Ed-Tech Isn’t for Wimps: Noodle’s Katzman on Building a Winner

2/20/13Follow @curtwoodward

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being contemplated as part of the latest round of national education reforms.

The way those evaluations are presently being built, he says, doesn’t really work. And a big part of that is because the people with the real valuable data about how to run a good classroom—the teachers themselves—aren’t getting help turning those insights into great, software-based tools that can help their peers make improvements.

It shouldn’t be a surprise that this isn’t happening, Katzman says: “Data is only used, exclusively, to fire them. You’re asking people who the gun is pointing at to design the gun.”

If the equation was flipped, and administrators had leeway to more easily fire the one or two worst-performing teachers, the good quality teachers could be an invaluable source of data about how classrooms perform, he says.

There are still plenty of complications for would-be education entrepreneurs, Katzman says. And the money people are a big part of that.

Traditional venture investors are still getting acclimated to the different dynamics in the education sector, he says—companies in the industry will take a longer time to develop, and their sale opportunities are typically going to be smaller than a blockbuster consumer Internet play, Katzman says.

That means entrepreneurs have to find the right VCs if they are looking for institutional investment, and also have to target people early in their funds, who might not mind waiting out a long-developing education bet.

The public markets also aren’t the best place for an education company, Katzman says, because the scrutiny is just too intense. On one hand, you have the education establishment that is very skeptical of attempts to change its model. On the other are Wall Street analysts who, if they’re doing their jobs right, will attempt to ferret out any weaknesses in a company’s product or business model.

“That tension of doing your business in total transparency, with a built-in jeering section, I think is headwind for any education company,” he says.

But those caveats shouldn’t necessarily scare off all education entrepreneurs and investors—Katzman says it’s still “a target-rich environment.”

“The people you’re competing with are either idiots, or … are going through their day with handcuffs on,” he says. “There is good business to be had here, and good social good to be had here. It’s just with some limitations.”

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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