Edtech Insiders
Edtech Insiders
Week in Edtech 9/18/2024: OpenAI’s o1 Model (Strawberry), Brisk Teaching Raises $6.9M, AI Use Surges Among Teens, Parent Trust in Schools Declines, AllHere Files for Bankruptcy, and More! Feat. Abby Coyle and Katie Gracey of ClassBank
Join hosts Alex Sarlin and Ben Kornell as they explore the latest developments in education technology, from AI breakthroughs to new VC investments and edtech reports.
✨ Episode Highlights:
[00:03:16] 🧠 OpenAI’s New Reasoning Model - ChatGPT o1 (Strawberry)
[00:07:20] 📚 AI's Role in Education - Practical Use Cases
[00:14:03] 👩💻 Common Sense Media Report on AI Use Among Teens: 70% of teens are using generative AI, with disparities in how different demographics use the technology
[00:17:42] 🏫 Schooling in America Report - Declining Parent Trust: 64% of parents believe K-12 education is heading in the wrong direction, driven by safety concerns and tech gaps
[00:24:51] 💡 Owl Ventures leads a $6.9M investment in Brisk Teaching
[00:33:40] 📈 AI Optimism in Schools - Clever Report: Teachers' concerns about AI making their jobs harder drop from 48% to 18% in the last year.
[00:37:15] 💸 AllHere Files for Bankruptcy
Plus special guests:
[00:41:22] 🎙️ Abby Coyle and Katie Gracey, Co-founders of ClassBank discuss how ClassBank teaches financial literacy through a digital school currency system and their recent $1M pre-seed funding.
📢 ClassBank is Hiring! They're looking for a School Partnerships Lead to help expand their impact in classrooms across the country. Check out the role here.
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🎉 Presenting Sponsor:
This season of Edtech Insiders is once again brought to you by Tuck Advisors, the M&A firm for EdTech companies. Run by serial entrepreneurs with over 25 years of experience founding, investing in, and selling companies, Tuck believes you deserve M&A advisors who work as hard as you do.
On the dawn of the AI era, 70% of teams between 13 and 18 reported having used at least one generative AI tool, and essentially they're very frequently using search engines using AI generated results. So that would be Google. That's kind of a no brainer use case of AI and having those AI generated results and chat bots are super common. So whether that's open AI, or whether that's a Gemini, or whether that's anthropic or some other thing, teens from households where parents have a college degree are more likely to use generative AI. So we're are seeing an income gap.
Alexander Sarlin:Welcome to EdTech insiders, the top podcast covering the education technology industry from funding rounds to impact AI development across early childhood K 12 higher ed and work. You'll find it all here at edtech insiders.
Ben Kornell:Remember to subscribe to the pod. Check out our newsletter and also our event calendar. And to go deeper, check out edtech insiders, plus where you can get premium content, access to our WhatsApp channel, early access to events and back channel insights from alexand. Hope you enjoyed today's pod. Hello edtech insider listeners, so glad to have you here with us today for the week in edtech. I'm Ben Cornell, along with co founder host edtech extraordinaire, Alexander sarlin, it's so exciting to be with you today. We've had some pretty incredible turnout at edtech insider events at the happy hours. We miss you, and I'm so excited to get around the water cooler and talk about what's going on in edtech today. Yeah, absolutely.
Alexander Sarlin:So last week, we had a great online session with Matt Walton about product market fit in edtech. Got really good feedback. Had almost 200 people attend live. It was really, really great. Thank you for everybody who is there. And I think, you know, it was really interesting. Matt is now doing an encore of that with his friends at emerge education. So if you missed that one, I'm sure he will tweak it a little bit at least. But, you know, check that out. And coming up on the pod, we had jamira Herrera and Lyman mismer this week. That's from reach and owl, collectively amazing edtech VCs. We have Ilya leashevsky And Mel cesarano from think human TV, Jennifer Holland from Google, tal Habibi from ISTE, all sorts of great, great chats coming up, and then the happy hour in SF. Ben tell us a little bit about it.
Ben Kornell:Well, we've got over 200 of our favorite friends that party down at Salesforce Park. And so if you were there. It was legendary. If you missed it. We'll see you at the next one. We will be in New York for New York edtech week coming up, so please come by and say hello. Well, without further ado, let's jump into the pod before we dive into some pretty fascinating reports that have come out across the EdTech ecosystem. Let's talk about what everyone's talking about in AI, which is the new strawberry model. What's your take Alex, as you see logic being built in in a purpose built way for open AI's latest product,
Alexander Sarlin:I think it's a really interesting and pretty smart development for the AI community at large, one of the big complaints about AI from many sectors, but especially education, has been the black box of thinking inside llms reasoning. You basically, you know, you ask it something, it spits something out, and you have to sort of try to suss out what it was thinking and why it made a particular mistake, or why it drew a particular conclusion. And OpenAI is trying to say, Hey, let's go deeper. Let's have something that has deeper reasoning skills, that can actually begin to explain its reasoning, and that can excel at much more complex tasks in especially science functions. So trying to make the AI both smarter and a little bit more transparent, a little bit clearer about how it's making sense of the world. I think that's really interesting. I haven't used it myself. I don't think anybody has used it, right? Has anybody been able to use strawberry yet?
