PHILADELPHIA -- Anyone hearing that San Francisco-based entrepreneur Alexandre Scialom won $50,000 in a business plan competition at the University of Pennsylvania on Thursday would probably suspect that the money came from the university’s Wharton School.
Such competitions have become a staple at business schools, which award money to start-up ventures, bring together new ideas and investors, and provide feedback to presenters on everything from their product to their presentation skills.
But Scialom wasn’t at Wharton or any other business school. The business plan competition in which he and eight other finalists -- from both for-profit and nonprofit organizations -- competed on Thursday was held by Penn’s Graduate School of Education. Open to any education entrepreneur, the competition focused on bringing together new ideas in the education space with big-time players already in the market.
A focus on business plans and entrepreneurial education is new for Penn and for education schools in general, which have tended to defer to business schools on matters of the marketplace. But some education faculty members, notably Doug Lynch, vice dean at Penn’s education school and director of the business plan competition, are starting to argue that as the world of education continues to evolve, these programs have an important role in teaching and fostering entrepreneurship.
"There are a lot of ideas and a lot of money out there for education, but it's a very complicated market," Lynch said. "Ideas and money need a place to come together, and the university can be an honest broker in that process. It's a safe and neutral place to play, and can provide the technical assistance that comes with higher education."
In the United States, more than a trillion dollars is spent each year on education, Lynch said. And because people are starting to be dissatisfied with the current system; because of technological innovations; and because of resource constraints at every level of government, the market is ripe for innovation and disruption, which can best be fostered by education schools.
The Education Marketplace
Education entrepreneurship is nothing new. In recent years, numerous education ventures have sprung up and have been entered in business plan competitions at universities; though some have fared well, they rarely come out on top. To figure out ways to encourage more entrepreneurship in educational fields, Lynch convened a summit of education entrepreneurs three years ago. Thursday's competition was an outgrowth of that gathering.
Lynch said because the education market, unlike many industries, is complicated by numerous regulatory structures, government involvement, and policy limitations, education ventures need a set of knowledgeable judges to evaluate them, and such judges are hard to find. That is why he founded the competition at Penn: he wanted to bring together promising ideas and people who were already successful in the field.
“Education doesn’t have the ecosystem that health care has to take innovation and bring it to the market,” Lynch said. “We wanted to construct a kind of sandbox where people could develop and pitch these ideas.” He said his goal is for Penn and Philadelphia to be for education what Silicon Valley and Stanford are for technology.
Lynch said his hope was that companies would be able to meet potential mentors or investors, including venture capitalists. Judges at the Penn competition included Ronald Fortune, CEO of Education.com , a site that provides educational resources for parents; Jonathan Harber, founder and CEO of SchoolNet,Inc. , a developer of data-driven assessment and curriculum software; and Alan Todd, chairman of Corporate University Xchange , which helps corporations design and improve their learning organizations.
Many of the judges, competitors, and attendees also took part in the third annual Entrepreneurship in Education Summit on Friday, an event that was closed to the media.
"It's much less about the competition and more about the people you can meet here," said Miki Litmanovitz, CEO of AppSuccess , who had previously competed in the Harvard Business Plan Competition. "Plus, there's the added benefit of winning some money," added Daniel Choi, the company's chief technology officer. Their nonprofit is a platform to connect low-income college applicants with mentors who guide them through the application process.
The atmosphere of Thursday's competition was what one might expect when a bunch of education-focused entrepreneurs get together. Most of the audience took notes on iPads during the presentations, and during breaks, discussions arose about the role of technology in the classroom, the value of entrepreneurial education, and Peter Thiel's fellowship  for individuals who agreed to forgo college for two years.
Now in its second year, the competition attracted about 200 submissions, many coming from other education-entrepreneurship programs such as the Kauffman Labs Education Ventures Program . A group of 60 judges graded written pitches and business plans on a variety of criteria. From that pool, nine groups were asked to pitch in person on Thursday.
