The quickest way to scare off an investor. . .

. . . is to tell them you’re an education company. In parallel with developing our first piece of technology, we’ve been trying to get to know Boston’s startup scene, especially the other great minds working in the education space. Naturally, we’ve run into plenty of investor-types eager to hear what three entrepreneurially-minded MIT grads are up to. An email I recently received from an intestor over at Adams Capital Management exemplifies the usual response:

. . . My condolences on your selection of the Education market. Although the non-financial rewards can be tremendous and the social impact profound, it is an exceedingly hard space in which to make money. . . I sure wouldn’t seek to make my fortune there.

Unfortunately, this pervasive attitude towards the education space can hardly be criticized considering its history. However, I think the general pessimism towards the education market is misplaced for a couple of reasons.

First, this pessimism usually places blame on schools for being extremely difficult to sell to. Blame often targets perceived defects such as overgrown bureaucracy, lack of innovation, and notoriously tight budgets. The buyer-user divide also proves daunting: although teachers are the primary beneficiaries and users of new technology, administrators usually sign off on the line item.

These complaints may very well contain elements of truth, but they are completely naive to the possibility that providers of educational technology are also to blame. Surveying some of the products offered in recent history, there is little question that the rigorous expectations for quality technology in other markets are not enjoyed by the education space. While many companies continue to offer impressive educational software for the home computer, many textbook supplements and other offerings intended for the classroom haven’t been built with the same vigorous dedication and rapid innovation as have mp3 players, cell phones, or graphics software. The bar is low and there is plenty of room for fresh talent.

Second, the average teacher is becoming increasingly likely to have grown up with computers. The often-cited obstacle of technophobia is quickly becoming irrelevant with the new wave of young, tech-savvy educators.

Finally, the increasing ubiquity of high-speed Internet access and home computers is opening doors to how technology can be used to improve the classroom. Whereas integrating computer technology into the classroom has traditionally meant scheduled computer lab hours and some compromises in curriculum, web applications offer the opportunity for boundless media resources, content sharing, collaboration, and a paradigm in which students are expected to participate at home instead of in a canned computer lab session.

The attitude that the education market is impenetrable and stingy is a self-perpetuating stigma. Pessimism dissuades talent from entering the space, which in turn stunts competition and innovation. When we look at education, however, we see opportunity.

We might be on to something

Chris and Scot recalled an experience in their MIT Chinese II class that suggests that at least some teachers out there really want a tool that provides an easy way to assess and train students’ speaking. Lacking anything with which to do such a thing, their teacher, Zhang laoshi, concocted her own, albeit unfortunately complicated, solution. Here’s an outline of her improvisation:

  1. Teacher downloads audio recording software.
  2. Teacher records voice with software.
  3. Teacher sends audio file to students over email or posts it online.
  4. Student downloads audio recording software.
  5. Student listens to part of the teacher’s recording.
  6. Student records voice in response to teacher.
  7. Repeat 5 and 6 until completed.
  8. Student sends audio file to teacher.

Whew. We think our solution is nicer:

  1. Teacher logs in to and uses our editor to build an audio assignment.
  2. Student logs on and completes the assignment.
  3. Teacher logs on and reviews, grades, or comments on student responses.

A problem can’t be any better defined than when the people it affects are already hacking together their own solutions to solve it.

Deferring YCombinator

In what has been our hardest and most mature decision yet, we have decided to defer our interview with early-stage venture fund YCombinator. When we first received our invitation to San Francisco, we knew we were going. Of course we were. This was our in with a substantial part of the Bay Area’s tech and investment community. We follow YCombinator’s online community religiously and have watched friends ship off to San Francisco and enjoy great success with YC’s seed money. Why in the world wouldn’t we interview?

But on reflecting more closely, the initial adrenaline rush seemed to mask the fact that we aren’t ready yet. Moving to San Francisco (a requirement if we were to receive funding) to surround ourselves with like-minded, talented, and young entrepreneurs would have been intoxicating. After sobering up, however, we would still be left with the task of building technology that foreign language teachers want to use. There are plenty of reasons we ultimately decided to defer, but primarily, we want to stay small, focused, and bootstrapped until we have put something into teachers’ hands.

In six months, we’ll have another chance to interview with YCombinator. It will make a lot more sense to take money then, if we haven’t already found another investor. Additionally, we’ll have done some serious development by then and be in a much better position to be accepted.