Ben Kornell:Oh yeah, I've been using it. I've been solving math problems with it. And, you know, I think so there's some trade offs here. The speed is slower, the accuracy is better, and what it is fundamentally doing, from a technological standpoint, is, instead of making Super Rapid probabilistic guesses what the next word should be, it's actually running a more complex algorithm That is really checking multiple sources to understand whether the information is accurate or logical. Now accurate, that's still going to be around preponderance of signal, but logical. Basically, it's the AI folding in on itself, asking itself, does that make logical sense and statistically, do I have the right data? Yeah, what they're doing is actually something that a lot of people have been tuning models have been doing on top. And I actually talked to entrepreneur in AI and education who was supremely frustrated and surprised because they had spent a month building an inference model that allowed for their AI to do logic where others couldn't, and then, boom, this gets launched, and it's like, well, crap. This was a big opportunity in the ed tech space that's now rapidly dissipating, because the ability for these large platforms to create logic models really solves some of the fundamental challenges of use cases in education, which is like, if it's inaccurate or if you're actually solving a logical problem, the AI has a lot of hallucinations. Now the good news is, for our edtech entrepreneurs is there's still errors, and it's still not 100% perfect, but it does show where AI is going, which moves from these like larger, larger, larger, larger models, which that will still happen for other use cases, but now there's an internal tuning or perfecting in their inference, in their ability to make the AI, quote, unquote, smarter. And I think the reaction in the space is twofold. One is this is a real unlock for more practical use cases. And the second is a caution around anthropomorphizing tech. It's still not thinking. It's still doing statistical probabilities. The question I have is like, how much compute is this taking up? And right now, strawberry is, I'm a pro member, pro subscriber, so it's rate limited. You can only use it so many times, but this is a much more expensive from a compute standpoint, process. And, you know, I can totally see Gemini heading in the same direction with some of the things we've announced around their learn. LM, so the race is, I feel like we're hitting the second lap of the race where it was first like, get the biggest model that has the highest output and the most data nodes, and now we're seeing people competing on context, window, on inference, on logic, on speed. And so it's exciting. It is.
Alexander Sarlin:I didn't realize we had access to it. I just put in a question while I was listening to you talk for the last minute. And it's so interesting because so I put in one of those classic sort of, you know, McKinsey Consulting style questions, where they ask you to do a really complex problem and explain all your reasoning. I asked it, how many grains of sand there were in the Sahara Desert, and how it would figure it out, right? And took 18 seconds. 18 seconds is a pretty significant amount of time in modern AI world. But what it came out with was a like five step process that literally explains every single step, how many million square kilometers are there, how much it's covered in sand, how much sandy area there is converted to meters, assume an average sand depth meter of 30 meters, then determine the volume of a single grain of sand, and then convert that to meters. All the math is in there. Everything's in there. It says it's one times 10 to the 24th grains of sand. That's pretty impressive, you know. And honestly, the most impressive thing to me about it is that it can explain its thing. I broke record here. I just said this. But like that, it can explain its thinking. Not only is the math, you know, much more solid than it was recently, but it can actually really run through. I can imagine as a student or a teacher having some really interesting times, sort of using this type of model. I think your point about compute is definitely intriguing. I have no idea how much energy it took, how much the climate was hurt by me asking this question of open AI, but at the same time, this is like a sea change. I hadn't used it and Wow, I'm impressed. Just first glance,
Ben Kornell:I'm impressed. Yeah, I will just say, like there is a question in the marketplace around AI, native companies winning, or dominant companies adapting to AI and this kind of technology that's out of the box from OpenAI has a benefit to incumbents. Oh, for sure. And so I think there's, you know, one thing we're seeing in education space is that distribution is still king. So this is a leg up for the large scale players who maybe wouldn't have the sophistication to tune a model, to get logical outputs, to basically have ready made out of the box logic models, what OpenAI would charge for such things on an enterprise basis remains to be seen. Yeah,
Alexander Sarlin:it feels to me like there's very little chance that an edtech company, that pretty much any edtech company, no matter how big it is, is going to be able to compete on any level with the actual foundation model creators, you know, on creating an actual model, but I actually think it benefits a lot of different people. It definitely it benefits incumbents, in that if you're an established company, you can sort of take. Something like this off the shelf and use it to do complex explanations or to do really high level science or math or physics at the same time. I mean to your point about smaller companies trying to tune models and have some differential advantage by doing that, that's just not where the advantage comes, right? I don't think the advantage is going to come through small tech companies making the model smarter, it might make them smarter in very, very specific ways, like, you know, smarter at doing particular types of curriculum creations, smarter at doing particular types of student data analysis, maybe. But even that, it's probably going to be a limited time before they can really make it smarter. Even in that kind of thing, it's really about, how do you take these incredibly powerful technologies and turn them into usable tools, distribute them to your point, into the places where people can access them, easily, tie them into existing systems, give them access to proprietary data. But I don't think anybody should be trying to sort of make the basic brains smarter, and think that that's going to be a defensible business model?
