Perspectives from a Geek with a Startup

This is a guest post by Michael Staton for the On the Horizon series on distributed learning environments. Michael studied poverty alleviation for his BA and MA at Clark University, where he developed a lifelong commitment to education and entrepreneurship. He then spent 3 years as a high school educator and was thrust into internet start ups in the education space. Seeing Facebook Platform as a disruptive opportunity, he co-founded Inigral, Inc as a consumer internet company set out accelerate real world relationships in an academic context using the product “Courses on Facebook.” Courses quickly gained traction in the Fall of 2007 and Founders’ Fund, an investor in Facebook, made a Series A investment. Inigral is also about to release a product to help K-12 educators cope with the pressures of the accountability movement. Michael is also the author of the Edumorphology and College Readiness for the 21st Century weblogs.

I spend most of my time in the midst of internet entrepreneurs. I work in an office with four other internet companies, go to beta launches in San Francisco, and attend panel discussions in Silicon Valley. Something that is conspicuously evident is that I’m one of the few entrepreneurs trying to solve problems in education. Another thing that’s evident, as ironic as it sounds, is that many internet entrepreneurs have given the problems in education considerable thought, many have even tried to contribute to or build a product to address needs in education at some point.

Start-ups in education are rare, but it’s not for lack of desire to work in the space. Venture Capital appreciates the education market size: it’s huge. Everyone gets an education, and mind-numbing amounts of money are spent to that end. Entrepreneurs tend to be young risk takers, and their first-hand knowledge of problems in the education sector is ripe. However, very few go-getters can convince an Angel Investor or VC that their product for the education market is worth an investment. To boot, older entrepreneurs advise young ones to stay away from the space. Why the reluctance? The market barriers.

In my paper, I comprehensively address barriers to market entry into the education market and propose some easy solutions. I focus on a set of interdependent forces particularly destructive to outside innovation; there is a causal relationship between public rhetoric and legal protections based on misunderstandings of internet use and political decision making, creating a risk-averse, zero sum purchasing process that requires an abnormally large and unhealthy investment in sales and support efforts.

 Reactionary rhetoric and inflammatory media coverage about extremely rare edge cases dominate the public dialog about the social web. A vocal minority of people like to talk about the risks of such open online communities, where teens can plan malicious behavior or get duped by predatory strangers. Legislation is designed to protect students from the open internet. Despite the fact that more malicious and predatory behavior happens at local malls, this rhetoric fills the media coverage and the fear of legal action dominate institutional mindsets about these technologies. Since decision making in education is often political and made in formal or informal committee, this airwave dominance and unfounded legal fears rule purchasing decisions.

Committees making purchasing decisions rely on an entirely different process than consumer adoption decisions, which are usually experiential. The result is that companies seeking market entry have to invest serious resources into a direct sales process that is highly expensive and bureaucratic in nature, and that much of the expense of the adopting institution is put into non-product related investment. Another deplorable side effect is that firms with large arms generally win a zero-sum purchase (which might as well be an exclusive contract, if it isn’t) that in a wide swath makes decisions for every student and faculty member. It is no wonder that the end-user gets stuck with poor products built with old technologies.

In stark contrast are products like Facebook that have always been after the allegiance of the end-user. The design and technology contrast with enterprise solutions is a topic worth a book. These sites have spread via personal referral and significant value-add to a person’s individual life. By focusing purely on product and spreading virally, they’ve been able to use new technologies that have great design, scale well, and have 100% up time.

Facebook’s Platform has been a wild success (if only at getting development talent). Third parties can now create new interaction paradigms on Facebook, and Facebook passes a user and their identity data back and forth to these third party applications, lowering barriers to adoption of new internet applications. Facebook Connect also serves a similar purpose for applications outside Facebook’s walls.

Working in the Facebook Ecosystem, I think that the Facebook model of design, growth, and platform architecture serve as models that should be replicated by academic software. Much can be learned from a focus on user retention, social software design, adoption barrier reduction, and third party integration.

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About Michael Staton

As founder of Inigral, considered the most innovative company in developing social software for student recruitment and retention in Higher Education, Michael has led three rounds of investment, including the first venture investment by the Gates Foundation, and brought on ninety partner institutions. Michael is a frequent speaker, author, and advisor on all things innovation in education, and advises several startups in the San Francisco area.
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4 Responses to Perspectives from a Geek with a Startup

  1. Enjoyed the analysis of the sales process that one goes through when working with universities. Your point about needing a dedicated sales force and capital to spend on extensive marketing is spot-on. I am the CEO of Scholar360. We sell proprietary LMS software and I can vouch for the big investment needed in sales, staff, and training.

    We are doing things a bit differently with NIXTY by taking a much different Web 2.0, viral approach. I’ll be very interested to read your analysis of the adoption barriers and ways to maneuver around those barriers. I think many of the efforts in this space will be successful. However, I think it’ll be slow and follow Christensen’s disruptive approach. People w/out the technology will be the first to sign on, then, as credibility is established, more established client’s will test out the software. I also think the low-investment (free to very affordable) will also aid the adoption process. That is, clients can maintain their enterprise system and also “try-out” 2.0 technologies for little to no cost. I think these types of pilot projects will eventually bolster their confidence in 2.0 SaaS providers.

  2. College student with an idea says:

    Can you please provide a link to Michael’s paper?

  3. Michael’s paper does not exist yet. These blog posts are a series of introductions to articles that will be published in an issue of On the Horizon early next year.

  4. Hi Glen,

    Good to hear your comments and your experience. I’m deeply satisfied by the concept behind your NIXTY product. I’m a fan of Christensen. Be in touch.

    - Michael

    And, College Student with an Idea, you can facebook message me.

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