Edtech Insiders
Edtech Insiders
Week in Edtech 10/16/2024: New York EdTech Week Highlights, Rise of Micro Companies, PhysicsWallah's IPO Plans, AI's Role in Education, Philanthropy Partnerships, and More! Plus Special Guest, Shauntel Garvey of Reach Capital
Join hosts Alex Sarlin and Ben Kornell as they explore the latest in education technology, AI developments, and key edtech funding moves.
✨ Episode Highlights:
[00:02:53] 🗽 Recap of New York EdTech Week, highlighting key themes and vibrant energy from the event.
[00:04:37] 📈 Discussion on the rise of micro companies, with lower barriers leading to a surge in niche startups.
[00:12:36] 🤝Convergence between philanthropy and EdTech, focusing on how partnerships can drive sustainable models.
[00:17:28] 💰 PhysicsWallah's $400-500 million IPO plans could reshape EdTech, positioning it to overtake Byju's as India's leader.
[00:21:22] 🤖 Controversial use of AI in Nevada to reclassify at-risk students, sparking debates on resource allocation.
[00:22:07] ⚖️ Broader implications of AI in decision-making, raising questions about existing policies and resource management.
Plus special guest:
[00:25:12] 🎙️ Shauntel Garvey, Co-Founder and General Partner at Reach Capital
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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 Education Entrepreneurs. Founded by serial entrepreneurs with over 25 years of experience founding, investing in, and selling companies, Tuck believes you deserve M&A advisors who work just as hard as you do.
[00:00:21] Shauntel Garvey: As we began to reflect on our current branding and positioning, we realized it didn't fully articulate our mission and what we've already been investing in for the past few funnies. At our core, we care deeply about enabling everyone to live their best lives. And so with our new thesis, we hope to attract and invest in more founders who elevate human potential and ignite purpose across learning, health, and work.
And you'll notice there is no mention of a tech, and that is intentional.
[00:01:01] Alex Sarlin: Welcome to EdTech Insiders, the top podcast covering the education technology industry. From funding rounds to impact to AI developments across early childhood, K 12, higher ed, and work. You'll find it all
[00:01:14] Ben Kornell: here at EdTech Insiders. 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 Alex and Ben. Hope you enjoyed today's pod.
Welcome to another edition of Week in EdTech. I'm Ben Kornell, alongside co founder, co host extraordinaire, Alex Sarlin. We're so excited to have you here today. We're doing a mini episode with EdTech because we have an incredible guest today. Shauntel Garvey, the co founder. And managing partner of reach capital is coming to talk to us about the new strategy or kind of re investment in their thesis.
And so we want to give ample time for that conversation. We also have so much going on in our space. We've seen many of you at ed tech week in New York. We're going to see many of you coming up at events in the Bay area. So it is, uh, exciting and dynamic time. Before we dive into the news, though, Alex, what's going on with P.
O. D.?
[00:02:29] Alex Sarlin: Yeah, we have a terrific episode this week. It's with Brian Shaw, the CEO of Discovery Education, an absolute giant in the field that has both made a lot of really strategic acquisitions and gone out and really just Gone everywhere. They're global. They have an incredible number of students and teachers, and they're thinking very carefully about technology and AI.
So really cool episode, definitely recommend that one.
[00:02:53] Ben Kornell: So we're going to start with a little bit of a reflection on New York EdTech Week, and then we'll kind of do around the world in headlines. New York EdTech Week was a blast. Check out our EdTech Insiders newsletter article on it. I'm curious, Alex, what are some of the conversations and themes that stood out to you from this year's New York Ed Tech Week?
[00:03:13] Alex Sarlin: Yeah, so, I mean, first off, I would say that it's becoming increasingly clear that Ed Tech Week, it used to be called New York Ed Tech Week, now they're just going with Ed Tech Week, is really, um, Becoming a counterpoint, a sort of East Coast balancing equivalent to some of the bigger West Coast ed tech conferences, if not sort of the big counterpoint, it really felt like it was a who's who of ed tech and a lot of people were there and not only that, compared to past years, they did something that was much, I think, strategically really smart.
They consolidated all of the sessions and all of the talks and all of the events really into one place. Building, which is a beautiful building on 14th Street in past years, they've sort of spread it all around the city for multiple days that made it a lot easier to navigate. And I think it made a lot richer hallway conversations than we've had in past years, because you don't have people sort of zipping from place to place around New York.
