9 Questions to Ask EdTech Companies

Josh Kim says colleges and universities expect their edtech company partners to know a lot of them, but institutions should know more about the companies, too.
 

May 17, 2017
 

Every person who works for an edtech company that hopes to do business with a college or university should read James DeVaney’s piece Time to Bust The Myth of the Slow University and the Fast Edtech Company.

The big point that DeVaney, the associate vice provost for Academic Innovation at the University of Michigan, makes is about partners versus vendors. In higher ed, we want partners. What DeVaney calls for is a deeper appreciation and understanding of the academic culture, operations, structure and constraints within the edtech for-profit community.

What is missing from DeVaney’s writing is the other side of the partner relationship. If academic people want corporate edtech people to understand them, then it is equally true that academics must understand corporate edtech staff.  

All good relationships are built on reciprocity. If we want to find a different way forward across the university non-profit/edtech for-profit divide, then we need find a way to see the world from each other’s perspective. We need to develop an informed empathy on both sides of the relationship.  

This is sort of informed empathy is necessary because, increasingly, we need each other to survive. To a degree that is not much appreciated or recognized within our academic community, we are dependent on our corporate edtech partners. The day-to-day operations of the services that we provide on our physical and digital campuses -- be they educational or credentialing or support -- rely on the smooth integration and functioning of services from a huge range of companies.  The complexity of modern postsecondary education requires an ecosystem of products, platforms and services to manage and run.  

It would be an interesting exercise to count up all the vendors that you rely on in your sphere of university work. In the digital learning space that I inhabit, we could not run our day-to-day business without the consistent and reliable presence of a learning management system (LMS) and student information system (SIS). These are only the top layer of the most visible for-profit platforms that higher ed depends on. Almost every system which we rely on -- from the financial (ERP) systems and business intelligence (BI), to the software and physical networks that manage our applications and data -- is the result of a university/vendor partnership.

It is interesting -- therefore a bit worrying -- that most higher ed people (including me) understand so little about corporate edtech world. We don’t know the answers to basic questions about how corporate edtech works, and we probably don’t even know the right questions to ask.

It is in that spirit of not-knowing that I offer these nine questions to our current and potential partners:

1. What is an edtech company?

This may seem like a very basic question, but it is confusing to most of us in higher ed. Are firms that we think of as publishing companies, like Pearson, McGraw-Hill or Wiley, really edtech companies? What about big companies that do lots of things, but that also do business with higher ed (think Apple and Microsoft)? 

Does the primary business of a company need to be education related for it to be called an edtech company, or is it only necessary that the firm works in the education space?

2. Who are the edtech companies?

Does somebody have a list of every edtech company, including their products and services?  Should university people know about all the players across the edtech ecosystem -- or is it enough just to know about the companies in the areas that we work, such as digital learning? 

How similar or different is an edtech company that works in the learning space to a company that is in the administrative space? Or is that a divide that does makes sense from a university perspective, but not from an edtech company's point of view?

3. How do edtech companies get into the educational technology business?

How are edtech companies born? Are they mostly startups, or are they mainly part of larger companies that have businesses outside of higher ed? At what point does an edtech company move from being a startup to something else? 

How are new and existing edtech companies funded? How does angel and venture capital funding work in the edtech world -- and how closely should we be tracking and trying to understand the various deals and mergers? What publications and websites should we be reading to keep track of the business side of edtech?  

4. How do edtech companies make money?

Who are the audiences for edtech companies: schools, departments or individuals? How much money do edtech companies make from institutional (B2B) and consumer (B2C) sales? How long does it take for an edtech company to earn a profit? What is considered a reasonable profit for an edtech firm, and how does that compare with other technology verticals? 

5. Does it matter if an edTech company is public or private?

Is it the goal of all privately held edtech companies to go public? Should it matter to a potential university partner if the edtech company is a closely held private company or a public corporation? Are the time horizons for private and public edtech companies different? 

What documents, materials and reports about privately held and public edtech companies should we be reading? What should we be looking for in these reports?

6. How many people work at the edtech company and what do they do?

These questions above are about business models. What is also interesting is what an edtech company looks like from the inside. Is it reasonable to ask to see the org chart of a potential partner or to ask about its headcount? How much of the internal organizational culture and operating structure should we understand about a potential for-profit partner?  

7.  Where do edtech companies spend their money?

I have little idea about how a typical edtech company (if one exists) apportions its spending.  What percentage of dollars go to staff, sales and marketing, operations and R&D? Are there benchmarks or best practices for edtech spending -- and that we should know about? If a company is spending above a certain percentage on customer acquisition (sales and marketing), and below a certain percentage on R&D, should we be concerned? 

How do percentages translate into actual dollar amounts? We understand university budgets, but how do they compare in scale and scope to for-profit edtech budgets? How opaque or transparent is the spending in the edtech corporate sector?

8. What is it like to work at an edtech company?

When I talk to people who work for edtech companies, I always ask them two questions: 1)  What do you do all day long? 2) What’s keeping you up at night? I’m curious about the actual day-to-day existence of people at all levels of the for-profit corporate world. I know what higher ed people do all day (at least I think I do), but what happens in the corporate world is a mystery. 

I also feel like I know what is worrying my university colleagues. Worries that almost always come down to scarcity, resources, people and security. Do corporate edtech leaders and doers worry about the same things?

9. What else should we be asking?

I just proposed a lot of questions -- and they might be the wrong questions. Spending a career in higher ed does not equip one to understand the corporate world. This is true even for those of us who partner with for-profit organizations. So much is hidden from us in our interactions that we don’t know what we don’t know. 

I’m convinced that we in higher ed need to ask better questions of our corporate partners. We need to develop the same level of curiosity about the for-profit world as we insist that edtech people have about higher ed. How can we make space for these sorts of searching conversations?

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