Ben Kornell:Yeah, totally. So kind of moving from that into the reports, I think what we're also seeing is user shifts. We've got four different major reports that came out. We had a clever report on the state of schools and really focuses on AI. We had a report from Common Sense Media called the dawn of the AI era. We had 2024, schooling in America around school choice and perceptions of school and then we last had the reach capital Impact Report. A lot of really important data here around what's going on in the space. So I'll start with what's going on in the field with parents and families, and then maybe we can talk through clever and reach capital's report. So on the dawn of the AI era, 70% of teens between 13 and 18 reported having used at least one generative AI tool, and essentially, they're very frequently using search engines using AI generated results. So that would be Google. That's kind of a no brainer use case of AI, and having those AI generated results and chat bots are super common. So whether that's open AI, or whether that's a Gemini, or whether that's anthropic, or some other thing, teens from households where parents have a college degree are more likely to use generative AI. So we're are seeing an income gap that said black and Latino teens are more likely than their white counterparts to use generative AI tools for creative activities such as generating images and videos, and also for practical tasks like translation and homework help. So on a use case standpoint, you're actually seeing black and Latino teens more engaged and in general, over half of teens, regardless of background, are using AI for homework assistance. So I guess one of the big takeaways I had is obviously teens are the early adopters for every tech like innovation, and they're leaning in hard. And it does seem like, you know, teachers are aware that kids are using it, and they're trying to find this right balance of represent your work as its own, but also feel free to use these as a sounding board or a thought partner. And you know, on a personal note, my son is doing speech and debate, and he's doing this thing called policy debate, which requires all of this research, and there's these huge documents, like 1000s of pages long, that you're supposed to go in and memorize. And we created a GPT bot, uploaded all of that data, and then he has a sparring partner that he can debate with. It's like the use cases that are mind blowing, transforming the world. Okay, maybe they're not here yet, but these, like small, practical use cases, are proliferating, and that's what the common sense report speaks to, before I go on to the school choice, any thoughts on that one, and also connections to the other suffering space.
Alexander Sarlin:I don't really have a lot to add to that. It's incredibly interesting. And I'm still getting my head around that racial disparity. I don't know what to make of it. It seems exciting. It seems like maybe there's a little bit of a sort of, you know, comfort with new technology that is not only true of teens, but may be true of certain types of teens where people are just saying, hey, I can make, you know, images, videos, music, I can do new things with technology. Let me try it. Let's see what happens. And maybe I don't know, but I think that's really exciting, and it speaks well for the next generation, being able to figure out these incredible use cases.
Ben Kornell:Yeah, you know, while this revolution is happening in terms of teens using AI. At the same time, we're also seeing that parent confidence in schools and pessimism overall around K 12 education is growing, and we have at the core this fundamental challenge of are K 12 schools relevant to the world? World in a way that prepares kids to be successful, and that is then compounded with the politics around what we've shown, which is trust overall, is declining in public institutions, and especially K 12 and universities. And so basically, 64% of parents say K 12 education is heading in the wrong direction, the highest level ever recorded in ED choices poll, school choice preference, 80% of students attend public school districts. Only 40% though of parents would choose this option if they had the freedom to select, and private schools were the most preferred options, with 36% of parents favoring them. So as we see people opening up these payment models with esas or vouchers, there is real threat to public schools as the preferred choice. Then the other three that kind of came forward are school safety is just front of mind, and with the shooting in Georgia, it's just becoming a real challenge for parents. When you drop your child off, you don't know, are they going to be safe. And whilst the statistics are really low compared to other modern countries, they're incredibly high. And the other two main bullet points was education saving accounts are universally embraced, with 76% of Americans and 84% of school parents favoring them. And what's nice about the ESAs in this report, they highlight it can be after school enrichment, or it could be as an alternative way of funding school choice and then technology in the classroom. Basically 66% of parents think that schools should educate students on responsible AI usage. So we heard from the students, they're using AI. It's dynamic, it's challenging. And then we hear from the parents, schools are losing relevance. We want more choice. School Safety is an issue. It's creating, I think a many of the conditions where at the state level, probably not at the national level, governors and state commissions of education are heading into a four year window of opportunity for them to really shake things up and change their system. Now, will that be good for our learners? Will that be bad? How will it affect the most privileged learners and the lowest income learners? How will this, you know, if each state does their own methodology here, how does the EdTech community play in those spaces? These are all big, open questions, but it definitely speaks to the dynamism of the moment. Yeah,
Alexander Sarlin:a couple of things that stood out to me about some of these results. This is definitely worth digging into. And you know, we'll obviously link to all of the reports we're mentioning here in the show notes for this episode. We definitely recommend you go dig into them. There's lots of stuff in there in terms of the parents. So you have students saying that you basically have highs about people saying that K 12 education is on the wrong track, pretty much across the board, right? 70% of the public says it's on the wrong track. 64% of parents, as you said, and students are also they're not in this particular survey. But we know that students are not super bullish on the direction of k 12. That said, when you actually look at parents satisfaction by school type, about 80% of certainly private school and homeschool parents, but actually a majority of all parents say they're either somewhat satisfied or very satisfied with their current school. So I think that's actually worth pointing out, and this is something that comes up in political polls a lot, where people are like when you ask them about the state of affairs at large, they tend to think things are getting worse and they're horrible and they're a problem. And then you ask them about their particular circumstances, they say, yeah, it's okay. This has been happening for the economy over the last few years. That sort of vibe session people call it, where people's personal economies are okay, but they think that the economy is going down for everyone else. And I think there's some element to that in these school results too. People think that the education system is on the decline, but fewer than you'd think, are dissatisfied with their existing school. And parents even say that they would prefer public schools to private schools, probably because of price reasons, of course, but and location is the number one. The number one reason people prefer public schools is that they're closer, but overall, I think that's an interesting schism, and it's something maybe we should just keep an eye on as we look at sort of the public perception of schooling. And then just one other thing about the technology that I found interesting, which was that the satisfaction with technology usage in schools obviously very relevant to all of us in the ed tech world, is significantly higher among private school parents, and that really jumps out to me. I you know, over 60% of private school parents say that they're satisfied with their child's use of tech in school, and over 50% are comfortable with the school's use of tech. So private school parents, the majority are saying, Yes, this works for me. It's, you know, we like how you're using technology. But. For district schools, much, much lower. It's in the 30s. So two out of three district school parents think that they're not using enough technology that both the children and the schools are not using technology to the level that they should be. And I think that's a real interesting opportunity, along with the ESAs that you're mentioning, Ben, which you know, we've had Joe Connor on the podcast, who is in mystery essay himself, but like, I think that's a really interesting opportunity. Public school parents are want, actually, more tech in schools. We know from inside that they're using 2700 tools in schools, but the parents are saying, No, it's not enough. We want more AI and we want more tech, and we know that that's really important for our students. Interesting finding. Don't you think it is?
