Thursday, July 25, 2013

Tribeca Flashpoint Academy Chairman Howard Tullman on Education Technology in ISTC Catalyst

July 2013 Feature - Education Technology

Revolutionizing Education through Ed Tech
By Howard Tullman (@tullman), Chairman, Tribeca Flashpoint Academy and Illinois Innovation Council Member

There’s a lot of exciting activity in Illinois these days around education technology start-ups. Just in the last 30 days, there have been multiple events specifically focusing on the new opportunities which the innovative application of various technologies (both new and old) to our tired and flawed education system are creating for both entrepreneurs and investors. And ultimately, the hope and the goal is that the real beneficiaries of these improvements will be our kids.

More than 35 edtech start-ups presented at the Education Technology Start-up Collaborative User Conference and Teach for America’s Pitch Day featured another group of very excited young business builders who were all focused on changing the education landscape. Finally, Tech Week Chicago 2013 also had plenty of education offerings among the businesses there who were showing their products and services to the impressive crowds all weekend.

So it’s fair to say that we’re seeing the levels of entrepreneurial energy and enthusiasm for the education space that we’ve been anticipating for quite some time. And the companies who are entering the space seem solid, somewhat more mature than expected and focused on solving real, near-term practical problems rather than trying to change the world overnight.

What we are most encouraged by is that we are finally also seeing levels of investor interest and engagement that will provide the early-stage funding and support that these businesses will all need while they prove out their offerings and before they are realistically able to scale.  Because these businesses in the short term aren’t looking for millions of dollars, the primary funding that is taking place is almost exclusively angels and early-stage firms and (good news here) some corporate venture departments that have been stuck on the sidelines for the last 5 to 10 years.

We really need all these small and active players because these initial deals involve too little in the way of funding for traditional venture firms and, in addition, most of the bigger VC firms took big, early education shots and (a) have basically been burned too often in the education space; (b) fear the 800-pound gorilla-like bureaucracies that rule the large education systems; and (c) think that none of us will live long enough to see major changes in the education space. I sure hope they’re wrong, but, in any case, they’re not actively playing in this space at present so their conclusions don’t really matter at the moment.

What does matter is that we give these scrappy new education start-ups all the support, encouragement and resources that we can muster so they can help us change the education landscape from a collection of clogged, constipated and clueless cod liver oil classrooms into places of purpose and passion, and enthusiastic communities of team-based and collaborative learning.

Did You Know?

Ed tech is still an emerging sector within digital tech entrepreneurship with most deals taking place at either angel or early stage investment stage. The average ed tech VC deal in Illinois these past four years is just over two million. Ed tech is a particularly good fit for angel investors because the sum required to seed a business is relatively low compared to other digital tech businesses.

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