Blackboard CEO Jay Bhatt on the Global Future of Edtech
What does the head of one of the world’s biggest edtech companies, Blackboard, think about the future of education?
First, you should know a little about his background. Jay Bhatt was a middle-school math teacher in the early ‘90s, teaching sixth-graders in Richmond, CA. He went on to work as an investment banker, specializing in mergers and acquisitions, and later became an executive at design software firm Autodesk (NASDAQ: ADSK). More recently, he served as CEO of Progress Software (NASDAQ: PRGS) for about a year before joining Blackboard as chief executive in late 2012. (Co-founder and former Blackboard CEO Michael Chasen left to go work on a social/mobile startup.)
Blackboard has a long and involved history as a pioneer in education technology. The firm was started in 1997, raised more than $100 million in venture funding, went public in 2004, and was bought out by private investors, led by Providence Equity Partners, for $1.6 billion in 2011. The company is making between $650 million and $700 million in annual revenue, Bhatt says.
Blackboard is best known for its learning management software, which helps teachers do things like manage classroom data, track assignments, and deliver online courses and materials. Over the past decade, Blackboard has expanded into other areas like collaboration, communications, analytics, and mobile apps. And this year it has moved into student databases and profiles (through its acquisition of MyEdu) and is also rolling out an online bookstore.
Amid its expansion, Blackboard has faced competition from efforts like Moodle, Sakai, and Canvas (Instructure), as well as from smaller startups buoyed by increasing venture-capital interest in education.
A snapshot of Blackboard’s business: About 80 percent is higher ed and professional ed, while 20 percent is K-12. Eighty percent is domestic, with 20 percent being international. That last figure could change a lot in the future (more on that below). Consider that Bhatt’s previous software companies, Autodesk and Progress, did something like 65 percent of their business overseas.
The company currently has about 2,800 employees. Its headquarters is in Washington, DC, but it has offices in Boston (where Bhatt resides), Austin, San Francisco, London, Brazil, and soon, Singapore, among other places.
I sat down recently with Bhatt at Blackboard’s office in the Fort Point neighborhood of Boston. We covered a lot of topics—from the rise of massive open online courses (MOOCs) to whether there’s a bubble in higher education—but one thing we kept coming back to was the global market for edtech.
“Education tech hasn’t really exploded yet,” Bhatt says. “The big software companies all have education practices, but they’re not really focused on education.”
Bhatt’s goal is to solidify Blackboard’s position as an entrenched leader in the market. And the key to that is thinking globally and long-term, he says.
“We’ve heavily invested internationally,” Bhatt says. “We’re really focused on the globalization of education.” As he puts it, that process “has not really scaled yet.” And that is what’s driving Blackboard’s product roadmap, as well as its competitors’.
“When you build software, you’re building for the future,” he says. “It doesn’t reach scalability until three to four years out.”
Here are some more highlights from our chat:
—On the future of the education software market: “The industry needs a leader in technology; the usual-suspect companies aren’t going to lead in education,” Bhatt says. “If you’re not an educational technology provider, it’s a pain to serve” the market of educators and students, he says. Clearly, he sees Blackboard as being in a unique position to capitalize on this market.
—On the importance of understanding the user: Bhatt calls this “the rise of the learner.” As a student, he says, “you may not buy the product, but you’re the center of everything. There’s a learner, and there’s a teacher. But the first piece is the learner—otherwise there’s no place for education.” And as Bhatt sees it, the learner should drive edtech companies’ strategy: everything from their user interfaces and user experience to their product design and analyses of the marketplace. (This dovetails with a theme from last week’s LearnLaunchX demo day.)
—On MOOCs as marketing: Open, virtual courses are “an unbelievable phenomenon that’s driving the concept that online education is happening, that people are willing to learn online,” he says. “The savviest universities are using MOOCs to matriculate students as a marketing tool.”
—On whether there’s a higher-ed bubble: “I don’t think of it as a bubble,” Bhatt says. “I do think people are questioning the value proposition of education. I don’t know if there will be 4,400 higher-ed institutions [in the U.S.] in 10 years. But the addressable market for education may actually grow,” he says, through digital tools, distance learning, part-time programs, and the like. The industry “will have to validate and justify for the consumer how education connects to job prospects and a happy life long-term,” he says. “So no, it’s not a bubble, but maybe it got ahead of itself.”
—On physical vs. digital content: As a deliverer of educational materials (and not a publisher), Blackboard has an important perspective on the future of content. Observers are wondering if and when the switchover to all-digital textbooks and so forth will occur.
“Generations are being divided by very small increments,” Bhatt says. “We have to understand a whole new generation of use is coming at us.” He’s talking about the surprisingly big difference between six-to-nine-year-olds—many of whom have grown up learning to read on iPhones, iPads, and Kindles—and 12-to-15-year-olds who (most likely) got started on paper books and still seem to prefer that format for most of their schoolwork.
One point is clear, Bhatt says: “If you’re going to extend education to the billions of people who have historically not had access to education, it’s not going to be through physical textbooks.” (Think India, China, and other big emerging markets.)
“Kids in China will be reached by devices, and non-Chinese brands,” he says.