So I had a bunch of interesting hallway conversations. I mean, One thing that's coming up a lot right now is people are sort of saying, has AI, you know, really changed anything yet? You know, where are we in the hype cycle? It's obviously something investors are still excited about. Is it actually getting through to schools?
Is it actually making a difference for students? That I had a number of different conversations with a number of different people about exactly that. Some are. Very pro. Some are starting to really lose faith and they're starting to think of it more as a trend than a actual transformation. That was the theme for me across the board.
How about you, Ben?
[00:04:37] Ben Kornell: Yeah, I think your point around it being consolidated into one spot, it was both an advantage and a challenge because every single room was packed. You never know that we're going through a severe funding crisis from both sides. Venture capital side, as well as the kind of customer retrenchment we're seeing in the space by the energy and enthusiasm in the space, there was so much energy, the panel that I led was around kind of lessons learned from by juice to you and also paper.
And it was a really great conversation in part, because we were grappling with the kind of normal challenges of startup life. Then talking a little bit about what the zero interest rate and COVID environment did, and then also talking about the fit of venture capital versus the like long term nature of ed tech.
And all of those kind of came together in one session. And what I really heard was, you know, we had companies that were at a kind of inflection point. During the zero interest rates or period where they really decided we're going to go for it based on not just business dynamics, but mission dynamics.
And the consequences were that they took on either way too much debt or they kind of grew over their skis and the resulting kind of. Pullback has been so dramatic that pullback both in interest rates going dramatically up in a way that's historically unprecedented. And then also the kind of opening and then dramatic closing of funding is also unprecedented.
And so you almost felt like there were the protagonists of the story and some of the kind of reflections on their own relationships and decisions, but also these external shockwaves. That took some of our best and brightest opportunities and really crush them under that weight. I'd say the second thing that I'm hearing is that we're still a little bit in this state of paralysis.
It doesn't feel like the dust has settled from all of the change. I don't know what your situation is with your house, because. There's the people who bought their house before the kind of COVID bubble. Then there's the people who bought their house in the COVID bubble, but with a very low interest rate.
And then there's the people who are buying their house now post COVID with high interest rates and high values. What you end up seeing is an overall slowdown in that the companies that financed or got, took on private equity money or had an exit. During COVID in that peak, their valuations were just so high that it's very hard for their investor base to eat a loss on a sale now or on a new financing now.
And yet the new capital doesn't want to come in at those old rates. So you have a company like Discovery, which sold at the peak. How are they going to grow back into their valuation? Whereas you have companies like Edmentum, which before peak had refinanced, rode the peak, but have come back off of that high, but are still in the money.
There's all these things that, you know, the TLDR of this is as an ed tech aficionado, you may look at a company and say that company is in great shape. Why are they not? Able to exit or raise capital or so on. And it actually has to do with all these back end financial things that really are a coincidence of timing and valuation.
And that, you know, all the M and a people that I met there, they're all just seeing total deals going down because people don't want to transact. Cause there's a mismatch. Of expectations from the sellers and the people holding the equity and the reality of today's market So we are in the middle of a correction.
Then the third thing I would just say is You know, the startup ecosystem is on fire in part because seed and a, the barrier to launching a product has just never been lower. Yeah. And so you're actually seeing people with like from idea to launch in like two months, three months, they're going from a concept to like having partners.
And so it makes me wonder, are we actually going to see micro companies be a real thing here? And when you see the folks that are developing really, really unique and like powerful, they may be rappers around AI, but they're really tuned to specific use cases. Those companies may not be the billion dollar company, but there's like a 10 million company there.
And you can see that the founder totally understands that path. And I think that that's going to be the really interesting data point to watch coming forward. So back to what we were talking about, big picture, we have the rise and fall of our like mega companies. Then we've got in the middle, a bunch of private equity mismatch in terms of valuation for our growth stage.
And for our early stage. Boy, it is just like the ability to pump out a startup has never been easier. That's my overall impression.
