Tim Draper identifies five EdTech areas ripe for investment: learning management systems, income-share agreements, collaboration tools, alternative post-secondary programs, and K-12 structure reform. He discusses scaling challenges and regulatory hurdles, drawing on examples from Draper University and his own family.
Chapters
So there are 5 areas where I kind of looked at that's interesting. So the learning management system, that's LMS, that's the most common, right? So you see many startups going into that space. Income share I talked about. That's the one I'm most excited about because I think, because of my background investment, I just can't bear to see such a good investment vehicle, but you have 2 sides of the people, the investors and the students aren't getting paired up. Does that make sense? Students need it and they'll definitely benefit from it. The investors, if you tell me this is a 25% IRR a year, why wouldn't I do it? So income share, I think enforcement is a challenge. But there is absolutely a solution and I think if we again meet in this room in the alumni event 10 years from now, I guarantee you there will be some companies that figure out a way to fund students privately and then get venture-like returns. Collaboration tools, this is where I feel You know, it's— I feel very privileged that we're in here sort of in the classroom face-to-face interacting with each other. We need to scale this. We should be able to collaborate and interact on a larger basis, right? It's very expensive to bring people in face-to-face. If we could scale this to 10,000 people on the internet via Skype or peer-to-peer within yourselves, we flip the classroom so you watch this video before you come and then this turns out to be a discussion. Right, all of those things I think will come, it's evolving and we at Draper University want to experiment with that as well. Alternative learning, here I'm referring to just different kinds of schools, right, this idea of 4-year college I talked about in our opening, there's no magical reason why it's 4 years and in fact if you listen to The president of ASU, Michael Crow, he talked about the university today that we see in the US, the public schools, have evolved over time. We started out with what we call the Greek college, so that's the Harvard, the Ivy League schools very early on. So that's more academic, just teaching, right? Over time you add research to it, so you actually have research professors working on bleeding-edge technology development, and then those people would do both research and teaching at the same time. What I'm thinking is as the next wave of schools coming online, people want to be able to educate 10,000 people at a time, using technology, perhaps there is a way to do it so that A, it doesn't take 4 years and B, maybe it takes 6 years but you could have a regular job and you just do it during your spare time. And that actually goes back to income share, then suddenly maybe you'd be able to pay it off as you go, right? So I think there are many things you can do and then if you even take a step back and say, like I often talked about my 5-year-old son, This K-12, right, why does it have to be 12 years? The information is so much— where he is now compared to when I was 5, I feel like he's much smarter or he knows more, so why do you have to put him through 12 years before he goes to college? Why not just compress this to 6 years? So someone needs to examine that, but unfortunately this is all very regulated, right? So the government does have a say. And maybe this is one of those things when the employers don't care, right? All they care about is a certificate from Coursera or Udemy, then you don't need a degree, right? So I'm actually quite open-minded about degree versus not degree. Right, I think, you know, I respect the data that when you have a degree, it's a lot easier to find a job to pay back your loan, but at the same time, maybe there are certain fields that are so specialized, you don't need a degree and you might be better off just getting a certificate.
