Is there a K-12 online learning ‘bubble’? Posted on April 7th, 2011 by Michael B. Horn

For several years now I have been an unabashed promoter of online learning as a disruptive innovation with the potential to transform our education system from a monolithic one to a student-centric one that personalizes for different student needs.

I still believe that.

But in the short term, there does appear to be a bit of a “bubble” developing around innovation in education—be it in online learning products and services, blended-learning schools, and the like.

This bubble might not fit the technical definition of the term—“trade in high volumes at prices that are considerably at variance with intrinsic values”—but it has some elements of that, as well as a few others that should give all of us at least some pause.

First, investment is heating up in the space. According to Michael Moe, there has been at least $225 million in financing deals over the past year as well as $367 million in merger and acquisition activity. There are a lot of positives here of course, as a critical reason for this is because there have been some valuable businesses created in the past 15 years in education, and there are many more disruptive opportunities now. That said, too often the investment of money in a company is treated as a success in and of itself rather than the creation of true intrinsic value in solid and sustainable models. And more than a few investors in the space have noted that the deals that they are seeing in the space have valuations that don’t square with the underlying value often.

Some of this “frothiness” is good. We just have to understand what it does and does not mean. For example, just because something is “online learning” or “blended learning” or “innovative,” doesn’t mean it’s necessarily good—that it increases learning outcomes or saves costs—or will be around in a few years. There will be shakeouts where some investors’ bets fail. And some bets of course will become spectacular successes, which is the beauty of the market.

Second, to this very point of creating real value, the quality of much of the online learning products and services (from content to learning management systems and on and on) is frankly all over the place. In some cases this is because many continue to create home-grown products that reinvent the wheel and miss the benefit of the talent and investment that companies can bring to the table. But another critical reason for this is that education policies all too often encourage a race to the bottom—a purchasing of the cheapest product regardless of quality—rather than one that pays for student outcomes. In addition, the consumer—often local school districts—is pitched constantly on different products or blended-learning solutions, all of which promise to get great results, but in reality often have thin or misleading track records, and the consumers don’t push the selling organizations enough in smart ways to get what they in fact need.

Third, reminiscent of the dot-com bubble where strange nonsense words became company names, there are all sorts of weird names popping up in education companies these days for products that are far less differentiated than their founders like to believe.

Finally, in a more general indictment in education, everything these days hails under the moniker of “innovation” and “transformation.” No longer is education reform the popular way to describe what one is doing, but instead one is “reinventing” the system. All too often, however, if one were being intellectually honest, they would note that nothing of the sort is occurring.

Where this will all end up is anything but certain. And as I’ve said, I remain bullish on this field in general and excited about the investment in education companies, but there does need to be some caution in the days ahead because all too often quality—as measured in actual student results and a lasting and real business model—is not there.

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4 Responses to “Is there a K-12 online learning ‘bubble’?”
Tom N, on April 8th, 2011 at 12:24 am Said:
I am constantly amazed actually at how average much of what comes out of corporate online learning companies is in terms of the use of technology. Are they choosing cost over quality?

Chris Bigum, on April 30th, 2011 at 11:34 pm Said:
Business has always been in and around schools to make a dollar. Not a good look. The banality of the product reflects just how hard it is to produce ‘killer apps’ in this caper. It also reflects the difficulty of making use of highly tailored software in classrooms where teachers prefer to call most if not all the shots. But all of this misses the point that folk have been trying to do this for over 30 years and have precious little to show for it. This, despite heroic efforts by many teachers. How technology is understood (theorised), how change is understood, how learning is understood, all matters hugely. When you look at these three idea spaces in education you get a good sense of how impoverished and palpably silly the understandings are.

Michael B. Horn, on May 1st, 2011 at 1:28 am Said:
Thanks for your note. We of course largely agree, but it’s also why we’re quite bullish about the online learning approach that goes outside the traditional classroom structure and starts with nonconsumption, not with the learning structure as it has been. There actually has been lots of progress in this arena, my very real fears aside.

Chris Bigum, on May 1st, 2011 at 11:51 pm Said:
Thank you for the reply. I’ve been interested for a long time in what you might call ‘the edges’ of educational practice. These are places/spaces that are generally deemed too difficult or unimportant to draw much attention from those who maintain the correctness of educational systems. The non user is, to me, one such space, i.e. is on the edge (usually deemed to have fallen off 🙂 ). Non users might range from the slum kids in India using a hole in the wall computer (Sugata Mitra’s work), to engaging the disengaged in ‘normal’ schools (the Knowledge Producing Schools (KPS) work I have had an involvement with). You offer a similar range of non users in your book.

My particular interest over some time now has been in the notion of schools as sites of serious knowledge production (this is an edge – silly enough not to be taken seriously or misunderstood by most managers). To me, whether you do it online or whatever it is important to move the notion of schooling away from the pretend activities that it is famous for (important when it was developed during the industrial revolution) and give kids access to mature insider forms of practice, aka experts which for the most part cannot be teachers. Most teachers in schools have little access to mature insider forms of practice, i.e. history teachers don’t do history, maths teachers don’t do maths etc. So you end up with a lot of well intentioned but misguided knowledge work in schools. Kids do ‘fridge door’ assignments and the long standing patterns of disadvantage are faithfully reproduced.

It always strikes me as odd that we are happy for a kid to sail around the world solo, play violin like a virtuoso, break Olympic records, set up a new business etc. etc. but in school the same kids are treated as if they have little talent and are in constant need of help and remediation. The one thing that two thirds of each school cohort learn (in Oz at least) is that they are dumb. Schools are fantastic at ignoring the amazing talents of every child; terrific at destroying the curiosity each child is born with and exceptional at ignoring the world in which these children will work and grow old. Schooling, as a colleague once remarked to me, is a form or organized child abuse.

When you can give kids access to expertise and they can work on ‘real’ tasks you do see something of just what kids can do. One of the Principals with whom I work loves to report on adult reaction to the work carried out by kids: ‘Wow! Did kids do that?”. There are lots of examples, i.e. the 826 work in the US, the little project we have running in Oz, KPS, Kaos Pilots in Denmark etc. Very occasionally you can get it as mainstream, i.e. Ricardo Semler’s Ecole Lumiar in Brazil.( a key feature in these examples is giving kids access to experts, not teachers if I can make the distinction for the moment.

I am encouraged by some parts of the online. The online environment can deliver access to expertise in spades and there are lots of wonderful examples of kids, old and young getting access to groups of experts to do work that matters to them and to their communities. Most of this happens at the edges of or outside formal schooling.

So in terms of what ‘online’ offers, I guess I’d be a little wary of what gets to be consumed. If it tastes like educational chicken (apologies to Seth Godin) then I am much less hopeful. For me, doing ‘real’ tasks not pretend ones and having access to expertise so what kids produce is good/cutting edge are two non negotiables. Apologies for the sermon but this stuff is so important.


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