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Deep Dive: Edmodo

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“It’s Facebook for the classroom.”  That’s a common description for one of the most impressive EdTech platforms out there, but it’s likely quite unfair.  The visual resemblance between Edmodo and Facebook may be uncanny, but the use case for Edmodo is terrifically different.  Between content management, social, and analytics, Edmodo shows promise beyond just being your classroom profile and newsfeed.  The potential for the company is sky high, but at the same time, my biggest reservation about Edmodo is around its ability to – truly – transform education.

Features

Edmodo’s main feature is “social,” in other words, imagine having a separate Facebook just for your classmates and your teacher.  Everything that popped up your newsfeed was related to your class and the only people you could communicate with were your peers and teacher. I’d like to think that would improve student engagement.  Facebook is the world’s greatest procrastination tool because it appeals to our very human desire for social connection as well as the darker, voyeuristic side of us.  Edmodo works by co-opting that promise of social connection and even voyeurism for an educational context.  You can send messages to anyone in your class, send out a blast, share homework assignments and pictures, not to mention watch your peers’ profiles and interactions the same way you “Facebook stalk” your friends.  You’d expect that would increase engagement with the classroom context then, even if only marginally.

One of the other benefits of this “Facebook”-esque platform is that it is inherently able to support expansion to constituents outside of the classroom – namely, parents.  Edmodo allows for parents to create accounts as well, informing them of their kids’ progress in class and upcoming assignments, and also providing them with another way to communicate with teachers.  Right now, this functionality is what Edmodo has gotten right more than any other platform I’ve seen.  There are other parent connectivity tools out there (like Parentlink) that maybe more fully featured, but none of them can give students a window into the classroom that parents care about.

On that “social” functionality, Edmodo stands head and shoulders above any other platform out there.  Where it starts to run into real competition is in its ambitions around two other feature sets: content management and analytics.  If you’re a teacher, Edmodo can be your Content Management System (CMS).  It can let you upload documents, from schedules to handouts to quizzes; it can let you collect information from students as well.  You can use your profile to make announcements to your entire class and you can lay out course plans and so on in an easily accessible, intuitive manner.

You can also use all of the data that the platform allows you to track for analytics.  There’s basic stuff like quiz grades and in-interface polls, but more interesting is the platform specific analytics around utilization.  I believe they make this available only at the institution level (this is their monetization strategy) but they allow districts to see which schools are the most active and, with Edmodo’s APIs, correlate that data with any other friendly data management platform (see: Edmodo Connect, their version of the “Login with Facebook” button that is now ubiquitous on the internet today).

This starts to sound exactly like Learning Management Systems, and in fact, at a basic level, the two are interchangeable.  From what I’ve seen of Edmodo and other LMSs out there (like Blackboard, D2L, and Instructure), I’d argue the LMS is better suited for content management, but it’s possible to hack your Edmodo usage to adequately push content.  So why would you ever use an LMS instead of Edmodo?

The competition here is analogous to the competition between Facebook and Google for millennials.  Would we rather chat via Facebook messaging or Gchat?  Gchat clearly wins on that one.  Where would you prefer to store documents, a Dropbox-like Facebook integration, Facebook Notes or Google Drive?  Again, Google is the clear winner.  But where would you prefer to interact with peers and see their learning progress – Timeline and Newsfeed or Google+?  (Needless to say, Facebook wins that.)

In an earlier post, I talked about the promise of LMSs.  As content interfaces, they can serve as a platform for greater analytics.  They’re built more robustly and have the potential to go into social as well.  D2L, notably, is building one of the coolest social offerings I’ve seen – a chat functionality with peers who are reading the same document as you are.  Edmodo could ultimately do all these things but my understanding is they just aren’t there yet and I struggle to see them catching up.  By choosing to grow virally, they sacrificed monetization for early scale, and my fear is that their business model doesn’t allow them the operating leverage to throw millions of dollars into R&D to build these features faster than the D2Ls and Instructures of the world.

Edmodo vs. the World

One Edmodo customer is quoted as saying, “we no longer saw the need to continue a high-dollar search for a learning management system. We now use Edmodo as the tool through which blended teaching and learning occurs.”  Even if you don’t buy the CMS viability of Edmodo, it’s hard to deny that it competes directly with LMS platforms just from a budgetary perspective.  That’s one formidable range of competitors right there.

