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Insuring High-Risk High-Yield Company/EDU Partnerships: An Idea for the NGLC
August 18, 2011 - 9:00pm

This is a proposal (or a conversation starter) for Next Generation Learning Challenge (NGLC), EDUCAUSE, and the NGLC funders and partners.

The NGLC is "….is a collaborative, multi-year grant program aimed at dramatically increasing college readiness and completion through applied technology.." and is partnered with EDUCAUSE and other organizations to "…disburse about $20 million over two years" (from IHE 10/11/10).

Disclosure: I have worked with the NGLC as a grant reviewer, and serve on a number of EDUCAUSE initiatives.

My proposal (or idea) basically boils down to this: Catalyze EDU innovation by insuring high-risk but high-yield company/school partnerships.

3 Assumptions:

1. If "meaningful improvements in college readiness and completion can be achieved" then some of the solutions will come from the for-profit private sector.

2. Colleges and universities are hesitant to enter into partnerships with small companies, even if the small company has the best, lowest cost and most disruptive learning technology.

3. That a granting body like the NGLC can utilize its resources to help mitigate risk, rather than underwrite the development of a new product or service. Risk mitigation, insurance, may be a more sustainable lever for supporting innovation than traditional granting methods.

The NGLC wave that I'm envisioning is aimed specifically at lowering the risk and increasing the support for potential high value (but unproven) collaborations between edtech companies (technology, publishing, startups etc.) and postsecondary institutions. A college or university is more likely to go with an unproven product or service from an unproven vendor if some of the risk and exposure can be mitigated. The imprint of an "NGLC" supported project may allow internal EDU champions to get traction around piloting a product or service that otherwise would not be considered.

As one of the decision makers for edtech products/services for my campus (specifically for the blended learning program that I work in), I always have the quote "nobody ever got fired for choosing IBM" in the back of my brain. With the ability to influence decisions and to take risks on a young company or an unproven (but exciting) new technology, I (disturbingly) find myself hesitating. The best product, the most innovative feature set, and the most passionate vendor partners must be balanced against the track record, solidity, existing customers, and long term viability of the company. Educational technology is like other technologies, the best product seldom wins.

The goal of the grant, therefore, would be to provide some cover to campus decision makers to work with startups or with an established company offering an unproven product. An insurance policy of sorts, with the cost of being willing (on both sides) to share whatever is learned in the process (the good, the bad and the ugly).

The criteria for selection would be the ability to demonstrate that the EDU/company partnership is indeed high risk (high risk to careers in particular) but has the potential to be high yield. A small company with a disruptive EDU product needs some traction, and traction means signing up some paying customers.

Could this work as a true "insurance" grant - in that it only pays (the school) if the partnership blows up (the partner company exits the business or doesn't deliver on its promises or roadmap), allowing the EDU institution a "plan B"?

I could also see how an NGLC grant could lower risk by offering a framework for advice and support during the negotiation and execution of the EDU / company partnership. As the "insurer" for the collaboration, the NGLC would be able to require disclosure from both side, and be in a position to recognize and fix small problems before they became big problems. The NGLC would be incented to fix problems, as this would avoid the need to "payout" on the insurance policy (and thus allow more partnerships to be underwritten).

Can you better refine this idea?

 

 

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