Edtech Insiders
Edtech Insiders
Inside ECMC Group’s $250M Education Impact Fund with Joe Watt and Atin Batra
Joe Watt co-founded ECMC Group’s Education Impact Fund to back bold ideas expanding equity and opportunity in education. Today, he leads the Fund as Managing Director, shaping how patient, mission-driven capital creates lasting change. He’s joined by Atin Batra, a Director at the Fund, who leads investments across the learner journey, bringing a global venture lens and a deep focus on measurable outcomes that improve learner success.
💡 5 Things You’ll Learn in This Episode:
- How ECMC uses patient capital to drive measurable educational outcomes
- The four stages of the learner journey guiding their investments
- Why AI-resilient and AI-enhanced careers matter for the future workforce
- What Workforce Pell means for career-connected learning access
- How to balance vocational goals with critical thinking in higher ed
✨ Episode Highlights:
[00:03:08] Joe on ECMC Group’s mission and fund origins
[00:10:59] Atin on measuring real learner impact
[00:15:33] Investing across the learner journey
[00:25:54] Building AI-resilient and ethical career pathways
[00:32:48] The promise and pitfalls of Workforce Pell
[00:44:15] Balancing vocational goals with critical thinking
[00:57:19] The importance of product velocity in edtech innovation
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[00:00:00] Atin Batra: None of us thinks that we can replace teachers with AI. We can certainly help them, and that's our focus is how do we find tools that help free up time for those teachers by taking away some of the brought the administrative sort of tasks from their plate so that they can spend more time focused on instruction where they're actually truly adding transformative value that AI cannot provide.
So it's really focusing on that and and how do we enable that? And that's just one profession that is teaching. But you can think about that in Allied Health with step four, right? How do we help? Enter those AI resilient careers that are step full. I mean, I don't imagine that we're going to see a robot take care of patients in the hospital, at least not in the next five years, maybe in the next 50.
[00:00:49] 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 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.
On EdTech Insiders today we have two amazing guests. One is an old friend of the pod and the other is an absolute new to the pod and very good veteran ed tech investor. We have Joe Watt. He's the managing director of ECMC Group's Education Impact Fund, where he co-led the fund's creation to invest patient impact aligned capital in ventures, tackling educational inequities, and expanding opportunity for underserved learners with a background spanning corporate strategy.
M and a private equity and investments in the tech and education sectors. Joe brings both financial and mission-driven perspectives to his work. Yield degrees from both the University of Illinois and from Duke University's Fuqua School of Business and lives outside Durham, North Carolina with his family.
We also have Atin Batra, who was the very first guest on this EdTech Insiders podcast way back in 2021. We're so happy to see him again. He is a director at ECMC Group's Education Impact Fund, where he leads investments in education in the future of work. Most recently, he founded and ran 27V, a pre-seed fund that backed 28
companies globally building on more than a decade of experience in venture capital, corporate acceleration, and startup building. His passion for education traces back to a nonprofit. He led back home in India to teach public speaking to high school students. Atin lives in Boston with his wife and young son, and is an ultra marathon trail runner who has completed multiple a hundred kilometer races.
Wow. Joe Watt, Atin Batra, welcome to Ed Tech Insiders.
[00:03:05] Joe Watt: Excited to be here, Alex.
[00:03:06] Atin Batra: Good to be back. Thank you.
[00:03:08] Alex Sarlin: So let's talk a little bit about the Education Impact Fund. So Joe, you co-led the creation of the Education Impact Fund at the ECMC group. Just let's zoom out a little bit there. Tell us about ECMC group and what the Education Impact Fund is founded for and how it's been evolving.
[00:03:25] Joe Watt: So ECMC group was founded over 30 years ago as a partner for the Department of Education. Um, started off as a guarantor agency and over the years has. Grown quite successfully in that role as a partner for, for the department in, uh, supporting the federal student loan program. But over the years, it's also expanded in pursuit of its mission to improve access and outcomes for underserved students in post-secondary education.
About 15 years ago, we launched. What has become one of the largest philanthropies focused on US post-secondary education. And about six years ago I had the opportunity to, uh, with a couple of their folks at the organization, help get what we call our education impact fund stood up and so. You know, first talk a little bit about why we started the Impact Fund.
Ultimately, impact investing allows us to compliment our substantial grant making work and all the impact that it is achieving with an additional tool that unlocks other mission aligned opportunities that you can't reach with traditional grant making. Alex, you talked about on this podcast that a growing.
Number of problems in the education space are being addressed by education technology companies and for-profit companies in the education space that have great impact, but don't. And can't scale their businesses using grant capital and so and shouldn't have to because they, they can deliver market rate returns.
And so through our impact investment fund, we can, we can reach those opportunities. It's also a way to compliment what we're learning on the grant making side. So much of what grant making is about is investing in and catalyzing new models and approach and research around what's, what's working. And so ultimately our, our impact investing.
Can, can compliment that by, by being a handshake and taking that work forward and supporting companies that are scaling those learnings. And it also just allows us to, to grow our impact deploying capital out of our, out of our corpus, out of our, our organization's, uh, capital base in different ways. And so it's certainly evolved over time.
The Impact fund started even predating what we call our education impact fund. It was very, we had some opportunistic. Um, investments in, in different fund managers and, and directly into some companies, but it wasn't necessarily a programmatic approach. And so, like I said, about six years ago, we, we established the strategy that we're now executing on to become a very programmatic fund structure that is deploying capital directly into funds.
Directly into companies, all with the idea of driving impact aligned with our mission. And so where we are today is a a $250 million portfolio we're, it's also an evergreen fund where all the capital that we deploy through the fund that's returned. It is ultimately reinvested in the fund to, uh, perpetuate that impact and continue to grow it.
But today we're, we're about a little over halfway deployed. We've got over 30 direct investments. We work with nine different managers and, and I think ultimately the way we've structured it is really to address what we viewed as, as sort of. Both gaps, but also opportunities to, to bring a new type of capital to the market in the education space.
