'Create Software That Makes People Smarter'

In May I published a piece in which I challenged edtech vendors to answer nine questions. The first person from an edtech company to take up my challenge is Jared Stein, vice president of product strategy & research at Instructure. (The company that makes the Canvas learning management system.)

My goal is to provide a forum that enables those of us who work in traditional, not-for-profit higher ed jobs (including faculty) to better understand how edtech companies operate, and how the people who work in edtech think. Colleges and universities are increasingly dependent on the platforms of for-profit vendors to run our core operations. Gaining an understanding of the edtech world will help us as we choose who to partner with, and as we manage those relationships.

I invite other edtech company leaders to get in touch with me about answering my nine questions. And I’m grateful to Jared – and Instructure – for being willing to invest the time and energy to engage with our community.

Q1. What is an edtech company?

A: An edtech company is a business that believes technology can make teaching and learning better for more people, and building that technology creates innovation and jobs. An edtech company focuses its product line on solving real problems in education, and philosophically must balance an education worldview with a technology worldview. Achieving this balance enables edtech companies to innovate.

Q2. Who are the edtech companies?

A: Instructure is an edtech company with a simple vision: "Create software that makes people smarter."  We like to make things simple, knowing that in order to be effective, simplicity isn't easy, as it must express a deep understanding. That's where we think technology can really benefit education -- by simplifying the tools educators need to help all students succeed.

Our vision also acknowledges our limited role in education. We are technologists first and foremost. We employ educators, of course, just like education employs technologists. But we don't pretend to be the educational experts; rather, we serve them. If we forget that, we risk losing touch with our actual users.

Our vision is also broad enough that, even though it's clear we are committed to improving education, we recognize that, in the 21st century, education is lifelong and can't be limited to just the classroom or the college.

That's why, at Instructure, we have several products and services that are focused on that vision, spanning higher education, K-12, and corporate learning. In this sense, our business really is composed of several, smaller businesses that we expect to grow so they complement and not distract from each other.

Q3. How do edtech companies get into the educational technology business?

A: Instructure was a start-up born of graduate students' desire to build awesome technology and fix the broken LMS market. As students, they saw firsthand how difficult, unreliable software was a barrier to their own success -- if their faculty wouldn't use it in a meaningful way, students ended up with the short end of the stick, losing out on the flexibility, convenience, and organization that the modern web offered. They wanted to changed that -- and to build technology that reflected a philosophy of openness and student-centeredness as a contrast to traditional corporate thinking.

They began by listening to users on a "product validation tour" (PVT), by hitting the road in a beat-up car with a slide deck of mock-ups that changed after every visit they could get. They started with just a little bit of angel investment, then took venture capital investment over the first few years as the company grew a revenue stream from more and more clients. (FYI. Crunchbase is a great place to learn about start-ups.)

Q4. How do edtech companies make money?

A: Some edtech companies sell directly to end-users (consumers/B2C). Mobile apps are the most common example today, though publishers and desktop software are good historic examples. Instructure's business model is B2B -- we sell our software as a service (SaaS) to institutions or departments. 

To do this, we work with institutional stakeholders through an evaluation process, of which we are usually several vendors involved. These evaluations are what we'd call a complex, consensus-driven sale -- the institution (rightly) involves users and stakeholders from across campus, from administrators to technologists to faculty. We're delighted when they include students, because that's the perspective we started with.

You ask about profitability, and that's a question that sometimes comes up in LMS evaluations as well. In our early years, Instructure strategically focused on re-investing in our company for growth over profitability. To be clear, business growth isn't just about growing the value of the business; it's about creating a stable company that clients can trust for the long term, ensuring the people we hire have a bright future, and having the resources the company needs to continue to improve and expand the software and services. Instructure is now in a position where we can continue to grow our business and make meaningful progress on our path toward profitability.

Q5. Does it matter if an edtech company is public or private?

A: Different models have different strengths for different companies. We aimed to go public from the beginning, in part because we felt that was the best way to show we wouldn't get bought by a bigger company, but also to provide our business with another layer of stability and resourcing for growth. Growth itself can present a challenge to edtech companies -- you have to have totally reliable technology, and your support people have to be top notch in order to serve a growing number of customers.

Instructure's IPO was in November 2015, and we've continued to be successful while providing more transparency into how the business is organized and run through quarterly earnings reports, presentations, and other public records. Because of our responsibility as a public company, we'll leave it to investment analysts to talk to what you should look for in those reports.

