Category Archives: Entrepreneurship

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.

 

An Idea for a Pay for Success / Social Impact Bond

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I’ve been in New Orleans all week, which is always great.

On Friday, I got some time with Stephen Rosenthal, my former board chair at NSNO.

He made the following argument:

  1. We spend ~150K to educate a child K-12.
  2. Then we send many of these children to college, where many of them drop out.
  3. Groups like KIPP to College and POSSE are demonstrating that spending another ~5K per kid can significantly increase the odds that a student will graduate from college.
  4. Right now, there isn’t much public funding for these programs.

He makes a good point: would you rather spend ~150K and have a ~10% chance of getting a student in poverty through college or ~155K and have a ~30% chance of getting a student in poverty through college?

While the numbers may not be exact, you get the idea.

So why not create a pay for success / social impact bond program?

Many cities and states have “promise” scholarships that guarantee free or near free in-state tuition for qualifying students.

Why not allocate a portion of these funds to providers who are only paid for each marginal student in their program who graduates college above baseline completion rates?

A provider could then raise debt based on an investor’s belief that the provider will help students through college.

If the provider works, it receives money from the government, the debt is paid off, and college completion rates go up.

If the provider fails, tax payers lose nothing.

 

Who Will Education Platforms Liberate?

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I’ve been living in San Francisco for a few months now.

During this time I’ve had the chance to talk with some great educational entrepreneurs who are making different platform bets.

A platform is a plug-and-play business model that allows multiple participants (producers and consumers… who may be one in the same) to connect, interact, and create value.

Education platforms are varied.

Some are content neutral: numerous programs can plug in and users can access in any way they want.

Some deliver more standardized content: fully baked competency curriculum, tasks, and assessments – with  more heavy curation of user generated content.

What I’m most curious about is this: who will education platforms liberate?

Platforms could liberate students. They might be better able escape mediocre curriculum, weak assessments, and substandard teachers and get better instruction, psychological development, and career guidance through platforms.

Platforms could liberate teachers. They might be able to better escape terrible district mandates and simply close their doors, plug into the platform with their students, and execute a far better instructional model.

Platforms could liberate school founders. The barriers to entrepreneurship could significantly decrease if a new school is plugged into a platform that does a lot of the heavy lifting in terms of technological, operational, and academic infrastructure.

Of course, platforms could end up liberating them all: students, teachers, and school founders could equally benefit.

On the other hand, platforms might also not deliver and simply liberate investor of their money and educators of their patience.

The Net New Charter School Growth Rate Just Plummeted to a Decade Low

I just spent some time with charter school growth numbers from 2005 to 2015.

I think these numbers are right but please do correct me if they are wrong.

I tried to look at a few data sources, and not all of them agreed, though they were roughly aligned so I feel like the below is a reasonable estimate of new school creation by year.

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From 2005 to 2013, net new charter schools great at a healthy ~7% a year.

And then in the past two years the net new school growth rate has plummeted, as has the absolute number of new schools created.

In 2015, there were only 132 net new school created compared to 310 in 2006. 

Some Reflections

1. If, like me, you believe that high-quality charter schools will be a major source of increased educational opportunity, this data is probably not good news.

2. There is some chance that this most recent data is reflecting a Great Cleanup. In this last year, 272 charter schools were closed, which drove down the net new school creation (404 schools opened, which is lower than one would hope, but not catastrophically low by historical standards).

3. Interestingly enough, charter school enrollment still grew by 9% this year. This could be the result of charter schools that opened in previous years growing to full enrollment (this often takes 3-4 years); new schools are being opened in ways that aren’t showing up in the data (a middle school adds a high school under the same charter); or virtual schools distorting the school to enrollment ratio (by enrolling thousands of students). Or something else I’m not thinking of.

4. All these closures + lower rates of new school creation could just mean that the sector is taking quality much more seriously. Perhaps the result of the Great Cleanup will be that the next CREDO national study will show better results.

5. My biggest worry is that this data reflects a slowdown in entrepreneurship; that some combination of politics, regulation, national mood, vision, etc. is causing great educators to not take the jump to open an awesome school.