You know, ultimately it's a very patient and flexible vehicle. We're able to think much more in terms of multiple on invested capital versus trying to drive. Internal rate of return, IRRs in a way that maybe some, some more traditional funds have to, given the way they're structured and how they have to return capital to their investors.
You know, we're able to invest across stages. We do everything from seed all the way to call it lower middle market growth equity, um, into later stage companies. And, and that allows us to really play the market we're in versus just the, the, the sort of, the type of. Stage that you otherwise would have to in a, in a stage specific fund.
And it we're also able to invest in different ways. We can lead rounds, we can follow and fill out syndicates. We're happy to be really active board members and, and, and, and play in that way or, um, be more of an observer or, or, or sort of, uh, support from the sidelines where we can like, so we're, we're able to do things in a very flexible way that allows us to support.
Things that are aligned with our, our mission and our our return objectives. But, um, that don't have to necessarily look exactly like the same thing every time. You know, the other thing that I would say that that we're approaching very intentionally is around our approach to impact. We are very. Focused on both rigorous outcomes measurement, but measurement that is focused on the outcomes that matter to each company.
So not being prescriptive about the, the outcomes that a company needs to focus on, but thinking about what are the metrics that matter to that, to that company, and how do we. Ultimately focus on better reporting. Those identifying, making sure that the, the right metrics are identified, reporting in those with, with rigor and credibility and at the right time, and embedding them in that company's, in that company's go to market in their, in their conversations with their existing customers so they can grow those relationships in conversations with new customers so they can bring on new.
New relationships in their product development, so their product is getting better and, and delivering on those outcomes in an efficacious way. That's what we're really focused on, and we have dedicated resources on our team, what we call our impact acceleration team, to, to help companies bring that, that thesis to bear.
Um, not necessarily just sort of sitting at the board level and, and sort of asking about impact outcomes, but really showing up in a very hands-on proactive way. Highly sort of consultative to, to help the companies early on support investment in those impact outcomes and the, the systems and processes and, and and approach to, to, to track and, and leverage that data to, to drive growth of those companies.
'cause that's the ultimate goal. It's not impact measurement for impact measurement's sake, but ultimately growing those businesses and scaling the impact. And then of course, you know, we, we, we do everything we can to bring not only our, our sectoral and, and mission focus to bear, but, but also our ECMC group platform.
You know, I talked about the foundation earlier. We have our large guarantor operation with some of some really impactful work that it does working with, directly with institutions and building capacity and, and, and supporting student outcomes within that, um, part of the enterprise. So we, we look to bring.
All of those parts of the organization to bear, to support our portfolio companies and, and, and the funds that we're investing in to drive great outcomes from an impact perspective, as well as to drive the, the financial returns that we're looking for, because we are ultimately looking for both with the, the investments that we're making.
So we're really excited about, about what we built today. We know we're still very early, but, and, and evolving and learning along the way, but we're looking forward to, to continue to grow the work in the future as well.
[00:10:59] Alex Sarlin: Yeah. And so Aton, last time we talked, you were also talking a lot about impact as your core investment thesis.
How could you really make sure you are looking for founders who are thinking really thoughtfully about impact for learners of different ages? Tell us about the impact aspect of the education impact fund. What is your core mission and what kind of metrics are you using to make sure that you're really moving in the right direction, and how does it align with your own personal background in venture?
[00:11:26] Atin Batra: Yeah, maybe I'll answer the The second one first is just my journey through, and you already called out. I was lucky enough to be on the first episode of your podcast, and I did talk about how impact is driving my investing philosophy. As I sort of stayed in that space and learned more, worked with more founders and met more people, I think my sort of thinking evolved from.
Just generic impacts actually becoming very focused on outcomes, right? And tangible, measurable outcomes. And as I kept learning more about that, EIF kept coming up as a team that was really thinking about it in a thematic, in a systematic manner. And that's how I. Was sort of able to transition to this team, and again, Joe and the team sort of took a bet on me and I'm glad and happy and thankful for that.
But to your first question, how we are thinking about impact, and this is what I mean when I say like the team's built a system and a thematic, thoughtful approach to it. We've been thinking a lot about our direct investment thesis across the learner journey, and so there are four steps in that journey as we've defined it.
The first one's unlocking equitable pathways. And there are metrics that we've sort of aligned each of those steps. So the first one's unlocking equitable pathways. And so we're thinking about access to programs. We're thinking about affordability, we're thinking about matriculation rates. I mean, those are the kind of.
Measurable outcomes that we're looking at when we're looking at solutions that are focused on unlocking equitable pathways. Then the second step in that journey is revolutionizing skill development, and so then we're thinking about credentials of value. We're thinking about measurable skill gains.
We're thinking about program ROI, which especially in today's environment, has become really, really crucial and critical when people are selecting programs. That they want to devote time and resources to. The third stop on that journey is once you're in the program, how do you actually remove all of your barriers to completion?
Making sure that you are actually able to leverage what you've just spent time and money on, and actually leverage that into something that will be sustainable for the long run in your life. And so we're thinking there about graduation rates, just persistence rates. What is time to completion? Right. And then the last stop on that journey is fueling career success.
So now that you've completed your credential, how does that translate into actual success on the career front? And so then we're thinking about placement rates, we're thinking about promotion rates, we're thinking about wage uplift. How do those metrics play into actually providing success? In the workforce for these underrepresented learners.
The way that we've defined that direct investment strategy is like across those four stops on the learner journey, and that's how we're deploying capital in companies that are sort of delivering those measurable outcomes at each of those stops.
[00:14:09] Alex Sarlin: Yeah, and, and as we know, there are so many off-ramps in that journey to getting those meaningful credentials, to choosing the credentials, to getting through the educational journey, then turning that into a meaningful career, and then as you say, staying in the career, getting promoted, really making it into a meaningful life.
It's a journey that so many of us take for granted, but it's so difficult for so many people and the education system just isn't always on their side. Let's talk about some of the companies you've invested.
