Archive for the ‘Education Reform’ category

Resurgence of Education Technology: Can startups disrupt the education system?

July 17th, 2011

During the technology bubble of the late 1990’s and early 2000’s, investors saw the potential that new technological innovations could have on the education system, both domestically and internationally. Over $500 million was invested into education technology companies in the year 2000, but the majority of that money was eventually lost as the bubble burst and most of these companies failed. Since then, investors have eschewed getting involved in education technology because the risk/reward profile of the industry was not favorable in their eyes. However, over the past two years, the education technology industry has experienced a resurgence in interest from the investment community. Ed-tech companies received over $177 million in investment capital during 2010 as investors are beginning to realize the important role that technology must play within the education system going forward.

What is often overlooked about the education market though is the stark difference between it versus a more traditional B2B or B2C market. Many of the companies emerging today have not taken the time to understand the nuances of the market and thus will face significant challenges ahead as they attempt to expand. In order for these companies to ultimately make a positive impact on the education system, the entrepreneurs, educators, and investors behind them most make more of an effort to educate both themselves and others on these nuances and what will make a successful ed-tech company.

Concept of Customer vs. End User

In September 2006, Economist James Koch labeled the textbook industry a “broken market” as a way to describe the relationship between the end user (the student) and the person making the decision on what that end user has to buy (faculty). The education industry as a whole could be deemed a broken market because, in many instances, faculty are making decisions for students about what they have to purchase and the students have no influence on that decision (other than to refuse to make the purchase).

While most entrepreneurs and companies are aware of the way the market is structured, very few of them fully understand the ramifications of that structure and how to succeed in a market such as this. In order to create a product or service that gains significant attraction, companies need to focus on creating value in the eyes of both the teachers and the students. This is a very difficult proposition at the K-12 level as most schools are so financially strapped that a product or service must generate significant returns for students to even be considered. In the higher education world, while students may be told by a faculty member they need a certain product or service, but the students are not forced to make the purchase. With tuition costs increasing rapidly, the product or service must have a direct impact on the students’ grades or else it will more than likely be ignored in favor of the cost savings.

Alignment of Values

Like any market, the reason there has been a resurgence in investment dollars within the education market is because of the potential for large returns. The US spends over $600 billion a year on education, which is significantly more than any other country in the world, and it is well-documented that this spending has not resulted in an improvement of student performance. Education is a market in which returns should be measured not only in financial terms, but also the impact new innovations have on students and teachers. By not focusing on both of these objectives, investors will experience the same dismal returns they experienced during the last ed-tech investment boom because the positive effects created by these new companies will be fleeting due to a lack of long-term sustainability.

Lack of Educator Involvement

While most companies have some educators on staff or contracted as consultants, there is still not involvement by these educators in shaping the innovations of tomorrow. In order to spur change within the industry, specialized knowledge is required to create products and services that will in fact improve student performance; the only way to gain that expertise is by truly engaging educators and using their knowledge to influence the development of products and services. Companies need information from educators who are working in the classroom every day and dealing with students on a personal level. For the ed-tech community to truly begin to have an impact of the education system, entrepreneurs need to be more focused on creating meaningful products and services and less focused on creating useless rhetoric to define their newly-created innovations.

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Posted in Education Reform, Education Technology

Tags: B2E broken market Education technology startups in education

The Social DRM Evolution for eBooks

June 28th, 2011
Recently, J K Rowling launched the Pottermore online reading experience that will sell Digital Rights Management (DRM)-free eBooks of the series for the first time. Although devices such as Amazon’s Kindle and Apple’s iPad lock downloads to their respective platforms to prevent illegal sharing and copying, J K Rowling will be the first author of many to take this open and unprecedented approach. eBooks may soon be available to read on any device, changing the way publishers and the eBook industry conducts their business.

When it comes to textbooks, it is safe to assume that publishers who charge $200+ for their textbooks would not want their student purchasers to have the ability to share their digital textbooks (eTextbooks). With DRM, we can imagine these billion-dollar textbook publishers have only a few major options to protect their texts:

1. Restrict access. To control the use of the eTextbook, publishers could employ a licensing server that locks the use to a specific PC or Mac computer. However, in a student environment, when studying or homework can be done on an iPad, laptop, library computer or even an iPhone- this may limit the usage on college campuses for students.

2. Password Protect. Although passwords can be issued through programs like SharePoint, there are just as many if not more software packages, like PDF Unlocker, which allow users to break into locked the documents. However, if they have the money and the resources to create a non-standard DRM system, they may be successful.

3. Lock digital rights. When offering eTextbooks publishers could secure the digital rights to USB drives or other medias and will therefore charge the same amount or more than their current printed textbooks justified by the cost of the large storage space.

