In this episode of Week in Edtech, Alex and Ben discuss:
1. AI
2. BigTech
3. K-12
4. Edtech
5. M&A & Funding
Special Guest:
In this episode of Week in Edtech, Alex and Ben discuss:
1. AI
2. BigTech
3. K-12
4. Edtech
5. M&A & Funding
Special Guest:
Welcome to Season Eight of Edtech Insiders where we speak to educators, founders, investors, thought leaders and the industry experts who are shaping the global education technology industry. Every week, we bring you the week in edtech. important updates from the EdTech field, including news about core technologies and issues we know will influence the sector like artificial intelligence, extended reality, education, politics, and more. We also conduct in depth interviews with a wide variety of EdTech thought leaders and bring you insights and conversations from ed tech conferences all around the world. Remember to subscribe, follow and tell your ed tech friends about the podcast and to check out the Edtech Insiders substack newsletter. Thanks for being part of the Edtech Insiders community. Enjoy the show.
Ben Kornell:Hello, everyone, it is the Ides of April. We have made it to April. And with that, you know the insanity has begun in edtech. It's the sales season. It's the conference season. It's the figure everything out before the next school year season. Hopefully your hair's not too on fire yet, because we've got a marathon to go. But we're here at Tech insiders to bring it to you all here in the weekend at Tech, along with my co host and co founder Alex Sarlin, we're excited welcome today. On the pod what do we have coming up Alex?
Alexander Sarlin:We talked to Julia Dixon who has a really amazing AI based application for to help students tell their stories for applying to college or scholarships. And we have talked to a number of amazing people, we have a debate coming up between two AI founders who founded different companies talking about different visions for the future of AI education. So keep an eye out for that one.
Ben Kornell:Great. And then of course, we have our ASU GSV happy hour, as well as our guide that we just published on the newsletter. So check that out. Hope to see you all there, it's going to be packed. So if you can't get in, still sign up for the waitlist, and we are going to try our best to give priority to waitlist folks for next year. You know, there's so many places to start, Alex. But I think the most obvious one is let's start with AI. So let's go around the world with AI. What are two or three headlines that are hitting on your Trump's?
Alexander Sarlin:Yeah, I mean, one interesting one. So we've you know, I know you've talked to Ethan Mollick recently, and Ethan Mollick has sort of made himself a real celebrity in terms of being a Wharton professor who also really embraces AI in his teaching. And in the wake of his work and other practical educators, we saw a really interesting article in the Wall Street Journal this week about how business schools across the country are really doubling down on AI. You know, everywhere in the curriculum, professors are embracing it for their, you know, students for their work. They're enabling students to learn about it. They're thinking about how to do you know, AI business models. And that was exciting, actually, for me and encouraging, I think speaks to business schools, very practical approach to education, and they're seeing AI coming and trying to get ahead of it. So that was a, that was a cool thing to see. And they talked about American University, specifically really embracing it, but I think it's coming everywhere. So that stood out to me. Yeah,
Ben Kornell:the big news for me this week was actually one that went under the radar, which was open AI announced this week that they would be offering check GPT 3.5 access with no login. And the play, I think big picture is that they want to be a Google like interface to the entire Internet. And this idea of no friction, you can search anything, it's free, that is a first step to being that front door. And you can imagine from that search query, you could have the AI results, as well as a set of links or search. And there is this big kind of race to own the future of search, hard to say whether it's gonna still be the lucrative business model at once was with advertising and, you know, incredibly high gross margins. The Ed Tech story on this, though, I find quite interesting, which is student data privacy is a key limitation for the utilization of AI in schools. And part of the challenge of using a check GPT interface is that kids would have to log in. And then there would be data transferred to the LLM or the cloud provider and so on from a kids queries. This essentially anonymizes the query. And this creates a Google like, you know, search bar, but for AI for kids in schools. I think that could be both liberating because all right, one of our big challenges, which is data privacy, this is essentially totally anonymous. And it's a frictionless use case. On the other end, it could be really, really scary. Like now we have really no way of controlling, you know, kids access to technology that we know Oh Can hallucinate or we know can have results that aren't maybe kid appropriate or kid safe. My sense is that the guardrails that open a eyes put on 3.5 makes it a relatively benign thing in the hands of any user of any age. But I think this could really unlock the kind of experimental use of Chechi Beatty and again, puts them in the lead with other platforms.
Alexander Sarlin:I don't agree with that part.