Ben Kornell:And you know, ultimately, I'm also, as we look at all of these reports, I'm looking at trend lines here, yeah. And, you know, this is one of those. I remember we were talking about the trend lines of universities and the cost and the ROI. Now we're seeing that universities are going bankrupt. It just feels like a drum beat here towards a vision where, you know, schools need to be more dynamic. Schools need to be more adaptive. One thing that I will say, it still seems like the community value proposition is quite strong and quite positive for schools. So while everyone might think that the overarching theme, it's not going the right way, they still value their community. And so I think that's the wind. This is actually the window of opportunity. Is, can we actually make our public schools that are universally available to all, not only innovative dynamic and preparing kids for a dynamic future. But can we also double down on their integral role as hubs of the community like that? Seems like the opportunity set. Agreed.
Alexander Sarlin:It's really interesting findings, and it's starting to feel, you know, speaking of that drum beat specifically around AI, I think you know, we've been reporting on these different surveys and reports about AI usage for two years now, and they're wildly disparate. It's really weird how different the reports are, but they're starting to seem to come to a similar conclusion. So, you know, we saw reach capital put out their report this week, their impact report. That's always a fascinating report. They're one of the major, you know, the absolute most influential, most impactful VC dedicated education VCs in the space, and one of the things that they call out is that AI usage in the reports that they're looking at are quite high. Basically, consumers. It's 80 plus percent of people are at least aware of if not used AI. About 40% of enterprises have actively deployed generative AI people with almost 90% or I guess it's 80% experimenting with it. It's easy for VCs, who are always trying to look to the future and find trends to sort of cherry pick statistics about AI going up. But the last few surveys and last few sort of outlooks on AI in education and just general usage and acceptance have all started to go up instead of we've seen fewer of these, like, hey, you know, Dan Meyer put out this thing, hey, only 18% or 8% of teachers have ever used it. That's not at all what we're seeing from almost all the other stats. I mean, in this reach report, they 49% of teachers reporting using generative AI once a week or more, about half once a week or more, and 75% using it at least sometimes. So we've gone back and forth. This happened with the teacher shortage. You know, when we first started the podcast, Ben, it was like one report would come out saying there's no teacher shortage, the next one would say there's a huge teacher shortage. And you'd go back and forth and say, who's right here? The average number of, you know, Paul's, you put the averages together here, I think AI is truly actually taking off in classrooms. And I think we should all sort of begin to accept that there may be skeptics, and that's totally fine, but it feels like the verdict is starting to be in there, that people are at least interested in using it and trying it, if not using it for really sophisticated use cases like your son's debate prep quite yet? Yeah,
Ben Kornell:for sure. I think as we're looking at all of the both the impact and what's going on in the space, we're also seeing a war play out, not a war, but a struggle playing out in the ed tech space around okay, how does this come to fruition? Will we have point solution tools that win today because they develop depth and expertise in a certain area and leverage AI to unlock greater opportunity for learners and schools. Or are we going to see things move towards one stop shop? Or a third would be that generally available AI will be good enough that it will essentially supplant all edtech specific providers. And so we got some really interesting signal this week with an investment from owl ventures on the One Stop Shop bucket. Tell us a little bit about that. Alex,
Alexander Sarlin:so this is an investment to the $6.9 million total investment in brisk teaching. Longtime listeners will remember that we had the brisk teaching team on. And very shortly after they, you know, really kicked off what they're doing. That's Armand Jaffer and Tom whitna. And these are actually people that I have worked with in previous roles. They are brilliant people, and I'm very excited about what they've been doing. We've seen magic school get a lot of attention as this sort of one stop shop, as you mentioned, Ben, they continually adding new functionality for teachers on the site, brisk, differentiating, you know, feature set really is around integrating extremely well with Google Suite, which is, as you always say, you know, the biggest company education, universally used in schools. So brisk is basically ties directly into the Google Suite. You have a Chrome plugin for the Chrome browser, you have basically plugins that work inside Google Sheets, inside Google Docs, inside Google Slides, where you can AI generate, I'm looking at it right now as I look at a Google Doc. You can you can generate content. You can grade content, give feedback to content, even feedback specifically around certain standards or a rubric. You can translate content. You can the functionality similar to, you know, it's not actually the same kind of functionality as magic school, but similar to some of the other functionality we're seeing across the AI space. Brisk just keeps adding things that you can do with your content. It can make slides automatically for in Google Slides. It can make quizzes, you know, you can just imagine all the use cases that we always talk about in AI, and they're trying to build them directly into your Google experience, which is a pretty compelling value proposition. And they've gotten a good number of users already, and obviously now, with the 6.9 million, are sort of off to the races. I think it's also worse, also worth noting that magic school has sort of been the belle of the ball. They've gotten a lot of attention from the AI teacher space and brisk and DFID have been sort of a little bit behind school. AI has been a little bit behind in terms of visibility, but they've been working really hard, and they've gotten a lot of users. And I think owl putting leading this round for brisk is showing that they're sort of throwing in their hat for brisk as their sort of horse in the race for the teacher AI space. But you know more about the internal VC wars than I do. Ben, what do you make of this investment? So
