Mandela Schumacher-Hodge, a former public school teacher and Ph.D. candidate in urban schooling, stood on the stage in a small auditorium in the America Online offices here one recent afternoon as three Silicon Valley investors told her how to best communicate with teachers.
It was a dress rehearsal for the next day, when the auditorium would be filled with 100 teachers and school administrators. They would watch Ms. Schumacher-Hodge pitch the education company she recently founded—Tioki, a LinkedIn-style professional network for educators—along with 10 other entrepreneurs.
The event, called “educator day,” is one of the most important and nerve-racking for the people taking part in Imagine K12, the biggest incubator program in the United States specifically for education technology startups.
Many entrepreneurs in K-12 believe technology can solve education’s problems, but don’t work to understand those problems before prescribing technology to solve them. That frustrates educators and can be a recipe for failure for fledgling companies.
The founders of Imagine K12—Tim Brady, Alan Louie, and Geoff Ralston—made their fortunes working for some of Silicon Valley’s star companies, like Yahoo and Google. But they’re trying to change that dynamic by helping people who start education businesses understand what educators truly need and then create products to meet those needs.
Twice a year, for three months, Imagine K12 offers a handful of companies seed money, business guidance, and connections to major investors. Some of those companies have gone on to raise millions of dollars in funding, riding an influx of venture capital into education that resembles, on a smaller scale, the consumer-technology boom that’s produced such companies as Facebook and Twitter.
Ms. Schumacher-Hodge, through her own experience and interviews with dozens of educators, believes her company could help teachers. But her pitch would soon need to convince a room full of skeptics, and the three Imagine K12 partners critiquing her work specialize in speaking to end users.
At the practice session on this August day, her argument for Tioki centered on a hypothetical story about a teacher who wanted a way to showcase her skills to admiring education bloggers. But the partners wanted her to change it.
“Great voice, great enthusiasm; just get us cases that resonate more with the audience,” Mr. Brady said. Ms. Schumacher-Hodge stood with her hands folded at her waist, wearing a headset microphone, forcing a smile and nodding.
The feedback continued. They recommended making the pitch about helping teachers get jobs; Ms. Schumacher-Hodge thought that would give the company’s other services short shrift. But the partners countered that it’s not actually about whether the user needs a job or not, it’s how the product makes him or her feel.
“The profession of teaching needs to be thought of on the same level as everything else,” Mr. Brady said, pointing to a need for services that empower teachers. “And there’s nothing that does that.”
Identifying a Disconnect
Imagine K12 started a year and a half ago after Messrs. Brady, Louie, and Ralston, looking for a mid-career change of pace, decided to turn their shared interest in education into their primary focus.
“The availability of knowledge and information has expanded to places never known before, and yet we teach children like we did a hundred years ago,” Mr. Ralston said. “That’s a disconnect we know has to change.”
Rather than start an education company themselves, they decided to use their money to finance others. For each company accepted into Imagine K12—about 250 applied for the three-month summer program, and 11 were accepted—the partners take a 6 percent stake in exchange for $10,000 to $20,000 in seed money. All of the Imagine K12 companies are for-profit, as is Imagine K12 itself.
The companies receive counseling, guest speakers, introductions to investors, and a “curriculum” on everything from accounting to education policy to the art of setting up display tables at conferences. Partners hold weekly office hours with each company and organize group dinners, parties, and poker nights. The program culminates in “demo day,” at the end of October, when each company pitches a functioning product to a group of investors.
“Imagine K12 is our best pipeline,” said Jennifer Carolan, a co-leader of the NewSchools Seed Fund. NewSchools recently participated in a $1.6 million round of funding for ClassDojo, an online behavior management tool, and a $2.2 million funding round for Educreations, a whiteboard lesson creation tool. Both are former Imagine K12 companies.
In education, there are pitch contests, grassroots organizations that support startups, and conferences that showcase new companies, but no other education incubators that offer the kind of seed money in exchange for equity that Imagine K12 does. Such initiatives have emerged as education becomes more hospitable to technology-minded entrepreneurs. More teachers are entering the workforce as digital natives, a generational shift helping to prompt the often slow-to-adapt field to embrace technology.
