Babbage: What distinguishes Knewton from traditional long-distance learning, and from other online offerings?
Mr Ferreira: All the value ever created by the internet falls into one of two categories: distribution or personalisation. As major pieces of education infrastructure move online, new technologies are being developed to manage that transition. Virtually everyone else is focused on distribution. Knewton is focused on personalisation. We want to work with everybody: we’re lining up partnerships with some of the great education publishers and schools around the world. We’re also going to release a retail version of our software, so that anyone anywhere can upload content, make it adaptive, and share it with anyone else around the world. [Read the rest of the interview.]
A friend of mine recently sent me the interview above. (Thanks, Ryan.)
I like the idea that distribution is one of the big benefits of the Internet. The cost of distributing information, experiences has collapsed. It’s like the effect enjoyed by the hinterlands of the northeast when canals were built in the early 1800s. Greater share of total economic activity moved to the canals and the total amount of activity went up as the costs of transportation and distribution went down. Ditto, railroads, department stores, supermarkets. But personalization is too narrow, I think, to cite as the second (of two!) big benefits. I would go up one level and say that personalization is a type of enhanced product so the label for that particular big benefit from the Internet might more accurately be “product quality.” Personalization fits under that headline label I think, alongside feature-richness, diversity of assortment, things like that. I think the other big benefits of the Internet — if we are trying to make an inventory of the fewest categories that capture the maximum % of the answer — might be (3) Idea Generation — Internet explodes the concept that there is a priesthood of people who are allowed to come up with and put forth new ideas — and (4) Production costs, particularly true with software. Then you could arrange the four in order of the product lifecycle: Idea Generation, Production Costs, Product Quality, Distribution Costs. Again the parallels to canals, railroads and vertically integrated industrial production are neat to think about.
I think education is an attractive market right now. The basic human desire to invest (time, effort, $, etc.) to improve one’s own situation is deeply written into our DNA. And now that online access is ubiquitous and cheap and people have learned over many years that quality content can be had online, I think it makes perfect sense that many of the dollars and minutes people spend offline on these activities will move online *and* the market size will increase significantly as transaction costs for accessing education fall significantly. While I haven’t invested in test prep or in the companies that aim to substitute university coursework, I have invested in technical education (Bloc.io) and lifestyle learning (Craftsy / Sympoz), and “brain wellness” (Lumos). They are at different stages of life but I feel like they each benefit from the macro trends in the consumer market generally. Plus they are founded and run by some exceptional people. Micro-economic (inside the firm) excellence — that’s the best “macro” trend you can have going in your favor.