Ben Kornell:we've written about micro companies before, and the challenge for any point solution is, what is the total addressable market? How much of the education wallet can you really capture? And what gets me excited about the point solution space is that you can build a company with 10 people and really go after it and capture it. So my classic example is like Japanese learning software platform. Of course, you could go to Duolingo, or you could go to, you know, general language curriculum or textbook, but the ability to be specialized in a specific area with specific pedagogy and specific needs, allows you to meet the needs of niche learning sub segments much more effectively. And second, you know, we've seen a proliferation of writing AI apps or reading AI apps or math AI apps. And we're, we've seen efficiency apps like one stop shop grading, but this is different brisk, and I'd say magic school. And, you know, we've covered Flint before. And I think there's a few others who are kind of going for the point solution as a wedge to then be, you know, multi solution. This is where the big dollars could be, and ultimately, who is most threatened. It's the LMS. Eventually, if these one stop shop AI platforms start doing all of the efficiency related tasks that educators need, and they start integrating learning, you actually have an LMS 2.0 opportunity here. That's the brain of the EdTech and of the curriculum and of the you know, program, and that, I think is incredibly exciting. So, you know, I'm not hearing anybody from brisk or magic school saying that they want to displace the LMS. But when you're empire building in this space and creating one stop shop, the next big thing to fall after you've gobbled up point solution, AI solutions is the LMS, and I'm pretty excited that some people might be positioned to take shots of that.
Alexander Sarlin:Yeah, a couple more things about the brisk round that I think are relevant to our listeners here, and related very much to what you're saying as well, is that the LMS is a really tricky space. A lot of people have been trying to, you know, create the new LMS or the new student information system for a long time. Not very many have succeeded. We saw Canvas obviously break through and become a huge player in the field, within structure, but it's a hard field to break into, because it's a very complex set of features and a very complex set of different users that have very different needs. Google has disrupted the space, distorted it, as you sometimes say, by putting out, you know. Their Google Classroom and Google education suite for you know, free to cheap, let's say, and often free. And they use the sort of consumer technology. And one of the things that stood out to me about the clever report they asked educators. So the clever report is really a survey of educators about all sorts of things around AI and technology. Another report I definitely recommend everybody read. One of the things that stood out is they asked educators, which edtech tools have been effective in enhancing student learning. And I don't mean specific ed tech tools, like a single company. They're talking about categories. So which categories of edtech tools have, do they think from their experience, not from, you know, empirical but from their experience, have been enhancing student learning. And the number one by far that's rated as very effective is document collaboration tools, aka Google Docs. And you know, a few other competitors in that space, gamified applications, comes in second. And then LMSs. At 60% said that LMSs have been very effective. That's higher than we might think, and 96% say they're either very or moderately effective. That I would not have guessed that educators are that bullish on LMSs. I think I always let a lot of educators consider LMS as a sort of necessary evil that they have to wrestle with. And, you know, parents are always looking at the grade books, and there's all this stuff that sort of, this detritus that comes with LMSs that makes teachers lives harder in some cases, but they're saying that for student learning, they think it's pretty effective, and they think document collaboration is very, very effective. So if you could think about that in the context of this brisk ground where brisk is literally baked into the document collaboration tools, Google Docs and Sheets and Slides and the learning management system, specifically the Google, you know, the Google Classroom, then they're really hitting teachers exactly where they think the value already is. And in that same report, they said 60% of teachers are comfortable automating administrative tasks, including grading. So if teachers are open to automating administrative tasks, think that the document collaboration and learning management systems are really effective along with some of the games. Then brisk is really well positioned among other companies that are sort of working in the teacher space that to really become a significant part of the teacher's everyday lives. And I think brisk is also, like a lot of the other teacher companies, freemium model, and they have a lot of features that are free and actually permanently free for teachers. So teachers can use brisk as well as magic school, and if it and a number of the others, and use a lot of the power of it just for free forever. And then the premium set of features go even deeper, and they go into things that are even more specific to what teachers might need. But you know, we've seen this space outpace a lot of the other AI use cases, partially because it doesn't touch student data nearly as much as anything else. One more thing from the clever report that I think is worth pointing out. Last year, they asked teachers, how many of them think that AI will make their job harder, right? And last year, 48% of them said yes. So last year, 2023, half of the teachers polled said that AI is going to make their job harder, not easier, despite all the efficiency gains that US edtech people like to promise this year, the number was 18% say that will make their team harder. So that's a sea change, right? I mean, that's a big deal. I think teachers are starting to see feel the value of these tools, and they're starting to say, oh my gosh, it just wrote my lesson plan, oh my god. It just graded my these exit tickets. For me, it just found insights. It just did this and that it just translated. It just differentiated. How can I now believe it's going to make my job harder? So that's pretty exciting, too. Yeah,
Ben Kornell:we've been hammering on this issue of use cases. And what are the use cases? What like? How might you use AI in the classroom? And normally, the way to grow a product into a platform is you find one use case, you drive that narrowly to get adoption, and then you expand your use cases. From there, what we're seeing, because AI is so versatile, is that actually going with a one stop shop is an advantage, because each educator can find a different use case that's most relevant to him or her. So one might be doing, you know, my lesson plan that I have to submit to My principal. Another person might be ideating on different topics they want to teach. Another one might be running data and spreadsheets. And so what you can as an administrator, you don't have to tune the use cases into Okay? Everyone, we're rolling this out. Everyone's going to do X, Y and Z instead. It's Hey everyone, we're rolling this out. Share with us the use cases that have been valuable to you, and we'll, you know, convene the teachers to share best practices. That's how teacher collaboration works in the wild. And I think this, they are brisk and magic school and. Some of the others are really tapping into something that could give them a virality that we haven't seen with other edtech tools.
