What are the Limiting Factors in New Charter Operator Creation?

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Awhile back I posted that lack of new operator supply is a major threat to scaling the high-performing charter sector.

I continue to mull this over. Over the past week, I’ve had two conversations on the issue. Some reflections below.

The Data

Last year, about 400 new charter schools opened. The data regarding the breakdown of new start vs. CMO expansion is not yet available.

A few years before that, about 15% of total growth came from new operators (the rest came from replication).

Assuming this ratio has roughly held, we can assume that about 60 of the 400 charter schools that opened last year came from new starts.

Root Causes 

My gut reaction is that 60 new operators being created in one year is far below optimal potential capacity.

What is causing this under-capacity? Some guesses:

1. Lack of talented founders, especially with regards to instructional leadership capacity 

Both of the people I talked to point to this as the main culprit. They noted that a lot needs to happen between the 3rd or 4th year of teaching (when many entrepreneurial type folks leave the classroom) and when someone is actually ready to launch a school.

In my experience, I’d say, on average, most people aren’t ready to launch a school until the age of 30 or so. So if you assume someone teaches for four years (from age 22-26) and could begin an incubation program at 29 or 30, what happens to them in these intervening 3-4 years?

Currently, no program (outside of CMOs) exists with the specific aim of guiding potential founders through these years. It is quite possible that we’re losing folks that could become founders because they are not supported during these years.

2. Lack of Incubators

Not many cities have incubators (organizations that run 1-2 year fellowships to prepare a founder to launch a school). And those that do exist are of mixed quality. And there is really only one national incubation program (Building Excellent Schools).

You could imagine that increasing the number of incubators would both increase the quantity and quality of new start-ups, especially if progress was made on issue #1.

3. Lack of Funds

I’m skeptical that this is true in charter friendly markets, where philanthropy tends to find its way into supporting great entrepreneurs. But this could surely be a factor in smaller markets. On average, a start-up probably needs around 500K to get off the ground, and this could be a limiting factor in some cities.

4. Culture and Status

This is a little more amorphous, but it’s unclear to me that we’ve made launching a charter schools as high status of a profession as it should be. Whatever you think of TFA, it has definitely changed the game for at least entering the teaching profession (though perhaps not staying in it). Nationally, we happen to be in a moment where being an entrepreneur / working at a start-up is one of the highest status things you can do. I often wonder: what would it take to make this true for launching a charter school?

What Am I Missing?

Let me know your thoughts. This is an important problem that needs to be solved.

If folks have great solutions, I’d be happy to try and play a part in making them come to fruition.

11 thoughts on “What are the Limiting Factors in New Charter Operator Creation?

  1. Ryan

    Perhaps implicit in some of this: if you’re a high-quality teacher in a CMO-rich environment, why WOULD you go it alone? You get support, training, help with a facility, etc., from the CMO, and if you choose the right CMO, you get enough autonomy not to need to set up shop yourself. Plus, as you mentioned, most charter founders want something to do between college and age 30 or whatever, and that usually means at least a stint in a charter school, which will in turn do its best to keep its best people.

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  2. nkingsl Post author

    Yep – and for most part, this is a good thing – as it fuels CMO growth, which we also need. But given that we (or at least I) think new starts are important for innovation / launching more great CMOs / etc – question is how do you build this pipeline given what you say?

    On one hand, perhaps the answer is this is self-sorting – the people who want to launch their own thing will eventually do so.

    But my hunch is that supports could be put in place that lower the cost of going alone. Incubators like BES do this, but I’m wondering if there are other supports that need to be in place before someone gets to an incubator….

    I’m not sure…

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  3. Tom Vander Ark

    When the authorizing pendulum swung from innovation to quality, it became harder, longer and more expensive to get a charter–and the more challenging pathway eliminates many potential founders from considering the journey. There’s almost no funding for pre-authorization teams and only one national funder supporting new authorized teams.

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    1. nkingsl Post author

      Intersting – I hear you, but also need to square this with the fact that many crappy charters still getting approved!

      I fear authorizers are at the same time being too permissive (often with politically supported charters) and too tight (on innovation)

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  4. Wm Murphy

    I think you’re on to something with the incubation line of thinking. BES seeks to incubate a very specific type of charter and their selection of leaders is fairly strong in biasing toward that model (unless you knowingly lie your way through your app which would be hard and unethical). There aren’t many innovative incubators – locally 4.0 basically stopped actively incubating schools in favor of other edupreneur start ups. Their recent collaboration to launch some schools with a personalized learning orientation was, like BES, seeking to incubate something pretty specific in terms of blended learning and personalization. I’m not sure there is support for a broad set of innovative practices but rather those that are the flavor of interest by an incubator. As educators age/have families their risk tolerance abates since most don’t have the financial wherewithal to weather lean years of starting without incubation support. So if it’s not supported by incubation it probably won’t happen.

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    1. nkingsl Post author

      Yeah, interesting to think about what a more robust incubation market would like – scale is important, so you could imagine regional incubators working across a couple of states…

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  5. John C

    The amount of innovation and entrepreneurial success in this sector always amazes me given the low success rates in other sectors. The challenge with entrepreneurs is it’s often hard to differentiate the good from the bad early on because they are successful precisely because they are doing something most “reasonable” people think can’t be done. However, there are lots of people in business who can be successful driving a new branch off a tree, which is what Ryan describes above. So I tend to bias towards Ryan’s argument and with the growth of CMOs there are now more green shoots available to start with a support system that insures a higher success rate. Since the collateral damage of a failed venture are children’s education, are there models that enable an entrepreneur to test their theories in smaller “lab” environments? I’m a little ignorant on the landscape.

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    1. nkingsl Post author

      I think there is a big gap in market around testing / piloting. Too often it’s binary – you get 1 million to launch a school or you get nothing. I think we need to get more creative about using summer schools / weekends / etc to test, pilot, iterate, etc…

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  6. Isaac P.

    60 new operators per year is a drop in the bucket of the need for schools, but I would guess (and I could be way off here) that number is close to the number of new and semi-established start-ups in other sectors. One of the greatest struggles will always be the absolute scope of the need, in terms of schools and entrepreneurs to lead them. And it seems to me that unless we fundamentally shift schools of education and who decides to enroll in them toward innovation and an entrepreneurial spirit, the long-term need will never be filled completely.

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    1. nkingsl Post author

      I agree that the need far exceeds the supply right now.

      It’s unclear to me whether education schools will ever be a big part of the solution for two reasons: (1) ideologically, most oppose charter schools (2) graduate schools in general aren’t great about launching entrepreneurs.

      But there is plenty of room for improvement here.

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  7. Pingback: Which University Departments will Evolve to Incorporate Entrepreneurship? | relinquishment

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