[00:09:55] Alex Sarlin: I think that's a really good read. And I mean, I felt that micro company energy there all over the place. I mean, on the panels was mostly people who have been in the space for a while, but on the floor and in the audiences, almost everybody, you know, you talked to, there were so many of these early stage entrepreneurs.
just done something like you said, very quick idea to execution. And not only that, sometimes to traction, these people had tens of thousands of teachers, even though the product is a year or less old, it's really pretty. Incredible. Three
[00:10:27] Ben Kornell: people doing 500 K in revenue and saying. I think we've got a path to get to a million with just the three of us, and this could be a really great life.
You know, they're not saying lifestyle business, but they're basically saying we don't need. To rely on venture capital to grow
[00:10:45] Alex Sarlin: agree and what's interesting about that model too Is that they're trying to be hyper responsive to their end users Which is something we actually haven't always seen be true in ed tech because especially with venture capital infused Firms, they want to be, everybody wants to be doing what the end users need, but sometimes there's different kinds of pressures.
There's pressures from boards, there's pressures to monetize, there's pressures to sort of grow. And I feel like a lot of these AI based micro companies in ed tech, if they don't. Want to raise tons of money. And if they're not, which a lot of them know they can't or aren't, they're getting SBIR loans, they're getting different kinds of funding if they're getting funding at all, they just are constantly talking to customers.
And when people ask for things, they say, we can build that really quickly because it's an AI feature. It's some version of a wrapper or a customization or a variant on what we're already doing. That's also really intriguing. And for the most part, that's in the teacher space right now, right? They're building for teachers, getting feedback from teachers and educators or
[00:11:40] Ben Kornell: college students or workforce.
I mean, adult users seem to be the predominant use case that's viable for micro companies right now.
[00:11:48] Alex Sarlin: A hundred percent. And
[00:11:49] Ben Kornell: they can take out a credit card often and pay for it. So you're awesome. Not reliant on old procurement. Processes and then there's the normal ed tech upsell, but it's not pure freemium.
It's like paymium, like low cost pay and then a premium to do like whole site or whole system. You know, we also had this really cool lunch Alex that we put together. And it included nonprofit leaders, founder of Kip, founder of Teach for America, leader of Overdeck Foundation, so on, but also many EdTech startups.
I mean, as we start looking at the philanthropic space, And the kind of capitalistic, you know for profit space. What are you seeing in terms of convergence or divergence?
[00:12:36] Alex Sarlin: Yeah, it's a great question. I mean I have definitely seen over the last six months or so a real reinvigoration of the Relationship between philanthropy and ed tech, right?
I mean, education. Philanthropies often have, you know, give money directly to schools or charter networks or after school programs. It's sort of a lot of different types of organizations that can receive education money. If you look at the list of grantees from the Dell Foundation or Gates Foundation or any of these long, long list, lots of different types of orgs.
Mhm. But it's not often a ton of ed tech. And I think that people have sort of gotten the memo that the philanthropic sector has gotten the memo that venture funding is way down. That people can start companies very quickly and the pressures are a little different. I mean, I think there's a feeling of, okay, if a group, either a nonprofit or for profit group can do something that can meaningfully move the needle in education for a particular audience or in a particular direction, pedagogically.
It is a viable path to change that philanthropic leaders are seeing more and more. I mean, we've seen CZI jump back into the mix in a way that they haven't been in a while. We are seeing Overdeck, we're seeing Gates, we're seeing, you know, a whole lot of different philanthropies. Walden Family Foundation is doing really interesting things, just really saying, okay, this is clearly a pivotal moment.
How do we make sense of it? How do we really make it work in a way that works for schools, that works for educators, that works for colleges? And I think some of the lines that used to be really stark about, sort of, non profits go get grants and for profits go get equity funding. The lines are getting much blurrier.
That's been my experience. Do you see it that way?
[00:14:18] Ben Kornell: I think, you know, the philanthropic space has to grapple with this. reality that scalability is limited in models that don't have a technology component. And so they're channeling that in two different ways. One, they're working with nonprofits to uplevel their technology capability, and that could be building a technology team in the nonprofit, or it could be partnerships and licensing with other edtech products.
And then second, they're also realizing many of these edtech companies That are for profit are actually quite mission aligned and probably a place for investment. The people that I think are most aggressive on this are those in. Structured foundations or philanthropies that are unique in that they can make both film profit and for profit investments or do a contract, but I think the pullback of venture capital has real implications on who's going to fund the gaps where maybe the TAM valuation.