Education Week is launching a new online channel that features breaking news and analysis about the education marketplace and new approaches to schooling that are changing K-12 education. Visit the new Industry & Innovation homepage.
Venture capital is picking up as well. In 2005, $10 million in venture capital was invested in the K-12 market, a major drop-off from the years of the dot-com bubble. In 2011, venture capitalists put $334 million into K-12, according to GSV Advisors, a Chicago-based education investment bank. That money also now goes further. Web hosting is cheaper, bandwith is becoming faster, and cloud-based applications, which are run through remote servers instead of costly on-site servers, are proliferating. Now smaller investments, or seed investments, can transform promising ideas into actual companies within weeks.
“It’s now so inexpensive to start a new venture that you don’t need to have a bunch of connections to billionaires to get off the ground,” said Kevin Carey, the director of the education policy program at the New America Foundation, a nonprofit think thank based in Washington. “You just need to be a teacher with a good idea.”
Among the 11 companies participating in Imagine K12 this summer, there are four people who have taught in K-12 classrooms. The rest are a mix of computer programmers, Web designers, business strategists, and people with experience in quantitative finance. They range in age from 18 to 51.
Mr. Brady said applicants were considered only if they had “a compelling tie” to education. But the entrepreneurial community also realizes the importance of attracting talented technologists to education.
“Great technology is really hard to find,” said Laurie Racine, the co-founder of Startl, a New York City-based incubator currently reconsidering its format. She added: “Great teachers are not so hard to find.”
That view can be a point of contention. Organizations like 4.0 Schools and Startup Weekend Edu focus on fostering entrepreneurship among local communities of educators, instead of the national, technology-centric approach of Imagine K12.
“Imagine K12 has really struggled with a lack of educators in the pipeline,” said Matt Candler, the founder and chief executive officer of 4.0 Schools, based in New Orleans. His nonprofit organization distributes small amounts of seed money and holds classes, contests, and fellowships to equip educators with entrepreneurial skills and match them with technologists.
Imagine K12 “can outcode anybody in the pipeline,” he said, “but a lot of the [entrepreneurs] that we met, they don’t understand the pain points, or the landscape.”
In response to such criticism, Mr. Brady stressed that in the current landscape, technologists are necessary for great teacher-led ideas to come to fruition. And to aid those new to education, Imagine K12 brought on its first “teacher-in-residence,” Jennie Dougherty, who taught at a high school in Massachusetts for several years, to offer a consistent classroom perspective for the participating teams.
“Until you get to a school or a classroom and see what the challenges are, it’s really difficult to start a business in education,” said Preston Silverman, a former technology strategist and high school teacher in India who founded Raise Labs, an online platform for financing scholarships that is currently participating in Imagine K12.
For Kasey Brown, a 51-year-old Imagine K12 participant who has taught for 19 years and before that worked for Hewlett-Packard, there are still blind spots on topics like marketing.
“The downside is: You don’t know what you don’t know businesswise,” said Ms. Brown, who, along with a 25-year-old programmer, Elliot Feinberg, co-founded DigitWhiz, an online math gaming program. “That can be a challenge.”
Feedback Is Critical
In the hours leading up to “educator day,” the traditional entrepreneur garb shifted slightly, from jeans and T-shirts to jeans and dress shirts. Teams set up tables in the auditorium, each with laptops for demonstrating their products, but also an array of pens and highlighters for email signups, and a wide selection of snacks to help attract users.
One startup, SmarterCookie, an online, video-based professional development tool, brought containers of cookies from Trader Joe’s grocery store, while the co-founders of Raise had a detailed conversation about whether to stack pieces of chocolate on their table or lay them out in a circle.
As teachers, who were bused in from around the area, filed in, the teams started schmoozing. SmarterCookie showed a woman how to comment on a video of a teacher in class. The woman later left her email address. On a large sheet of paper that asked “What’s the best advice a teacher gave you?” she wrote, “Take a deep breath.”
‘Educator Day’ Begins
When designing Imagine K12, the partners closely followed the format of Y Combinator, a renowned incubator for consumer technology, also based in Silicon Valley. But they added “educator day” because they believe teachers should be a larger part of the software-development process.
