THE NEW EDUDOTCOM:
BOOM, BUBBLE OR BUST?
Western Interstate Commission for Higher
Education Cooperative for Educational
• Excitement around innovations in collaboration
technologies that promote learning and engagement is
inspiring educators, researchers, venture capitalists, and
product managers alike.
• Commercial interests are salivating at the prospect of all
the MOOCs, flipped classrooms, and online programs that
will require collaboration tech – recognizing that education
and training may be ready for its “Internet moment.”
• This session takes a look at the emerging market
opportunities through the eyes of your customers, and
offers suggestions for capitalizing on opportunities.
The New EduDotCom 2013 2
Why We Care
US edu. expenditures:
Global edu. Expenditures:
Michael Moe, April 16, 2013, ASU/GSV Education Innovation Summit
The New EduDotCom 2013 3
Education’s Internet Moment
• Investments in education-technology companies
nationwide tripled in the last decade, shooting up to $429-
million in 2011 from $146-million in 2002, according to the
Na-tional Venture Capital Association.
• In 2009 alone, venture capitalists pushed $150-million
more into educational technology firms than they did in
the previous year, even as the economy sank into
The New EduDotCom 2013 4
Today's investors believe this round of .edu
growth is different from the last dot.com.
Michael Moe, GSV Asset Management, has noted said the
first ed-tech wave had been based mostly on euphoria:
"There were just a bunch of things that were, candidly, thrown
against the wall," he said of the 90s start-ups. “Some companies
pitched ideas that had no sustainable business model. Others were
years ahead of their time. When the dot-com bubble burst, investors
fled the market.”
The New EduDotCom 2013 5
Wait – did someone say “Bubble”?
• Government subsidized debt, also known as financial aid,
fuels much of higher ed growth.
• Average family borrows $60K: $35K by parents, $25K by students
• In 2010, student loan debt surpassed credit card debt in
• There are rumblings among financial organizations
tracking the market segment suggesting that higher ed
may be “cruising for a bruising” similar to real estate in
2008 and technology in 2000.
The New EduDotCom 2013 6
The “Bubble” Phenomenon
• A financial bubble is defined by values that are inflated beyond
what the market will bear, or when justified against historical or
The tech bubble exploded when company valuations went crazy with
no revenues to back them up.
The housing market prices moved beyond what people could
reasonable afford even as banks pushed money into people’s hands.
• In higher education, many measures continue to indicate that
investments in higher education pay off….for the people
assuming the debt, that is.
• What about for companies providing goods and services to
institutions whose stakeholders are starting to feel the pinch?
The New EduDotCom 2013 7
FOUR ASSUMPTIONS ABOUT
THE HIGHER ED MARKET
The New EduDotCom 2013 8
Demand for Higher Education is Inelastic
(Inelasticity - The situation in which the supply and demand
for a good are unaffected when the price of that good or
The New EduDotCom 2013 9
New Sources of Revenue are Always
• Public Funds
• Endowments and annual giving
• Enrollment Management
• Grants and Contracts
The New EduDotCom 2013 10
Higher Education is always consumed the
• On campus, in the
• Semester/quarter based
• Course credit based on
contact (1 credit hour = 15
hours in class)
• Online courses (cohort)
• Online courses
• Competency based
• Mobile learning
• Badge systems
The New EduDotCom 2013 11
…(pay no attention to all that “Free”
education out there...)
The New EduDotCom 2013 12
The Public’s Faith in Higher Ed is
The New EduDotCom 2013 13
The New EduDotCom 2013 15
The biggest reason this boom might not
be as different as you think
“…It’s because no matter how new your tech, or how great
the idea, or impressive the possibilities, we won’t crack the
code on transformation until we change the most important
part of the equation. And that is the human factor.”
The New EduDotCom 2013 16
It’s not about the TAM
• Don’t focus on the TAM (Total Available Market). Focus on
your TSM (Total Serviceable Market) – the slice of that
very large funding picture that deals specifically deals with
• Up to 87% of annual IT infrastructure budgets are
allocated before the financial year’s end (Campus
• Sales cycles for large IT purchases can take up to 18-22
months for approval
The New EduDotCom 2013 17
Think Like an “Educatian”
• Educators care about mission, not about markets.
• Listen for what THEY want to do. Not all UCC
opportunities look like a course. Or a MOOC.
• Find the influencers. Help them help you.
• Find ways to make your customers successful post-sale.
• Showcase their work. They will present all the great stuff
they are doing with your platforms at their professional
meetings and conferences.
• If your customers are happy, they will be your best
advocates. They will tell their friends. They will tell the
press. They will tell their legislators.
• If they are unhappy they will tell their friends and
colleagues even more.
The New EduDotCom 2013 18
Discussion, Questions, Challenges
The New EduDotCom 2013 19
Thanks for your interest
Ellen D. Wagner
Executive Director, WCET
The New EduDotCom 2013 20