Some Work of Noble Note

May Yet Be Done

Category Archives: Venture Capital

“This labor, by slow prudence to make mild
A rugged people.”
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Here are my musings on the technology and financial world. My career to date (in Media & Telecom investment banking and in growth equity investing) has seen the two frequently intersect. For better or for worse, they will be forever linked in my mind.
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Deep Dive: Edmodo

“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.

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Education’s Awakening: Adaptive Learning

In an earlier post, I talked about how education at Oxford has remained remarkably unchanged over the course of centuries.  As an example of an “evolved” learning style, I provided the “American” higher education system, with its investment in lecture-based pedagogy and social learning.  Really, though, all that represents is a sideways move in learning evolution.  American colleges didn’t advance learning, they just borrowed elements from less advanced learning environments, namely the K-12 classroom.

This is sad because the traditional classroom developed not out of any particularly brilliant insights on how best to teach students.  Instead, it developed from a need to educate as many students in the shortest amount of time and with the fewest consumption of resources.  Kids have required education since the dawn of civilization and parents figured out that it was more efficient for them to throw all the kids together in a classroom and use only one adult to teach all the kids at once.  Efficient in terms of time commitment for parents?  Yes.  But no one can possibly defend this as the optimal path toward academic efficacy.

Adaptive learning, then, marks the dawn of the next stage of education’s evolution.  Guided by the foundational premise that every student learns differently, adaptive learning uses technology to understand something about how a student learns and then provide content differently based on how it qualifies a student’s knowledge level.  A basic example is the GMAT; as you answer questions on the GMAT, it adjusts the difficulty of each successive question it serves up to you.  It helps the GMAT create gradations of knowledge by constantly subdividing test takers into more refined groups of “knowledge isobars,” if you will.

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Idea-driven vs. Knowledge-driven

There have been too many articles exploring the shift of the cultural center of gravity from New York to San Francisco.  (Appropriately, a lot of the hand-wringing comes from sources like the New Yorker and New York magazine.)  But these articles tend to be culturally focused, even the ones purporting to compare the finance and tech worlds.  They answer questions like, “is tech douchebaggery the new finance douchebaggery?” or “do writers need to live in San Francisco?”

These articles will occasionally wonder what the implications are for society when its best and brightest are choosing to go build sexting apps.  A website called FirstWorldProblems.biz exposes just how nonsensical many of these “problems” are that startups are trying to address.  (Examples include “I can never come up with enough cool music for my parties” or “I just have too many social networks for me to keep track of.”)  None of them really contemplate the question at any length.

I finally came across an article that actually dwells on the problem of the brain drain, looking not just for why people join startups, but spending real time looking at cultural, sociological, and business implications of this new world order.  Writing for the New York Times Magazine, Yiren Lu doesn’t actually take a position on whether this is good or bad; in fact, the article’s lack of agenda gives it the pleasantly “purpose-less” feel of a meandering late-night conversation with friends.  But in this one piece, Lu exposes a number of different motivations and characteristics of the techie ecosystem and I can’t help but draw out my own implications.

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Learning as a “Choose-Your-Adventure” Experience

I’ve had the privilege of being a student at the University of Oxford, an institution that has been responsible for education for nearly a millennium (classes were taught as far back as 1096 AD).  While I loved the experience for countless reasons, I came away significantly more in love with the “American-style” teaching employed by universities this side of the pond.  At least one purpose of every exchange program is to expose students to different pedagogies, and the Oxford experience did exactly that.

Oxford expects more of its students – not in terms of outcomes, but in terms of self-direction.  American colleges, meanwhile, prefer to meet students halfway and provide more structure around learning.  I think this is a function of age.  Education at Oxford hasn’t evolved very much over the centuries.  The Junior Common Room (JCR, i.e., undergrads) are treated like grad students in the US; in other words, you’re given enough rope to swing freely or hang yourself.

My Classical Economic Thought class, for example, was shockingly hands-off, compared to any economics class at Dartmouth.  The assignments were weekly prompts (like “Reconcile the differing views of comparative advantage in Adam Smith’s Wealth of Nations and Ricardo’s Principles”) to which you produced a 5 – 10 page paper.  To answer these prompts, you were given, at the start of the term, a reading list of about 20 books and 50 articles and were assured that all the requisite understanding lay somewhere in that recommended reading list.  If not, you could refer to another generic reading list on the Econ department’s website (of about another 30 books).  Your challenge was to figure out how much time and at what intensity you wished to engage with the material.

Also unexpected was how classes weren’t lecture-based, but rather, just a weekly one-hour tutorial with a grad student advisor.  You would submit your paper to the Tutor a day in advance of your tutorial and would then discuss it together for an hour.  Most tutorials were one-on-one so you rarely interacted with other students in a formal academic setting.

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Credentialing, or Why We Need “Ratings Agencies” for Personal Education

One of the hot topics du jour is “credentialing,” or a universally accepted way to verify that an individual possesses a specific skillset.  I am, admittedly, a firm believer in the value of education outside of providing for a professional career.  But for the purposes of this discussion, I’m going to completely ignore that side of the issue.