Ben Kornell:Well, one other thing I would just say is, it's a mind blowing moment where, like, a year and a half ago, this was the cutting edge of technology. This was the forefront and now it's free. You don't need to sign up, you just use it for free on the internet. That's also I think, a pretty good statement of where we've come in the last, you know, 18 months on AI. So I'm curious to hear your pushback. It's not heavy pushback. I
Alexander Sarlin:mean, I agree with almost everything you're saying. I have two minor pushback points here. One is that schools still, this actually puts the onus more on schools to decide what their AI policies are going to be. Because having no log and having, you know, chats up to just a moment away from any Chromebook from any device. I mean, that they still could blacklisted, right? I mean, they still could say, you know, what, we don't believe that catch up. T should be accessible in class. So we're going to block the site, and that would still block access for students. I certainly hope they don't do this. But I think a number of them will, especially because we're seeing some data coming out of educators starting to revive that fear of plagiarism, for better or worse. But I think the bigger point I would say is that I don't think it's a coincidence that open AI is doing this open move, right at the moment when Gemini, which is not fully open, but only requires a Google account to get in which most students aren't have at this point. Right. Because of their because of their Google Classroom accounts. I think that's what this is about. And it doesn't make it a bad move. I mean, I love that it's happening there. And I think it speaks to your point that, you know, the war is really on who can sort of own AI on the sort of front page of the AI internet the same way Google has on the front page of the search internet for for decades, you know. So I agree with that. I just I wouldn't say that it puts open AI back in front, because I think this is a reactive move. I think this is a move the way they say we have to do this, because that login wall, especially because nobody ever had a chat GPD you know, account and open AI account before this is actually a potential barrier that are going to send people to Gemini. So that's my read on it. I feel like it's a competitive move. Maybe I'm overthinking it here. We also saw opening I talked about this Stargate center. How did you see that news?
Ben Kornell:I'm just in the prep. Yeah, tell us about it.
Alexander Sarlin:So there's this it's send me rumor it came from the information. But it seems somewhat credible that basically, Microsoft and open AI together are planning this 100 billion dollar US data center, which is orders of magnitude more than other data centers that's basically trying to be you know, the hub, they're calling it Stargate. That's like the hub of, you know, AI compute, in a public way in the US. And they're basically I mean, 100 billion dollars is a lot of money for something like this. And it would take five to six years to build this. It's more than triple Microsoft's normal expenditure for this kind of thing. And that power that it needs may require nuclear power. It's that much. Yeah, or fusion.
Ben Kornell:Exactly.
Alexander Sarlin:So to me, this maybe speaks to your point about maybe open AI is really attempting to sort of take me they are obviously attempting to take the lead. And I would say even Microsoft is trying to grab Google's, you know, market share for a lot of things. But yeah, I'm also excited. Just to be clear, I am excited about the idea that there's no login wall for GPT 3.5. And I think it does speak to the safety and privacy that they've already baked into it. I want to talk a little bit about some of these polls that have come out with teachers as well, because I think they are an interesting part of this story. But yeah, I'm curious, what do you think I don't want to, you know, steamroll here with this idea. Maybe this move, which actually, it was planned for a long time, maybe this is something they were coming for, anyway. And this is part of their push for it to be in education.
Ben Kornell:You know, what's interesting to me is the combo of these two stories, which basically means that they're trying to move further down the stack into the data layer, and the compute layer, and really chatty VT 3.5 is a free front end. And guess eventually, you know, any of the GPT consumer facing is just going to be a front end to what is really the core play, which is an ever expanding large LM an ever expanding compute. And so it does make me wonder is the cost of compute going to go down to zero? Or is the cost of compute going to continue Due to grow, maybe it gets orders of magnitude more efficient. But the more efficient it becomes, the more we use, I will just say the idea that these centers are getting bigger and bigger makes me wonder about the environmental impact. And we've had many stories on crypto mining and the like, carbon footprint, we really do need to talk about the AI carbon footprint to and how are we making sure that is it nuclear powered? Is it? Do we have new sources of energy like fusion? Do we need to have, you know, a greater energy infrastructure to support this work? Those are all big questions. On the utilization standpoint, I think the just to segue into that, you know, business schools are using it. And you can see that the practical use cases that are emerging, have to do with learning, you know, almost experiential learning in context of the business case. But I still, you know, think that most of the use cases, in just a pure pedagogical way in K 12 have been limited. So, you know, the real question is to ban to not bend to support it to not support, I think we're actually seeing a, you know, I mentioned this before, a wait and see approach where most schools and districts have this incentive, just to wait six months, because the technology is getting better. And there's this new concept I really like called a thick wrapper. So there's like, you know, it's just a wrapper around GPT. And that's an investable, or that's not indefensible. But I think there's been pushback to say, actually, you need a pretty thick wrapper around GPG to improve the utilization in education. Another study that came out on this last week, which, you know, the Schmidt futures people packed was really around how AI assessment at a very high level is very effective. But when you get into detailed analysis, it loses all kind of rigor and efficacy at like a detail level. So you need the stick rappers that actually tune and train for the purpose in mind. So I think there might be this is probably where we're heading is thick wrapper use cases in education, where it's so particular to the education context, that's where the defensibility will be. And that's where the value add can be in the stack.