Alexander Sarlin:Totally. The other thing we've seen is magic school, you know, expanded from Magic School for teachers to magic school for students. And we just saw as part of this announcement, brisk is launching a tutoring function called brisk boost that's student facing that basically it turns any content into a AI chatbot that students can use to ask for help. So it's basically a personal tutor that can make sense of the teaching materials. And that is another speaking of one stop shops, right? That's an interesting trend in these one stop shops as well. They're not just trying to be one stop shops for teachers, but they're trying to be one stop shops for the school, for all the different use cases you might need. And they're going to, I went to the whole school, and maybe not always, not everybody, but definitely for teachers, certainly for some administrators, and certainly for some students as well. Frankly, that makes things more complicated, because student use of AI is still something that has third rail potential, but it's exciting too, because at school, AI has the same thing school, AI can do things for teachers and do a lot of things for students as well. It's interesting. And I think it's a space where you're starting to see a few of these companies start to sort of get out in front of the pack. And it is a pack. There are a lot of AI point solutions, and a lot of them are doing it exactly the way you just said, Ben, they're they're not waiting and saying, Oh, well, we do this one thing. Let's own the market in this one thing, and then expand. They're saying, let's constantly expand. Every time I've opened magic school or brisk or different, there's more. There's something new that it can do every time. And that's the plan here. It's whoever can adapt faster and faster and faster, who can keep shipping faster and faster. They do exactly what you said. They get more points of entry. They get more virality, because they get teachers saying, hey, they just put out a tool to send notes home to parents. That saved me three hours this week. I'm going to tell everybody in my department. I'm going to tell everybody in my teacher's lounge. It's really, really interesting. All right, we have to cover one more story, which is probably the biggest downer of all of these. This has been a pretty positive week, but we're starting to finally put a little bit of a bow on the LAUSD all here. I don't know what he would even call it adventure. Do you want to tell us a little bit about what happened with all here this week? You
Ben Kornell:know, first answer, First, they win bankrupt. And this feels like the final chapter of a dramatic story that's been playing out. Kudos to the 74 million for their incredible coverage, and what really started as this sense of promise of AI is an equity issue that should be available to all promoted by LAUSD superintendent Alberto Carvalho, and then came to fruition in this vision of Ed, which is ed or Edwina or Eduardo, the kind of AI assistant for learners that can help them catch their bus, understand what their homework is, get feedback in their native language. All of that promise ended up in controversy with a all year contract that when you read the contract, it's so expensive that it's hard to imagine any startup signing up for that scope of work. Number two, there's meaningful dollars that LAUSD put into this. Reports range from 2 million to 4 million that's already been spent on this project, and now we the CEO and founder left it's in somewhat disgrace, kind of thrown under the bus by her board, and now we're seeing the dissolution of the company. I think there's the story here and what happened, and I don't know that any expose is going to uncover some shocking reality. This is textbook, you know, going company that signed up for something ahead of their skis and a scope of work that was probably undoable to begin with, and funding issues and so on. But I also think the bigger story for our space is this becomes one of those red flag warnings that people will just continue to come back to, oh, we can't do this project with you, because what happened with all here? Or, Oh, this is just going to be another all year situation. And over the years, we've had these kind of benchmark controversies, Bloomberg blowing up, or the iPad debacle in LAUSD, and it really suppresses the opportunity for schools and organizations, edtech organizations to work together, because it creates political and public vulnerability for any of those partnerships, and also sows seeds of doubt. Now the naysayers will say that's rightfully held, that doubt is rightfully held. But I think was it a tech problem here? No, I don't think so. I think it was a contracting and scoping issue. So as you kind of look at the fallout in all of this, what are your takeaways? Yes,
Alexander Sarlin:I think it's a really tragic and sad story. And you know, you're right. The 74 million has done an incredible job reporting. And yeah, and I've done this a lot today, but I do recommend people go back and read their reporting from the beginning of this, because it gets into some real detail about the investors, about some of the consultants, about they literally dug up the salaries of everybody, all the C the C suite at all here. They're really doing a very good job of investigative journalism, but it makes me sad, because I think that the idea of a city wide, across the board, chat bot that can tell parents everything that's happening with their schools, and it's designed for low income families, is an amazing idea, and I do hope that we don't throw the baby out with the bathwater, and consider this one use case of reason to not do big things in AI and edtech in general. With that wraps our episode, and we're going to go up to our guest. We have. Our guest today is Abby Coyle, who is a CEO of class bank which just raised a pre seed round, and they're doing really interesting things with financial education. Let's welcome our guest, Abby Coyle. We have the co founders of class bank. Abby Coyle and Katie Gracey, they just raised their pre seed round for a really interesting classroom tool. Welcome to the podcast. Awesome. Thank
Abby Coyle:you for having us. Alex, thanks. Alex,
Alexander Sarlin:wow. So first off, tell us a little bit about what ClassBank. It was formerly called Class equity, and you've just rebranded. What does ClassBank do, and what is it sort of adding that's really new to the EdTech space?