As opposed to the alternatives above, the Pottermore online reading experience is watermarking each eBook at the time of purchase with the identity of the person who purchased the eBook. “While strict DRM ensures that you are the rights holder before you can access the content, digital watermarking (sometimes known as social DRM) simply associates the file to the purchaser. This means that e-Books can be used across any platform, but if they are uploaded to file-sharing websites, the copyright holder should be able to tell which purchaser was responsible (although any file-sharer worth their salt would know how to remove such a watermark),” said Wired.co.uk. They say this is so authorities can track down the “sharer” of the ebook, but it prevents the purchaser from sharing the eBook with someone who did not pay for it by effectively shaming him or her for his or her illegal behavior (although, people often lend out printed books to friends, and they are not often thought of as book pirates.) This watermark strategy challenges the purchaser removes the anonymity of illegal sharing, and pressures him or her to “do the right thing.”

This evolution of eBook and eTextbook can also be compared to consumer purchasing in the music industry. Although there are several free music-sharing, platforms, there are now over 75 million accounts on iTunes linked to credit cards. Obviously people, somewhere, are choosing to purchase their music as opposed to stealing it digitally. Our conclusion is that if the purchaser can justify the 99 cents it costs to buy a song, they will also justify a reasonable price for an eBook or eTextbook and choose to purchase it instead of steal it.

The Center of Math is looking to discover new and innovative ways to release our eTextbooks in a fully functional, fully interactive and DRM-free way. Therefore, we believe if we charge an affordable and reasonable price for our eTextbooks and grant students free-use of the download (as if they purchased the hard-copy text at the bookstore) they will justify this purchase and choose not to share infringe on the copyright.

But just a thought… if these eTextbooks were to be openly shared with the world and math was made available to anyone and everyone, would that be so bad? We don’t think so.

Question for the Math World: Do you think that eBooks should be DRM-free?

Sources:
http://www.theinquirer.net/inquirer/news/2081247/rowling-unveils-pottermore-drm-free-harry-potter-ebooks
http://techcrunch.com/2009/01/06/itunes-sells-6-billion-songs-and-other-fun-stats-from-the-philnote/
http://www.wired.co.uk/news/archive/2011-06/23/harry-potter-e-books-drm

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Posted in Education Reform, Education Technology, News, Textbook Industry, Textbooks

Tags: DRM eBooks eTextbooks harry potter readers

Another Reason Why Your Textbooks Cost So Much: Inefficient Government Bureaucracy

April 28th, 2011

It is no secret that the cost of elementary, secondary, and higher education in the US has risen rapidly since 1980. Pundits point to a variety of different sources that contribute to these increases in cost, but scarcely is the finger ever pointed at the bloated bureaucracy surrounding the education system. Over the course of the past two weeks, we have gotten to experience this bloated, inefficient bureaucracy for the first time.

The digital textbooks we offer have begun to attract some attention within the high school and college markets due to their high quality, multimedia approach to learning and their affordability. On April 8, we had someone from the Virginia Beach City Public  Schools (VBCPS)  reach out to us and say that they would love to check out the books. In order to be considered for adoption, we had to submit a request for proposal (RFP) to their procurement department, which did not seem unreasonable; however, this is where the fun began.
Assuming that the procurement office would have the RFP on hand for potential proposers, we reached out to this office to ask how one obtained a copy of the RFP. It turns out that just to be granted permission to read the RFP, one has to pay $10 to a government contractor (DemandStar Onvia) whose only function it seems is to host static PDF documents on a server for download. While $10 is a trivial amount of money, the fact that a government contractor exists simply to fulfill this role is slightly ridiculous.

After obtaining and reading the RFP, a significant amount of information was requested, but not so much as was unreasonable; it would make sense that a school district would want to know all of the credentials of an organization creating books to educate their children. However, several stipulations regarding the preparation and delivery of the RFP were some of the most inefficient and wasteful directions we had ever read. According to the RFP, six printed copies of the proposal had to be submitted to the procurement office via traditional mail as well as an electronic copy either via email or on a DVD with the 6 printed copies. Why, in what is the Internet age, would any government office request that an organization print out and waste over one hundred pieces of paper when the exact same information could be relayed via a PDF attached to an email also puzzled us. The package of printed copies also  had to be delivered to the procurement office by 3pm on April 14 or it would not be considered.

We complied with all of these guidelines and shipped our proposal package with an electronic copy on DVD at 8am on April 12 via USPS with delivery confirmation. We also submitted a PDF version of the proposal via email as a precautionary measure. According to USPS, our package arrived at the VBCPS building at 9:05am the morning of April 14, roughly 6 hours before the deadline for the RFP. When following up with the procurement office though, our proposal did not get delivered from the VBCPS mailroom to the procurement office until April 15 at 10:22am, which disqualified us from being considered for adoption.

As we had complied with all of the guidelines of the RFP and the proposal had been delivered to the physical office of the VBCPS, we assumed it was just a misunderstanding that would be rectified with a phone call. Instead we were told by the procurement office that there was nothing they could do and the decision would stand. The representative from the VBCPS told us that even if the package had arrived three days before and never made it to the procurement office by 3pm on April 14, it was not their problem (he admitted this had happened in the past). Instead, he decided to blame us for submitting our proposal so close to the deadline (which he does have a point about), even though we only became aware of the need for textbooks only 5 days before.