Q6. How many people work at the edtech company and what do they do?

A: Instructure employs more than 1,000 people. Our headquarters is in Salt Lake City, Utah, at the foot of the mountains, and we now have offices in seven locations around the world. The senior executive team at Instructure is responsible for Customer Success, Engineering & Operations, Finance, Marketing, Product, Sales, Human Resources, Legal, etc.

That's pretty much like any edtech company in one way or another. In the early days, people wore a lot of hats because we had to, and those people now tend to have very strong cross-organizational knowledge and relationships, which enables us to get things done quickly and transparently.

One of the things that's been important to us from the beginning is avoiding unnecessary bureaucracy because that's just lame and wasteful. But in order to do that, we have to have a strong company culture with values that make dumb, bureaucratic hoops irrelevant:

• Simplicity
• Customer experience
• Openness
• Trust
• Ownership
• Excellence
• Integrity

This is how we strive to be a company that our clients will love and our employees will believe in. We don't think we'd be successful if we didn't live these values, so we do a lot of things to specifically encourage and recognize these values in our teams every day.

Openness, for example, is super important in our culture as well as our technology because it supports other values. Our work space is physically open -- no one, not even our CEO, has a private office. This makes our offices inviting and real, and it helps people feel like we're truly all on the same team, that even though our titles are different, we're all sitting at eye level, and no one should be above helping others. This layout facilitates communication and connections across teams and departments.

Information shouldn't be secret; we want employees to know why and how what they are working on supports larger goals and impacts our users, and to be able to have answers for customers when they need it. So we have a wiki-like internal knowledge base (instead of just an "intranet") that all employees can access and contribute to.

Q7.  Where do edtech companies spend their money?

A: Because Instructure is a public company, you can actually find out how we spend money in our quarterly financial results. We report how we spend money will shift as the business develops. For example, as an unknown start-up going up against well-established incumbents, it was critical in the early days that Instructure invest a lot of money in sales and marketing in order to tell our story and create brand awareness. That's less important for us in the U.S. market today, but still very important internationally.

Q8. What is it like to work at an edtech company? What do you do all day long?

A: I'm VP of Product Strategy & Research. I spend most of my time collaborating with Product Management, Marketing, Sales, and Finance as we strive to make the best decisions for our users and our business. That can be as simple as ensuring that everyone in every team is aligned on shared objectives so that we all understand the why behind what we're doing. I'm responsible for guiding us in what we research, what we build, and how we take our software to market. I analyze data, I write reports and present analyses. I also coach team members, and I learn a lot from everyone, every day.

My team also spends a lot of time talking with (and learning from) users and customers. We talk about the things they love in our software and the things that need improvement. We aim to be open and honest in these conversations, never to over promise or over commit, and to work together to figure out the ideas that will be most impactful.

As we get into blue-horizon thinking about the future of edtech and how -- pragmatically -- we get from here to there, I rely on my smart colleagues for the best ideas, to help us avoid mistakes, and to balance out my own perspective.

So, basically a lot of meetings. But awesome meetings with whiteboards and note cards and assorted edu-nerd thrills.

Also, what’s keeping you up at night?

Making the right decisions about roadmap and technology investments so that we both support current instructional practices, and also enable new, innovative approaches and ideas in teaching and learning. We started from the idea that the most important thing we could do was to make educational technology easy to use, so that more faculty would adopt it, so that students would benefit and a campus community of instructional practitioners would form.

That's still true, and we hold to the critical rule of agile software development: "Listen to your customers." But we must also listen to peripheral voices and examine fresh approaches to education that may be outside of the mainstream. In that respect, my responsibility is to balance our understanding of what users ask for with an understanding of the problems that they need to solve. Those aren't always the same thing, and sometimes the problems are latent. It's not a dilemma so much as a challenge: People may be satisfied if you give them what they ask for, but you'll only change the world when you go where no one's been.

Q9. What else should we be asking?

A: Perhaps, how can we build better, more productive relationships with edtech companies? I don't have a pat answer for that, but there seem to be more and more opportunities to partner and engage in ways that are meaningful and authentic.

We see this happening a lot via organizations like the IMS Global Learning Consortium. I'll also plug the work that Educause is doing to connect higher education institutions and leaders with edtech companies (for example, through the Corporate Member Advisory Committee, which I participate in).