Tech Platforms, Publishers Join Forces to Sell Content
Nearpod, an ed-tech startup that offers teachers a digital platform for designing interactive lessons and delivering them to students on their tablet computers, has generated 250,000 users in 18 months.
Now, the Miami-based company hopes to serve entire schools rather than just their most tech-savvy teachers, and to actually turn a profit instead of burning through investor cash. Key to making that leap, said Emiliano Abramzon, Nearpod's co-founder, will be partnerships with publishers offering ready-to-use lessons.
"Type-A teachers are creating their own content, but the mainstream would like to get content created for them," Mr. Abramzon said.
Nearpod's approach reflects an emerging trend: In the crowded field of ed-tech startups seeking to go to scale, companies with distribution platforms and those that develop instructional materials are joining forces.
"There's a lot of great content out there that wasn't getting into classrooms. Now, it's being plugged into the infrastructure that is increasingly being used by teachers, students, and administrators," said Jennifer Carolan, a managing director at the NewSchools Venture Fund, an Oakland, Calif.-based nonprofit that has invested in roughly 30 educational technology startups, including Nearpod.
The key to facilitating such "integrations," as the technologically sophisticated refer to them, is the proliferation of the API, short for "application programming interface."
Well-established in the consumer-technology world, APIs—in essence, computer code that allows software applications to communicate and share data directly with each other—are now allowing startups to easily integrate with each other, with more-established companies, and with large educational data warehouses, such as the one being built by the nonprofit inBloom organization.
Many companies and their supporters are enthusiastic about the trend, but some analysts urge caution.
"There are plenty of plausible partnerships out there," said Adam J. Newman, a managing partner for Education Growth Advisors, an education-business advisory firm based in Stamford, Conn. "But the real question is how do they advance the sustainability of the two parties?"
In the case of Nearpod, teachers can use the company's learning platform to create presentations and transmit them to students' tablet computers, then advance the whole class from slide to slide while giving short quizzes to get real-time feedback on what each student is learning. Nearpod makes some prepackaged lessons available for free, and users can pay to unlock the rest, as well as additional software features and storage.
With no traditional sales force, Nearpod has relied on social media and digital marketing to spread the word about its product.
Melissa Pientok, a 3rd grade teacher at Sunset Elementary School in the 760-student Whitehall, Wis., school district, is a typical user. She heard about Nearpod at a teacher-led gathering known as Edcamp and quickly became a fan. But so far, Ms. Pientok is the only Nearpod user at her school.
"I'm more passionate about tech than most," she said.
To scale up, Mr. Abramzon said, Nearpod needs to reach a broader base of users. Relationships with hardware makers are the ideal, and Nearpod recently had a big win in that arena, landing a coveted spot as one of the apps preloaded on the 664,000 iPads being distributed in the Los Angeles district as part of a 1-to-1 computing initiative.
But Mr. Abramzon said the next stage of his company's growth will depend on school- and districtwide adoptions by principals and superintendents, most of whom immediately ask, "How long are you going to stay in business?"
In such situations, he said, partnerships with highly regarded publishers can lend a newer platform like Nearpod credibility and value.
For publishers, meanwhile, partnerships with platform developers are a natural fit, said David Ciulla, the executive director of ReadWorks, one of four content providers now working with Nearpod.
"We don't want to build what we don't have to," Mr. Ciulla said, "and it's too much to ask an ed-tech entrepreneur to be a discerning consumer of literacy curricula."
Based in New York City and also a recipient of seed money from the NewSchools Venture Fund, ReadWorks is a nonprofit focused on improving students' reading comprehension. For years, ReadWorks' collection of instructional units, lessons, assessments, and reading passages has been stored on its website, available only to educators who log in, download, and print out each piece they want to use.
In an effort to grow beyond its current base of 466,000 registered users, Mr. Ciulla said, ReadWorks is in the process of "liberating its content" by building a brand-new database and application programming interface. The goal is to allow an expanded pool of users and distribution platforms to easily access and digitally share ReadWorks' materials via apps.
Once the API is up and running, ReadWorks will also be able for the first time to collect data about how its material is being used.
It's roughly analogous to the approach taken by a company like Amazon, which has an API that allows third-party developers to automatically access Amazon's product information, post that information on other websites, and update it in real time.
"There's been a lot of talk about the API economy in the consumer-tech space. We're just now starting to see that in ed-tech," said Ms. Carolan of the NewSchools Venture Fund.
ReadWorks, for example, is also in the process of forming an API-enabled partnership with Edmodo, one of the most established online "social learning" platforms in the market. And Edmodo's ascendance has been fueled in part by its own API: In late 2011, when planning for the new technology first began, the San Mateo, Calif.-based company had roughly 4.6 million users and a dozen content partners, compared with 28 million users and well over 100 partners now.
For a content provider, the potential benefits of being exposed to all those teachers and students are obvious.
For platforms, it's all about becoming a desirable one-stop shop for teachers and students, said Crystal Hutter, the chief executive officer of Edmodo.
"Users want to come to one place and discover the best materials and share them right there, in the platform," Ms. Hutter said. "That's a huge part of our value proposition."
Ms. Carolan hopes that the nascent trend of ed-tech partnerships will result in a "healthy ecosystem" that allows startup talent to take root and flourish.
But the market for both content and distribution platforms is fairly saturated, said Mr. Newman of Education Growth Advisors. There are also signs that the wave of early-stage venture capital that has poured into the ed-tech sector in recent years is starting to recede.
The result, Mr. Newman said, could be partnerships between companies just hoping to avoid getting washed out to sea.
"I think 2013 to 2015 will be a period with a lot of partnership and acquisition activity," Mr. Newman said. "Part of it will be around survival for businesses that got some good early traction but stall when they're unable to access more [investment] dollars."
Vol. 33, Issue 11, Pages 1, 12Published in Print: November 6, 2013, as Tech Alliances Fuel Startups