Opinion
Money & Finance Opinion

Wireless Generation’s Berger and Stevenson on Hurdles Facing “Real” - Make that “Classic” - Education Entrepreneurs

October 28, 2007 2 min read

Probably the best of the bunch of papers from the American Enterprise Institute’s conference on education entrepreneurship in school reform - with entrepreneurship broadly defined to include philanthropy and nonprofits. Yours truly could not attend because he was not invited, but the papers are available to all here.

By way of full disclosure, Wireless Generation was one of K-12Leads and Youth Service Market Reports ($1500/yr) first clients. (I write this not so much to attract new clients, but to show readers’ where there is a business relationship with an organization I discuss, and that it’s going to be a small dollar value.) Placing both personal wealth and energy at risk defines entrepreneurship. (See for example, American Heritage Dictionary: A person who organizes, operates, and assumes the risk for a business venture.) To my mind, nonprofits engaged in public education on a fee-for-service basis are a crucial innovation in school reform (for reasons you can find in chapter 17 here), and I spent a good deal of my education career studying, working and investing in and for them. But it obscures the meaning and consequences of the term to call their managers “entrepreneurs” - social or otherwise.

Having studied, worked with, and invested in owner-operated k-12 firms - and started my own small business in the field several years ago, I can say that there is nothing quite like the mindset of people who have placed everything they own and are behind an idea. It may not be a better or worse mindset for school reform, but it is different enough from working for other people, or just with other peoples’ money, or with philanthropy’s free money, that it deserves its own label.

This isn’t a moral judgment, so much as a cry for clarity. To show that I’m not trying to denigrate the nonprofit manager, I’ll call the person who puts her own wealth at risk in her own enterprise a “classic” entrepreneur.

There’s not a lot of writing on the subject of “classic” entrepreneurship in school improvement, let alone thoughtful writing based on direct experience/lessons learned/mistakes made. Kudos to AEI’s Rick Hess for bringing some new blood into an otherwise inbred eduwonk community. For the most part, eduwonks concerned with the supply side of school improvement are just too closely tied into the new philanthropy/education nonprofit axis - and especially its’ flawed Charter Management Organization business model. (A critique of mine that only explains the lack of an invitation in part.)

Berger and Stevenson have something to say about the differences between the new philanthropy’s interest in replacing traditional school districts and the classic entrepreneur’s interest in modernizing them - and how those differences play out on the ground. As a teaser to get you to read the paper, consider their “top ten barriers to entry” facing classic entrepreneurs in k-12 education:

• The Education Sector Does Not Invest in Innovation

• Oligopoly

• Decentralization

• Vicious Sales Cycles

• Pilot Error

• No Return

• Viewing Teacher Time as a Sunk Cost

• Short-Lived Superintendents

• The Vendor Wall

• Start-Up Capital

It does read like a list of reasons for leaving the market to nonprofits, but these two hope to do well by doing good, so the barriers are not insurmountable. Classic education entrepreneurs will find it refreshing to hear from one of their own. Nonprofit managers should do the “compare and contrast” exercise.

As I sometimes say, “get out of your in-box!” Have a look.

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