Alexander Sarlin:It's a great point, I've been thinking about the sort of engine versus car metaphor for when you think about these sort of models, and then the UX and the use case and the software and the you know, and the training that goes around it. And it's like, you know, obviously, the models are just getting so much more powerful. And we saw that with Claude recently, with everything that happening in anthropic we're seeing with Meadows new thing. And then of course, Google and open AI are in this like, fierce competition and Microsoft in there, too. But it's like, I like your point of a thick wrapper, I think there was this sort of moment where people were like, Oh, this concept of like a thin wrapper, it's like, oh, you have this really powerful engine, you're just putting like a thin shell around it. And it's just like, oh, it can take off. It looks like it's speeding, because, you know, it's basically the engine underneath doing all the work. Now, I think there's this realization, well, if you actually do tailor it to a use case, if you make the user experience really amazing, and actually, you know, make it usable in a way that is not just an open text field, right, which is what jet CPP is. And Gemini, that does add a lot of value. And in the education use case, I think that's particularly true. Let's talk briefly, this is my last day I story. I like this a lot. There's always so much to talk about here. There were two polls that came out this week that were a little dismaying to me, frankly, the numbers were a little higher than I would expect for for the sort of fear factor and the the nervousness coming from educators around AI. You know what one poll reported on an Axios this week basically said it was an even between educators who say that AI will be a boon will help their careers 28% think that and 25% think it's going to be negative. So that's pretty much even. But maybe even more concerning there is that, you know, almost two thirds of newer educators of less experienced educators describe themselves as extremely fearful or somewhat fearful of AI. And I wouldn't have expected that I would have expected newer educators and younger educators to maybe embrace this more. But that's not what they're seeing. They see it the other way around, that people with more experience are less fearful maybe because they've seen lots of trends come and go. And new educators are maybe feeling a little more threatened. That was a surprise to me, a non surprise was that almost all teachers are looking for more professional development or looking for AI literacy. That's something we've heard in lots of other polls, but that was interesting that we also saw in a separate poll reported on a bi district administrator magazine that basically 60% of teachers say they are certain that one or more of their students have used generative AI on schoolwork, and that 68% of teachers are using a detection tool to check if they are and many teachers are starting to say that students are getting in more trouble for using AI to complete schoolwork and I thought this narrative was sort of start dying off this idea of you know, AI is just a plagiarism tool. But it doesn't seem to be according to these polls, at least there's still a lingering effect of teachers worried about both AI sort of hurting their own careers. And it being a lever for students to cheat. What did you make of any of these numbers?
Ben Kornell:Well, I think we're going to oscillate between optimism and fear back and forth, back and forth. And remember, this is scatterplot. So, you know, even in an individual school, you may have your AI optimists and your AI pessimists that this is not uniform experience. One thing to understand out of the labor movement is that there's rising concern about AI automation going after white collar jobs of which teaching is one of the largest union unionized fields in white collar. And so I think from the labor side, there's going to be increasing pushback concern and skepticism around is AI taking jobs, or is he not? And second to that, I think this concept of academic integrity is now becoming a really big gray area, you know, one of the elements of Ethan Moloch new book is really around a co relationship between humans and AI. And it's kind of this collaborative living with each other kind of concept. Where do you draw the lines of where an idea is novel? Where is it, you know, leveraging technology, and what is academic integrity and truth and, you know, authentic work in that context. And I don't think we've got the guides for educators. So in that gray area, what you're seeing is, you know, conservative take, you're also seeing that in low income schools, disproportionately, African American Latino kids are getting accused of cheating more, in part because the voice of AI is considered to be kind of white dominant cultural voice. So you know, Amanda Biggerstaff, had a great post this week with a study that basically showed the declining accuracy of these detectors. It's not just that they're inaccurate, it's that over time, they've become less and less accurate. And so full stop, there's no benefit of accusing kids of cheating. There's only downside, and the best way is to either re architect your tasks, so that they're not easy to be done on chat TPT, or dialogue with their students to an end have a code of conduct in your class around what is authentic work and what is not. But as a school board member, I have to say, I'm struggling, and I'm deep into this stuff. And we're a K eight district. So we don't even have some of the high school, you know, issues. But we are in the greatest of gray areas. I think we've ever been in