You know, venture type exits aren't going to be there. And where the venture exits still are probably is like educational infrastructure and AI around like core programs that command high value. But as soon as you get outside of those zones. It becomes really fragmented and challenging and hard to see yourself, see your way to a billion dollar valuation company.
And this is where, you know, philanthropy is going to have to decide, are they going to step in or are they not? If they decide only to go with nonprofits, what you end up having is a terminal commitment, which means that the nonprofit basically is reliant on nonprofit foundation funding, whereas many of the ed techs.
Once you kind of get up to a certain scale, it is sustainable and self perpetuating, right? So, you know much more we could talk about on this I think we should do a quick around the world on outside ed tech bubble headlines Specifically with ai? Any last thoughts on New York Ed
[00:16:24] Alex Sarlin: Tech Week? No, I think there was so much going on and I'm still digesting it and sort of making sense of my own notes and some of the notes of other people that have passed on there, so I think there's more to come with that.
I like your point, it didn't feel like a downturn when you're in those rooms. It felt like there's still a lot of excitement, a lot of really smart people, people who really care about kids and learning and just the education space. All still leaning in and saying, how do we make this work? Even if there's been a lot of shifts.
So that was exciting. I just did want to mention, speaking of exits, there was one exit before we go into pure AI. Do you want to just, let's briefly mentioned that, you know, physics wallet in the, in the two weeks since we've last talked, you know, physics wallet had just raised a 210 million round. at a 2.
8 billion valuation. And since then, there's now news that they are already looking at investment banks for a 400 to 500 million IPO next year. So that's the kind of news that we saw a lot of during the pandemic, and we have not seen in quite a while. Just wanted to get your take on that before we go to Pure AI.
[00:17:28] Ben Kornell: I think that Also, the valuation that they're projecting is actually, you know, reasonable, you know, given their growth, what we'll be curious to see is physics wallet has a huge India footprint, high retention, high product market fit, but can they reenact that kind of success? In global markets will really be the determination of whether there's an upside value on the IPO, or whether it will be, you know, essentially a multiple on their current growth and EBITDA.
I will just say we need some IPOs, like our space in some IPOs. It is just healthy for our ecosystem to reprice and revalue things. Whether it's higher or whether it's lower, and also it's the, you know, ability to continue to attract capital due to liquidity events. And I think there's a number of private equity health companies that would be nice if they could IPO rather than just do a private equity to private equity transaction too.
So, you know, kudos to the physics while a team for putting this out there, let's see how they can execute.
[00:18:39] Alex Sarlin: It's also dethroning. I think in many ways by Jews as the standard bearer in India, they are now, you know, very much the biggest, I believe in the country for ed tech. And they do all sorts of different things.
They have a sort of at school type component with live online classes. They do in person classes. They do. Competitive test prep. They do like, they do job readiness. Like it's almost much more of like a 10 centi Chinese model of tech than we see here, where it's like they do 10 things at once. And as they grow, they just pick another thing and then just go into that.
That's not something we've always seen in the U S ed tech, but they've done it and they've done it successfully. And I think they've really, it's exciting to see an IPO like this. And yes, we need more in the U S and Europe.
[00:19:21] Ben Kornell: Well, on the other headlines around the world, I think anyone should check out Claire Zhao's AI in Education email chain.
An article from the New York Times caught my attention where in the state of Nevada, they're using AI to reclassify who is at risk versus who is not. And the AI controversially narrowed that down from a list of approximately 200, 000 students to just 55, 000 students. Concentrating resources for those 55, but also having meaningful budget implications for schools that are serving the other 150, 000.
And, you know, I think we're about to see stories like this perpetuate, which is we have new data and analysis tools that AI and they're coming up with new conclusions. The headline is AI is cutting budgets for kids. But the reality is that these are actually long standing, like, resource allocation dilemmas that schools and systems have been grappling with.
And instead of having these very, you know, unsophisticated tooling, now we can have really specific, targeted tooling. So, if a student is low income in Nevada, they're classified as at risk, And this algorithm takes that one step further and says, well, actually, there are a number of other factors that could help us be more precise about what at risk really means, and we can bundle more targeted interventions towards the at risk.
I think this is the story here is AI going to be this political touchstone that invites pushback, even though it's actually human processes here and human Like decisions that are at play, or are we going to actually expose many of our antiquated ways of resource allocation and actually have the hard conversations about what does it mean to have deep intervention?
