Category Archives: Entrepreneurship

Quick feedback for the New York Times

Screen Shot 2017-05-05 at 8.44.11 AM.png

The NYT just published an article on NYC’s school choice system.

The article is worth reading for its qualitative insights into what it’s like to navigate the system. I have deep empathy for families that struggle to find great schools for their children. They deserve much better.

But the framing of the piece is flawed, and I hope other journalists don’t repeat this mistake in future articles.

The authors argue that school choice has not delivered on its promise because many students still don’t have access to great schools.

But school choice does not increase the supply of great schools; rather, it is a mechanism to allow families to choose from schools that already exist.

School choice is about access and fairness. You can assign families to schools based on their address, or you can try to create more just systems. I strongly believe we should do the latter.

But increasing equity of access will likely not lead to dramatic jumps in quality.

It is only be creating new schools, scaling the best schools, and improving existing schools that quality increases. This is not the job of a citywide enrollment system.

Moreover, if you increase access but restrict supply you well get frustration. And this is exactly what has happened in New York City. The city’s enrollment system persists, but its efforts to increase supply have faltered.

When NYC leaders have focused on increasing supply – both through the small schools movement and growing the charter sector – rigorous research found that school quality increased. The results of these efforts are detailed below.

In sum:

School choice is all about equity in access.

School supply is about creating better options.

We should not confuse the two, and we should not expect school choice to increase school performance in and of itself. It must be coupled with a deep focus on school supply.

Small schools results:

Screen Shot 2017-05-05 at 8.58.15 AM

Charter results:

Screen Shot 2017-05-05 at 8.53.01 AM.png

 

 

 

How does a MGMT team figure out what their organization does?

On its face – “what does your organization do?” – should be an easy question for a MGMT to answer.

But it’s a hard question that I doubt many MGMT teams could accurately answer.

Three Reasons for “What We Do” Failure 

First and foremost, MGMT often confuse the question “what do we do?” with the question “how will we succeed?”

Second, MGMT teams often can’t say what they do in 1-2 sentences because they have failed to achieve clarity around their core activities.

Third, MGMT teams often can’t articulate the tactics and tasks that employmees execute in the daily carrying out of “what we do.”

My Tactics Failure 

Recently, I was struggling with executing and felt that achieving my goals was at-risk.

I then tried to think of what more I could do to achieve my goals.

I then realized that I wasn’t sure I possessed the full list of tactics I could pull from.

In short, I could not articulate the tactics and tasks of what we do.

Conducting a “What We Do” Audit 

Our team of four is twenty months old. And half our team has been with us for about a year or less.

This January, we achieved clarity on exactly what we do.

But we have not yet achieved clarity on what we do each day.

In hindsight, I think we should have brainstormed a tactics list before we launched our work.

That being said, codifying what we do each day after 20 months of work is not a terrible place to be in, given that you need time under your belt to figure out what you do each day.

To ensure we’re all learning from each other’s tactics – and building out a what we do toolkit – we’re conducting a three step process.

First, we’re going to articulate the major categories of daily work; i.e., “coach CEOs” and “coordinate with other philanthropists.”

Second, we’re going to list out all the tactics that fall within these categories.

Then we’re going to pressure test our categories and tactics, and debate if / why they are things we should be doing.

Building for Effectiveness and Scale

Conducing this “what we do audit” and codifying the tactic toolkit will ideally help with efficacy (each of us is drawing from a great toolkit built with our collective knowledge) and scale (if the team grows new members won’t have to learn solely from modeling and direct experience).

Of course, it’s impossible to codify everything it takes to execute at the highest level. No team is self-aware enough to codify everything, and the work is complicated enough that new situations will require first principles analysis of execution tactics.

But efficacy and innovation are born out of deep knowledge. And codification is a way of increasing knowledge.

Can you throw money at the problem of charter school growth? We might find out.

Screen Shot 2017-04-15 at 3.54.04 PM

President Trump’s federal budget calls for over $150 million in increased spending on charter schools.

Florida’s House of Representatives just passed a “Schools of Hope” bill that would provide $200 million to non-profit charters that opened schools in neighborhoods with high concentrations of “D” and “F” schools (the Senate has note yet voted).

Given that the rate of new school openings has dropped over the past few years, these new funds, if approved, could stimulate the pace of growth of charter schools.

Some reflections:

Will Florida funds increase growth or shift growth?

It’s unclear whether the Florida funds would increase charter growth or simply shift growth away from other states towards Florida.

My guess is that it will increase growth for two reasons: (1) it’s hard to grow across state lines so I doubt out of state operators could absorb the full $200 million and (2) if the for-profit world is any indication, other states will follow Florida’s lead to compete for great charter schools, which ultimately will create a greater pool of growth funds across the country, which should stimulate new entrepreneurs as well as provide funds for operators to grow in their home states.

How much does money incentive growth in the non-profit sector?

For management teams, growth is much less lucrative in the non-profit sector than it is in the for-profit sector. Salaries go up a bit, but not 50-100X, and there is no cashing out of equity.

There may be some status associated with winning big grants and growing, but the lack of financial incentives to individuals is probably a big barrier to successfully throwing money at the problem.

