Citing Investor Priorities, AltSchool Closes Some Sites, Pivots to Software Sales

By Benjamin Herold — November 03, 2017 6 min read
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Personalized-learning pioneer AltSchool is closing one of its private schools and consolidating several others, moves the company describes as “tough choices” necessary to pursue unexpected new business opportunities and demonstrate to investors the viability of its long-term plan to sell software to K-12 public schools across the country.

“Closing any school is painful,” AltSchool founder and CEO Max Ventilla said in an interview. “But ultimately the path for the company to be sustainable and impactful is to provide the platform we’re developing to schools we don’t directly operate.”

AltSchool was founded in 2013. The company has been backed with more than $175 million in venture capital from such Silicon Valley luminaries as Mark Zuckerberg of Facebook and Laurene Powell Jobs of the Emerson Collective. It currently runs seven of its own schools, which typically charge more than $25,000 per year in annual tuition. Those schools also serve as laboratories where AltSchool can pilot, test, and improve its technology, which seeks to merge the insights of top-flight engineers and progressive educators into a platform that can be used to better understand how every child is developing and tailor students’ learning experiences accordingly.

AltSchool’s closure of its Palo Alto campus, first reported by Bloomberg Technology, will affect about 65 families. The company’s six remaining schools will be consolidated into four sites—two each in New York City and in San Francisco, where the company is headquartered.

Several dozen parents at AltSchool’s Palo Alto campus signed an online petition saying they were “shocked and saddened to hear of the plans to close our school,” in just its third year of operation.

Critics described the move as a sad, but not surprising, example of a deeper challenge faced by the ed-tech sector at large, and the personalized-learning movement in particular.

Many such ventures “involve grand experimentation on students in order to develop and sell products to other schools,” said Audrey Watters, an independent researcher who maintains the popular Hack Education blog.

“So much of what these companies do is really for their investors, and that really dictates the kinds of decisions that get made,” Watters said.

Ventilla expressed frustration that AltSchool, which previously received criticism for focusing its attention on private schools serving mostly wealthy families, is now taking flak for choosing to prioritize efforts to serve a broader universe of more diverse students in the public-school sector.

‘Leaning In’ to New Business Opportunities

Ventilla and AltSchool chief impact officer Devin Vodicka spoke with Education Week by phone Thursday night before addressing a meeting of concerned parents in Palo Alto.

He said the closure and consolidations are not happening because AltSchool is low on money.

Instead, he described the moves as an unfortunate byproduct of the company’s strategic decision to “lean in” into the surging market for personalized-learning software.

“We’re being realistic,” Ventilla said. “In a few years time, when we raise our next round [of venture capital], we will have to show not only great success in the schools we run, but real progress in extending our platform to other schools.”

The company’s approach has always been unusual. In the past, AltSchool officials talked about rapid expansion of their network of “microschools,” which attracted parents and media attention alike with their combination of cutting-edge technology and hands-on, project-based learning. At the same time, a powerhouse development team sought to use the data and insights generated by those schools to develop new technology tools that AltSchool hoped would become a next-generation “operating system” for the K-12 sector at large.

Pivoting towards software sales has been part of the company’s long-term strategy for the past 18 months, said Ventilla, who previously worked as the head of personalization at online-services giant Google. At the 2016 SXSWedu conference, Ventilla announced a new “Open AltSchool” initiative, aiming to attract private, public, and charter schools interested in using the company’s technology.

The platform is meant as hub for organizing the learning experiencing for teachers, students, and parents alike. The idea is to create holistic portraits of each child’s academic, cognitive, and behavioral development, based on data collected through a wide mix of tests, assignments, projects, and everyday learning activities. The software also helps teachers generate customized learning “playlists” geared towards each student’s strengths, weaknesses, and preferences.

Unlike many other personalized-learning platforms, AltSchool’s technology is not built around a particular curriculum; the idea is to provide schools with a system that can accommodate many different visions and local examples of personalized learning.

Demand has been unexpectedly robust, Ventilla said. Next school year, AltSchool expects to have about a dozen partners serving several thousand students, most of whom will be in public schools.

Unfortunately, he said, taking advantage of that interest means shrinking the footprint of its own network, most notably in Palo Alto.

“This is earlier than we expected, and it’s requiring us to adapt quickly with finite resources and time,” Ventilla said. “This is a really hard thing for those and kids and families to be facing, but it’s in their interest to face it now, when we can provide the most support.”

‘Shocked and Saddened’

So far, at least, that seems to be small consolation for parents whose children are suddenly without a school for next year.

“Three years ago we took a risk and supported AltSchool,” wrote parent Jingjing Xu on the petition demanding answers from the company. “We are extremely shocked and saddened by the news of [our] school closing.”

It also raises bigger questions about AltSchool’s values and priorities, said Watters of Hack Education.

“When you think about schooling as a business, you don’t always recognize that you’re not dealing with products, you’re dealing with other people’s children,” she said.

That’s particularly true, Watters maintained, when companies feel beholden to venture capitalists expecting them to bring products to scale quickly.

It’s been an ongoing tension for one of AltSchool’s biggest backers, Facebook founder Mark Zuckerberg, who has invested millions in the company through Zuckerberg Education Ventures and the Chan Zuckerberg Initiative.

In recent months, CZI officials have taken pains to stress that personalized learning isn’t primarily about technology, and that efforts to bring new products to scale must be driven by evidence and grounded in the science of how children learn and develop.

At the same time, though, Zuckerberg has talked of his desire to “personalize learning for every student,” and Jim Shelton, who heads CZI’s education efforts, has made clear that bringing personalized-learning strategies to scale is one of the group’s priorities.

In a statement, a spokeswoman for the group acknowledged the difficulties caused by AltSchool’s decision to downsize its own schools, but expressed support for the company’s strategic decision to focus on growth, as well its “whole-child” approach to personalized learning.

“We are disappointed that these closures mean a number of families and students will lose access to AltSchool’s teachers and innovative approaches to education,” said Raymonde Charles, the director of communications for education at the Chan Zuckerberg Initiative.

“It’s our hope this decision will help them achieve their goals of improving learning and teaching by focusing on research and partnering with great educators as they make their work available to more students and families.”

Photo: Max Ventilla, founder and CEO of AltSchool, poses for a portrait at the AltSchool headquarters in San Francisco in 2015.--Ramin Rahimian for Education Week-File

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A version of this news article first appeared in the Digital Education blog.