What does it mean to be, you know, assigning staffing and resources based on need, this is kind of a ground zero. I think for a much, much bigger question where resources are scarce. And AI can help us better understand how to allocate those resources, or at least ask the right question. But will the system out and out reject that in a bid to kind of keep resources locked as they are, you know, how will we navigate this as a society?
So I think it's a fascinating article, probably misleading in terms of how they put the emphasis on AI versus on the resource allocation. But something I think that will be coming in the months and years ahead.
[00:22:07] Alex Sarlin: I really agree. I think this is a microcosm of something we're going to see, not only in education, but in many industries, in many parts of society over the next few years, you know, you can argue this, but I would say AI is probably better at taking big data and synthesizing and drawing conclusions than any existing human being.
individual, maybe even human committee at this point. And given that, it's going to draw different conclusions than a lot of people have drawn in the past, and it's going to recommend different things. And there's going to be a lot of debate about all sorts of decisions, from funding decisions, to medical decisions, to insurance decisions, to Safety decisions, you know, AI will recommend things and predict things that people say, well, that flies in the face of what we know to be, or what we think we know to be true, what we've always done, and then people are going to have to have a real come to Jesus moment and say, okay, but maybe what we've always done isn't exactly the right way, or, you know, be careful and say, well, let's look at this.
Thoughtfully and not just blindly followed the AI because maybe they're missing something that we know to be true. So there's going to be this just push and pull on this a lot. And one other thing I would call out that also felt like a microcosm of the future of AI in education. In Massachusetts this week, there was actually a lawsuit where a student had an essay basically to admit him to the National Honor Society.
And the essay was generated at least in part using AI. The school through I'm sure their own AI policy or integrity policy flagged it, you know, basically didn't let him in and even sort of punished him for it. And the parents of this student are saying, wait a second, that doesn't seem fair. It doesn't seem, you know, equitable.
It's not, it's not evenly applied and you know, why should this be true? So this, this is going to be another microcosm. I think we're going to see in education coming up. A lot, especially in education in this case, because schools are struggling with their AI policies. They're trying to figure out what the integrity policy is.
They're trying to figure out when AI is usable or not usable in what situation for what use case and in what, you know, in what way can AI be used. But I don't think. Parents, I mean, we've had helicopter parenting, we've had parents sort of complaining about grades for a long time now, and that's been exacerbated by the visibility and transparency that they have through LMSs, but I think you're going to start seeing the pushback on the schools.
Policing of AI coming from families. And frankly, I think that's a good thing because I think schools policing of AI is in many ways can be very reactive. It can be very conservative. It doesn't always sort of really acknowledge the complexities of what's going on there. And rather than asking. Educators to change assignments or, you know, thinking about different ways to assess, they're letting, for the most part, things go as usual and just students have this supercharged power.
So that's an interesting one as well. So with that, let's move to our guest segment. We're talking to the amazing Shauntel Garvey, co founder and managing partner of Reach Capital.
[00:25:12] Ben Kornell: Hello, everybody. We have a super special guest. Shauntel Garvey, founder and managing partner of Reach Capital. It's so amazing to have you on the podcast, but also just Alex and I've been following the journey from New School Ventures days to Reach getting started to now an incredible portfolio of companies and investments.
And we're so glad to have you on the pod.
[00:25:40] Shauntel Garvey: Thanks for having me.
[00:25:41] Ben Kornell: So we're going to dive in first with the latest news. Breach Capital announced a renewed thesis. So it's really not a pivot. It's really a clarification or a doubling down on some of the things that you've been doing. But it's expansive. It's moving beyond just the term edtech.
To learning, to health, to work. Can you tell us what inspired REACH to renew its thesis and how does it align with evolving trends in ed tech?
[00:26:09] Shauntel Garvey: Thank you. And I appreciate that question because it does seem like breaking news, but again, it is not a pivot. And so as we began to reflect on our current branding and positioning, we realized it didn't fully articulate our mission and what we've already been investing in for the past few funds.
At our core, we care deeply about enabling everyone to live their best lives. And so with our renewed thesis, we hope to attract and invest in more founders who elevate human potential and ignite purpose across learning, health, and work. And you'll notice there is no mention of a tech, and that is intentional.
