Over the past few months, I’ve made the case here that “Disrupting U.S. Schools Wasn’t Possible Before. That May Be Changing” and that “Without Education Savings Accounts, Disruptive Innovation In U.S. Schooling May Not Be Possible”.
This is a big deal.
Given the desire for “system change” in schooling in the US—moving from a time-bound, monolithic system not built to optimize learning to one that prioritizes substantive learning and development for each student—Disruptive Innovation is the most straightforward path. That’s because, as I explained in the piece “Why ‘System Transformation’ Is Likely A Pipe Dream”, system transformation almost never happens by changing the fundamental tenets of the system itself, which resists altering its underlying DNA. Instead, system transformation comes from replacing the system with a brand-new system. That’s what Disruptive Innovation, the causal force undergirding creative destruction, does.
As a result of this opportunity, there’s another thing that’s true. There’s arguably never been a better time in my life to be a US K–12 education entrepreneur than right now. And for those looking to start schools, it may even be better to be a K–12 entrepreneur at the moment than one in postsecondary education.
I wouldn’t have said that in the past. But hear me out.
First, let’s get the big caveat out of the way. Yes, venture funding is challenging for education startups at the moment. But, as I’ve also argued, I don’t think most education entrepreneurs should be taking venture funding in the first place. That’s particularly true for most who are starting schools, where the biggest entrepreneurial opportunities exist today, and the barriers to entry are lower than they’ve been.
For years, postsecondary education was the better place to be as an entrepreneur launching a new school. There was an actual market in which students could choose where to apply and enroll. There were opportunities to create programs for learners of different ages, durations, goals, and circumstances. Entrepreneurs could choose how to price the programs—and there were lots of innovative models in a sea of headlines about the high cost of higher education.
For those willing to brave the challenging world of accreditation and state authorization, there was also a part of the postsecondary sector in which government dollars would follow the student.
As a result, we saw a fair amount of business model innovation in the postsecondary arena—from online and mobile universities to MOOCs and from course and certification providers to bootcamps, job-training programs, and more.
That market still exists. But the barriers to entry feel comparably high compared to those in the 19 states with education savings accounts (ESA) policies for K–12 education. Here’s why.
To review, an ESA is a state-funded account that gives parents public money to customize their child’s K–12 education, allowing them to pay for a mix of private school tuition, tutors, books, therapies, online courses, and other approved educational services.
As a result, in the states with ESA policies, dollars flow directly to parents, who can, in turn, pay for a mix of services, which makes it far easier for school entrepreneurs to create a viable business model to stand up a new school.
And, until recently, it’s been far easier to launch a microschool eligible for ESA dollars in most states than it ever has been to found a public charter school, which must be approved, at a minimum, by an authorizer.
This is where the K–12 school sector stands apart, at the moment, from the higher education one.
As Raphael Gang and I chronicled in Education Next, increasing numbers of states that are passing ESA laws are also requiring new schools to meet a variety of input-based requirements before they become eligible ESAs—the most visible of which is to get accredited. Continuing to follow this path will raise the barriers to entry, which could make the K–12 sector look more like higher education, in which gaining state approval and accreditation for a new school is an arduous, costly process that takes several years, as Preston Cooper wrote for Education Next. Not being accredited in higher education limits access to government dollars, which puts non-accredited institutions at a disadvantage relative to those with access when trying to enroll students and build a sustainable business model.
Even though there are bright spots in K–12 microschool accreditation from entities like the Middle States Association, states should stop raising the barriers to entry and protecting the existing system with well-meaning policies and regulations. Having more options for families to vote with their feet and move to schooling solutions actually making an impact for their children is vital at the moment.
What’s more, as Alpha Schools’ Joe Liemandt has observed, there are other ingredients in the market today that make it even easier to start up schools, from digital curriculum to enrollment systems and more. It’s not hard to imagine that if Timeback, the learning platform Liemandt and his team are developing, takes off as advertised, start-up schools would have access to an upwardly scalable technology enabler around which to build novel, disruptive schooling models. There are already a variety of school models using the platform, for example.
As John Danner, the founder of Rocketship Education and now Flourish Schools, has written, external entities that handle business services for schools will make low-cost private schools a more and more viable proposition and turbocharge the sector.
As long as states don’t screw it up by erecting input-based barriers alongside ESAs, the barriers to entry for school entrepreneurs—and thus the opportunities to reinvent schooling—could remain far lower in K–12 schooling than in higher education. And that could create a vitality and level of educational innovation sorely needed for families and the nation.
