good for us, but seeing steps counted is exciting. They see that kind of stuff. The data— I was talking about sort of a data map behind the scenes. Most adults, parents, anybody has heard of sight words or high-frequency words. In the academic world, they're sometimes called Dolch words or Fry words. But, we've scanned 50,000 books. We pulled the 1,000 words that are the highest frequency. They make up 3/4, 75% of the words in all the books. And, we just gamified them. Read them out loud correctly in any order, And, the first 3 times, they sparkle off the page and then they're yours. And, you can see on the dashboard which ones you've won. And then, we do a very customized specific errors that each kid has made just like if somebody gave you a math test and circled something and said, try this again. So, we help them build the broad foundation and then help them practice their kind of specific errors.

Yeah. So, the sight words, just again, so I understand as a layman, which is If kids really have internalized that subset of words, the fluency of reading just is greatly accelerated. Is that roughly right?

It's exactly right. And it's the same reason— the sort of English teachers talk about it as automaticity. You have to be automatic with those words. And it's the same reason we memorize the multiplication tables in math. Because at some point you get to an equation, and if you are puzzling out 7 times 8 as opposed to automatically having 56, You lose the thread, right?

Right, right.

So, no, that's

great. I mean, it's great. Now, how about parents who, you know, my school hasn't adopted this, but I am an involved parent and really want a tool like this for my child?

Yeah. So, we do a consumer offering where it's just— right now it's iOS only, iPhone and iPad. Personally, I prefer the iPad just because it's a bigger screen, but it's your choice. So, the app right now in the App Store is free and you pay for books. And so, the offer right now for parents is pay the same price for books and have your kid have that kind of real-time support and data so that you're not the one pestering. You're the one who could be like the cheerleader who's like, good job.

Yeah. That's fantastic. Hey, really interesting story. Again, strongly encourage our listeners, our audience, If this resonates with you and you want to be supportive, reach out to Andrea. I'm sure she'd love to connect with you. And yeah, keep up the good work. Again, nothing inconsistent with doing well and doing good at the same time. And again, I just think that this is an example of that. So congratulations on your progress to date. Congratulations on your seed round. And Just continue to kick ass out there.

Thank you for having me.

All right, have a good night. Take care.

You too. Take care.

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