Reach Capital Edtech Outlook 2017

aReach K-12 Edtech Outlook2017

Reach supports the most promising entrepreneurs developing technology solutions to address challenges in early childhood, K-12 and higher education.

We invest in early-stage companies that develop tools, applications, content, and services to improve education opportunities for all children.

2© 2017 Reach Capital. Confidential. All rights reserved.

About Reach Capital

3

At Reach, we believe in...

Learning that...

Technology that...

● Have a sense of purpose and actively pursue it

● Are empathetic, caring, and connected

● Work together to solve problems and improve the world

● Enables and respects a person’s agency and voice

● Exposes one to broad perspectives, places, and challenges

● Enables meaningful human interaction

● Minimizes boundaries and deepens connections between people

● Enhances and scales effective practices

● Increases access to quality education

Communities where people...

© 2017 Reach Capital. Confidential. All rights reserved.

a

Education is at an inflection point

Tech-enabled learning is here

5

Digital immigrantslearned to use

computers in the workplace

Digital immigrantslearned to use

computers for school

Digital nativesgrew up with computers, video games, and social

media

Mobile nativesalways connected; integral part of life

BABY BOOMERS1946 – 1964

MILLENNIALS1981 – 2000

GEN X1965 – 1980

GEN Z2000+


Today's students are mobile and always connected

Photo sources: Express Newspapers 2015, Mr. Martin's Web Site, MacStories 2017, Independent Digital News & Media 2017


Then Now

67%of millennials agree they can find a YouTube video on anything they want to learn

Learning is now bite-sized, on-demand, and accessible anywhere

Think with Google

Photo sources: Amazon, Buzzfeed

https://www.thinkwithgoogle.com/marketing-resources/micro-moments/i-want-to-do-micro-moments/

aK-12 schools are making headway


PC Revolution Begins:first computers in school

1:5 Computer:Student 2:3 Computer/Tablet:Student

1977 2000 2016

NCES

Schools are moving rapidly to one device per child

Photo sources: Computer History Museum, Ben Schumin, Google

https://nces.ed.gov/programs/digest/d10/tables/dt10_108.asp


of state-mandated tests in 2016 were available in a digital format

Then Now

85%EdTech Strategies

Online test policies drive schools' tech investment

Photo sources: Military OneSource, Education News

https://www.edtechstrategies.com/wp-content/uploads/2015/11/PencilsDownK-8_EdTech-StrategiesLLC.pdf

a

10

New Devices Shipped to Schools

Low-cost devices meet school demand


• 20M Chromebooks are used by students and teachers weekly

• Microsoft offers suite of low-cost devices starting at $189

• Apple launches a $299 iPad for education

New York Times

https://www.nytimes.com/2017/03/02/technology/apple-products-schools-education.html?_r=1

a

Classrooms are connected but need more bandwidth

Cost of K-12 Internet access has dropped significantly


EducationSuperHighway

https://s3-us-west-1.amazonaws.com/esh-sots-pdfs/2016_national_report_K12_broadband.pdf


Virtually all U.S. classrooms are connected ...

13




… but more bandwidth is needed

15%but only

of districts have enough bandwidth for 1:1 learning

88%of districts have enough

bandwidth for online testing


Photo sources: Education News, Edsurge


ADMIN SOFTWARE- Internet access

expands applications

- Focus on backend systems and compliance

HARDWARE- Computer lab era- 90% of edtech

spend is hardware

- Apple dominates in schools

CONNECTED CLASSROOMS- Proliferation of

low-cost devices- Student apps take

off


With connected classrooms, edtech broadens focus to instructional resources and content

1990s 2000s 2010s

a

Content is breaking free of the big publishers


More than half of all states allow textbook funds to be used for digital materials

DMAPS

http://dmaps.setda.org/?fwp_gep=gep-textbook-policy-digital-bool

BMO

Texas made a rapid shift to digital content

93%43%20152014

Percent of new instructional materials that are digital

18

SETDA


https://cdn2.hubspot.net/hubfs/253501/BMO_Edu_and_Training_Report.pdf?utm_campaign=Monthly+Newsletter&utm_source=hs_email&utm_medium=email&utm_content=36072156&_hsenc=p2ANqtz-8KPJmT-LSoAPVfYsJuj1P1ogf3LF_mqnerNjJsU5zGFBy1Jt-yy79-y013M5INBDYSdneGmXLw7dctkSO18i2vy43A40CvKhUNoGNtvzbajOYE768&_hsmi=36072158

http://www.setda.org//wp-content/uploads/sites/14/2015/10/SETDA_Navigating-the-Digital-Shift_full_10.19.15.pdf

© 2017 Reach Capital. Confidential. All rights reserved. 19

Digital materials will soon overtake print in U.S.