[00:14:36] Atin Batra: I'd love to talk about the company. I was just laughing about this with someone the other day. I think we take those things for granted now like you and me at our stage in the career because it was 15 years removed for us, right?
Like Exactly. I graduated 15, 17 years ago and it's not as fresh in my mind anymore. And we're further along in our career. We, as decision makers now have, it is incumbent on us. To put ourselves in the shoes of those people that are actually coming out of the programs today in this time and age with all of the headwinds, all of the systematic changes that are happening with artificial intelligence.
I mean, imagine if you were sort of in that moment when all of these changes are happening and it's changing everything you know, about learning about education, about programs, and about career. So I don't know. I mean. I feel like we have to develop that empathy and I feel like we're losing it because maybe we're just 15, 17, 20 years removed from that time in life, and that's a shame.
So anyways, I think to your question.
[00:15:33] Alex Sarlin: I agree. I totally agree.
[00:15:34] Atin Batra: Yeah. So thinking about companies that we've invested in along that learner journey, start with the unlocking equitable pathways. So this is a company that we invested in just this year. It's called U Science. Which is actually a college and career readiness tool for high school students.
It's rooted in decades of research and it's helping high school students take an aptitude test that then gives them the options that are open to them, that are best fit for them. And then how do you actually plan both your college. So your academic path, but then also your career path leading into that and that all of that is linked to each other.
And so thinking about some of the outcomes that the company's delivered, they've had more than 4 million students that have taken aptitude tests. More than 8 million certifications, industry recognized certifications have been earned through U Science's platform. Those certifications are actually valuable in the sense that they help these students save on tuition when they get actually into university.
Like they're saving thousands of dollars in tuition because these are credit bearing certifications. I was thinking about it recently, you know, when I was in high school I was applying to film schools. Thankfully I didn't get in and that that helped me avoid about a decade of frustration, but it also helped me avoid a lot of heartburn and I think about U Sign sort of solving that, right?
Like, you know what you're a best fit for. And focus your efforts there. So that's unlocking equitable pathways. The second one is we think about skill development, and I said this earlier, like skill development. We are thinking about outcomes that are focused on program ROI. And so we have a company called Acadian that we invested in that's focused on credit mobility in higher ed.
They've delivered more than 50,000 credits. To their students through the core sharing platform. Their core sharing platform is used by 460 plus universities and colleges, including multiple MSIs, minority serving institutions, HBCUs. But 50,000 plus credits have been earned thanks to aca. And you think about an institution like Morehouse College, which is an MSI, it has a limited class size aca.
Dium has helped more than 40 students just in that university. In the last year or so, 40 students just graduate on time by taking classes that weren't offered by Morehouse, but by other consortium members. And by getting access to those courses, you are able to meet your graduation requirements. And that's like real persistence and completion rates.
That's impact at scale, really. I was actually listening to a few of the episodes on your podcast, and I think there was a podcast with Jean Claude of Digital Promise, where he talks a lot about credentials of value, right? I think it was only a couple of weeks ago, but he's talking about credentials of value and how to actually enhance the R OIF of a program, and I think Acadia's really doing that for higher ed, really nailing it.
So that's pretty promising for us. So that's unlocking equitable pathways, revolutionizing skill development. The next one is removing barriers to completion. This, I promise you, is my favorite story. I always love telling this story about our portfolio, but we have a company called Stelek, which is a next gen degree planning tool for higher ed.
And if you look at just the numbers, I mean they've got 11 million plus degree planning activities that they've facilitated to date That number by itself, it's big, but it doesn't really. Convey what they do. And so the story that I love to tell the anecdote is this past year at Santa Monica Community College, the institution found through the degree audit tool that STEL has built, they found that more than 2000 students at the community college had already earned enough credits to meet their degree requirements, but did not know.
The students did not know that they had actually met the requirements. The univers, the, the institution itself did not know that they had met the requirements. And without selling, they would not have, oh, goodness, graduated. They wouldn't have received their degrees. And you and I and many other folks in the ecosystem, we are constantly debating about the value of a degree and a credential.
And, and that's all fair. Like we should have that conversation. Everybody has opinions, but let me just tell you, they have value today. So imagine 2000 people receiving a degree and a kind of credential today that they otherwise would not have, and I think that is meaningful impact at scale. And yeah, as I said, I love telling that story.
The last stop on that journey is how do you then connect higher education to workforce, or how do you sort of work on learning that is tied to workforce? And so we have a company called Step Full that we invested in late last year. My colleague Steve Des, led that deal transaction for us. But Step Full is an online training and career opportunities platform for Allied health roles.
And so if you think about some of the metrics and the outcomes that they've delivered, they've got an 87% pass rate, which I think is unheard of. In some of the training programs, they've got 75% completion rates, and the stuff that we really care about is that wage uplift. They've been able to demonstrate amazing wage uplift for all of their students as they're going back.
Into their allied health roles and leveling up from like promotion or title standpoint? Right. One, they're getting access to roles that were closed off because they didn't have the credential, but also they're moving up in that ladder and those are delivering wage uplift and wage gains for them.
[00:20:37] Joe Watt: I mean, I think.
A lot of the way we think about the investment thesis too, stems back to like, how do we support things holistically as an organization, right? If you think about what we're doing with our grant making, which is a huge part of our organization's impact. It aligns to certain opportunities and challenges within the education space that aren't addressable by the market.
Right? But with our impact fund, we can compliment that work and reach things that aren't addressed by grant making, right? So we're able to support companies that are increasingly, I mean, you know, you guys talk about this all the time on the pod, right? Like companies and technologies are increasingly.
Serving a bigger and bigger role within schools, colleges, the workforce, and driving learning outcomes. And so by investing across that student journey as a thing just laid out. It allows us to leverage the work of our grant making that ultimately identifies areas for opportunity, catalyzes sort of new approaches, but then leverage market rate capital to drive scale.
Mm-hmm. To drive increased reach. Drive further efficacy and scale of these new and innovative models. So it's a really, the intent is to have a really, really synergistic, complimentary strategy across the organization.
