John J. “Jack” Lynch Jr. took the reins as CEO in November 2012 when Renaissance Learning—which makes and markets STAR Assessments and the Accelerated Reader and Accelerated Math curricula—was owned by Permira, a London-based private-equity firm. Google Capital, an equity fund focused on growth companies, invested $40 million in Renaissance this year.
Renaissance Learning, which started with a reading product developed by Judith and Terrance Paul in 1984, graduated into the stratosphere of ed-tech companies this year. In March, the Wisconsin Rapids, Wis.-based business was sold for $1.1 billion to Hellman & Friedman LLC, a San Francisco-based private-equity firm, at more than double its $455 million sale price from only 2½ years ago.
In a telephone interview, Education Week Staff Writer Michele Molnar asked Mr. Lynch to talk about the ed-tech marketplace, what it means for educators and students, and what he sees on the horizon for education.
How has the K-12 marketplace changed in recent years?
Our customers are becoming more data-fluent, using data for decision making. You can probably find it in health care, too, where [doctors] are beginning to use genomics to tailor treatments. We’re using what we call “learnalytics” to help teachers tailor instructional strategies for students. Companies like us endeavor to turn that fire hose of data into real insights to help students move along a learning path. We’re very focused on that.
You talk about leveraging student data, but lately there’s been a firestorm of concern about protecting it. How do you reconcile these two forces?
Obviously, it’s a fair concern. From our standpoint, it’s not an issue for our customers because they know we ensure our data is hermetically sealed. No other folks can use it other than educators; if they [educators] choose, they can share [data] with students and their parents.
It’s a concern legislators are having and parents are having. The thing is, we need to be careful. ... The unintended consequence of taking data and locking it down in a local school district would be pretty significant and would impact our ability to help students progress.
How do you think that “unintended consequence” should be addressed?
The Software & Information Industry Association’s education division is very focused on ensuring that the data-privacy concerns are fleshed out in greater detail and that we also do not overreact to those concerns. They have a subcommittee within SIIA that’s really focused on data privacy.
How do you work with schools?
We have a sales organization of 150 people. It’s probably an area where we have an advantage. We have very strong brands in the K-12 market, so we have brand recognition, and our sales force spends a lot of time building relationships in K-12. Half of our people are on the phone talking to customers about products; half of our people are in the field.
The largest school districts are more byzantine and bureaucratic. You need folks who understand … and can work with them on a few processes to get through a rather complex decisionmaking process.
What are your biggest challenges as a company now?
Our biggest challenge, as we grow, is to continue to recruit outstanding talent to accelerate the growth of the company. I spend a disproportionate amount of my time on people and talent. That’s what’s made us successful getting to this stage.
What can educators expect to see from Renaissance on the horizon?
We are working right now on the learning progression for science. Right now, we’re doing all the research to create the sequencing of the skills. That will be the next biggest content area we’ll move into—STAR Science.
How do you create new products?
We use an agile process. It’s from the concept of the lean startup. We essentially create a minimum viable product [in response to the problem being solved]. Then we go into “alpha mode,” with customers who use the product, and we constantly modify the product according to that feedback. Then we get to the field-testing and get more data, then modify through that process.
How long does product development typically take?
It depends on the scope of the product. For example, we just created a classroom response product—Alpha Pulse—that’s now in production. It was four months from alpha testing to launch. STAR Science, from conception to release, is going to be 2½ to 3 years.
What changes in ed-tech do you see coming?
In the next three to five years, we’re going to be using data in the classroom with great facility. We’ve talked about personalization in education for quite some time. We think about that as using data about where a student is in a learning progression. We may want to use adaptive learning, may want to sit down with the student and put them in a group-instruction setting. We think the teacher is really the end-user of these learnalytics.
A number of other companies are really focused on having the computer be the teacher. That won’t be our approach. Some of those companies will continue to do well.
I think you’re going to see also a lot of digital materials available at a lower cost. Price points are going to go down.
How can schools work more effectively with private companies and what do you see as the greatest barriers to that collaboration?
My view is that you have to earn your stripes. You have to be worthy of the trust of the school. They’re making a pretty significant commitment when they bring in your technology or services to the classroom. They don’t want their kids to be lab rats. They want research to show it’s efficacious.
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A version of this article appeared in the June 11, 2014 edition of Education Week as CEOs Speak Out