89% of school technology leaders expect instructional materials to be at least 50% digital within three years

BMO

https://cdn2.hubspot.net/hubfs/253501/BMO_Edu_and_Training_Report.pdf?utm_campaign=Monthly+Newsletter&utm_source=hs_email&utm_medium=email&utm_content=36072156&_hsenc=p2ANqtz-8KPJmT-LSoAPVfYsJuj1P1ogf3LF_mqnerNjJsU5zGFBy1Jt-yy79-y013M5INBDYSdneGmXLw7dctkSO18i2vy43A40CvKhUNoGNtvzbajOYE768&_hsmi=36072158


Digital content frees us from static textbooks

thousands of sources4 major publishers

district-prescribed curriculum teacher-curated content

adapted in real-time7-year adoption cycles

Photo source: G.I. Jobs

• Lessons, assessments, and activities are unbundled

• Anyone can publish

• Purchases made by subscription or on-demand

Content marketplaces disrupt establishedpublisher model


22

Teachers Pay Teachers marketplace upends traditional publisher model

teachers in U.S. downloaded at least one

resource from TPT

total earned by teacher authors on TPT in 2016

$100M 14teacher authors have

earned over $1M on TPT

2 3out of

Teachers Pay Teachers


https://www.teacherspayteachers.com/About-Us


a

Over past 3 years

• S&P 500 up 24%

• Pearson down 58%

• Houghton Mifflin down 32%

23

Publishers are on the decline

Jan 2015

Jul 2015 Jan 2016

Jan 2017

Jul 2016 Jul 2017

Perc

ent C

hang

e


a

Teachers drive rapid adoption and enable new business models


Teachers drive viral growth of ed tech products

40M monthly active users

20M users in 3 years

90%

of schools in 5 years

Edsurge, Edsurge, ClassDojo


https://www.edsurge.com/news/2015-11-23-bootstrapped-since-2005-quizlet-raises-12-million-to-reach-1-billion-learners

https://www.edsurge.com/news/2015-05-06-google-classroom-celebrates-one-year-anniversary-with-new-features-for-teachers

https://www.classdojo.com/about/


Teachers overwhelmingly find resources online

40.4%

Simba Information & MCH Survey, May 2016


Decision-makers rely on teachers and increasingly students for edtech recommendations

100%of superintendents

95%of principals

Improving Edtech Purchasing

Rely on end-user recommendations for K12 edtech purchase decisions

http://digitalpromise.org/wp-content/uploads/2016/02/DP_ImprovingEdTechPurchasing_FullReport.pdf

28

Teacher choice

Abundance of digital resources


Massive user adoption

Upsell to schools / districts

Upsell to families

Premium featuresFree product

Freemium business models are behind the fastest growing edtech products

ENTRY POINTSell to school- and

district-decision makers, who push product down to classrooms

Product is free for teachers and students who drive school- and district-level

purchases

CONTRACT SIZE $10K+ / district $1K - $5K / school

SALES CYCLE 6-9 mo < 3 mo

SALES REPS Field-sales ($$$) Inside-sales

GROWTH Driven by field-sales Driven by teachers


Freemium flips traditional top down sales model

TOP DOWNInstitutional sales

BOTTOMS UPFreemium institutional


Newsela ramped up to 78% of US English teachers in less than 4 years

Teacher-love drives growth and school sales for Newsela


Newsela

Teachers love product and evangelize

High teacher engagement enables

sale to schools

Viral growth driven by social media

Teachers & students access for free

High quality, leveled news articles engage students

Schools pay for analytics and other high-value features

https://newsela.com/

Free access to over 25K high quality e-books makes Epic an easy choice for teachers

32

87%of all K-8 schools

use Epic


87%


Parents and kids first learn about Epic in school and bring it home to continue reading

Families learn about Epic from teachers

Families purchase Epic for home use

Teacher referral builds parental trust in brand

Students use Epic at school for free

Students access thousands of books in digital classroom libraries

Parents support and reinforce reading behaviors at home

a

How has this impacted learning?

We’re getting better and better at doing what we’ve always done.