Abby Coyle:Yeah, definitely. I think maybe to give you a quick background context on what class bank, I should probably start with my experience as a classroom teacher. I formerly taught middle school math for a few years with Teach for America. When I was teaching in an underserved community, my school was right next to the local homeless shelter and right across the street from one of the largest tent cities in our country, and I just became so frustrated that we were drilling skills like the quadratic equation, but not teaching our students those essential life skills, like how to open a bank account or manage a budget or apply for a job. And unfortunately, this wasn't just a problem in my classroom. Currently, 74% of students lack confidence and knowledge about personal finance, a skill that every student will need to use in their lifetime. And folks usually think, oh, you know, that's a high school problem. We don't have to worry about it yet. But those habits actually start forming at the age of six. So it's really important to bring financial literacy into the classroom as early as possible. And that's really what inspired Katie and I to start class bank. So we are a Digital School currency system that integrates financial literacy into everyday classroom routines, so students have their very first bank account where they can earn, save and spend classroom or school dollars. Our goal is to really provide that practical, hands on real world financial experiences, so students can learn in a safe space before they're actually faced with those real world challenges and consequences
Alexander Sarlin:financial literacy and real world skills in general, but specifically, financial literacy is something that so many parents wish their kids were being taught in schools. I think many teachers, including you as a teacher, predator, wish was being taught in schools and the students wanted to it just doesn't usually make its way into the core curriculum. So tell us more about how your financial literacy is sort of married to what students are already doing in the classroom, so that it doesn't feel very supplemental or like it's taking the time away from core curriculum.
Katie Gracey:You're exactly right. Alex, whenever we explain what we do, almost every time, the first thing teachers say is, wow, I wish I had that in school, I didn't learn anything about real world finances in school. And as teachers, you know teachers have so much on their plates. You may have heard that research that teachers make more minute by minute decisions than brain surgeons, at over 1500 decisions a day. And that research was from the 90s. So you can imagine how much that's ballooned with all the different tech tools that they're now available. So you hit the nail on the head, having it be really seamlessly integrated into the day to day is our number one priority. And when we first started class bank, we were kind of figuring out how to marry those two, the school culture, with the financial literacy. But the more we talked to teachers and schools, the more it became clear that the financial literacy piece is really the how behind what is driving those positive school cultures. You're trusting students with that feeling of financial freedom and giving them responsibilities in the school, and they're rising to the plate and really making sure that they're really contributing to that community, and they want to do a good job because they're being trusted with those responsibilities. So yeah, that financial literacy piece is kind of what's driving those positive school cultures in class bank,
Alexander Sarlin:right? So it's sort of, it solves two problems at once, the lack of financial literacy and financial curriculum in schools, but the way that students earn their classroom dollars in class bank is. Through, as you say, these positive behaviors, supporting the classroom, helping other students, all sorts of things that actually make the school environment healthier, happier and more productive. Tell us a little bit about what that looks like. So Abby walk us through a 10 minute segment of a class where class bank is in use, and what it looks like for the students and teachers. Yeah, absolutely. So
Abby Coyle:the quick snapshot overview of what our platform provides for a digital school currency system so students have their very first bank account where they can earn bonuses for those positive behaviors reinforcing the school values. Students can save up their income to purchase different rewards from a classroom or a school wide store, things like getting to choose flexible seating or listen to music in class, but building on, I think, really where we differentiate ourselves, you know, we're not just a digital points in school store system. We're really empowering students to play an active role in their community. So students can apply for classroom or school wide jobs and earn a salary for that contribution, just like we get in the real world. And then students even have to save up for monthly expenses, things like rent or utilities. So, you know, students get that feeling of, oh, I got my paycheck this week. Really want to spend it in the store, but, you know, I have to save up for my rent due next week. I need a budget for that first really building that financial literacy through practical, hands on experience.
