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The Lure of Lore

March 15, 2013

It's hard to know quite what to make of the announcement today that John Katzman's Noodle Education is buying Lore, the e-learning company formerly known as Coursekit. It's tempting to dismiss the deal as one hard-to-figure-out education search company (Noodle) buying a startup that generated some buzz (and investor money) at inception but hasn't yet gained much traction.

But writing it off that way might underestimate Katzman, whose track record in identifying and starting companies that seek to transform parts of the higher education ecosystem is strong. His first enterprise, Princeton Review, changed the face of standardized testing preparation; 2tor, which he founded in 2008 but left last summer, has carved out an elite niche among the companies helping colleges take their programs online and to scale. (The latter is now called 2u.)

Taken at face value, the purchase of Lore seems only mildly significant. The 18-month-old company was founded as Coursekit by students at the University of Pennsylvania as one of a series of startups seeking to improve on traditional learning management systems like Blackboard by blending them more fully with social media. 

Coursekit, which changed its name to Lore last year, skirted the traditional path of trying to persuade colleges or programs to adopt the platform to deliver its courses, opting instead to get individual professors and students to use the free system (in the hope of selling them books or tutoring services). Bloggers and analysts at the time -- such as Inside Higher Ed's Joshua Kim and Audrey Watters -- saw pedagogical and technological promise in the company's open access approach, but wondered about its business model.

Lore's materials say that it is used by professors on more than 600 campuses, but it does not register even as a blip in the annual Campus Computing Project's review of the learning management system market, which is based on institutional sales, notes Kenneth C. (Casey) Green, the project's founder (and a blogger for Inside Higher Ed). That's in direct contrast to another startup LMS begun at about the same time as Lore: Canvas Instructure, which had gained a full 4 percent of the LMS market by the time of last fall's Campus Computing Project survey.

So if Katzman (who declined to say how much he paid for Lore) and Noodle have not bought the LMS for its footprint in the market, why, then?

The answer is that Katzman was looking for a learning management system to serve as a foundation for a new, second business line for his new company, Noodle.

What is the first business line? Fair question. As is true for just about everything Katzman does, Noodle has grand ambitions: the founder was fond in its early days (2010) of encouraging people to "think of it as Google for education." The site allows users to search for all types of learning they might want to do -- to "find the right school, college, tutor, instruction video, or any other education resource." It has not yet revolutionized education search in the way Katzman hoped it would, though he says major improvements are coming soon.

In the meantime, there's that second business model, which Katzman calls Noodle Launch. Defined in broad strokes, it sounds like another in the growing number of "online enablers," companies that help colleges expand their reach via digital education. That market has been heating up, with purchases of existing players such as Embanet/Compass (by Pearson) and Deltak (by Wiley), expansions into new realms by companies such as Academic Partnerships, and new initiatives from Blackboard and a company spawned by Carnegie Mellon University.

Katzman says that Noodle Launch will have two key differences from most of the current players, most of which require the colleges and academic departments they work with to use a package of all of their services (program selection and development, marketing help, technology, lead generation, enrollment services, etc.). Like Blackboard's proposed online services arm, Launch will let individual colleges (and high schools and other organizations) use its services "à la carte," Katzman said in an interview -- just using Noodle's instructional design or marketing help, perhaps, or simply adopting Lore as the LMS.

The second difference is (potentially) the big one. Katzman's goal is for Launch to focus intently on helping colleges take advantage of the company's various technologies to do something that, in general, the spread of online learning has not: allow them to cut tuition. "Noodle's goal here is to help all educators -- universities, K-12 schools, and others -- use technology to significantly reduce tuition while improving the quality of both their on-campus and online programs," he said via e-mail.

Katzman said it would be premature to say exactly how Noodle plans to lower institutions' fixed costs while not only protecting but actually strengthening quality. But presumably anticipating critics' fears that it would do so by using less-qualified instructors, robo-grading, or other means likely to lower quality, he insisted that "this is not about turning colleges into correspondence schools.... We need more faculty/student interaction, not less."

 

 

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