[00:21:59] Alex Sarlin: Yeah, that's a powerful strategy to put all the pieces together so that you can really.
Influence things from different angles, from the grant making angle, from the direct investment angle. And it strikes me that I think the thesis and your actual strategy all come together. They're both very holistic. So, uh, you just mentioned a number of different companies addressing removing obstacles to graduation, like.
Not knowing you already have enough credits or helping people find their pathway with a youth science sort of career exploration. It's like finding the pathway, getting through the education that you need, getting to the credential, transferring and, and getting credits from other universities as needed.
Like what Acadian does, it's sort of like. All pieces of the pipeline that are broken often in the existing system or have problems, and then you can sort of plug them with these really powerful solutions. One other thing that strikes me about your portfolio is you have certain investments about specific types of careers.
You mentioned step full. You also do one about mental health professionals or there, I think you have a couple more that are about particular areas, growth areas, and then there are also ones for particular populations that help particular populations in their education to career pipeline. I'd love to hear you, Joe.
Let me start with you there. Talk about any of the investments that you've made that sort of focus on either particular populations or particular sectors.
[00:23:19] Joe Watt: Well, yeah, and as you noted, right, like I think there's probably a lot of intersectionality between those, right? If you look at, one of our longer dated investments is in a company called Care Academy, where they're working with caregivers and folks that help support healthcare for elderly populations.
And if you look at the makeup of that workforce, it's primarily women. It's often people of color, people that are immigrants, and ultimately our goal as a fund is to support underserved learners. Learners that historically have not been either reached or supported or allowed opportunity within the maybe more traditional post-secondary.
Offerings that exist. And that's not to say those aren't great offerings, but ultimately our goal is to expand the Sure, right and expand opportunity for folks. And so we purposefully, as an organization, as a fund, think of underserved as a very open and evolving definition. It's not a prescriptive or static thing.
That allows us to cross everything we do, but within the context of our impact fund, think very dynamically around impact and so. With that open mind around what that means. We're able to look at each opportunity on its own merits and identify within a company like a step full that it then talked about, which works very specifically on a specific job right category.
Think about the impact of that very differently than another company. Our portfolio is, works with incarcerated learners and folks that have been impacted by the justice system. Very different population, very different outcomes. But still ultimately aligned towards that goal of helping people get access to high quality education that's gonna have a meaningful impact.
[00:25:17] Alex Sarlin: Their lives. Yeah, their lives. So Atin, many of your portfolio companies at ECMC Education Impact Fund focus on helping people move into meaningful careers and get onto career trajectories and remove obstacles, but career trajectories sometimes themselves. Change. Right. We are in a time of a lot of confusion about the future of the workforce, and I'd love to hear you talk about how you think about this in the long term as you're looking at investments.
How do you sort of future proof your investments to make sure that the pathways that your companies are working towards will continue to thrive in the future and the people in them as well?
[00:25:54] Atin Batra: Yeah, we could probably spend an entire day talking about just that question. I'm, I'm trying to think of, that's a big one.
Yeah. The various ways that you attack that. I'll start with the learner. I think, as we've always said, that is the most important population that we serve as an investment organization is. How do we address the underserved learners? How do we, I think as you quite rightly put earlier in the conversation, how do we get them credentials of value and then make sure that those credentials of value lead to meaningful work.
So we think a lot about what are durable skills, especially in this time and age of AI disrupting, you know, a lot of what workforce is asking for, like really thinking about what are AI resilient skills. On the one hand, but then also what are AI enhanced skills or career pathways? And so we've been thinking a lot about both aspects of that.
I think when you think about AI resilient skills, you think a lot about teaching. Like there is a huge, massive teacher shortage in our country. I know some people believe that they can replace teachers with AI. I am not one of those, and I can speak for our team that we are not. Like none of us thinks that we can replace teachers with AI.
We can certainly help them, and that's our focus is how do we find tools that help free up time for those teachers by taking away some of the. Wrote the administrative sort of tasks from their plate so that they can spend more time focused on instruction where they're actually truly adding transformative value that AI cannot provide.
So it's really focusing on that and and how do we enable that? And that's just one profession that is teaching. But you can think about that in Allied Health with step four, right? How do we help? Enter those AI resilient careers that are step full. I mean, I don't imagine that we're going to see a robot take care of patients in the hospital, at least not in the next five years.
Maybe in the next 50 by the time I need one for sure, but by the time my parents need one, hopefully not. I think we still need human beings to do that empathetic role of caregiving, and that's why some of the companies that we've invested in. Sort of are in those space. That's the first part of my answer to your question.
I think we think a lot about AI resilient careers, AI resilient skills, and how do we find innovative solutions that are pushing that space forward. The second way that we think about it, as I mentioned earlier, is what is AI enabled? How is that being pushed forward? And so as an example, we've invested in a company called Springboard that provides training for corporate customers, for employers who then provide that as benefit to their employees.
As you think about, and I think this was part of your question, was what is changing in the workforce from a learning and development standpoint? A hundred percent, right? Everybody's focused on reskilling, upskilling, making sure that their workforce is better utilized, best fit roles and all of that. But I think what employers are also realizing is.
That their employees, who, if you believe it or not, are one of their largest stakeholders in that ecosystem of customers, shareholders, and employees. Employees is usually your largest stakeholder. Those employees are now pushing the employers to think about providing learning opportunities that are the phrase that I used earlier, like that are providing tangible learning outcomes.
Don't give us a benefit, an l and D benefit, that if I take, I get a certification, but that doesn't lead me anywhere. And it's almost like that's a placebo. That is just being used to mollify my employees, but give us an opportunity where you give us a learning opportunity. We will invest time, effort, our heart and soul into that.
But that needs to lead to something that is tangible. Whether that's wage gain, whether that's career mobility, whether that is parallel movement into another field that is probably growing faster than where I am today. So it's employees are pushing their employees into thinking about that, and that's what we're trying to figure out is.
What are those skills? What are those learning opportunities that we need to have more of? So Springboard is one where essentially they are providing some of those courses that will help with that kind of movement. We have another company called Chiron Learning, which I also know you've had on your podcast.