Alexander Sarlin:education. And I think, you know, you mentioned a really interesting point there, which is that, you know, one of the many inequalities in education by race is that black and Latino students are more likely to get in trouble to get suspended to get really to have action taken against them for behavior issues. And so that is probably expanding. I'm sure the numbers are really coming to that. I haven't seen them yet. But I'm sure they're they're saying, yeah, like you say, black and Latino students are probably more likely to be accused of plagiarism for a variety of reasons. But including just the inequality that just isn't the systemic inequality in the system anyway, which is pretty scary. And it is an incredibly gray area and an exciting one in some ways. But the some of the some of the issues are continuing to raise their head. And yeah, I can imagine a world where schools in response to these educators fears in response to even students fears when we talk to students, you know, recently who are doing a lot of thinking about AI, I thought one of the main things they were saying is students keep getting in big trouble for using AI. And that's really not where we want to be. Yeah, this is a big issue. But another big issue happening at the K 12 level. And I'd love your thoughts on this, because I think you know, this space really well is that it's looking like you know, per sort of blockbuster New York Times article this week, that absences that chronic absenteeism is basically doubled since the pandemic and has not really gone down significantly, even now to three school years into the pandemic that is also higher among black and Latino students. And people sort of know why in a vague sense, but I don't think there's an exact understanding of it, but it's went from basically 13% Now we're at 26 28% of students is one and three or four students are just not showing up to school. What what do you make of that? That just
Ben Kornell:really stuck with me in the data? It's it's like one in four or one in three students not attending regularly at school. And what was interesting too, about the article is that they didn't just look at low income school districts or large school districts. It's really like a common thing across districts of all sizes and all income levels and yes, The lower income schools have a higher percentage, but everybody across the board is basically seeing a doubling of chronic absenteeism. And, you know, the question that the article asked is, like, Is this a new normal, and it actually pulls some families that are saying the kind of belief in attending school leads to success was shaken during the pandemic. And I think the other is that kids and families are going through so many other challenges outside of the school, that, you know, absenteeism from school is a symptom of larger economic turmoil, which could be, you know, moving multiple locations, or having severe mental health issues, tackling, you know, economic instability. If we are ever going to say, what's the canary in the coal mine for a dark era in our history, I think chronic absenteeism is a canary. And we really need to be paying attention and leaning in with teacher Young, who is highlighted in the article. Also, I know her from my time in Oakland. And one of the things that she was mentioning was, we need to double down on online auctions. And so I think our school districts have pivoted hard to in person learning. And that was because for the majority of students, the virtual learning didn't work. And so it was kind of like, Let's go all the way back. And actually, if you read the article, and also see the kind of rise in homeschooling, and so on, it did actually work for a smaller number of people. So maybe there is also a need to reimagine the options that kids should have, in order to attend schools, I will just say my school district has also had a spike in chronic absenteeism. And part of what we're doing is just a parent education campaign, that really helps them understand like, every day a child misses school, they're falling further behind, because that we kind of lost that sentiment in our community. And so I do think there's almost like a campaign that needs to be run, which is whether it's online, or in school, kids should be learning every day, you know, through their schools.
Alexander Sarlin:Yeah. And I think in California, where you are, there was a particular, you know, extreme reaction towards safety over opening schools up again, during the pandemic, and late pandemic era. And I think maybe that exacerbated that feeling of, you know, school is somewhat optional, it's not necessarily a big deal to not go to school as much as you usually do. It's like, I think that, like the parent education you're talking about, seems really necessary at this particular moment. I mean, I am so torn about what this should mean, for the EdTech sector, because in some ways, this should be a huge opportunity, as you said, you know, as hybrid learning comes back into fashion, and we sort of see the pendulum swing the other way, or hybrid, or even fully online learning, at tech companies, you know, stand to really gain from that. And as more options, you know, micro schooling, homeschooling the pod learning kind of thing, you know, become more and more acceptable, that should be good for the tech sector. That said, I mean, sadly, it really feels like the overall story for the pandemic, Fred tech is that it sort of missed its moment, because the results really were not good. And not that many students had positive effects of sort of that shift. So if people are probably saying, you know, I don't know if school was really works, and I don't know, if online learning really works. Maybe I'll just, you know, I don't even know what maybe I'll just throw my hands up and let the kids do what they want. And I think your point about the canary in the coal mine is a really good one. Because what does it mean for this generation of kids when they become, you know, 1820? Or, yeah, one for who these kids are going to have, you know, basically pseudo dropped out of school, we have several grade levels behind, it's pretty intense. A couple of super passing headlines that I think are important, but I don't think we have time to cover in depth does a new federal task force targeting cybersecurity in school, cybersecurity is something we don't talk much about on this podcast, even though lots of edtech companies focus on it and care about it enormously. Schools have become the leading target for cyber criminals, this leading target for cyber criminals. So the federal government and the Secretary of Education have really leaned in and they're doing a lot more funding and they just put together this Coordinating Council they met for the first time this week, we're gonna keep an eye on that. The other thing is open AI unveiled a AI technology that recreates human voices to compete with the 11 labs of the world. It is not fully out yet, but this is going to be something that you know, like everything in AI has a huge double edged sword. It's going to be amazing for the likes of AI tutors that can replicate teachers or tutors. That's pretty cool. It's also going to create, you know, a new era of spear phishing or you know, problematic communication the likes of which we've maybe never seen, so it's, you know, You all have to just wait and see where that's gonna land. But it's gonna be really interesting when voice cloning technology becomes truly, you know, accessible to everyone.