Another: Student Information Systems (SIS) like Pearson PowerSchool or Kickboard.  When you ask every student to make a profile to join a class, you’re immediately obliterating any need for an SIS that the teachers and administrators have.  As it stands, teachers have a hellish time getting information from SISs anyways (one of the reasons I helped start the mobile app Dash4Teachers).  If wanting to call a student’s parent was as simple as clicking on his/her profile and seeing a teacher-specific “About Me” section with parent phone numbers, or if wanting to send a snail-mail blast to every student in a district could by done with the Edmodo database of student addresses – you’ve made redundant the SIS in a major way.

But that’s still not the extent of Edmodo’s competitive landscape.  With its social focus and ability for real-time teacher-to-student digital communication, Edmodo offers a potential Classdojo killer.  With analytics and Edmodo Connect, Clever and Google Apps for Education (GAfEd), and with the Marketplace and the ability to plug into any number of other content and analytics apps, GafEd again and potentially even Knewton.  Heck, with Edmodo’s ability to facilitate content sharing across all teachers in its network, it’s a threat to the established textbook publishers as well, even though it itself doesn’t provide any content.

If you’re Edmodo, you have to be simultaneously exhilarated and terrified that you’re effectively competing with every player in the educational ecosystem.  Instead of Facebook, the right way to think about Edmodo’s ambitions may actually be as the Google of education (which, appropriately enough, Google itself may be).

Extreme Value Case: Edmodo

A JMI-ism I’ve adopted is the “Extreme Value Case” (EVC), i.e., what is the greatest possible steady-state operating scenario.  Edmodo’s EVC is a world where every student “goes to school” by logging into Edmodo.  As an attendance tracker, it is the first thing kids do to start each class, and all non-spoken interaction occurs through the platform.  Teachers distribute handouts that way, assign homework, and conduct tests and quizzes; students use it to collaborate on group projects and discuss assignments.

In its role as the disburser of content, Edmodo is also closely linked to content creation as well.  There are apps available through the Marketplace that help teachers write tests and homework assignment.  Edmodo is a community for all teachers to share ideas on how to teach Gatsby.  It also serves as a medium for one school’s American History teacher to build a cross-disciplinary syllabus with the same school’s American Lit teacher so that the same group of students gets to learn the two subjects in the proper, intertwined way (rather than the current, segregated way).

The Edmodo Marketplace also has plugins that supercharge data analytics, potentially bringing it into adaptive learning levels of content delivery efficacy.  What adaptive learning hasn’t talked about yet (at least publicly) is natural language processing (NLP), for which Edmodo provides the best content source.  NLP engines like Clarabridge have their own Marketplace apps (or heavier platforms) that are built to scan every single message, comment, or discussion board post, providing teachers with linguistic analytics of how well their students are learning and how happy they are or aren’t with class.  These NLP platforms are so powerful and so Edmodo-compatible that it only makes sense to use them to design test questions to optimize for student and teacher assessment.  It provides yet another reinforcement of Edmodo as a content creation platform.

The network effect of such a platform doesn’t just apply to the user side, it applies to the vendor side as well.  If everyone is on one platform, every loftily aspirational education product out there has to cater to it (the iTunes effect), and once that happens, it starts to make too much sense building specifically for that market.  Content providers, analytics platforms, integration players, everyone needs to be not just Edmodo compatible, but Edmodo native.

Weaknesses

The EVC above is – obviously – not close to happening just yet.  As someone who has built familiarity with Edmodo only through market conversations, demo views, and internet research, I hesitate to provide a list of “weaknesses” of the platform.  I’ve never used it and could be dead wrong about whether a feature inclusion or exclusion is truly a weakness in the first place.  I’m willing to be wrong about this and properly reeducated if that’s the case.  That having been disclaimed, here are two things that I worry about with Edmodo.

First, Edmodo is too thin.  Right now, it lacks the depth of LMS platforms like Instructure and D2L and I don’t trust its ability to run the EdTech space’s requisite big data analytics the same way I do of those platforms (or even others like Clever).  It shares the veneer-like quality of Facebook – only one click away from everything the platform could possibly do.  This is a huge win for the intuitive side, but a loss for its depth.  I’m reminded of the PlayStation 3 tagline, “It only does: everything.”  In Edmodo’s case, it only does everything (social) – which has the paradoxical potential to be everything and almost nothing meaningful.