I think it was last year maybe, but Roger, who founded Chiron Learning.
[00:29:57] Alex Sarlin: Oh yeah.
[00:29:58] Atin Batra: He is ex Google, so has been in this space a long time. But he thinks a lot about ethical AI and going back to something we were talking about with teachers, like he thinks a lot about how do we provide. Infrastructure that is ethical and valuable to the teacher population so that they can then abstract away the road parts of their job would really focus on the instructional aspects of their job.
So that's, yeah, I mean, if I was to just try and answer this question in a simple way, which frankly is not easy, and I don't think you should ever take it as just that, but no, the simplest way is probably just thinking about AI resilient career skills and then AI enhanced careers pathways, and that's the way that we've been thinking a lot about just all of the changes that are happening in the workforce.
[00:30:37] Alex Sarlin: No, I think that makes a lot of sense and it is a very big question, but I think that was a good way to look at it. What will stay the same and what will change in in age of AI or with other technological or other kinds of changes. We're gonna see some skills and some career trajectories will stay very durable and some aspects of them will stay durable and others will be created out of whole cloth, and we're trying to get our heads around them as a
[00:30:58] Atin Batra: society.
That's why you are the podcast host and I'm the guest because you can simplify and synthesize the information better than I can. I thought that was a great no,
[00:31:06] Alex Sarlin: no. Oh, that's nice to hear. But no,
[00:31:10] Joe Watt: if I could just add to that then's response there. There's two things that I think are exciting that are changing here, particularly related to like workforce training.
One is obviously the capabilities that AI is allowing for scale. Obviously there's some really potential there. The other thing that I think is changing positively that can drive scale is way that training is funded right? There was this push for we've gotta get more short form credentials, we've gotta get more people.
So of stackable pathways that don't look like maybe the traditional path, but the funding didn't necessarily totally change or open up to accommodate that. And you know, what you're seeing with workforce, Pell put a huge amount of potential impact to open up. Non-traditional workforce training to a lot of people that historically have not been able to access it.
Now we've gotta figure it out. It's gotta be truly accessible. And I think there's some, a lot of folks that are doing, you know, I know JFF and a lot of others are doing great work to try to influence that, to make sure that it's done in, in a way that. Can be, those funds can be accessed, you know, work. A lot of apprenticeship dollars have been available, but sometimes the trouble is how do we actually access them at scale?
So I think we gotta get that right, but if we do, it allows for so many more people to take advantage of those, of those new pathways. And then you combine that with the new approach and models that can be powered by. Just new technology that's coming on the, it's just really exciting to, I think, be in front of that
[00:32:48] Alex Sarlin: a hundred percent.
Actually, if you don't mind, I'd love to double click on the workforce Pell Peak, because this is something we have briefly talked about a few times on the podcast, but it's actually a really big deal in the workforce and higher ed sectors in certain ways, and I think it's something we haven't. We haven't dug into enough, so I'd love to actually expand on that a little bit more.
So tell us a little bit about the workforce, Pell changes that have happened recently and how it's gonna open up a whole different suite of opportunities to be accessible by federal funding. And also, when you say the access has to be there, there's always this sort of push and pull whenever anything involves.
Federal dollars, there's a lot of opportunity for abuse or a lot of opportunity for people sort of chasing the buck. So there's has to be this balance of making it accessible and usable in a wide range of different opportunities, but also not usable and not, you know, not allow bad actors into the space the way we've seen with some for-profit education in the past.
Can you just expand on that because I think both of you think about this a lot. I'd love, let me start with you, Joe, and then I'd love to hear you Atin talk about the Workforce Bell piece as well, just because I think that's actually a. Big change that I'm not sure a lot of our audience has really gotten their head around.
I'm not sure any of us have.
[00:33:56] Joe Watt: I think that's part of the challenge, right? It's still relatively vague as how it's going to roll out. It's also still sort of long in the future, right? Like the dollars won't be available for at least a year. I mean, we've gotta go through a negotiated rulemaking process.
There's gonna be some changes, but I mean, at the crux of it, right? I think what the change is. Is that historically Pell dollars, which been have been a huge lever for access for folks that come from lower resource backgrounds to access post-secondary education, have only been available for more traditional college programs.
Right? And so things like short form, you know, workforce, employer aligned training models have not been able to be paid for through those types of dollars, those types of grant dollars. Because of that, it really limits the amount of students, the types of students that can access those programs. So if you are coming from a limited resource situation, you're much more.
To go to a more traditional community college program than you are to leverage a, maybe a non-accredited or even accredited online, you know, training program that's really short. You know, that's 10 weeks sort of bootcamp style, which, you know, can have great outcomes like you. Do you know, duly noted, there are plenty of programs out there like that, that aren't, may not have great outcomes, and that's something that we have to get right here.
We have to make sure that the dollars are protected and only support programs that do deliver good outcomes. But we also need to do it, you know, uniformly, we can't just look at one part of the market and you know, not look at others when we're sort of making those assessments, but. So ultimately it's opening up I think something like 10 and billion of of funding, which is a significant percentage of the overall pool.
And so it's just a massive. Step function change in the, the funding potential for those programs. But there's a lot of details to be worked out around which programs are eligible right now. You know, to be eligible it will have to be provided by an accredited institution. What exactly that means and how potentially sort of third parties can partner with post-secondary institutions.
You know, I think it's a little bit TBD, it also has to be. A distance education course versus a correspondence course, which is a like esoteric definition that people have to sort of understand what exactly that means. And it comes down to self-paced versus structured or instructor led and instructor time and engagement and all that sort of stuff.
So there's a lot of details, outcomes, and the expectation around. And historical outcomes that programs are gonna have to demonstrate to ultimately be eligible for those funds is gonna be something that people are gonna have to figure out. And I think there's probably gonna be some change around, depending on, on how the rulemaking process goes.
But all that to say, a lot to figure out. But a huge opportunity that companies and training providers and educational providers that are in this space. Absolutely. You have to keep their eyes on because it, it can be a real game changer.