We believe the EdTech label has become both too narrow in some regards, so just selling tools to K 12 schools, for example, and also too vague in other regards. We think learning tech better captures this broad range of software solutions that help people of all ages learn. And as you mentioned, our thesis is also aligned with the unbundling of education.
You know, today, learning permeates so many aspects of our everyday lives. It is happening both inside and outside of traditional classroom walls and can be both formal and informal. And I do want to set the record straight, what has not changed is our commitment to startups focused on high quality learning experiences in K 12.
That is our roots, and that is definitely where we have deep expertise, and so I don't want our K 12 founders to think that we're abandoning them and we're no longer investing in that space, and that is not true. As you said, it's a renewed thesis to just show the expansive nature of the work that we're doing.
[00:27:52] Alex Sarlin: And as you mentioned, Reach has made many investments in the past in workforce development or adult learning companies. So it's not, I'm sure it is a change internally, but it is something you have been doing for quite a while. So I guess companies like Work while and 20 and, you know, all sorts of people who are really focused on the adult space springboard.
Can you talk a little bit about why now is sort of a great time to expand that concept of ed tech to learning tech and really sort of taking the education name out of it. It makes a lot of sense. Why this year, do you feel like it's such an important thing to declare to the world?
[00:28:30] Shauntel Garvey: So this year, we are really thinking about how all those things are interconnected, how our health influences the work that we do, how our learning influences our work.
They're all super interconnected. And the reason we want to do it this year is because we really think that people have moved away from just meaning and purpose. Everything going on in the world with the, you know, stratification, political stratification, with just more silos, we think it's really important, again, to really think about why we do the work that we do.
And we want to come out and say, there is a broader purpose for the work we do. We want to have impact, and we can have impact by making sure that people are having these meaningful, purpose driven lives.
[00:29:14] Ben Kornell: Purpose driven lives. I totally hear that and definitely looking backwards at your portfolio. A lot of this makes sense in terms of the audiences though.
There's like the startup founder ecosystem audience. There's also the LP ecosystem audience. And in the past. The way investors in funds, limited partners, LPs would often think about ed tech or learning tech or whatever they would say, you know, focus on what, you know, most, and I will diversify. I will invest in another health tech company and I will do a FinTech company.
And so this idea of slicing things into pretty narrow verticals. Has been a long strategy in the investment landscape and coming out of Zerp and coming out of a pretty turbulent time for EdTech, but also with AI, which naturally knows no bounds across these different things. How are LPs responding to this reframing and how specifically does health and workforce kind of fit into this expanded view from a LPs perspective?
Our
[00:30:18] Shauntel Garvey: LPs are responding very favorably. Again, they would love for us to expand our footprint, expand our impact, and again, be able to have a diversified portfolio, which can then translate into better returns and better financial outcomes. And so again, how does health fit in? How does work fit in? So we'll go through that.
So research has shown that education obviously is a social determinant of health. You know, according to the CDC, adults with a college degree live, on average, a decade longer than those without a high school diploma. We also know that health is foundational to both learning and thriving. Behavioral health issues can significantly impact a student's ability to learn and develop, especially if these go undiagnosed or untreated.
So we invested in a company called Coral Care that helps parents access high quality pediatric therapy specialists, and also a company called Cartwheel, which helps schools offer behavioral health services at scale. But even, you know, prior to these recent investments, we've been investing in health care training solutions.
We have an investment in Sketchy, which is a learning platform for medical students, and then Stepful, which is an online training program for allied health careers. Work, as you know, where learning is actually applied. And what we've seen recently is as a pace of innovation accelerates, people are going to have to be lifelong learners.
They're going to have to continually upskill and reinvent themselves. And as I was talking about meaning, we know that the average person will spend a third of their life at work. We want to make sure again, people can find meaning purpose in their jobs. And oftentimes finding that meaning and purpose is tied to opportunities to learn and grow.
So again, it goes back to always learning, always growing both as students and both as adults.
[00:32:01] Alex Sarlin: Yeah, it's a terrific point. You know, two, Sort of familiar complaints in the past about the ed tech sector. I'm sure both of which you've heard hundreds of times or said hundreds of times to others are that lifetime value can be really tricky because often people are sort of using education as a means to an end or as a transformation.
And it's for a limited period. And then they sort of move on, even if they absolutely love your product, they've moved on. And the other is that schools and school districts can be really difficult customers. They're just really. bureaucratic, there's a lot going on inside the bureaucracy and the sort of structure there.