I’m instead focusing on the value of education in terms of employers and hiring.  People go to school to 1) learn skills that prepare them for any range of trades that they want to pursue as a career; and 2) to signal to employers that they possess such skills.  But the system is imperfect; here’s an example:

At Deutsche Bank, I served as an analyst recruiter and saw firsthand how unfairly focused all bulge bracket banks are on feeder schools.  Reviewing a resume from a “non-elite” school would only occur when people inside the bank pulled strings to highlight such specific candidates.  Meanwhile, we had clearly structured processes to ensure that everyone who applied from Dartmouth (or Harvard or Duke, etc.) had his or her resume reviewed – and not just by a random set of eyes, but by alums of that school.  I knew when a Dartmouth kid took Econ 26, 36, and 46, that he had a real interest in the finance world; I also knew never to ask accounting questions in the interview because Dartmouth just didn’t teach that as a subject.  That’s a significantly different experience than being the one guy from Podunk State who happened to get a shot through incredible personal hustle.  He got grilled on accounting and was given a much higher bar to clear.

This system may be unfair, which is an issue in and of itself – good schools get the best jobs, but not everyone has the same access to good schools to begin with.  The other huge problem with the system is how inefficient it is.  The most competitive jobs should go to the most competitive (i.e., qualified) individuals.  Those individuals may have attended an Ivy League school; but oftentimes, they didn’t and the current job market has no efficient way of screening for that.  In other words, very few firms are hiring very few of the right people.

Indulge Me in a Brief Analogy

Think about the job market as the corporate bond market.  Investors cannot possibly know all they need to know about every corporation that’s out there trying to sell them bonds.  Yet investors are comfortable investing in XYZ Corp. just as they are investing in General Electric.  They may require a higher interest rate to compensate for additional risk, but they’re still willing to commit many hundreds of millions of dollars to XYZ for the promise of payments down the road.  Why?  Because S&P and Moody’s gave XYZ Corp a BB+ or Baa credit rating.  Investors don’t need to fully trust XYZ or MNO or UVW Corp.; they just need to fully trust S&P and Moody’s.  Those ratings agencies enable liquidity in the corporate credit market.

The education market has no such equivalent and is, consequently, nowhere near as liquid as it could be.  The implications for market inefficiency are truly staggering.  Selective investors – in this case, highly desired employers like Google or Goldman Sachs – have no ratings agencies to compare educational qualifications across different institutions.  As a result, they choose to invest in – hire from – AAA-rated institutions like the Ivy League.  College branding has effectively become the ratings agency for individuals.  This isn’t necessarily a problem until you consider that college education is supposed to provide the skills that are being assessed in the first place.  In other words, it’s as if every single corporate bond issuer gave themselves their own credit rating instead of Moody’s or S&P.

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Pearson Throws Down (the Credentialing Gauntlet)

This past week, at the Summit to Reconnect Learning, education behemoth Pearson announced its new credentialing platform, Acclaim.  Pearson’s hope is that Acclaim, built on Mozilla’s Open Badge infrastructure, will serve as a standardized certification system for different skillsets in the new online economy.

My earlier post on Credentialing looked just at one provider of a credentialing service, Coursera.  I noted that the most logical institutions out there to assume the mantle are MOOCs.  Pearson obviously thinks otherwise and, while it’s too early to provide an outlook on Acclaim, I’m curious to see what they’re able to accomplish here.

(Before discussing Acclaim further, let’s all be thankful that OpenBadges even exists right now.  Mozilla isn’t considered an EdTech giant but in terms of expediting the credentialing movement, this is a great way to have an impact.)

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The Humanities: Crucial to Venture Capital (and Everything Else)

The liberal arts have gotten a bad rep. As the joke goes, “What’s the most important question that Philosophy majors need to learn to ask?” Answer: “Would you like fries with that?”.  This isn’t the best trend for society.

Conventional wisdom, especially in light of the startup culture that has overtaken the world, is that hard skills like programming and engineering will rule the day. Pres. Obama has been pushing STEM education initiatives and schools are now being evaluated on the quality of their computer science classes. Nowhere is this enthusiasm felt more than in the tech investing world. We prize technical CEOs who can “talk dirty” in the language of code. We want the visionaries who can both spot seismic technology shifts and also understand the underlying science.

So far so good. Yet this blog, ostensibly about the EdTech world, Venture Capital / Private Equity, and the intersection of technology and finance more broadly, goes out of its way to incorporate the humanities. Why do I post thoughts on books that I’ve read? Especially when these books never directly pertain to the tech or finance worlds?

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Asking the Right Questions

I’ve worked for one startup in my life – Dash4Teachers, and the lessons I learned from that experience deserve their own series of posts. However, I recently had the opportunity to work for a “startup” in a very similar capacity.

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Twitter for EdTech: The Medium is the Message

There were two remarkable events generated in the Twitterverse in the last few years. The first is #BloomsdayBurst, the live tweeting of James Joyce’s Ulysses on Bloomsday (June 16) 2011. The second, more recently, is #Beow100, the efforts of a Stanford medievalist, Elaine Treharne, compressing Beowulf into 100 tweets for her course on the various manifestations of the work. The remarkable outputs of both #BloomsdayBurst and #Beow100 offer insight into Twitter’s potential as an educational technology – far, far beyond the view that even the most Twitter-philic teachers have of it as a “cool” way to communicate with students.

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Venture Capital, Hedge Funds, and the Efficient Markets Hypothesis

Leena Rao at TechCrunch recently wrote about San Francisco-based hedge fund Coatue Management investing $50M in Snapchat.  There’s so much subtext in this one deal to help inform thoughts about the broader Venture Capital model.

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