[00:37:19] Alex Sarlin: Achin, how do you think about the workforce, Pell changes? I mean, for companies like Step Full or Care Academy or Motivo, or some of the ones in your portfolio that are getting great outcomes for really meaningful career connected learning, how do you think they are thinking about it?
[00:37:34] Atin Batra: It's exactly what Joe said. I think there is a lot of excitement around those changes that are essentially going to lead ultimately to helping learners access programs that truly have demonstratable outcomes. I think there's a lot of excitement there, but also I would say it's being cautious optimism and excitement.
Right. In the sense, because as Joe said, that we, we still have a long path to go. I think what I will say is something I said earlier with respect to the workforce, which is employees have. Essentially push their employers to become more thoughtful about ROIs and, and learning outcomes. I think the same thing is now happening, and it has been happening for a while.
I'm not saying that it's, it's new, but the same thing is happening on the higher education side. It's, it's these students are graduating with hundreds of thousands of dollars in debt and realizing that there are no jobs for them, because what they learned for the four years was essentially obsolete, sadly about 10 years ago.
So, you know, they have been agitating for this, and they have been pushing their institutions. They've been asking, you know, the policymakers administration to sort of help with that movement. And I think we're starting to finally see some of that bear fruit. I mean, the stuff that we were keeping an eye on even through last year was, was the gainful employment rules that are coming into effect soon, and that is basically forcing these accredited institutions to start to report on outcomes.
And I think that's one arrow in your quiver of things that you can do. But then workforce be bio, like all of these will hopefully come online in the next year or two and, and they will all collectively sort of push our education system to be more career connected, to be more tangible, to be more relevant and lead to outcomes.
[00:39:10] Alex Sarlin: As I hear you talk about the pushing that the students are doing, which I totally agree with, they're pushing employers to help them get skills to upskill or re-skill or move forward in their career. They're pushing institutions of higher education to be more relevant, to get them more career ready. I think it's starting to even trickle down to the high schools into K 12 where now adult parents are looking to schools to get their kids career ready.
And recent Gallup polls at 2% of parents think that schools are successfully getting their kids ready. 2%. That student pushing it begs, I think a really interesting question for all of us as educators, and I'd love to hear both of you speak about this as well, which is students have an increasingly, I would call it almost like a.
Instrumental, maybe transactional view of education. And I don't mean that in a bad way. They're saying, I want X at the end of this road and this education is gonna help me get there. It's this degree, this certificate, this bootcamp, this class, this course, this skillset. They're heading somewhere in their life.
And education is a path, and I think still, especially in a many traditional higher education institutions. There's still sometimes a view of education as much more of a softer, a little bit of a hazier view of education. It's like we're here to enlighten, we're here to expand minds. We're here to make citizens we're, it's not that they're wrong, right?
It's not that either view of education is correct, but they're pretty misaligned and I think that the direction that we're seem to be going in, and I think a lot of your portfolio companies are very much. Aligned with the student perspective, the more, hey, how do we keep students in the pipeline? How do we get them what they need?
How do we get them the job? How do we get them the promotion? How do we get them the skills that are gonna get them, you know, to the next level of salary or just, you know, to get the position they're looking for? I'm curious how both of you see that tension and how it's changed over the years between the gauzy, you can call it almost like the liberal, artsy view of education and the more instrumental like.
Vocational view of education. Joe, lemme start with you on that.
[00:41:06] Joe Watt: I think it comes down to, you know, a topic that's been sort of well discussed, which is like students and parents, anyone who's got a stake in the funding or the, the decision around deciding to go to a post-secondary program is questioning the roi.
And sometimes they're, it's a resounding, yes, this is worth it, and sometimes it's not. And sometimes it's a gray area and, and so like that's happening. And then was it Charlie Munger, who's like, show me the incentive and I'll show you the outcome. Like, I mean, a lot of this gets again to the, the funding incentives that are out there, right?
And if we only fund programs that look like X, well the people that are, you know, in charge of provisioning programs, that's what they're gonna provide. And so I think as those two things change, and there's some tension being introduced there, higher ed institutions, particularly within the context of enrollment, that is not increasing in the same way it has historically, and where funding flows outside of even just tuition dollars are not necessarily at the levels maybe they used to be.
And research dollars are being checked. So there's all these pressures. Transform as an institution and, and offer be more market relevant for, for a lack of a better word. And I think that's a great thing because at the end of the day, higher ed institutions exist to serve the needs of citizens in the, in the country that they're in.
Right. And, and if, if ultimately, you know, students are looking for more dynamic and. Sort of stackable pathways that allow for more flexibility and, and align to their needs because. The student populations at these institutions look very different than they did, you know, 20 years ago. Right. I mean, the amount of students that are working, the amount of students that have kids that are, you know, there's just so many differences that institutions have to, and I think our increasingly, like, I think we should give a lot of schools a lot of credit because I think there, it, it's changing.
It's changing for the better, but it's, as everyone knows. Higher education is, does not turn on a dime. And, and that's something that, that's part of the reason why we've set up our fund and structured it the way and our investment the way that we do is because things do take time and they don't always happen in sort of institutional fund cycles.
But we do think that sort of the arc of it bends in the right way and, and we're excited about that. For sure.
[00:43:43] Alex Sarlin: Yeah. The workforce, learning the workforce. Pell more apprenticeships, more public-private partnerships between universities and ed tech companies or other kinds of providers or, or big tech companies even that to provide market relevant credentials.
It. I feel like the pendulum has been swinging for quite a while back in that direction, and it feels like there's still a ways to go, but it feels like people have been thinking about this for a long time, including both of you and I. I think of Ryan Craig, of course, who's been fighting for this for a long, long time and it just feels like things are really changing now.
Achin, do you agree?
[00:44:15] Joe Watt: I think we gotta be careful too, right though that like. If we, you know, you mentioned transactional, right? Like there's a risk, right? Even just because we go to short form programs, just we, because we go to stackable programs, doesn't mean that we shouldn't seek to enable people to get those durable skills, get those critical thinking skills to build those capabilities.