Ben Kornell:Yeah, there's a bunch of ethical implications there, for sure. You know, you were talking a little bit about Ed Tech missing its moment that really made me look at some of the data coming out of home on IQ. And this won't last session of the podcast. I mean, it feels like we're really looking down the barrel of a restructure of the ad tech industry, where, you know, the headline news is a 580 million of edtech VC for q1 following 80 billion invested over the prior 10 years, not even an AI tailwind, can arrest ad tech VC collapse, ouch, that is just painful. When you saw this, you know, and of course, we're both AI optimists. But on the EdTech, front, this has got to be very, very concerning speaking of canaries in the coal mine, what's your take on the whole on IQ report,
Alexander Sarlin:it's pretty hard to find a positive spin on this. I mean, just to get a little bit more into the numbers, you know, the first quarter had half a billion dollars of VC, which means that, you know, extrapolated out, you're talking about 2 billion in total VC for the year, if it stays at this rate, 2 billion is the same that we had in 2014, we have not had only $2 billion of edtech venture in 10 years, it's been much higher than that for almost all those years and way higher, much, much, much higher, but in the period between 2018 and 2022, and sort of the post pandemic era, with the big giant, high end 2021. It's very scary. I feel very nervous for all the EdTech entrepreneurs who are in their funding rounds right now, because what this implies is that, you know, for one reason or another money is not going into edtech in bigger ways, they did exclude the ZM rounds, and is that school bus, you know, automation tool that had a humongous round $140 million, Series II. So if you add that on, at least there's a little bit of a bump, but like, and the biggest rounds are in India, the biggest rounds outside of that are in India, they're not even in the US. So I think for USBC, this is basically like, I mean, it's unbelievable how far it's fallen from its, you know, big height in 2020 21. I don't know what to make of it. I mean, I want to dig into something you've said on this podcast a few times. And I feel like this is the proof is in the pudding, which is that the VC model for Ed Tech may be a little bit sort of starting to run its course I mean, does this make you feel like that's really coming true, you know,
Ben Kornell:the positive spin on this is that VCs are now asking companies to show positive unit economics, short term path to profitability. And like all the conditions of product market fit and scalability as a precondition to funding, which then begs the question, why do you need to raise that money if you've got all of those pieces, and so, so it's down 90%, maybe you only need 10% of what you needed in terms of fuel before to kind of get over the hump and get to profitability. So on the micro level, building a company has never been easier, the path to get to profitability has never been clearer. But the idea that you're gonna have publicly traded mega companies, I think that that is the big question mark. Now, because VC model is really predicated on homeruns and not just singles and doubles. And what we're seeing the market moving to is a singles and doubles market. We're really the only action from an investor's standpoint is precede seen in a after that point. There's no you know, path for return. And the only buyers in those scenarios are private equity buyers who, you know, will exert more and more power if there's not alternative venture funding. So I think this is a big moment where philanthropy has to think about are we stepping in social impact funds need to think about where are we stepping in and are we and the larger VC funds are probably going to have an incentive to diversify, and say we don't just do it Tech, we also do all these other things. The other theme that we've heard coming through loud and clear over the last few years is that learning is actually liquidus thing that actually has to happen in every company, almost everywhere. And so I wouldn't be surprised to see anybody sitting on large capital stacks or trying to raise a new fund starting to blend together, you know, future of work and healthcare and, you know, other stuff into their fund, because it's pretty bleak. And the last thing I would just say for the individual Little out there that's thinking about starting a company, or that's working at a company where you know, part of their payment is in equity. What you have to remember is that the liquidity horizon that you're looking at right now is like a 10 year horizon. Liquidity used to be way, way quicker, you know, three or four years, because every time you raise a new round, you have the opportunity to say, let's take some chips off the table, that is just not going to be the case here for a good while. So you know, pay yourself the right salary, make sure that you're like doing work that you're passionate about the impact. And remember that the equity you have is the lottery ticket, you know, where if you hit it big, awesome, but if you hit zero, you know, it shouldn't be defining of your financial future. The only thing
Alexander Sarlin:that jumps to mind for me that I might add on to that, and I don't know if this is even really true yet, but one headline that caught my eye this week was that Houghton Mifflin bought a company called writable, and a company called writable. And not only did they buy that company, but they retitled The founder of the company to be the head of sort of Hmh is like AI Lab, which is obviously sort of an attempt to think about how to use AI in a variety of different products. And I wonder if that might be a little bit more of a viable pathway for tech startups right now, rather than chasing, you know, millions and VC funding via micro company, saline, get users do something really innovative and interesting, and then look to be bought out for probably not a huge amount, but look to be bought out. Yeah, and I'm part of a bigger ad tech company of Renaissance Hmh and McGraw Hill, because they are, I think we've talked about that m&a landscape, I think they're going to be really hungry to acquire all sorts of innovative use cases for AI, especially just because there's sort of not other options for entrepreneurs, so they can sort of have their pick of the litter, it's gonna be, it's gonna be interesting.
