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Coursekit's announcement on 1/2/12 that it had secured a $5 million Series A round of venture capital financing is important news in our industry. Perhaps more interesting than the money is that the investment is being led by a venture firm, Social+Capital Partnership, that was started by former Facebook executive Chamath Palihapitiya. This investment will give the founders of Coursekit something perhaps even more valuable than development capital, that is networks and guidance within and from experience and plugged-in Silicon Valley veterans.
For some great context on this investment check out Steve Kolowich's 1/11/12 article, Cracking Up the LMS: What Does the LMS of the Future Look Like?
Some Questions to Ponder:
- What should we in higher ed think about this investment in Coursekit?
- What does this investment say about the changing LMS and ed tech ecosystem?
- What does this investment mean for the other LMS providers, including new entrants like Canvas?
- How is Coursekit likely to evolve?
I've been mulling these questions around for the last few days and I have some tentative thoughts (which may be altered by your thinking).
My Thoughts:
A Big Deal: This $5 million investment is a big deal and great news for all of us in the LMS and edtech ecosystem (both users and providers). How cool is it that a bunch of students decided to built their lives (not just their careers) around doing an educational startup? How amazing is it that they were able to get the money they will need to take a real shot at this, with resources to hire some talented people whose only goal is to provide better platforms and options for the creation and delivery of education? $5 million is small potatoes in most tech verticals, but in ed tech $5 million can do many things. Coursekit may or may not get traction, but what is important is that the success of Coursekit (and Canvas and others) opens the door for venture people to invest in a portfolio of education plays, and for smart people to conclude that it is a reasonable risk to forgo safe employment and go to work at an ed tech startup.
An Interesting Model: Coursekit's story is both simple and powerful. Develop a great learning ecosystem and make it free for professors to adopt. Don't try to compete for enterprise sales. The customer is the professor. The founders of Coursekit think that the missing ingredient from existing LMS platforms is some combination of social and simple. Maybe - although everyone who works for each LMS providers says the same thing. The doesn't really matter, as Coursekit should have the freedom to rapidly learn and evolve. Since every professor that adopts Coursekit has adopted by choice, the relationship between Coursekit and the professor is inherently flexible and positive.
A Good Bet: Social+Capital Partnership are smart to put Coursekit in their investment portfolio. The model of organic adoption by individual faculty will allow Coursekit to grow organically, to avoid high customer acquisition costs, and to stay focussed on innovating the platform. Small development teams working with commodity infrastructure (both provided and offered as a service) can do big things with relatively few dollars. Social+Capital Partnership is primarily investing in a team, and in getting to know Coursekit's CEO Joe Cohen, it seems to me that Palihapitiya has made some good choices in who to invest his firms attention. In getting involved with Coursekit, Social+Capital will also learn an enormous amount about the higher ed tech industry, and be in a much better position to make many more small bets that have the potential for a low-probability but high-return payoff.
These thoughts don't quite answer the questions posed above. I'm hoping that you will have some insights.
What do you think about Coursekit?