I mean, Derek Thompson came out with a piece, I think in the last week or two on the end of thinking, right? Like that's the scary thing right around. If we combine a shift towards more short form programs that don't allow for just purely from a time perspective, for that level of reflection and kicking around different ideas and rowing in that way as a, as a learner, we combine that with an incredibly powerful technology that has the ability to take, you know, so much of that out of your hands if you let it, like, that's the risk, right?
So we have to be really careful about that.
[00:45:18] Alex Sarlin: Yeah, it's the arc of educational history in the us. It's like, as it, it's expanded more and more access to more and more different types of non-traditional quote unquote learners. I think the tension between that, you know, the original Ivy League, you know, Harvard was a divinity school or a lot of what college used to be.
Was about thinking, but it was also incredibly limited in access and often forced the privileged and then they could have the opportunity to go think for a few years and they were still gonna be fine in their careers. And it's really changed. I mean, when the, the workforce changed, the skills needed to be as successful in the workforce right now are growing and changing very quickly and there's so many more people who need them.
That's much more competitive. I just feel like. I agree and I haven't read the piece. The Derek Thompson. I love Derek Thompson. I haven't read it yet, and I, I agree. But I think there was this moment where we thought we could have it all. Where you'd be like, okay, college for all. And if we have college for all, that means everybody has access to institutions that can expand their mind and expose them to new ideas.
And by the way, then they'll get out and they'll be able to graduate and have a really successful career. And I don't think we fulfilled that promise as a society. I mean, the dropout rates were so high, the community colleges. Were not leading to the type of career outcomes that anybody wanted. And I feel like we're now having to rethink that assumption.
This, this is my personal opinion, but Atan, what do you think of this moment in time? Do you feel like we're gonna over index and sort of overcorrect and become a fully vocational education system and then say, oh no, we forgot about donkey Hodi.
[00:46:55] Atin Batra: Yes. I mean, I think in short, I do kind of agree with you, I think as, as human beings, and this is not a knock on us, but I think as human beings it's easier for us to talk in extremes, right?
[00:47:04] Alex Sarlin: Yes.
[00:47:04] Atin Batra: And you said it like the arc of history is we constantly oscillate between two ends or the pendulum. That's just what it is like.
This is true not just in education and everything sort of that we see around our in human life. I was reading a, a New York Times article, I think it was this week or maybe, maybe it was last week, which was about how over the last 10 years there was a huge push to do CS education in high schools, right?
So you had code.org and you had all of these other institutions that were really teaching you how to develop coding skills. And then you've got. Today when you don't really need coding skills 'cause you've got Claude for that and you've got chat GPT for that and yeah. And that's how people are now coding and you've got cursor for that and and Ripple it.
And I can probably spend a year just naming the names, but the idea being that when we oscillated in that direction, I think we forgot that what we were trying to teach was not so much coding, but we were trying to teach critical thinking. We were trying to teach logical thinking. We were trying to teach.
Problem solving. We were trying to teach those core skills, those foundational skills. And if we truly stayed rooted in them, then whether we studied coding or we studied physics or we studied any other kind of math, we will still come out ahead. And I think that's where I feel like the narrative maybe influences a little bit of what we end up talking about is just.
We said Go coding, but nobody said, actually what we're thinking about is, is critical thinking skills and those critical thinking skills are relevant today just as much they were 10 years ago, and I think we'll be just as much 10 years from now. You know the article that Joe was mentioning, he slacked it to our team and we were all reading it.
It's like, yes, AI is changing how we write, but. You still have to think, right? You can't give that up. That is a human quality and so just I feel a little bit of that. Yes, it's pendulum, but the best way to sort of get out of that cycle is to root ourselves in the core skills that you want. And if you just orient around that, you'll probably come out ahead and, and so I'll connect this back to something you said earlier, which is.
College used to be fuzzy in some way in terms of the value that it was providing, and I agree with that, but I also don't want college to be, and this is what Joe was saying, like only about vocational training, because you need that space to develop some of those skills. You need that environment or you need that.
One of our colleagues who is an associate on the team, Mindy was talking about this just this week. She was saying, sometimes you need to manufacture friction so that you can learn something because friction is how you learn. And it's, it's basically that, right? Like you have to be forced to do critical thinking to learn how to do critical thinking.
But if you're constantly being handed AI and, and constantly being, saying this is linked to a particular career, then, then you're sort of losing out on that. The, the last thing I'll say on this, this is an example that just came to mind was, was all of the coding boot camps, right? Like the 10 week coding boot camps.
You'll get a great job. What happened to them? They do not have the outcomes. They do not have the outcomes because they just did superficial learning. What about the, the core skills that you needed to be a programmer? The, the problem solving pieces that you never learned because it was, you know, learn the language in 10 weeks and then you'll get a job.
And there is a reason that there, there are not that many of them around today because people realize that they did not have great outcomes. But as I think about all of that converging in our thesis, it's thinking about those durable skills. It's thinking about programs that actually deliver outcomes that will help you actually get on that career path in the long run, like I'm not thinking 1, 2, 3 years beyond this.
We've had so many companies that come up to us and say, we can graduate 85%, and they immediately get a job. And our question to them, and Joe's been instrumental in pushing even me to think about that is. Okay, but what is the persistence rate? Six months down the line? What is the persistence rate of those new employees a year after they graduated from the program?
Are they still able to survive and thrive in those roles? Yeah, because that means that they've understood the fundamentals of, of what they're doing.
[00:50:57] Alex Sarlin: What you're both bringing up is that there are major risks in the, in the fully vocational view that you have maybe much more short term thinking or sort of faddish skills that might go out of style than Natasha Singer.
The article you're talking about from the New York Times is a really interesting one, really chronicling the entire coding education. She's writing a book on this about the entire coding education movement, and I think she's sort of framing it as if, if it was a, a little bit of a, like a con, which I don't agree with that.