Ben Kornell:What do you make of that? There's the degree to which we're playing musical chairs, and you don't want to be the one without a chair when the music stops snow, you know, for writing, we're just seeing, you know, month after month, XYZ platform now has a writing AI, if there once they all have it, like the music has stopped, and you are not listening. You know, I chalked this up as a private equity acquisition, you know, Houghton Mifflin, famously has a leveraged buyout structure where they took the company from public to private, and they're leveraging you know, debt. And so what you're probably looking at is a sale where the actual transaction is probably not as lucrative, but the upside long term. You know, being a leader in that future organization may buy a share in the upside. So yeah, I mean, this is the new normal, I really do think that finding ways to get yourself to profitability, and then leveraging partnerships, whether that's m&a or a signed deal, to get to scale is going to be key customer acquisition has always been the biggest challenge in our space. And so many of these distributed platforms have an advantage in that they already have hundreds of 1000s of schools signed up. And if you can sell to them, they can sell to the schools, or universities or corporations. So you know, I was posting on LinkedIn the other day that actually like distribution might be the moat and not technical expertise as the moat in our space.
Alexander Sarlin:Yeah, I think it's a really fair point and distribution, maybe even over user experience or over a learning outcome. Or it might be sort of the ultimate thing that makes it an ad tech company succeed at this particular very odd moment. Yeah.
Ben Kornell:I mean, look, the alternative is like this is when some investor is going to make a huge killing because they're counter cyclical betting. So as much as the like, overall numbers look bleak. This is you know, typically, this is the time when there's something that breaks through and we have a new technology here that is reshuffling the deck. And so you know, especially like in learning differences and special education space, I think there's going to emerge a big winner in that space because we've known that's been problematic for a long time. And finally the technology is moving the moment so I think their assessments and other area that I'm that I'm bullish on hard to know though, is the bigger players are going to win that one or an upstart. But overall, I think you're gonna really have to be selling painkillers and not vitamins for a good while to have success. Then
Alexander Sarlin:it sounds like the chronic absenteeism is one of the biggest pains that schools are feeling at the moment this post pandemic, just the students are not showing up.
Ben Kornell:So for our final story, I do want to like give you know, sharing Oh, you know, the guild founder, Rachel Carlson, Romer, Rachel Romer, you know, announced that she is handing the reins off to her successor CEO. And she shared like a really, really deep and intense personal story, essentially, a year ago, she had a stroke, a major stroke, at like 37 years old, and has been in recovery ever since. If you haven't read any of it online, it's worth going to LinkedIn and just checking it out. I think we've always looked at Guild as one of the Darling companies in our space, and inspiration for how they've kind of created a double sided marketplace of education and opportunity for upskilling. For all, I think this just really takes it to the next level in terms of how inspiring she is, as a leader, she's always been an advocate for women CEOs and, and founders in our space, but to hear about her family and health struggles, and how she's, you know, handling it, how the company's handling and so on, she is really moving and inspiring. So for all of those out there, you know, if you need some inspiration, and also just let some like heart and soul of our space, you know, took that up. I was completely shocked
Alexander Sarlin:when I saw that post on LinkedIn. And I just really, and she's really coming out very publicly about it. Right now, you know, just this week. And it's just quite a story. I agree. It's really worth looking at. And she has been a guiding light, a sort of perennial keynote speaker at all the conferences, somebody who's just been absolutely out front in terms of doing really amazing things, especially in the workforce space, and their recent sort of pivot to support companies in their own internal upskilling, I think was really smart. So they've had a really good guild has had a really good year, she mentioned that in the post, they're doing really well. And you know, her her health issues have just come out of nowhere. So yeah, it's it's very intense. Before we go to our guests are amazing guests, Alexa Von Tobel. From learn best and inspire capital. Let's talk just really briefly about a couple of funding rounds that came and acquisitions that happened this week. One bright spot, you know, we talked about the low VC funding but modal announced a$25 billion series A not bad at all to upskill employees in AI know, modal is a company that was founded by ex Udemy. Folks, they the ex CEO of Udemy, and the ex chief learning officer of Udemy, who are coming together and you know, other ed tech veterans to do a really interesting, you know, workforce play. And so that's a pretty good round to move in. And obviously, they're leaning into AI, we saw wonder school acquire early day, which is a childhood educator marketplace. So that's a nice pairing, and we saw Ed light, raise a $4 million round, much smaller round. But I'd like does a really specific and interesting thing to help teachers give feedback to students in a in an authentic way. So that's a very sort of learning focused product, it's nice to see that there's still money going to them,
Ben Kornell:that kind of product. You know, anytime we see a funding round, now 4 million is almost the equivalent of like 12 million. So exactly, it's great to see that there is still a lot of action in that space, by the way, reach capitals still being pretty active in early stage. So you're seeing actually a shift into like earlier stage stuff from GSB. And from reach. So something to watch.
Alexander Sarlin:I mean, I talked to Claire's out and Jumeirah Herrera last week about the AI at tech space. And it was funny, I asked them, you know, are you waiting and seeing because the technology is moving so fast? And they said, Nope, we are not we are absolutely making investments. We're looking at people were doing it. And you know, now this whole an IQ comes out. And it's like, Well, are you but it seems like yeah, they are maybe the numbers will go up next quarter. It's it's a wacky moment. Maybe it's just the amounts are getting much smaller. So they're still investing. I know Rich had a lot of investments last year, but the maybe the amounts are so much smaller doesn't add up to very much overall, it's interesting. With that I think we can pass off to you and introduce our guest.