35

Technology super-charges student writing


Manual typewritersStudent writing looks

professional

Electric typewritersPublishing is faster and

easier

Chromebooks, Google Apps, AI

Writing is collaborative and feedback rich

Desktops, MS WordThe writing process is

digital and iterative



GEN X1965 – 1980

GEN Z2000+

36

Tech-enabled instruction is multimedia, two-way, and differentiated


ChalkboardsTeachers supplement lectures with visuals

WhiteboardsStudents with allergies spared from chalk dust

Sync’d student devicesStudents receive

differentiated content and can respond in real time

Interactive whiteboardsTeachers supplement

lectures with multimedia



GEN X1965 – 1980

GEN Z2000+

Photo sources: Slate, NY Post, IntMath Valley View Elementary


While tools have improved, today’s classroom experience can still feel surprisingly old-school


Hairspray set in 1962

GEN X1965 – 1980

Fast Times at Ridgemont High

1982


High School Musical

2006

GEN Z2000+

Photo sources: Hairspray, New Line Cinema; Fast Times at Ridgemont High, Universal Pictures; 10 Things I Hate About You, Buena Vista Pictures, WYPR

Sparrows Point High School, MD

2017

TODAY’S CLASSROOMHOLLYWOOD IMITATES LIFE

a

Now consider workplaces of the future ... automated by robotics, artificial intelligence

and machine learning ...

39

The nature of work changes as more and more activities are automated

McKinsey

81%Predictable physical

activities

69%Processing data

64%Collecting data

Work activities with the highest automation potential



https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwjclsb5hJHWAhVIj1QKHe7eAdwQFggpMAA&url=http%3A%2F%2Fwww.mckinsey.com%2F~%2Fmedia%2FMcKinsey%2FGlobal%2520Themes%2FDigital%2520Disruption%2FHarnessing%2520automation%2520for%2520a%2520future%2520that%2520works%2FMGI-A-future-that-works-Executive-summary.ashx&usg=AFQjCNEA5o6gs8eT4KXBvD0p98I3SBNS-Q

a

‘‘‘‘

Workers will need to work more closely with technology … and acquire

new skills that will be in demand in the new automation age

McKinsey Global Institute

a“Automation

could make us all more human”

41

Automation creates opportunity for workers to make use of innately human skills

Top skills needed in 2020

Developing others Problem solving

Emotional intelligence CreativityMcKinsey, World Economic Forum

Photo sources: BeanCap, LuxeBeat © 2017 Reach Capital. Confidential. All rights reserved.


https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwjclsb5hJHWAhVIj1QKHe7eAdwQFggpMAA&url=http%3A%2F%2Fwww.mckinsey.com%2F~%2Fmedia%2FMcKinsey%2FGlobal%2520Themes%2FDigital%2520Disruption%2FHarnessing%2520automation%2520for%2520a%2520future%2520that%2520works%2FMGI-A-future-that-works-Executive-summary.ashx&usg=AFQjCNEA5o6gs8eT4KXBvD0p98I3SBNS-Q

https://www.weforum.org/agenda/2016/01/the-10-skills-you-need-to-thrive-in-the-fourth-industrial-revolution/

a

We believe that now is an opportunity to transform learning

a

Reach poses a challenge to the edtech ecosystem:

How might we…

… harness technology to change learning and help people

meet the next generation of opportunity?


How might we...

Increase access to educational opportunity?

Streamlined school choice and enrollment

Free digital library with over 25K+ titles for schools

Platform that enables non-literacy specialists to

support struggling readers

45

Presents sets of news articles that examine personal identities

from diverse communities

Students around the world collaborate on projects about

language, culture, & global issues


Animates and publishes stories of students’ personal struggles

in their own words

How might we...

Expose students to new perspectives?

Connects students with industry professionals

46

Connects students with peers who have faced similar

challenges

Connects students with alumni mentors


How might we...

Make meaningful connections between people?

47

Students produce videos using Green Screen by Do Ink


Students express themselves and learn from

others on Flipgrid

Students write for a global audience on Pobble

How might we...

Give students a voice and a real audience?


problem solving

learning how to learn

critical thinking creativity

collaboration

How might we...Teach skills essential for personal success and societal impact?

a

Frontier technologies help educators to do what educators do best

a

50

Chatbots scale student support from enrollment to graduation

AdmitHub

AdmitHub offers 1:1 student support at scale through AI-powered mobile messaging

REAL-TIME, PERSONALIZED SUPPORT

- Sends nudges- Gathers important data- Fields FAQs

AVAILABLE 24/7- Meets students on mobile- Answers questions instantly

CONNECT- Students are connected

with empathetic college counselors for more meaningful conversations

90%Of students engaged with

the Chatbot in Georgia State’s first year

Photo Source: AdmitHub © 2017 Reach Capital. Confidential. All rights reserved.

https://www.admithub.com/

a

“I love Pounce, it’s not pushy.”