“Feedback from the people actually using the product is critical,” Mr. Louie said during his remarks to the audience of about 100. “Times have changed, and you educators no longer have to be on the receiving end of bad technology.”
Typically, new products in education require extensive research, costly focus groups, and lengthy sales cycles that prevent innovation, Imagine K12’s partners believe. In the new technological climate, teachers can test products through the Web, and they’re directly reachable by cell phone, Skype, Facebook, and Google Chat. Companies can enter the market with early versions of products—or, in startup parlance, “minimum viable products”—and quickly get feedback from teachers on what works and what doesn’t.
“Take a pile of dirt, and add one feature to it. That’s your first product,” said Mr. Candler, of 4.0 Schools. “And then you ship it to a teacher.”
As the educator-day audience visited the Imagine K12 companies’ display tables, Ms. Brown hoped to gather feedback on DigitWhiz.
Lorin King, a 5th grade math teacher at a charter school in East Oakland, Calif., said she was looking for a fractions lesson for her students. DigitWhiz doesn’t have a fraction game, Ms. Brown said, because, by learning fundamental skills like multiplication, students can learn more complex concepts, like simplifying fractions. So she showed Ms. King a beach-themed game for sorting like terms.
“If they nail these down, everything else is an application,” she told Ms. King. Then, perhaps remembering the spirit of educator day, she added: “But if you think we should consider it ...”
Educator day began with presentations from the partners and Ms. Dougherty and then pitches from each of the 11 companies. Most of the tension and nerves from the practices and reiterations seemed to prepare the entrepreneurs, who hit their marks without any major flaws.
As recommended, Ms. Schumacher-Hodge did not use the blogger story. She instead listed a number of hypothetical scenarios that would cause a teacher to need a professional profile, including presenting herself to bloggers, but also networking and passing along a project-based-learning portfolio. Feedback from teachers that day eventually led Tioki to integrate other social networks into its own and to change its interface for posting teacher video.
In a recent interview, Ms. Brown said, based on Ms. King’s feedback, DigitWhiz is developing a game on prime-number factorization that can further support fraction learning.
Changing the System
Overall, the pitches were well received, and teachers stayed long after to try the companies’ products and meet the entrepreneurs. But amid the optimism and even idealism of the presentations, it was not lost on the entrepreneurs that starting an education company can be harder than some other ventures.
For founders of consumer technology companies like, say, the photo sharing application Instagram, customer adoption can be driven by being a “passive onlooker,” said Bharat Madhusudan, a co-founder of current Imagine K12 company Securly, a Web-security system for schools. In education, he said, “you need to be in the field, in the trenches, meeting superintendents, decisionmakers, and convincing them yours is the best way to go.”
The difficulty of selling to schools is a common refrain among the companies. Many purchasing decisions are made by people who are not the products’ end users, teachers, they point out. The sales process can be slow and tinged with politics, and because authority often rests with local agencies, there are, in many ways, different markets for each of the 50 states, or even for each of the roughly 14,000 school districts.
“Every person we talked to in ed tech said find a way to make money without selling to schools,” said Mike Gerson, 25, who co-founded SmarterCookie, along with Tess Brustein, 25, a former teacher in New York City. The alternative is selling to teachers, parents, and students, which some Imagine K12 companies intend to do.
But still, the Imagine K12 entrepreneurs hope that not only will they succeed in a tough marketplace, but they can make it less challenging for those looking to innovate.
Mr. Silverman, of Raise Labs, wants to give students who can’t afford college more access to financial aid. Jeremy Keeshin and Zach Galant, 22-year-old Stanford graduates who were also teaching assistants, decided to start CodeHS, an online computer-science curriculum, to help teachers and students develop better programming skills and, ultimately, become more modern citizens.
“That’s what’s exciting about a lot of ed-tech companies,” Mr. Keeshin said. “Instead of trying to make a small change to a bad system, we are trying to come from a new angle.”
The frustration among Ms. Brustein and her friends in trying to get meaningful feedback and professional development led her to start SmarterCookie. An alumna of Teach For America, she considers herself a teacher at heart, and one who is taking a risk in leaving the classroom to start a company.
“I wouldn’t want to go into any other area of entrepreneurship,” Ms. Brustein said. “This is where I come from. I come from education. This is what I care about.”
