#edcetera

[edtomorrow-blog]

edcetera: Does Pearson Blue Sky Mean Dark Clouds for Startups?

Can Pearson crush ed tech startups with its scale and might?

I know Pearson does not have the best reputation among my education blogger colleagues, and probably for good reasons. But no one can deny that the company has a great digital strategy. Pearson is aggressive, and seems to understand our quickly changing landscape in education. In order to remain on top, you need to start testing new verticals early on, acquire interesting teams and technology, and/or quickly build a similar product. Sound familiar? Again, this is right out of the playbooks of major tech companies like Facebook, Google, Microsoft or Apple.

Clearly, Pearson sees itself more in the league of tech and Internet-centered companies rather than being a classic publisher with a digital strategy.

Read more at edcetera

[rhymeswitheducation]

Needed: Dividends over Exits Mindset in Education Tech (And Finance!)

(By Jeff)

As I continue to get deeper into this blogging thing, one of the most happily surprising (though upon further reflection, it should have been totally anticipated) side-effects has been my exposure to other lesser-knowns writing, brilliantly and otherwise, about education.

In the last few weeks, Kirsten Winkler (@kirstenwinkler) who blogs about education technology at bigthink.com (Disrupt Education), EDUKWEST, and most recently EdCetera, has proved her worth in my mind. Earlier this week, Winkler posted about the need to change the mindset in education technology from one where investors think about "exits" versus one where they think about receiving ongoing (and increasing) dividends on their investments. (See the full post here: We need a Dividends instead of Exits Mindset in Education.) While I am completely in awe of the increased interest in education the technology sector has shown in the short amount of time that I've been paying attention (3-4 years), I am completely out of my depth when I try and discuss it, so I'll leave it to people like Winkler.

However, I think the change in mindset she is advocating for is exactly the one that is needed in education finance as well. (I know, I know, I still haven't posted about what exactly a human capital contract is, but I promise, it's coming!) Student loans are a product of an "exits" mindset where lenders want a pre-determined (and pre-valued) exit. The lack of exposure to upside risk forces them to raise all interest rates so that those who pay back their loans subsidize those who default. Human capital contracts are a large and intentional step towards a "dividends" mindset. 13th Avenue Funding, which will utilize a co-op-type arrangement is yet another step in that direction. (Post about 13th Avenue and my recent meeting with their COO coming soon, as well!)

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