This may be because Edmodo is skating to where the puck is, not where it’s going.  Edmodo is a groundbreaking social platform for classes but at the end of the day, Facebook is Facebook.  Someone once observed that the reason it’s so hard to monetize on Facebook is because, while people go to Google with a purpose (find hotels, research a topic, etc.), people mostly go to Facebook explicitly without a purpose.  It is, like I said earlier, the world’s greatest procrastination tool.  The feat for Edmodo would be shedding that aimlessness that is an inherent danger with anything social.  Social – fun for the sake of being fun – needs to be more than just collaboration in education; it needs to be purposeful.

Without knowing the Company’s product roadmap, I can’t say definitively that Edmodo is just skating to where the puck is.  Their ambitions (like with Marketplace) are clearly grand, but I haven’t seen anything out of the platform yet that elevates it to beyond just social with basic content and analytics.  They’ve got a long way to go to hit the EVC above, but theirs may be the grandest EVC of all the EdTech players currently out there.

Second, I worry about Edmodo’s ability to build the bridge to any of these various future states.  As I touched on earlier, Edmodo grew virally because it’s free.  They side-stepped the single most frustrating part of being a K-12 vendor, namely, having to squeeze dollars out of K-12 districts.  The problem is, they did this by making themselves free and going directly after teachers.  Even though they’re better set up to monetize now (via sales to districts on aggregated analytics from the platform), they still lack the operating leverage to invest in R&D the way I’d want to if I were running the company.  They need to figure out how to draw more capital from districts, how to fund these great ambitions, intelligently and quickly enough to not just get there first but in the best way possible.  I really hope they do.

Conclusion

Edmodo’s capital providers include NEA, Union Square, Greylock, and Benchmark.  Even though some invested as recently as 2012 (when the company was north of 6 million users), they invested in a business with a still uncertain monetization strategy (as is in vogue among VCs these days).  The basic principle underlying all those bets is that once you get scale, monetization will be easy to figure out.  That view is half correct; monetization is definitely possible to figure out, but it may not be as powerful or sustainable as you’d expect (see: every mobile gaming startup in the history of the world, heck, even Facebook).

Edmodo, currently at 33M+ users is still enjoying viral growth, with teachers evangelizing based on just how different and intuitive of a product it is.  This is appropriate for the platform that most represents the potential for social learning right now.  A more interesting metric to me is how many districts are on the platform, the closest proxy to “paying customers” that we can get until Edmodo files.  (All I’ve found so far is that they have 88 of the top 100 districts.)

On that note, will Edmodo in fact file to go public?  I think it’s the most likely outcome for the business (and this isn’t something I’m saying just based on how desperate I am to see any real metrics on the company).  I don’t know that Facebook has any interest in buying them, despite their visual and functional similarities and their sustained grip on a massive, fickle userbase.  Facebook has certainly attempted to move into education, but I’ve never heard them mentioned as a viable tool in any of the market work I’ve done.

GAfEd, extremely powerful and used by the savviest teachers out there, is likely too self-confident to buy their way into this space; I have a feeling they’re convinced they can win this.  It’s the same mentality that launched Google+ instead of Facebook, though the result may not be as poor this time around.

Other buyers: Pearson?  I hope not.  Pearson is doing too many things at once and would lose all of Edmodo’s momentum, hiding it as just one more box in its already labyrinthine org structure.  Plus, I think Pearson would be too tempted to plug Edmodo into PowerSchool and its other EdTech offerings, a diversion that would stunt Edmodo’s real potential.  Additionally, even despite its well earned reputation for paying “full value” for assets, I’m guessing the expected valuation for Edmodo might be too rich for them.

An IPO to me is the most likely outcome for Edmodo, especially if you think the company itself could be acquisitive.  NEA, one of Edmodo’s largest investors, happens to own a good chunk of the next-gen LMS Desire2Learn, as well.  (You may remember the 2012 transaction billed as Canada’s largest VC investment ever, and the 5th largest Series A ever.)  An LMS/Edmodo combination could be powerful, though just as subject to the retrofitting dangers of an Pearson/Edmodo combo.

Truly, Edmodo has an enviable array of exit options and future states, but in this entire discussion, maybe I’ve missed the whole point of it all.  As one teacher/user said “it makes me feel like I’m more relevant in [my students’] lives.”  Isn’t that the hardest thing to do?

Author: AJ

I'm an education enthusiast, growth equity investor, and MBA student at Wharton.

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