Ben Kornell:Hi, everyone. Today we have the special guest Alexa von Tobel, Founder and Managing Partner of Inspired Capital. She's got a new book coming out. We can't wait to tell you more about it and also dive into her journey of educating the world on financial literacy. Welcome to the podcast. Alexa.
Alexa von Tobel:I'm so happy to be here. Thanks, guys.
Ben Kornell:So let's start with a little bit of your journey. You don't come to the education space through the traditional path of, you know, classroom teacher or anything else like that you really have been on the financial path. Where did that start intersecting with your passion for educating and empowering young people and especially young girls?
Alexa von Tobel:Well, so a few friends, I care deeply about personal finance growing up, my family went through a tragedy we lost my dad and my mom overnight had to manage her finances. And as a 14 year old, like I remember, remember that. I remember her being like, I've got to now manage our finances for the first time on top of like getting my three kids through this tough thing. And it just stuck with me and I went to Harvard undergrad and was very business oriented and good. I've always been really good at math and I, and I just kept being like, I can't believe there's no education here. And it really started to bug me. And I was seeking it. And I went to, I took accounting at MIT. And I remember being like, I'm taking accounting, and I can, like, do the finances of a company. But like, I literally don't know what a credit card is, or how to think about it as a 20 year old. And I just started getting a note. And like any good business idea, it was starting to get under my skin. And fast forward, I ended up founding learn best nights and weekends. In my free time it was learn earn ambassadors, the three pillars of money, if you learn it, earn it and embrace it. And I started just building the business that I wish existed for me to empower people everywhere, young people to manage their finances. And then one last thing, the more I kept pulling on that thread, I started realizing what an incredible true injustice it became meaning, if you have lots of money, lots of people want to give you advice. But if you have no money, nobody wants to help you. And the financial world is quite painful. There's big repercussions. What I mean by that is, you make a mistake, you are in a position where you hurt your credit score, get credit card debt, it takes years to fix that student debt years to pay it back. And so if you don't start on the right foot, then you're basically on your back foot playing defense for the rest of you know, 15 years or longer or forever. And the more I thought about that, I'm like, that's wrong. That is not fair. That's like if our healthcare system only saw healthy patients, and if you're sick, you're on your own. And I just said, I'm gonna go fix that. And so learn vests was born. My three books that I've now written and published, and the most recent one, money matters with Rebel Girls, is because I have little girls, I have kids, I have three kids, two girls, and boy. And I said, we've got to pay it forward to the next generation, because we've got to start playing offense with money, not defense.
Alexander Sarlin:Tell us a little bit more about this most recent entry into your series of books for about financial literacy for young readers. This is about Rebel Girls, money matters. What is new about this particular book? And what are you really trying to accomplish with these amazing education for young women? Sure.
Alexa von Tobel:So let me start with the basics, which is that money is still not in taught in high schools, elementary schools, colleges around the country, it is still not, which is pretty wild, because it is literally a life skill that is there in present every single day that you are on this earth. So I took a step back, and I love the Rebel Girls brand. I believe in empowerment of all human beings. And I had a moment where I said, There's got to be something that plays offense for these kids. And so the idea to write a children's book has always been in the back my mind. And then, candidly, in the last few years with everything that's happened with women, women's rights, etc. I had a moment where I was like, I no longer believe in standing on the sidelines, when you see things in plain sight that need to be fixed. I was like, I've got to do my part. And I feel really strongly about doing my part and decided to write the book with Rebel Girls. Because I think that if you can empower every child, by the way on the planet, financially, to understand how the financial system works, so that they can show up to the party in a fair way. You can change everyone's lives, and particularly Rebel Girls, obviously, it's a brand for girls, having two girls, I said, I want to empower every single woman on the planet, to be financially savvy and stable. Because if you can do second grade math, which this book is aimed at kids six to call it 15. Even really, if you can do second grade math, you can manage money. It's really that simple. The math isn't that complicated. It's simply a matter of knowing the guardrails. So, boom, money matters is born. I wrote the book, it came out last week on my daughter's fifth birthday, my little girl, Rosie Ryan. And it is a very important and meaningful book for me because it is coming deeply from my value system.
Ben Kornell:Yeah, I love how you in the book, make it really practical. And just so our listeners understand, you know, your past books have really been more for an older audience financially forward and financially fearless. And so as you bring it to the kind of teen and preteen audience, I thought it was really great, though, like MASH exercise. There's like budgeting activities, where it's like, okay, come up with a budget, how would you manage this? You do and later in the book, talk a little bit about investing money and also planning for as you grow up, like, think about your future salary, and how do you consider other financial considerations? As you get into the more advanced stuff? Do you believe that, you know, school should have more of a role in the investing money and salary and financial planning stuff? Or is it a little bit more the basics of you know, revenue and expenses and how to save, like, where should schools be playing?
