Why is the education industry neglected by the top wind?

Two years ago, most of the top VCs were out of touch with the education technology industry, but that would change--and in fact, it is already changing.

In the past year, look at the stakes in the education industry for well-known investment companies: Accel Investment in Lynda, NEA investment in Desire2Learn and Edmodo, emergence investment in top hat, a16z investment in Udacity, And benchmark's investment in Minerva. And that investment continues.

The size of the education industry is huge and the industry continuity is not strong. They are rarely associated with technology and are often overlooked by entrepreneurs and investors. Therefore, there is great value in it, investment returns and opportunities for innovation are enormous.

The company that currently devotes to education space has the advantage:

Advantage 1: Attract high level talents

With consumer-style sites falling out of favour, high level talent is starting to look elsewhere for jobs.

Horizontal software that is, services (SaaS) companies may be profitable in the short term, but these companies often operate with the risk of being commercialized by low-cost suppliers, and it is hard for product sales to go beyond those that are more focused on vertical areas. More importantly, it is difficult for the level software, the service provider, to articulate a compelling vision so that it is difficult to attract passionate talent, and those consumer-web companies tend to have the advantage of attracting high standards in this area.

On the other hand, vertical software, a service company, can focus on a particular industry and resonate with people who really care about the field. In addition to the education industry, few industries can attract widespread attention. Almost everyone wants to focus on it and grab as many opportunities as possible to have a positive impact.

In the past, executives were thinking of "intervening" in the education sector through boards or charities in the twilight of their careers. The idea is changing and more and more people are realizing that early intervention in education will make them successful.

Advantage 2: Public Interest

Educational stories are still in the mainstream. The issues surrounding student loans, international competition, unemployment and equity affect not only the education sector but everyone around them. If you create a company and solve the problem in an innovative way that the world wants to solve, you will naturally be in the spotlight. Outside of Silicon Valley (and perhaps even in Silicon Valley), I bet I've heard Salman Khan more than anyone who's heard of Peter Thiel.

This is a huge advantage of the education technology industry.

Whether you like it or not, your assets, talents, clients, and partners will be influenced by public opinion. Those who know how to tell their stories properly are likely to arouse public interest, and a passionate listener will not be satisfied.

Three advantages: Market timing

The education system is being besieged by angel investors. The results of the education did not keep up with the current job market demand. The budget is also being slashed. Higher education institutions are also struggling because they have to adjust their growing tuition fees to cope with the open and free external education resources. The last industry to face such pressure was traditional media, which beat the traditional media overnight and won billions of of dollars in business.

If those institutions of higher education are smart enough (and we want them to be smart enough), they should harness the power of technology and transform technology into a catalyst for change. If they cannot foresee this, their fate will be the same as that of the paper media and radio. If you look at it in two, it's also an opportunity for tech companies that have just started in the field of education.

Advantage Four: Through the industry word-of-mouth communication

Unlike vertical software, a service provider, the education technology company's clients will not compete with each other. Universities are different, and they are very competitive, like athletes on the pitch. Because they need to run their own school brand for the potential students. But there is a lot of collaboration between the vast majority of educational institutions, and this collaboration is common even between schools in the K-12 (from kindergarten to high school).

If a teacher or an educational institution finds a good product, it can improve the students ' academic performance. They will certainly recommend this product to colleagues or peers. This phenomenon is so unique in the education industry that technology companies in other industries are often unable to benefit from it.

Advantage Five: The competitive advantage of external view

Right now, education technology is much less competitive than consumer technology or corporate technology. It is relatively low to build better products, have better executive power and replace the existing ones.

Historically, many educational technology companies have been created by passionate educators rather than those with commercial or technical minds. Its competitive advantage is that formal institutions are more closed and can provide long-term cooperative relations. In addition, some structural barriers in the education industry are gradually disappearing,

These startups need a view outside the education industry to determine whether they are truly groundbreaking. Many VCs who have made huge returns on "traditional" education companies are concerned about the identification of business models, and companies need to rely on ideas from outside the board to maintain their competitive edge.

Review past work in the education industry, summarize some blind spots from experience, and combine the experience of other industries to see what can be used for me. For example, if we invite Gordon Ritter (founder of Salesforce Company) to the board, we have the opportunity to learn Salesforce's successful experience; Yammer,box, and Veeva These companies are expanding their businesses ' experience, which can help educators improve their competitive edge.

In the next few years, investors will have great success if they focus on the education sector. Of course, if investors turn a blind eye to the development of the education industry, they will miss one of the biggest opportunities of the decade.

(via VB)