6. I feel a little lonely in digging through this data! When labor data is announced, you have 10,000 economists and pundits analyzing the numbers. I feel like there’s about five of us in the country who do this with charter data. Of course, I don’t expect the amount of analysis to rival national economic data, but it feels like that for a sector of this maturity there is not a ton of data analysis. And, yes, I’m now in a position to fund others to increase this capacity, so if this doesn’t get fixed I’ll share some of the blame.

Let me know if any of this data is off and I will correct it.

 

Scream It From the Rooftops: Autonomy Does Not Equal Entrepreneurship!!!!!

I’ve been on the road for the past two weeks and have been spending time with great city based education leaders from across the country.

A common struggle they face, and a common issue I see everywhere, is the confusion between autonomy and entrepreneurship.

To be very specific:

1) Autonomy is the granting of freedoms.

2) Entrepreneurship is the creation of new self governed organizations.

Autonomy is a management strategy. When it comes to serving disadvantaged families, management strategies have limited upside and a lot of downside in terms of the opportunity cost of not pursuing entrepreneurship.

We need structural strategies that grant true freedoms.

The magical moment is when you give an educator the opportunity to create the school of her dreams.

The magical moment is not when you give an educator the chance to pick her math curriculum.

The future is in handing power back to educators so they can create schools that you would want to send your children to.

The future is not in letting an educator opt-out of centralized staffing ratios.

To be blunt: an educator who is playing the autonomy game is still sitting at the children’s table.

The future is not autonomy. The future is trust, risk, freedom, and accountability.

I don’t think I’ve used five exclamation points in my life, but, people, if we don’t get this right, we’re going to stay stuck in cages of our own creation.

And children everywhere are going to suffer.

Could we alter K12 education to increase the number of tech start-ups?

valley

Marc Andreessen lit off a tweet storm on this topic of increasing the number of tech start-ups, and a few of his ideas were about K12 education:

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On the K-12 side, he calls for more: Montessori, project based learning, entrepreneurial themed schools, STEM summer camps, and high school internships at tech companies.

Marc Andreessen is an expert in start-ups; he is not an expert an education.

That being said, watching many successful founders might give him some insight into how certain educational experiences influence entrepreneurs.

Of course, causation is very difficult to improve with anecdotes. An entrepreneur might say: “that math summer camp is what launched me to be an entrepreneur,” but it’s difficult to prove that this is actually true.

In terms of evaluating Marc’s K12 proposals, I have never seen any research linking Marc’s proposed solutions to increases in entrepreneurship rates. While I’m open to the idea that these ideas could work, I start with some degree of skepticism.

As a somewhat expert in education and a non-expert in entrepreneurship, here are some musings:

1. The average age of a successful start-up entrepreneur is 40. This number is lower in the tech industry. The average Y combinator founders is 26.

2. Paul Graham notes that domain expertise is very important. This fits my intuition.

3. So if we want more start-ups, I think we should create educational systems and professional environments that maximize the number of individuals who attain domain expertise as quickly as possible, and then attempt to create the structural conditions (VC money, cultural status, immigration, tax policy, university environments benefit cushions, etc.) that will support entrepreneurs to take risks, even when they are in middle age.

Andreessen’s list gets at a lot of these structural factors, and offers many specific solutions of which I am no position to evaluate (such as taxes on capital gains).

But, again, I’ve seen no research that connects his K12 proposals to increases in entrepreneurship.

Moreover, there is some risk that his K12 proposals, if implemented poorly, could decrease rates of domain expertise (project based learning is hard to pull off and can lead to lower rates of academic attainment when not done well).

Lastly, it’s worth noting that only a very, very, very, very, small portion of the population will ever  launch a successful tech start-up (or attempt to launch a tech start-up that has any chance of succeeding at scale).

So while we should definitely experiment with programs that create pathways future entrepreneurs, we should keep in mind that most people will be working at organizations that they did not found, and will thus need mindsets and skill-sets that are different than those of founders (even if there is some overlap).