How much does money change the emotional incentives of charter entrepreneurship?

Perhaps money will have a positive causal effect through non-financial channels by changing the emotional incentives of charter entrepreneurship.

It takes a special kind of person to open a charter school when the local district, the local teacher’s union, and half your friends are telling you charter schools are destroying public education.

But what if the federal government and (eventually) dozens of states were offering large amounts of public dollars for you to open a charter school?

When the President, the Governor, and the Mayor are all asking you to grow – and putting their money up – perhaps this changes your emotional inclinations?

How much does money lower the headaches of growth?

Perhaps incentives should be thought less in terms of accusing gains and instead in avoiding pain.

Ask a charter operator what the biggest headache is for growth and facilities will inevitably be near the top of the list.

To the extent additional funds can be used (or allow other money to be used) for down payments on facilities, these funds might help stimulate growth.

My Guess

I think a state package of (1) multiple state authorized charters and (2) money for buildings would have a positive impact on growth.

Local school board authorization and lack of facility funds are huge headaches for even the most sophisticated charter organizations.

Removing these barriers would be a positive step forward.

However, I do worry that the process of lowering barriers, increasing funds, and scaling great operators will not meet the demands of the political cycle.

As this Politico piece notes, it’s unlikely that the nation’s best operators are going to immediately scale in Florida.

My recommendation to Florida would be to mimic the growth of the federal charter school program: start small, spend the funds prudently, and the increase the amount of funding available as operator capacity to growth increases.

In other words, fight for 25 years of 10% growth, not a 2-3 year moonshot.

What social entrepreneurs can learn from Medium’s business model shift

Medium is trying to change its business model.

I. For-Profit Business Models 

In the for-profit market, you can only sustainably solve problems when the solutions generate profits.

Overarching visions (bringing the world’s information to everyone) are brought a little bit closer through sound business models (ad driven internet searches).

The profit requirement is useful in that it ensures entrepreneurs add value to other people in their quests for solving great problems.

But the profit requirement is also limiting: an entrepreneur might complain that the quickest path to solving the far problem is not solving one close problem after another.

II. Non-Profit Business Models 

In the non-profit market, philanthropy often determines what problem an entrepreneur can try to solve.

This is useful in that philanthropy is not bound by solving profit generating problems.

But the philanthropic model is also limiting: when there is no need to add value to other people, bad endeavors can go on for far too long, thereby reducing the amount of funds available to good endeavors.

 

III. The Risk of Each Model 

In the for-profit market, entrepreneurs need to guard against the fact that solving close problem after close problem may get them off the path from solving their far problem.

This is what Medium is struggling with.

In the non-profit market, entrepreneurs need to guard against the fact that trying to solve the far problem will lead them down a path where lack of accountability prevents them from adding any value to others (despite expending large amounts of resources).

A lot of social entrepreneurs and philanthropists struggle with this. They set out to solve far problems without understanding the near problems.

Most often, solving near problems better trains you to solve the far problem.

Social entrepreneurs should keep their eyes on the far problem, but they ignore near problems at their own peril.

Medium had the discipline to recognize that they were solving close problems that were not leading them to solve their far problem.

Social entrepreneurs need to have the same discipline in the opposite direction: they need to recognize when an elaborate plan to solve a far problem is a wasteful quest that ignores real people’s acute needs.

Future rivalries: the platform vs. the chief academic officer

I’ve previously written on the rivalry between chief academic officers (who manage instruction) and chief schools officers (who manage the portfolio of schools).

In traditional districts, I deeply believe that the chief academic officer should report to the chief schools officer, who should report to the superintendent.

___

In the future, I think the chief academic risks losing another battle: this time with instructional platforms.

In his book the End of Average, Tyler Cowen makes the argument that those professional who form symbiotic relationships with technology will thrive. He cites the example of hybrid human-computer chess teams.

It is likely that the same will be true in education.

___

My hunch is that in the future most schools and districts will be on educational platforms that combine human curation of content and algorithms to develop an instructional program from afar.

In this sense, many school operators will outsource many of the traditional roles of a chief academic officer to a platform.

Once these platforms get good enough – chief academic officers who claim “I know our children better” and demand full control of the academic program – will lose. The platform will be better.

The platform , on average, will be better than a chief academic officer.

But this does not mean that a platform, on average, will be better than a platform + a smart / humble / hardworking chief academic officer.

As with chess, the hybrid may very well win.

___

How might a chief academic officer add value in this new role?

She could:

  1. Monitor relationships and place students and teachers into groups in a manner that would be difficult for a platform to intuit.
  2. Utilize local community resources to augment instruction.
  3. Provide intensive academic support to students who are not progressing as expected.
  4. Provide non-academic interventions to struggling students.
  5. Run experiments to test whether new platforms might be better to adopt.

In other words, the chief academic officer might morph into a chief learning officer that focuses on psychology, relationships, anomolies, and technology acquisition.

___

Timing is one of the hardest part about incorporating technology into daily operations.

Move too fast and you have a mess.

Move too slow and you’ve harmed those you’re serving.

Over the past year, I’ve tried to spend time learning about the major platforms out there.

