This office space on the fourth floor has all the characteristics of a startup company’s environment. Young professionals are gathered around tables, some even sitting on the floor, working on their laptops and sketching on whiteboards. However, what sets this space apart is the fact that it is being hosted by Kaplan Inc., a well-known name in education. Kaplan has launched a program aimed at helping education technology startups succeed in the complex K-12 market. This program, called the "accelerator" effort, is part of a larger trend among major education companies like Pearson and McGraw-Hill Education to support and guide school-focused startups. By participating in these accelerator programs, startups have the opportunity to benefit from the knowledge and resources of established companies like Kaplan. On the other hand, Kaplan and other education companies have the opportunity to gain exposure to new ideas and potentially form partnerships or acquire these startups. However, some caution that these ties between corporations and startups can be unhealthy if entrepreneurs lose sight of their original vision for improving schools or feel pressured to align with the larger company’s ambitions. Despite this concern, executives at Kaplan and other education companies see value in learning from the innovative nature of startups while also providing them with support. Kaplan, for example, typically focuses on improving existing products, making it challenging to foster internal innovation. Working with startups allows Kaplan officials to experience the excitement and drive that comes with launching a new product. Kaplan is not alone in its efforts to support education startups. Pearson and McGraw-Hill Education have also formed partnerships to provide financial support and mentoring to startups. These companies hope to learn from the fast-paced work of startups and may even recruit entrepreneurs to join their teams. Kaplan’s accelerator program offers $20,000 and a 6 percent equity stake to each participating startup, in addition to a $100,000 convertible note. The program selected 10 startups out of 350 applicants, and these startups worked out of Kaplan’s facilities in Manhattan. Overall, these accelerator programs provide startups with valuable resources and support, while also allowing larger companies to tap into the innovation and creativity of the startup community.
Gary Hensley, the Chief Executive Officer of Edbacker, is one of the co-founders of this startup company. Edbacker aims to assist K-12 schools in raising funds through crowdsourcing. During an interview with Education Week, Hensley spoke from the headquarters of 1776 in Washington, D.C. This organization, in collaboration with education provider Pearson and other companies, provides mentoring and resources to startups. The day-to-day operations of this program are managed by Techstars, an organization supported by over 75 venture capital firms and renowned for running accelerator programs globally. Don Burton, the Managing Director of Techstars, has been working from Kaplan’s office for the duration of the three-month period. His role involves coordinating the support given to the startups, which includes assigning small teams of mentors to each company. These mentors act as de-facto advisors, offering guidance on various issues such as technological design, customer acquisition, and strategies for selling products in schools. Kaplan has provided the entrepreneurs with office space, which has been designed with a loft-like aesthetic and features an open work space with tall windows, glass-enclosed rooms for private conversations, and even a basketball hoop. Adjacent to this startup space is an area occupied by Kaplan employees, featuring cubicles and giving the startups access to Kaplan’s resources, including some of its proprietary products. Kaplan, headquartered in Fort Lauderdale, Florida, is part of the publicly traded Washington Post Co. The company provides test-prep services and operates for-profit higher education businesses on multiple campuses across 21 states. As of the second quarter of 2013, Kaplan reported revenues of $548 million. At the New York office, the startups receiving mentorship include Newsela, an organization that offers an online system for delivering nonfiction texts customized for different reading levels. Newsela’s founder, Matthew Gross, and his team have benefited from the guidance of mentors such as Seppy Basili, the Vice President of College Admissions and K-12 Programs at Kaplan’s test-prep operation. The startups’ workspace is designed to create an environment that fosters the flow of ideas and advice. Entrepreneurs often share advice on various subjects, ranging from experts in video-game design to financial management. Kaplan has also embraced a startup mentality in its operations by organizing hackathons for employees to generate innovative ideas and launching internal startup projects. Overall, Kaplan’s support for startups exemplifies their commitment to innovation and forward-thinking in the education sector.
Accelerator programs have the potential to be a valuable resource for startups trying to break into the K-12 education market. Donna Harris, co-founder of 1776, an organization supporting startups, believes that partnering with the right corporate companies can help startups overcome the barriers they face in the education sector, ultimately fostering innovation in schools. One such partnership is between 1776 and Pearson, with Pearson supporting education startups on 1776’s campus in Washington, D.C. According to Harris, startups can accelerate their growth by collaborating with Pearson, resulting in a combination of fresh ideas and existing infrastructure.
Diana Stepner, head of future technologies at Pearson, explains that their partnership with 1776 is part of Pearson’s larger initiative to connect with education startups. While business deals may arise from these partnerships, Pearson primarily sees potential in gaining insights from entrepreneurial minds on how to build effective teams and develop ideas and products quickly. Startups tend to make decisions faster due to their smaller teams and agile structure.
However, some caution that entrepreneurs need to fully understand the conditions of the support they receive when partnering with corporations in accelerators. Mandela Schumacher-Hodge, general manager of Startup Weekend Education, emphasizes the importance of clear communication between the supporting entity and the startup founders. This ensures that entrepreneurs are aware of the nature of the support they are receiving and any potential financial implications.
In contrast, Kaplan, a company known for its educational services, takes a more open approach. According to Mr. Rodriguez, a former startup founder who now works for Kaplan, the company allows startups it helps nurture to develop their products and services freely. Kaplan may offer to acquire these startups or form business partnerships with them if they show promise. Mr. Rodriguez acknowledges the risks involved, as some of these startups may become competitors to Kaplan. However, he believes that taking such risks is necessary for fostering innovation and growth. He emphasizes that there are no strings attached in the support Kaplan provides and that startups are encouraged to make decisions that make sense for them.