I'm curious if you are seeing this expansion to thinking about workforce and health as a way to sort of get out of some of those traps and think about learning tech being a much broader category.
[00:32:50] Shauntel Garvey: Yeah, well, I wouldn't say they're traps. They're definitely hard spaces to navigate. And yes, by broadening this thesis, by broadening the different areas that we can go into.
We feel like we can have impact through different wedges and through different openings and opportunities. And so, yes, we want to have great solutions that are within the confines of traditional educational institutions, like schools, like how you're at institutions, but again, like you said, learning is happening all around us, outside of those institutions.
And so there's an opportunity to also back solutions and products that are That learning that's happening in the workforce or, you know, on our own as we're continuing to upskill and again, our LPs love that, too. Again, it opens up a broader range of business models that we can invest in. And so, again, I think K 12 has traditionally been seen as selling directly to schools, which, as you mentioned, is difficult and requires very innovative founders.
But, you know, in these other areas, we're selling through, for example, health insurance payers. We're selling through. Enterprise we're selling directly to parents for services. So a lot of different buyers and it opens up new business models.
[00:34:03] Ben Kornell: Yeah, I'm especially interested in your thoughts on the impact of AI on learning and work, you know, and you talked a little bit about some emerging areas that you're excited about, but specifically with AI, how is AI transforming the way learners engage with content and how educators approach teaching and that could be both in the school and education context or just in a broader learning context.
What are you seeing from the AI front? Yeah,
[00:34:30] Shauntel Garvey: I'll touch on a couple things in a couple different buckets. So, in the learning front, we know that the AI has ushered in a wave of new study tools. You know, I think there's an opportunity for study tools that are deeply integrated with the school's curriculum to provide a learning with a learner with hyper personalized learning experience that's really tied to their specific contents.
But I'm most excited about tools that feel more like a companion, something that's providing you inspiration, motivation, that's just going beyond that academic support. Within health, we are looking at solutions that are really addressing this massive health care labor shortage. And so obviously you have the health care training programs to increase health care worker supply, but then there's also tools for clinicians because we also want to keep them there.
We want to prevent burnout and we really want to increase retention. And so there's AI tools right now that are really taking on a lot of the health care administrative tasks. Think about scheduling, billing, medical transcription, and with AI taking on these tasks, then clinicians can really focus on patient care.
So really excited to find ways to allow clinicians to find more joy, again, more meaning in the work, and that ultimately will mean that they will stay in the field over the long term. And then in work, we recently released a report called Reimagine Work. And we discussed this need for what we call a skills engine.
And right now, the skills needed for both workers and companies to be successful is just rapidly evolving. And so we're looking for tools that can identify skills that people have, and then also understand the skills that workforce needs, and then you can use AI to really close that gap. So those are just three kind of emerging trends we're seeing, how AI is being used across, again, learning.
Health and work.
[00:36:17] Alex Sarlin: As we talk about these different sort of aspects of the learning spectrum and the AI spectrum, it feels like there's really interesting opportunity to sort of combine some of the things that you're saying there in terms of identifying skill gaps. Helping create personalized curriculums, helping, you know, AI that can motivate students.
Do you see a world in which some of the silos between traditional education, whether it's higher ed or K 12 and sort of workforce skills are going to start falling down because of AI? There'll be a little bit more of a conversation happening between the skill, as you say, the very fast evolving skills of the workforce and the relatively slow moving curricula, traditional curricula we see in traditional institutions.
[00:37:00] Shauntel Garvey: Yes, that's what I'm actually hoping for. So we've had a thesis for a while now around work integrated learning, right? So just as you were saying, how do we actually combine industry with academia? How do we make those two worlds come closer together? And again, this is now more important ever because things are changing so fast.
What I'm learning in school today is now irrelevant in the next six months. And so again, how do we make sure that, you know, again, the industry is talking to. The institutions. And I think AI can really enable that. And I really thought about this too, with, with kind of the entry level worker, right, the worker coming right out of university, who's going into jobs that are right now being automated, think about investment bankers or consultants.
A lot of those jobs are being automated. And so we have to really rethink. What is the new entry level role and what skills do entry level workers need to have to be successful? And a lot of it is going to rely on AI literacy, AI proficiency, And, you know, being able to reinvent kind of those new roles in this in this evolving world.
