Markets Opinion

FreeReading.net: Wireless Generation Adopts an Open-Source Strategy

November 08, 2007 4 min read
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Open source k-12 curriculum is not a new idea. It’s not even a new business strategy. But when it was adopted by assessment support provider Wireless Generation on November 7, it took on new importance.


Because CEO Larry Berger declared war on the multinational publishers that dominate k-12.

Whether the story to unfold will be that of Jeff Bridges in Tucker – A Man and His Dream or in Seabiscuit – or Peter Sellers in The Mouse That Roared, remains to be seen - and is definitely worth discussing.There is a sea change going on in K-12 education as educators act on the finding that teachers and their ability to understand and address students’ individual needs have the greatest positive effects on student learning…. But schools still spend a huge chunk of their budgets – nationally, approximately 7 to 8 billion dollars per year -- on textbooks and instructional materials…. That leaves a much smaller pie that schools must stretch to purchase formative assessment, professional development, and other initiatives that help teachers do their jobs well. Free-Reading.net is a step toward changing these economics and freeing up funding for things that improve teaching and learning.

This is not a paragraph of quotes from Larry Berger, CEO and Co-Founder of Wireless Generation, pulled together by some reporter over the course of an interview. It is his coherent statement straight from the firm’s press release.

Greg Toppo of USA Today sums up the story here. After noting that Florida Instructional Materials Adoption Committee for K-3 Supplemental Reading Programs has recommended the Free-Reading.net program for adoption, edbizbuzz readers could probably write it themselves.

They certainly understand the bottom line – state adoption of a free web-based curriculum threatens print-based publishers. Digital media and online delivery are classic examples of disruptive technologies that swamp barriers to entry created by dominant players, and can change markets overnight. The multinationals’ long-term strategy is to milk their mature, cash cow print businesses as long as possible, while simultaneously preparing themselves to dominate the inevitable shift to digital media and online content delivery. Their interests lie with a long transition from the first to the second, and they’ve lobbied very hard to slow it down through regulation of the states’ adoption process.

The release and the story offer unambiguous evidence that Wireless Generation did not adopt its disruptive strategy in a fit of absent-mindedness. Management, and presumably the board, thought about how publishers might respond. They can’t ignore it, just stand by, let it pass through Florida’s adoption process and watch this move on to the next state.

So Wireless Generation’s management knows it faces a spectrum of futures defined by three possibilities. For lack of better labels, and to help readers appreciate the strategic landscape, I’ve drawn on three movies.

In Tucker – A Man and his Dream, Jeff Bridges plays Preston Tucker, a real-life character from the 1950’s whose automobiles were nothing short of revolutionary. The company was strangled at birth. Tucker could not secure a network of distributors or the capital required to boost production, largely because the big auto manufacturers blocked his every move.

Bridges plays Charles Howard, a more successful 1930’s real-world character, in the movie Seabiscuit. In this case, Howard bought a horse with good bloodlines, saw potential others ignored, and made a set of good decisions. In 1938, Seabiscuit beat Triple Crown winner War Admiral in a head-to-race.

These movies bound the spectrum. I wish I could find a Jeff Bridges’ movie for the middle case, but I don’t have the time. The movie that comes to mind is The Mouse that Roared, a work of fiction set after the Second World War. In this film, Peter Sellers plays several characters from the Grand Duchy of Fenwick, an impovershed principality whose leaders decides that best way to gain American investment is to follow the path of Germany – declare war on the United States and lose. They figure that the best way to get Washington’s attention is to go nuclear (or at least pretend to). Hey, it was funny in 1959.

I don’t think the Tucker scenario is very likely. Wireless Generation doesn’t need a strong local distribution network or capital to ramp up production. As long as it wins adoption in a few states, there’s a viable business. And as long as there’s a viable business, the firm presents a threat that cannot be ignored.

I don’t think I’d bet the farm on the Seabiscuit scenario, but Wireless Generation and its investors don’t have to. All they need is for the big publishers to conclude it’s a nontrivial possibility. To the extent they do, they will try to buy the company - and that’s The Mouse that Roared scenario. The more the publishers believe Wireless Generation is a viable initial public offering opportunity, the more they will be willing to pay to avoid it.

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