I think people were the entire coding. Infrastructure was about, was trying to be very helpful to people, but the world changed underneath our feet and I think that is the risk of being too vocational, is how do you prepare people to be agile and adjust to and adapt to changes. That is, that's something I think we are all wrestling with, both in our our own lives and in the educational system.
How do we prepare people? I think you're striking a very smart balance between the style of education that thinks very practically about. The goals about, about, you know, meaningful life goals at the end of an educational pipeline and how to plug all the holes in the pipeline, how to make sure people are persistent.
You have mentor collective, people supporting each other. You have ways to avoid dropout. You have all, all sorts of interesting portfolio companies focusing on this. And then how to turn that into something that's really gonna be meaningful. I think the really. Purposeful, you know, purpose-driven education towards a vocational goal is one aspect of it, but you're not losing sight.
And I think we are all have to, I wrestle with this myself, as you can tell. You know, we all have to not lose sight of what durable skills mean in this AI era. What critical thinking means. Let me end with one question just to, as we all put on our little future hats. You know, if we fast forward five years from now, let's assume we're.
Workforce PE is in place and they've figured out all the details of it and it's, it's working as intended. We have demographic changes to higher ed that are affecting things. I'm curious what you think will be different in the world in five years that will change or maintain or just validate how you're thinking about your investment thesis.
What is coming next? Joe, let me start with you on that.
[00:53:01] Joe Watt: We're not great at exponential change as. More so than maybe five, 10 years ago. We're in a place where that saying, you know, you, you overestimate what's gonna happen in two years, but underestimate what's gonna happen in 10 years is, is very spot on.
Because, you know, while I, I think there's been some really great analysis done around. What the level of revenues that have to be generated by AI companies has to be to satisfy the amount of money's being spent on compute and chips right now. And like, it's crazy. Is that gonna play out in the way that people think that it will or is it gonna play out more like the, the telecom infrastructure investments of, you know, the early two thousands, like TBD, but I think.
You can certainly look at what the technology can do today and assume that we're gonna figure out some things that are gonna be quite impactful and it's gonna change things pretty meaningfully. What I'm hopeful about is that there seems to be a recognition that really across the spectrum of education.
What we're doing is not working. It's hard to find data that would suggest otherwise. And I think there's also a pretty clear groundswell around we need to have a better relationship with technology in education. We need to be more thoughtful about it. And the underlying thesis of our fund is be really patient and focus on companies that have meaningful outcomes and help them.
Measure those metrics that really matter and articulate those to their customers, to the market in a way that's gonna scale. So to me, if there is a increasing emphasis on outcomes. That's great because that means companies that are really delivering meaningful impact will have success, but you have to be patient enough to let it play out, and it's gonna play out over the long term.
I mean, we talked about workforce Pell, like there's no way that companies are gonna be tapping into workforce in a big way, like. From now. Now it's gonna be years before that fully sort of manifest itself, but if ultimately does, it'll be a massive opportunity and a massive shift for the sector. And so there's huge opportunity to build, build great companies aligned to that.
But you gotta be patient. And I think that's what we're trying to do. But it does seem like, you know, five years from now, I think there is a. Because of all the pressures that we've talked about, because of all the demand side shifts in what people want and are willing to pay for from higher ed and the supply side shifts on the funding side, I really do think there is.
We are, we can be at the cusp of a meaningful transformation of how higher ed is delivered at scale. Not just on the margins, but truly at scale. Because institutions are having to make some of those changes and people are looking for 'em. So to me that's exciting. And hopefully five years from now we look at, we look at an education system.
Isn't purely vocational and isn't purely sort of elite Ivy League education, and everybody else just goes straight in their workforce. It's one that offers a whole host of connected offerings that suit the needs of a lot of different types of learners while still. Providing the space for and the support and scaffolding and technologies that allow them to develop the durable skills, critical thinking, everything that we're talking about that's gonna lead to success in their lives.
[00:57:00] Alex Sarlin: That's great and I hope so too. I love that thought that, you know, I think we're, we could evolve the system and actually make some real change as we realize that as the world is changing under our feet, you know, what we're doing hasn't been working well enough. I totally agree. Aan, let give you the last word.
What happens when you put on your future hat?
[00:57:19] Atin Batra: One, I sort of agree with everything George just said and, and would a hundred percent. Uh, plus on that, if I took a different lens on it and I just looked at it from the perspective of founders and the folks that are actually building technology, I think what I would tell them, and I would very honestly, I don't think I'm a great sort of predictor of what the future is gonna hold for us, but.
I would just say to them, you know, think about this quality of velocity, like how do you build a product velocity or a velocity in, in your thought process? And I think that to me is piece of advice that I would leave everybody, you know, who's listening to this with is one of our team members, Steve Deutsch sort of talks about this a lot, is.
Product velocity essentially means how do you keep up with times, but also how do you keep ahead of them so it's not just sort of matching what the world is doing, but it's actually staying one step ahead. And that quality is becoming extremely critical as you build technology and as you build that company and sell that, that solution to customers because of just the way the world is changing.
And I think that applies to education just as it, as much as it applies to any other sector or industry. And I think that's what. We as a team have worked very hard to sort of help our portfolio companies and our founders really internalize is, is that, and so that, that's what I would leave everyone with is just, just think about how you increase the speed of your learning and what you're delivering to this world.
[00:58:34] Alex Sarlin: That's fantastic. So maintain velocity, focus on outcomes, be patient, watch what's changing, and try to keep a balance between the, the vocational and the rest of what education offers. These are powerful lessons and, and plug the pipeline, you know, keep people in school, keep them graduating. Find every way to get them through the educational gauntlet that we've created in the us.
Joe Watt is managing director of ECMC'S groups. Education Impact Fund and Atin Batra is director at ECMC Group's Education Impact Fund. Thank you both so much for being here with us on EdTech Insiders. Thanks, Alex. Thanks a lot, Alex. Thanks for listening to this episode of EdTech Insiders. If you like the podcast, remember to rate it and share it with others in the EdTech community.
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