So I do hope that I will kind of break down some of the silos that even starting back toward high school. Right? And so even AI tools to kind of see, what is my career trajectory? What are the different paths that I can take? We talked a lot about it, like a career companion that starts with you in high school and is telling you, hey, you're on this journey.
Here's the different courses that you need to take. Here's the different people that you need to meet. These are different experiences that will get you to your ultimate end goal.
[00:38:36] Ben Kornell: Yeah, it's so fascinating because as we talked about the fund, you know, not being siloed here. It's AI naturally resists silos.
And this idea that you would have a K 12 app and a higher ed app and a workforce app. And, you know, as you talk about the companion, you can see that companion. Evolving with the individual over time, and you can see it being for learning, but also for health, mental health, especially, but, you know, managing personal health.
And you can also see it helping on the workforce side. So, like, really interesting to see almost how your fund evolution is tracking the tech evolution. I know we didn't prep on this part, but next year will be a decade. For reach and you know, what an incredible decade it's been. What, Shauntel, are you proudest of?
And as you look at the decade going forward, what are you most excited about?
[00:39:38] Shauntel Garvey: Most proud of the founders we've backed and the companies that they've created. I had no idea starting this fund that we would be, you know, touching the lives of millions of learners, educators, parents. workers just had not envisioned that and just so excited that we were able to kind of back and come alongside a lot of the very visionary founders that we work with.
Also very proud of the team that we've built. Most of us have been together since the New Schools Day, so over a decade now, I'm just glad that we can continue to work together and again, continue to, to build the bench for this next generation of reach. What I'm looking forward to, I'm looking forward to investing in these new areas and learning, you know, again, it's going to be new for us, but learning what's exciting in some of these areas, learning alongside different co investors who have more expertise in these different areas.
I'm excited to build some newer relationships. And just think about what Norwich can be, even globally, and the global impact that we're going to have in the next few years. Fabulous. I
[00:40:45] Alex Sarlin: have one more question. I'm so curious about your take on this. You mentioned that really powerful statistic about, you know, people with college degrees at this moment and living 10 years longer.
And there's this, this huge suite. This is like the deaths of despair research. You know, there's so many, um, Downsides to dropping out right now, health downside, economic downsides. I'm curious your take and the sort of reach take on how to help students navigate those transitions between school and college or college and workforce or school and workforce.
You know, part of the benefit of knocking down silos is and having things like a consistent companion or a motivational coach with you could be, you know, When you leave even a very supportive high school, you have often students have nobody to support them through the next phase. I would love to hear your take on that, because it feels like such a key part of this puzzle.
[00:41:35] Shauntel Garvey: Yeah, I think another part of this puzzle, it's just the people that we have in our lives. And so we've done a lot of work around social capital. And who are the people that are mentoring us through those different transitions? Who are the people that are saying, Hey, Shauntel, you know, AI is automating consulting.
You may want to look at a different career path for you. And so I think it's really important that we also just establish stronger relationships. And that starts with, you know, the relationships that you have with your teachers, with the parents, but then, you know, going outside of that, what is that network?
What does that village? That is surrounding people again, to make these transitions, to build social capital, and to make sure that people are successful in their next phase. And so we think a lot about what does that look like? How do we foster those relationships and broaden those relationships and those networks?
[00:42:26] Ben Kornell: That's great. What an incredible interview, Shauntel, to be able to like zoom in and then also zoom out and just think about these themes and also just around. What digital thriving looks like going forward in the future. Congratulations on all of the success. You know, I would just say, I know you're, you kind of led with the companies that you backed and you've by far been super successful, but everyone, Alex and I know from the reach team, they're just special, great human beings.
So congratulations. Most of all, just building such a awesome, talented. And inspiring group of people. And we're excited to cheer you on with this renewed thesis. And as you continue to impact the lives of millions and millions of people around the world. Thank you. Tell us the best website for people to check out.
Reachcapital. com. It's easy. It's easy. Reachcapital. com. Thank you so much for joining us, Shauntel. And we will be talking to you soon. Thanks for having me. Thanks
[00:43:33] Alex Sarlin: for listening to this episode of ed tech insiders If you like the podcast remember to rate it and share it with others in the ed tech community For those who want even more ed tech insider subscribe to the free ed tech insiders newsletter on substack
