How Are Investors Viewing the EdTech Space? GSV Ventures’ Deborah Quazzo Weighs in
Deborah Quazzo is one of the most recognized voices in ed tech.
She is the managing partner of GSV Ventures, an early-stage venture capital fund that invests in education and workforce technology entrepreneurs. In addition, she is co-founder of the ASU GSV Summit, which celebrates innovations and innovators across the global “preK to Gray” learning and talent landscape, and attracts over 5,500 attendees.
She serves on the board of dozens of organizations, such as The Board of Dean’s Advisors at Harvard Business School, The Khan Academy Thought Leadership Council, and The New Profit Prophets Education Advisory Group. She previously served on the board of a number of education organizations, including The Chicago Board of Education and KIPP: Chicago.
Her expertise and experience in the ed tech space are outstanding, and she generously shared with us her perspective on the changing realities of education and ed tech companies during the COVID-19 pandemic.
GSV Ventures aims to support the education world through their summit series and their venture fund. Though their annual ASU GSV summit is postponed until the fall, they have a virtual summit series every Wednesday through April. The series, titled "The Dawn of the Age of Digital Learning," focuses on how our world is moving from B.C. to A.D., as in "Before Coronavirus, After Disease."
When we spoke to Deborah on April 5th, she explained that the first summit had 2,700 attendees and that the next one, on April 8th, would have sessions across three channels that people can tune in to: An early childhood learning A.D. channel, a K-12 education A.D. channel, and an investment landscape & emerging tech A.D. channel. It would also include a presentation from Dr. Marc Brackett from the Yale Center for Emotional Intelligence, offering tips and techniques to help people achieve personal strength during these trying times.
"So with [the ASU GSV Summit], we're trying to help people have a forum to hear things and ask questions and hear what people think, what leaders in the sector think about what's happening and then have a session where they can maybe do a little bit of a zen experience to think about what they can do for themselves in these crazy times," explained Deborah.
To help their portfolio companies during this time, GSV Ventures is trying to be as helpful as they can by meeting with each company weekly, and doing a detailed analysis of how COVID-19 will positively and negatively impact them. They are also ensuring that companies are aware they can tap into available Small Business Administration loan programs. Deborah explained that this is one way that companies can "extend their runway" during these challenging times.
Perspectives on COVID-19’s impact on ed tech companies
Until schools reopen and are ready to invest in products, Deborah recommends companies refrain from selling to districts. She suggests that efforts should instead be redirected elsewhere:
You’ve got to take your burn down to a place where you can survive, and then you’ve got to be ready to come back out fighting. Spend this time working on your brand, your product, or your go-to-market.
The selling period to schools is very seasonal, and, as Deborah pointed out, it is unfortunate that many ed tech companies are missing out on the current season. While she thinks companies can "bounce back" if they've got a great product, she empathizes with those that have to make difficult decisions in order to take 25-40% of their cost base out:
We don't have a lot of folks having to take Draconian layoffs, but we have some. We're just trying to be supportive because it is stressful enough to be an entrepreneur but to suddenly be an entrepreneur who's having to lay off really good people for no performance reason is awful. Certainly, how you handle those things is a learning experience, and really important for the reputation and survival of the company going forward.
Ed tech companies that are in the best position to be successful during the pandemic, Deborah explained, are those that are already well-established and those that are still in their very early stages. She believes that there will be a real strengthening of the category leaders who are already trusted by schools: "I think this is a situation where there's a saying that goes 'disproportionate gains go to a leader.'"
She added that though earlier stage companies may be set back a few months on their plan, as long as they have the wherewithal, they can survive while their focus is still on testing and solidifying product/market fits.
Current challenges and opportunities in education
As someone who is heavily involved in the education sector, Deborah is well-aware of the current challenges that schools and families are facing. First and foremost, Deborah explained that equity gaps have never been more apparent. Most schools’ current priorities are not investing in technology, but the safety and food security of their students. The significant homeless-student population in many districts is a cause for concern, and Deborah explained that figuring out the logistics of their basic needs is incredibly difficult: “I think the hard part is our schools have become, in many ways, our homes and where a lot of important services and wellness, community, love and that sort of stuff is happening.”
Even though this is an incredibly difficult time for most, Deborah highlighted some of the positive outcomes the current pandemic could bring to the education field. One of these outcomes is greater attention to the inequity that drives the lack of internet connectivity and devices in many families’ homes. Deborah also thinks that the pandemic may lead to districts being required to have a robust remote learning plan going forward, as part of national readiness requirements. In addition, Deborah believes that students and teachers will feel more comfortable with digital learning and that there will be a greater appreciation and a tactile understanding of why ed tech is useful. This might lead to districts spending more on technology, and moving their budgets “from analog to digital”.
The goal of ASU GSV has always been to bring people together that may not do so naturally, such as educators, entrepreneurs, and investors. Sharing and hearing from different perspectives in order to better understand one another is something that Deborah strongly believes in:
I think it is getting important for educators to understand the kinds of personal and professional stress that they're under is mimicked by the companies who are trying to deliver services.
As the current situation evolves, Deborah is optimistic, choosing to draw focus to how this has the potential to elevate dialogue and common empathy within different sides of the education community.
ASU GSV Summit
The annual ASU GSV Summit is the industry catalyst for elevating dialogue and driving action around raising learning and career outcomes through scaled innovation. Learn more here.