“I like how convenient it was.

I didn’t have to look through my emails. I just went to text.”

51

Students love AdmitHub, especially those who are underrepresented

Summer Melt Case Study, AdmitHub


32% Greater engagement from traditionally underserved Pell Grant population

94% Of students recommended AdmitHub’s chatbot for future students


http://blog.admithub.com/case-study-how-admithub-is-freezing-summer-melt-at-georgia-state-university

52

AdmitHub helps scale 1:1 support and frees counselors to focus on critical conversations

AdmitHub

Of the 185,211 messages sent, less than 1% needed university

staff intervention

“We would have had to hire10 full-time staff members to do the amount of messaging that

‘Pounce’ did.”

—Scott Burke, AVP for Undergraduate Admissions at Georgia State University (GSU)

When’s the housing deadline?

Which parent do I use on FAFSA?

When will I know if I got accepted? This is my dream

school, but I don’t think I can afford it.


https://www.admithub.com/

53

AdmitHub’s real-time, tailored support improved enrollment outcomes at Georgia State University

How an Artificially Intelligent virtual assistant helps students navigate the road to college

+3.3percentage points

21.4% Decrease in Summer Melt

16.9% Increase in flawless FAFSA

14.9% Increase in loan counseling


https://poseidon01.ssrn.com/delivery.php?ID=627112031031100009068110088118004126017039000080068005126025104090071067081066068105028099044055108047124120095004015019007068027083008052040016104025009067066009102067081035116121089016065018090022120004127065003126086126124125117122095105114124110106&EXT=pdf

https://poseidon01.ssrn.com/delivery.php?ID=627112031031100009068110088118004126017039000080068005126025104090071067081066068105028099044055108047124120095004015019007068027083008052040016104025009067066009102067081035116121089016065018090022120004127065003126086126124125117122095105114124110106&EXT=pdf

a

54

With AI-assisted grading, educators can give constructive, timely feedback en masse

Gradescope streamlines the tedious parts of grading so educators can focus on what they do best: giving great feedback

HOW IT WORKS

- Students submit work online, or educators scan & upload

- Using AI, Gradescope automatically groups similar responses

- Educators provide granular, constructive feedback for the group of responses all at once

Handwriting recognition and AI automatically group similar responses

Constructive feedbackprovided by educators at scale


55

AI-assisted grading transforms grading -- and learning!

“The course is much better off because we are able to implement this type of frequent assessment and give students better feedback, all within 24 hours.”

Chris MayfieldJames Madison University

"I feel like my life has changed. Not only did [Gradescope] cut down the time drastically, the quality of the end result was dramatically better … It resulted in a grading criteria that was so clear, structured and consistent that the students also enjoyed it."

Samuel DickersonUniversity of Pittsburgh

“Gradescope has revolutionized how instructors grade homework and exams. I don’t use that word a lot, but once you’ve used this tool, there’s no going back.”

Armando Fox, UC Berkeley


a

TeachFX provides teachers analytics and insights on classroom dialogue

HOW IT WORKS

- Teachers record their lesson using a mobile app

- Voice analytics technology distinguishes voices of different speakers

- Teachers see a visualization of speech patterns over the course of a class

56

Voice analytics provide insights that can help teachers facilitate more student dialogue

I decided to adjust my curriculum to include more simulations and focused discussions … The students were more engaged than I had seen them all year. Students were speaking over 80% of the class!

Lucas RichardsonHistory teacher, Pembroke Hill, MO

I thought student talk was going to be a lot more. Seeing the quantitative data was shocking at first. I want to improve, to raise my student talk percentage. So I'm working toward that.

Matt HicksEnglish teacher, Rockhurst High School

Our district is ecstatic about TeachFX. We have been striving to increase academic discussions in classrooms. Teacher talk and student talk is fundamental to reaching the expectations of our standards.

Daniela RoblesDirector of Teaching and LearningBalsz School District, Phoenix, AZ


57

Together, we can create communities where people

- have a sense of purpose and actively pursue it- are empathetic, caring, and connected- work together to solve problems and improve the world

Photo sources: The Teaching Channel, Mystery Science, Tinkergarten, YouCubed

58

Join In

@reachfund

[email protected]

Submit your company

Search EdSurge's job index

Follow UsWork in EdTech

Build a Company

https://medium.com/@reachfund

http://www.blended.blog/


https://twitter.com/reachfund

https://reachcap.typeform.com/to/QYiKmb

https://reachcap.typeform.com/to/QYiKmb

https://www.edsurge.com/jobs

https://www.edsurge.com/jobs



a

Thank You