It feels like it’s getting close.

Not yet sure who is Friendster and who is Facebook.

The race is on, as they say.

Why don’t we have a 10x better school?

10x

There’s a Silicon Valley mantra that your need new product needs to be 10x better than the incumbent in order for you to displace them and have a shot at a market monopoly.

Uber, for example, is a 10x product. It vastly better than taxis on so many dimensions (price, easy of use, consistency, service, etc.).

In education, it’s unclear to me that we’ve built a schools that are 10x better than the median traditional district school.

We have built schools that are 10x better than failing urban schools, and it’s no surprise that this is where the entrepreneurial sector has seen so much success.

Why haven’t we built a bunch of schools that are 10x better than an average school?

I’m not sure, but some reflections below.

1. Educators are trying to be 10x at the wrong thing 

Great tech companies usually initially succeed because their technology – not their operations – is 10x better than their competitors.

Often times, technology can be built by smallish group of highly talented people and then scaled at little marginal effort or cost.

So far, school operators have not been able to replicate this model of technological advancement and scale. This way of thinking is not in their DNA. They are still trying to squeeze 10x improvements out of areas such as program design, human resources, and operations.

It will be interesting to see if Summit, Alt School, Khan Academy and others can utilize a 100x tech backbone to scale an instructional program that, over time, evolves into a 10x better school.

2. There’s no profit motive

Perhaps. With companies like Bridge Academies, we are seeing interesting attempts at 10x breakthroughs in the for-profit international market.

On the other hand, there’s plenty of for-profit K12 and university operators in this country, and they aren’t launching 10x better schools that are displacing government and non-profit operators.

3. The education sector is over-regulated

Perhaps regulation is stifling innovation.

I’m sure that this is at least partially true, but the most in demand private schools are not very innovative. Rather, they tend to be highly selective, academically rigorous, extracurricular rich, and culturally strong.

And they also cost $30,000 a year.

So, to date, the private side of things is not exactly delivering a bunch of breakthrough innovations.

Maybe an expansion of education savings accounts will unleash some 10x products, but it’s hard to say this with great confidence.

4. The industry culture is risk averse 

Education may be attracting and retaining professionals who are generally not willing to take the risks needed to achieve 10x products.

In some sense, given that children are involved, this culture is to some extent warranted.

But maybe it needs to be loosened up a bit.

5. This is (mostly) as good as it gets

Not everything can be made better. The fork I ate my dinner with today is not that much better than a fork from the 1970s.

Perhaps this is about as good as schooling gets.

My guess? 

I don’t yet have opinions that are strong enough to warrant action beyond the work I’m already doing.

But I want to keep thinking about this.

Elon Musk vs. the Environmentalists – Some Lessons

musk

One of the core values of our team is: we face and solve brutal realities.

Another on of our values is: we ask why. 

Recently, at a team retreat, we read and discussed Musk’s biography. It is well worth reading.

In reading the book – and reflecting on our values – I was struck by how Musk differs from many environmentalists.

Facing the Brutal Reality of Climate Change

Both Musk and the environmentalists care about the future of humanity.

Both Musk and environmentalists believe that humanity is at-risk due to human induced climate change.

In this sense: each has faced the brutal reality of the dangers of climate change.

Because of this brutal reality, environmentalists are doing important policy and conservation work.

Because of this brutal reality, Musk launched Solar City and Tesla.

Facing the Brutal Reality of Single Planetary Existence 

But Musk, in considering the threat of environmental disaster, did not stop asking “why” when it comes to the risk of human extinction.

Rather than being satisfied with the (true) morality tale of humans destroying the planet; he kept on asking why humans were so exposed to environmental collapse on Earth in the first place.

The answer is of course obvious: Earth is the only planet we live on. As it goes, so do we.

In terms of human continuity, it is very fragile to only live on one planet. Ultimately, even natural environmental shifts (volcano explosion, meteor, etc.) can destroy humanity. Musk realized this was a major problem that many environmentalists did not seem to be working on.

Yes, slowing human made climate change is important, but it is only a stop-gap solution. Leaving Earth is the more sustainable solution.

Completing this logic pathway (of asking why humanity is truly at risk) only requires the knowledge one might pick up in high school.

Ultimately, getting  down to the root solutions is as much as about mental habits as it is about knowledge: facing brutal realities, continuing to ask “why,” having the boldness of vision to put forth a solution – this is what is needed…. as well as having the operational capacity to make a good attempt to realize this vision.

It is rare that all these qualities sit in one person. This is what makes Musk so special.

And it is why we have Space X.

Our Work 

I’d like to think that some of our greatest successes in New Orleans were because we faced brutal realities and we asked “why” a lot.

Some of our biggest failures likely came from a failure to live out these two values.

When it comes to facing brutal realities, I find the following to be of use: soberly analyzing existing performance data; reading the criticisms of thoughtful people in other tribes; taking the time to quantitatively role forward your expected impact over 10-20 years.

When it comes to asking “why,” I find the following to be useful: sitting on potential solutions before acting on them; setting-up a culture and process for rigorous team questioning; having a board of directors that constantly questions your work; reading broadly to build-up false solution pattern recognition.