This whole scenario is definitely disheartening on a number of levels. First, everyone knows that traditional textbooks are massively expensive and now the VBCPS students are being deprived of even the opportunity to have considered for their use a high-quality, very low-priced, more functional, modern textbook. Second, and more importantly, it makes us wonder how many times every year smaller organizations that are actually trying to improve education (vs the major publishers who clearly are more concerned with their profit margins) are shut out of processes like these due to incompetent bureaucrats.

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Posted in Education Reform, Textbook Industry, Textbooks

Race to the Top: Is It Enough?

July 27th, 2010

With the the deadline having recently passed for Phase 2 applications for the “Race to the Top” program, states are now left to wait anxiously until September to find out whether they qualified for a portion of the $4.35 billion that the Obama administration has earmarked for the initiative. This program, which is designed to spur education reform amongst individual states, comes at a time when the US education system as a whole is being consistently outperformed year after year by most of the other rising powers in the world . While the US education system is definitely in need of a change, the question remains whether the “Race to the Top” program is enough to incite the kind of change necessary to truly fix the system?

Money is Not Always the Answer

According to the National Center for Education Statistics, the US spends almost $600 billion on public education every year. We have access to some of the best facilities, technology, faculty etc. in the world today and yet it still does not seem to change the fact US students are not performing as well as the majority of their foreign peers. Like many other social initiatives, the problems with the US education system cannot be solved by merely increasing funding to a system that is clearly broken. In fact, according to author Jay Greene, over the course of the last 30 years, we have doubled per pupil spending (adjusting for inflation), and our schools are still no better. Consequently, while the Obama administration’s “Race to the Top” program is a laudable effort and utilizes a creative, incentive-laden method for states, it does not address one of the main causes of the problem.

The Structure of Teachers’ Unions

There are many problems with US education that stem from several different areas: American culture in general, lack of parental involvement, cost of supplies/textbooks, and the teachers’ unions that dominate most of the school systems here in the US. The problem with this is that the teachers’ unions are some of the most powerful lobbyist groups in the US and consequently, they possess immense bargaining power when it comes to negotiating contracts for their members. Often times, these contracts are ultimately not what is best for the students and they are the ones who suffer as a result. Even Albert Shanker, one of the early leaders of New York’s United Federation of Teachers, admitted in the 1990’s that the unions were harming education, and he compared the unions in education to how unions were harming the automobile industry by affecting quality. The real question remains how can we improve the quality of education, while also not marginalizing many of the great teachers who currently educate our young people?

The Future of the Education System

The Obama administration’s “Race to the Top” program is a step in the right direction with regard to education reform policy, but it should not be the only piece of legislation that is designed to create change within the US education system. There needs to be more reform measures like this on that focus on accountability, effectiveness, and performance to better track how our students are doing. There also needs to be community support and involvement from students and parents, which will mean creating ways to remove the apathy and disinterest that has settled within some communities across the US. We have reached a crossroads in the US within the education system, and these types of reforms will not be easy; however, what people need to realize is that without some pain and reform now, the system will not get better and thus we will continue to get worse as a nation as a whole.

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Posted in Education Reform

The Student Debt Problem in America & the True Cost of Textbooks

June 14th, 2010

Recent college graduates are facing one of the most difficult times that any generation has had to overcome to begin their careers. Many of these graduates have incurred tens of thousands of dollars in student loan debt throughout their academic careers and with the state of the job market, many are finding it very hard to service this debt.  The national average for loans incurred by college graduates in 2010 is $23,000, and this number does not account for any additional credit card or other personal debt. It has been estimated that 2 out of every 3 college students takes out some form of loan in order to finance their education, and the total amount borrowed per year in the US is upwards of $15 billion.

One might question why these graduates have incurred so much debt, and it is directly related to the rapidly increasing cost of college tuition. The chart below illustrates that between 1978 and 2008, the cost of college tuition at private universities increased at more than three times the rate of inflation, and in fact increased more than even the cost of healthcare in the US, which is another industry that has had widely publicized price increases.

One factor that is fast becoming one of the most expensive costs associated with college is the price of textbooks. As we have covered previously, the average student spends $900 per semester on textbooks, which translates into $7,200 over the course of that student’s college career. We want to examine how much the average college graduate would have to pay assuming they took out a Stafford loan for $7,200 for the traditional ten years for all of their textbooks.

Over the course of the ten years, a graduate would pay almost $2,750 in interest to cover the cost of the books they purchased in college; that is $2,750 that they would not be able to invest for their own future, whether it would be saving for retirement, putting towards a house, etc.  Considering the rapidly rising cost of tuition and fees, don’t you think it’s time we considered at least one way to help reduce the cost of education for students by reducing the cost of textbooks?

Sources:
The College Board “Trends in College Pricing”
New York Times “How Much Student Debt is Too Much”
USA Today “Young People Struggling with the Kiss of Debt”
Student PIRGs

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Posted in Education Reform, Textbook Industry

Tags: college costs cost of education e-textbooks Education Reform inflation inflation vs. education Textbook cost