The finalists in the competition included for-profit and not-for-profit teams focusing on K-12 education, higher education, and continuing education. Some groups had teams that included several M.B.A. students and computer programmers, while Scialom was essentially a one-man operation, with a little help from his wife and an intern he recently hired. While no two ideas focused in identical areas, some patterns emerged.
Several finalists, like Scialom, focused on developing web applications that would provide information to students to help them make better decisions. Several others sought to make better learning management systems or provide applications that would improve components of these systems. “Blackboard does $400 million in revenue and is extremely vulnerable to disruption,” said Glen Moriarty, CEO of NIXTY, an open-source learning management system that could serve as an alternative to Blackboard. “I look forward to the day when I can start taking some of that."
Two different prizes were up for grabs. The first, a joint prize awarded by the Milken Family Foundation and the Penn Graduate School of Education, was a $25,000 first-place prize and a $15,000 second-place prize. The second prize, the William and Flora Hewlett Foundation’s Startl Prize for Open Educational Resources, also worth $25,000, was available only to open-source projects. The school did not establish criteria on which the judges were to evaluate the finalists, instead leaving it up to the judges to determine how they would evaluate the proposals, which they did behind closed doors. When giving feedback, the judges talked about a range of topics, including the need for some programs, the educational benefit of some ventures, and how easily the companies could be scaled up.
Scialom took home both first-place prizes for theCourseBook , a site similar to Yelp to help lifelong learners find and select courses after they've left college. Scialom, who said he and friends often have a difficult time finding information on courses and determining the best courses to take when they are interested in a subject, said he saw an opportunity to help colleges connect with students like himself. The site allows colleges to post their open-enrollment courses in one location, and it lets students provide reviews to help others make decisions. In his presentation, Scialom said he hopes to establish an application similar to Kayak where students can pay for college courses through his site. He would take a percentage from those payments. He plans to use the prize money to help grow the site, which now only covers the San Francisco Bay area.
The second-place prize went to Intellidemia , a syllabus-management platform. Judd Rattner, CEO of the company, said it began as a tool that would convert college syllabuses into a Google calendar that would easily allow students to view their weekly schedules online. The service expanded the design after finding that several colleges -- for-profit universities and community colleges in particular -- needed an application that would let them standardize syllabuses across campuses and courses, particularly when it came time for them to be examined for accreditation. Using the application, instructors can break down their syllabuses into components and make them available for students, other professors, or the public to view. The application helps administrators keep all the college's syllabuses in one place, helps potential students evaluate courses, and helps other professors determine how to construct their courses. By putting the information in a standardized form, the company also hopes to aggregate data on similar courses to make recommendations for materials and resources.
One of the more surprising moments of the day came when finalist Matt Pasternack announced at the beginning of his presentation that he was in the process of closing down GoalPost , the company that had taken him to the finals.
Instead of pitching his business, he focused on the lessons learned from his business’s failure, notably that K-12 education wouldn’t see any benefit from small technological advances like his company until laptops are widely adopted. “The platform of the classroom is paper, and the classroom is currently optimized,” Pasternack said. “Small, incremental introductions of technology can actually hurt efficiency.”
His company, which would have had students keep reading logs online and would subsequently recommend books based on their responses, was widely liked by administrators. But when he brought the idea into the classroom, it turned out to be more of a hassle than anything else. Teachers had to reserve computer labs, and students had to log in to the school system and then into the GoalPost site. In the end, the students not using the program spent more time reading and doing actual coursework, he said.
Pasternack's presentation is a good example of something Lynch repeatedly stresses -- that entrepreneurship helps individuals or universities learn from mistakes as well as successes.
In addition to reaching out to entrepreneurs and holding the competition and summit, Lynch also teaches a course on educational entrepreneurship in the graduate school. He said including entrepreneurship in the education curriculum gives people another way of addressing problems. By holding such competitions and seeing what works in the real world and what individuals choose to address, he said, faculty members can find new topics to research and new sets of data to explore.
"It's like water and a rock," Lynch said. "You'll often have academics look at education and try to tackle the big problem. They'll say, 'The issue is access' and try to address access. What entrepreneurs do is chip away at the edges in ways that actually make a difference, and eventually the problem's not there anymore."