What Schoology’s Venture Funding Means for the LMS Market

LMS vendor Schoology just raised $32 million in Series D venture capital funding, bringing the total that they’ve raised to just over $57 million. If you’ve never heard of them, that’s because they have mostly been focused on K12, where they are doing very well. But they have turned their attention to US higher ed recently. They had a surprisingly big presence at EDUCAUSE, where CEO Jeremy Friedman told me that they are prepared to make an aggressive push. Their ability to get major funding was probably helped by Instructure going to market, and possibly by the leak that Blackboard is putting itself on the block as well. I don’t generally take money guys too seriously in their ability to predict ed tech, but they may be lucky on this one. I think there may be an opening the US higher ed LMS market for a new entrant.

LMS selection for schools often works a little like the selection process that high school students typically go through when picking a college. Students looking at colleges usually have a favorite going in. Maybe their friends are going there. Or their big brother or sister. Or maybe they just heard that it’s cool. But they don’t apply to just one college, in case it doesn’t work out for one reason or another. So they have a second tier of schools that might be OK too. Generally, they don’t know much about your favorite school going in and they know even less about the “might be OK” schools. Depending on how cautious they are, they might throw in one or two “safety” schools that they really don’t want to go to but that they feel (or their parents feel) should be included for the sake of completeness.

Likewise, colleges and universities frequently go into an LMS evaluation process with a favorite. Because the selection is generally done by a committee of stakeholders rather than just one person, there might be conflicting opinions on what the favorite is. But more often than not, there is a nascent majority or a consensus opinion about the likely winner, at least among the core selection committee. Back in the early to mid-aughts, the default favorite was usually Blackboard because it was considered to be the safe alternative that everybody was using. When Blackboard faltered, the favorite began to split between D2L and Moodle—and occasionally Sakai, particularly for larger public universities—with type of school and geography having a big influence on which one was likely to be the frontrunner. These days, the schools that Phil and I talk to report Instructure as the starting frontrunner at least four times out of five, across school types or geographies.

But LMS selection processes still need their “might be OK” candidates. For one thing, most of them are mandated by policy or by law to do a real multi-vendor evaluation. And most evaluation committees genuinely do want to look at alternatives. Just because they have a sense going in of which alternative is most likely to be the best doesn’t mean that they are closed-minded. The trouble is that there aren’t many alternatives that selection committees feel hopeful about these days. Increasingly, Sakai and Moodle aren’t even making it to the serious evaluation stage in US higher ed evaluations; and even when they do, they are often treated like safety schools. Blackboard never fully recovered from reputational damage done under Michael Chasen and their failure to deliver on Ultra this year was a huge setback. At the moment, they are being treated like a safety school as often as not. If Ultra slips further—and maybe even if it doesn’t—they could start losing significant numbers of customers again. And we haven’t run into many schools that are particularly excited about D2L either. Probably the best I can say for them is that they are the least likely of the LMS companies that are not Instructure to be dismissed out-of-hand.

I think there’s an opportunity for a new entrant to get a fair hearing from selection committees that want a real horse race but aren’t excited about any of the incumbents. Ironically, the rise and success of Instructure has probably reduced risk aversion among schools to go with a scrappy start-up. I don’t know if Schoology is going to be the one that gets a foothold in the market because of this opening, but their timing is definitely good.

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New Column At EdSurge

Starting today, Michael and I are publishing a three-post series on personalized learning at EdSurge. Depending on how that goes, we could end up providing a regular column there.

The first post today is titled “Why Personalized Learning Matters to a New Generation of College Students”.

As we talk to the people on the front lines of these differentiated instructional approaches—students, faculty and staff with real-world experiences, both good and bad—the most significant theme that emerged was the challenge of helping students that come to class with wildly different starting knowledge and skill levels. Personalized learning should be seen as an effort for institutions to directly support students across the spectrum.


We’re excited to be working with EdSurge, helping them expand their coverage of higher education and helping us to share analysis and e-Literate TV content with a broader audience.

You can read the whole article here.

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Asking What Students Spend On Textbooks Is Very Important, But Insufficient

Mike Caulfield responded to my post on data usage to understand college textbook expenditures. The core of my argument is a critique of commonly cited College Board data. That data originating from financial aid offices leads to the conclusion that students on average either spend or budget $1,200 per year with that number rising, while there is more reliable data originating from students showing the number to be half that amount and dropping.

In Mike’s response post yesterday, he generally agreed with the observation but is concerned that “readers of that piece are likely to take away the wrong conclusion from Phil’s figures (even if Phil himself does not)”. There is a risk that people see the lower numbers and conclude the “crisis is overblown”, leading to this observation:

If we’re looking to find out if prices for some set of goods are too high, then by definition we cannot look at what people are spending as a reliable gauge, because one of the big effects of “prices too high” is that people can’t afford what they need.

If you don’t pay attention to this you get in all sorts of tautologies.

In the specific world of textbooks, Mike considers the lower-cost method of renting used textbooks, noting:

So which figure do we use here? The chances of getting everything you need as a rental are low. Sure, you could be the super-prepared student who knows how to work the system and get them *all* as rentals — but not every student can be first in line at the bookstore. And the ones at the back of the line — guess their socio-economic class and first generation status?

This is an important issue, and I appreciate Mike’s understanding that I am not arguing that college textbook pricing is an overblown crisis. I agree that the crisis is real and that the hardest-hit are likely low socio-economic class and first generation students.

But let’s move past these agreements and drop the gloves. Continue reading

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Bad Data Can Lead To Bad Policy: College students don’t spend $1,200+ on textbooks

The average US college student does not spend or budget more than $1,200 for textbooks, with that number rising each year, as commonly reported in the national media. The best data available continues to show that students spend roughly half of that amount, and that number is going down over time, not up.

Last spring I wrote a post documenting that the College Board is not a reliable source for college textbook expenditures. With last week’s release of College Board data, it is worth repeating that data for their “Books and Supplies” category are:

average amounts allotted in determining total cost of attendance and do not necessarily reflect actual student expenditures.

Much more reliable data from the National Association of College Stores (NACS) and the Student Monitor consistently show that students on average spend between $530 – $640 per year for textbooks or “required course materials”.[1]

There is also fairly clear data from NACS and Student Monitor showing that student expenditures on textbooks or “required course materials” is going down[2]. Continue reading

  1. Read the spring post and a a postscript if you’d like to see the details. []
  2. Note that NACS used to be a biannual study and does not have data for AY2009 and AY2011. []
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Instructure Dodges A Data Bullet

Last week’s EDUCAUSE conference was relatively news free, which is actually a good thing as overall ed tech hype levels have come down. Near the end of the conference, however, I heard from three different sources about a growing backlash against Instructure for their developing plans for Canvas Data and real-time events. “They’re Blackboarding us”, “the honeymoon is over”, “we’re upset and that is on the record”. By all appearances, this frustration mostly by R1 institutions was likely to become the biggest PR challenge for Instructure since their 2012 outage, especially considering their impending IPO.

The first complaint centered on Instructure plans to charge for daily data exports as part of Canvas Data, which Instructure announced at InstructureCon in June as:

a hosted data solution providing fully optimized data to K-12 and higher education institutions capturing online teaching and learning activity. As a fundamental tool for education improvement, the basic version of the service will be made available to Canvas clients at no additional cost, with premium versions available for purchase.

What that last phrase meant was that monthly data access was free, but institutions had to pay for daily access. By the EDUCAUSE conference, institutions that are part of the self-organized  “Canvas R1 Peers” group were quite upset that Instructure was essentially selling their own data back to them, and arguments of additional infrastructure costs were falling flat. Continue reading

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