Question: What is your perspective on valuations in EdTech? Is there a bubble? And if so, will it burst?
EdTech Startup Show listener Pamela Gaudet asked this question for NYC EdTech Leader Jessica Millstone. Here are some notes I have from Jessica's response to this question.
If there's something you disagree with or find inaccurate, you can blame it on my notes, not Jessica's answer.
- The EdTech Startup Advantage: Many observe how education lags behind other sectors by several years. When it comes to EdTech startups this can be an advantage. Entrepreneurs and investors can look at business models, sales and marketing strategies, and investment trends, and then react to those a few years down the line if / when those same trends play out in education.
- The Rise of Lifelong Learning: As people begin living longer, switch careers more often, and react to the ever-accelerating information economy, an attitude of lifelong learning will continue to proliferate. "This podcast excepted, you can't just listen to podcasts all day," Jessica said. She's talking about how people require different modalities and experiences for their learning. This will continue to reveal new opportunities for entrepreneurs in education.
- Increased Value of Education (and Educators): Jessica notes that some people may raise their eyebrows at $50mm Series B Rounds. But there is an interesting side-effect to more investment money pouring into education companies. The perceived value of education and educators may increase in society as more investment floods in this sector.
- I'd add to this that social media, personal branding, and influencer culture will eventually play out in the world of teachers, too. There will be massively successful individual teachers who can captivate and teach learners far better than others.
- Congratulations, you're an education company: Early in the 2010s, Marc Andreessen famously wrote that "software is eating the world." The inference from this was that every company is now a tech company (or else get eaten). The next evolution of business, Jessica believes, is for every company to become an education company. Startups will be compelled to create high-quality educational content that helps users maximize the benefit they derive from their products and services.
While specific financial forecasts are difficult or impossible to get right, one thing is clear: there are trends coalescing to create more demand for innovation in how we learn.
What are your thoughts on EdTech valuations? Reply and let me know.
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Thanks for reading,
Gerard Dawson
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