Alexa von Tobel:I think school should be playing in full financial literacy, all of it. I think in the same way that we learned sex education. Why are we not learning financial literacy in schools? These are basic critical skills for everybody on the planet. And I always say money is a lifeline. I wish it wasn't true that money wasn't part of every single day of your life. But it is it is how you feed yourself, protect yourself, roof and shelter. And it is so fundamental in the same way that we teach kids basic health care in school, brushing your teeth, and hygiene and why on earth are we not teaching financial literacy, it blows my mind. And it should be all of it. It should be budgeting, savings, understanding debt and credit cards, investing retirement and insurance, the whole nine yards. And they're simple, simple concepts. They're not complicated. But if you can sit in front of a team of kids and say, Listen, credit cards are really dangerous. And we now live in a more digital world where you don't even see the money. But if you take out a credit card, when you're 18, and racked up credit card debt and don't pay it back, it could torpedo your financial life, almost irreparably that is something that should be taught in every single school. Because then on the college campus with free pizza and a free hand, they offer you a credit card, where you are completely defenseless as an individual, and those are the sorts of things that really matter.
Ben Kornell:Yeah, we're seeing a couple edtech companies attacking this ever fi as well known for financial literacy, and then green light, which has a debit card for kids. In terms of the book, I think this is really built as a starting point, essentially, anyone could pick this up and read it, even adults could pick it up and read it and say, Okay, I'm going to just master the basics, in terms of the supports that you would like to see from both the Ed Tech community, from schools and districts, from universities and so on. If you had a magic wand, you know, and you're talking about this kind of end to end, how would you imagine that system of education working and for our listeners, what's the kind of whether they're a parent or whether they're administrator, what's the action we as adults can take. So
Alexa von Tobel:if I wave my magic wand, literally, this book, money matters. It is a full financial plan for kids. I mean, you go in there it is all the topics that you need. But I think starting in second grade math, third grade math, fourth grade math, all the way in, it should be present every single year as a reminder of why numbers matter is helping them people understand and contextualize the basics of money. So in a perfect world, we would have every student in America run a balance sheet. I mean, you think about it, we learn business expenses, why not run a household income, help somebody understand, there's two big levers, what comes in what goes out, right? And you can't materially change both of those levers all the time. And so helping people really understand the basics of money, I would want people to understand money products. So what is the savings account? How does it work? What's a checking account? How does that work? We don't really use checks anymore. So digital account your Apple Pay, how does that work? Again, those concepts, know where in our education system, and then really big critical ones. What is a credit card? How does student debt work? How does a mortgage function? What is homeownership? Those big decisions are pretty crazy. And then finally, retirement savings right now life expectancy for our children is life expectancy tables go out 120 120 years, you probably can't practically work after 75 physically. So we're in this really tough moment for that generation of how are they going to pay for nonworking years, so security's not going to cut it. We know that. And what happened when the government was so skirting with these longevity tables, we shifted a lot of the responsibility on to individuals 401k is that's what it is, it's it, you don't get a pension anymore. And so security can't cut it. So we pass the responsibility, but with no matching of the education, all of that needs to be taught in schools. I
Ben Kornell:love it. I love it. I will say I actually learned from reading the book, I learned some new insights of just simplifying the way to think about it. And insurance in particular was an area where I was like, how to think about in leveraging insurance to protect the downside scenarios. Really, really great book, money matters. I found it at rebel girls.com What's the best way for people to get to money matters the book.
Alexa von Tobel:I mean, the book is literally sold everywhere. You can go on Amazon on Walmart and go to Rebel Girls. But um, so so you can follow me on Instagram. I'm at Alexa Von Tobel. The link is right there. But I'm so proud of this book. And I'm proud that we've had some amazing human beings like Reese Witherspoon and Dr. Becky promote the book and share the book. And I think it's for me it's a bit of a movement. It's a mission here which is I'm done with the The Next Generation playing defense with their wallet. That's unfair. It is. Again, I didn't set up our financial infrastructure here in America, but it is a very damning one, you make a mistake. Those mistakes are very painful, versus just teaching and empowering people to play offense. And if you can do second grade math, you can manage your wallet. And so empowering kids with those fats. It is truly one of these things where if you empower people financially, you can empower them to get out of any tough situation in their life. That is why I tell I
Ben Kornell:love it. Well, thanks so much. Alexa Von Tobel. You are an inspiration for both me and Alex. And your book is available everywhere. So check it out. Money Matters. Thanks so much for joining the pot.
Alexa von Tobel:Thanks, guys for having me. What an honor.
Alexander Sarlin:Thanks for listening to this episode of Edtech Insiders. If you liked the podcast, remember to rate it and share it with others in the tech community. For those who want even more Edtech Insider subscribe to the free Edtech Insiders newsletter on substack.