Alexander Sarlin:It's caught on with some really big school districts. So Katie, tell us a little bit about the growth you've seen. I know you're you've been working with New York City. You've been working with Orange County in, I believe that's Columbus, Ohio. Tell us about how this has been received by the districts that are using it, and what they say the impact it has on the classroom and then the school culture. Yeah, it's
Katie Gracey:been really exciting to be on this journey. When we started about three years ago, we definitely didn't expect how quickly it would take off in 2022 we were high fiving that we had 20,000 students on the platform, and now we're supporting over 400,000 students across the country. And what's really exciting is that this growth has been largely driven by teacher word of mouth because of the impact they're seeing in their classrooms. And yeah, in Columbus, we were actually just able to visit one of our schools that has been with us from the very beginning, Pleasant View Middle School. They shared that after one semester, they saw a 23% drop in behavioral disruptions, and 95% of their teacher said, ClassBank is a powerful intervention tool, which for a big school, having 95% teacher buy in that circles back to its ease of use. So that was really great for us to see. And yeah, it's easy to get stuck on the numbers, but our favorite days are when we get to go see the schools and actually view that impact firsthand. When we were visiting them in Columbus, it was really powerful to see how fully they've really integrated ClassBank into the fabric of their school culture. They've written it into their discipline policy, into school culture initiatives. One teacher shared, I no longer have to worry about discipline because students are motivated and build community in a way I haven't experienced in 21 years of teaching. So that community building aspect is really kind of at the heart of what we're doing. That's
Alexander Sarlin:amazing. We love teacher we call them teacherpreneurs, right? And the Ed Tech insiders world, I don't think we came up with that term, but I'd love to hear a little bit about what the experience has been starting a company knowing you know, coming from that background where you know exactly what it's like to manage classroom behavior issues, to try to motivate students through various ways, just sort of be having been really on the other side and in the trenches of, you know, so to speak, of a classroom. How has that shaped your strategy with class bank and you know, how has it shaped your ability to sort of connect with the needs of teachers and students in the classrooms? Yeah,
Abby Coyle:definitely. I think that has been the key driver of our success so far. Katie and I know the needs of students, know the needs of teachers, school administrators, district leaders, often competing needs across those different user bases. So I think being able to balance the different needs and challenges and goals of all the different users across the board is has really been, you know, why we're seeing such high growth? You know, I think especially on the teacher end, we understand if it is gonna take up extra time for the teacher, they're not going to use it. So going back to just making this a seamless experience for teachers, we're saving them time. We're not just one other thing that they have to do in the classroom. We're really helping them build that engaging community and teaching financial literacy without the need of lesson planning. Teachers do not have to do any prep. I think going back to our school visit last week, one of the moments that really stuck out to me was when I was helping a seventh grader set up her Saving Schools on the platform, and when I asked, you know, what did you think about this? She paused and said, you know, this will really help me save and spend my money wisely and budget for bigger goals. And I just, I couldn't have written a better exactly the kind of hands on learning that we're aiming for. And again, it didn't require any lesson planning from the teacher. That student was a read. Watching that aha moment all through experience,
Alexander Sarlin:the stories like that. When you talk to the teachers and students or your end users, whatever you're doing in edtech, and they just say the thing that is like you dreamt they would say when you started it in the first place, it's exactly that. It's the most amazing feeling. So you know, this is a pre seed round. You raised it earlier in the year, and it was just announced now, but this has been what we all call, you know, a little bit of an edtech winter. It's been hard for early stage ed tech companies to raise money over the last, you know, 18 months at least. Tell us a little bit, you know, Katie, I'm curious what it looked like raising money in this environment for an idea that obviously has traction, has lots of students and big districts involved, but is also something a little bit new that hasn't been proven out. I'm so curious how investors sort of saw you coming, and what that was like at this particular moment.
Abby Coyle:I can maybe jump in and answer that question. I think we're so incredibly excited and grateful to officially announce this pre seed funding, and so grateful for investors that really are passionate and are behind the mission and the vision that we see. And I think anyone that you ask understands how important financial literacy is, and it's currently a space that's just not really being tackled in the education space. So I think being able to find mission aligned investors is really what helped us through this pre seed round, and just Yeah, again, so appreciative that we were able to close this in a difficult environment to kind of chat about what is next and what we plan to use the funding for. We're excited that we'll be able to actually ramp up our marketing and sales efforts. You know, we've, we've shown these early signs of product market fit, and now being able to help build awareness and drive that adoption for class bank nationwide. And also a quick plug, we are currently hiring for our school partnership lead. So if anyone is listening and passionate about creating meaningful learning experiences, shoot me an email. Abby@classbank.com would love to chat. That's
Alexander Sarlin:fantastic. And you know, one of the things that you are doing as part of this marketing and this expansion is you just rebranded. You were formerly called Class equity. You're now ClassBank. I'm curious what that process looked like. I know that we have a lot of entrepreneurs who listen to this podcast who probably think, you know once a week about whether they have the right the right name, the right positioning. And sometimes it can feel really daunting to change something after you've already launched, but you've done it quite successfully, and that you're now@classbank.com tell us a little bit, just from the inside about that rebrand, how you decided to do it, and how you decided it was going to be worth the lift.
Katie Gracey:Yeah, pretty much everything we do at class bank is really driven by teacher and school feedback, and that made the process relatively pain free. You know, we just heard from them, really wanting to kind of clarify that vision. When you hear class bank, you kind of picture something in your head, and yeah, it kind of was, we're working with schools and teachers to figure out what name would really stamp, what we're doing to really not only hit the financial literacy piece, but also that community, building that economy, creating that unified structure throughout a school. So working with teachers in schools was the short answer, and everything just kind of flowed from there. And also, you know, a great team on the back end helping us organize everything from SEO to marketing. So yeah, we're really grateful for everyone that helped us in that process. Yeah,
Alexander Sarlin:congratulations. It feels like a really amazing launchpad for the company with having some precede money to run with having all of these, you know, hundreds of 1000s of students and teachers that are obviously fans and that you can get feedback from in this fast loop that you're obviously listening very carefully to. I'm really excited to see where you go next. Where should people go if they want to learn more about
Abby Coyle:Yeah, you can visit our website, classbank.com, or class bank? follow us on LinkedIn. That's where we post more of our business sided updates. You can also follow us on social media to see you know the platform in action, hear what teachers are actually saying. Our handle is@MyClassBank. Yeah,@MyClassBank, fantastic.
Alexander Sarlin:So if you have teachers or students in your life that are interested in financial literacy and in classroom management, that's pretty much everybody. Please send them to classbank.com thank you so much for being here, both of you. It's so incredible to see teacherpreneurs really hitting success and hitting scale, and it's really amazing. So thank you so much. This is Katie Gracey and Abby Coyle from ClassBank. Thanks, Alex,
Katie Gracey:thank you so much, Alex,
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 EdTech community. For those who want even more edtech insider, subscribe to the free edtech insiders newsletter on substack. Whew.
