Union Square Ventures, the New York City venture capital firm best known for backing high-profile Web 2.0 startups such as San Francisco's microblogging service Twitter Inc., is paying a lot of attention to education these days. The firm's three partners -- Fred Wilson, Brad Burnham and Albert Wenger -- sat down with The Deal for a Behind the Money roundtable interview to discuss the firm's interest in education; what's wrong with the current system; how Web 2.0 technology may be able to fix it; and what opportunities lie ahead for startups. Watch the video above or download it at iTunes.
"We were looking for opportunities where the Web was going to be
fundamentally disruptive," says Burnham about USV's conception in 2003. "We were looking for any opportunity where we thought an industry could be fundamentally changed, and I think education is one of those."
"There is zero cost of distribution on the Web," continues Burnham.
"It's a ubiquitous medium now. I think we will begin to see fundamental
transformation in education, and that's why we're paying attention now."
The educational system in the U.S. is "badly broken"
and "stuck in the past," says Wilson, who points out that the current
system has failed many a technology entrepreneur from Microsoft Corp.
co-founder Bill Gates, who dropped out of Harvard as an undergraduate,
to David Karp, the founder of USV portfolio company Tumblr Inc., who
didn't even finish high school.
"It's
clearly not serving the best and the brightest of our youth very well
and hasn't been for a long period of time," says Wilson. "And then
again there are whole swaths of our youth that are not even graduating
from high school so it's failing them too."
In terms of startup opportunities, Wenger says the firm is looking at education very broadly and watching with interest projects such as the OpenCourseWare Consortium,
a collabaoration of 200-plus higher education institutions, and
thinking about ways people can add to the coursework being published
online and teach other.
"We've always had an interest in
marketplaces," explains Wenger, who says there are several startups
that are creating marketplaces in USV's portfolio. "Etsy, for instance,
is a marketplace
for handmade goods that puts somebody who makes something directly in
touch with the buyer. The same is happening in some startups that are
focusing on education that are enabling individual teachers to teach
over the Internet a particular course either to an individual or group."
USV has not invested in an education startup to date but is hosting an
invitation-only event on "Hacking Education" on March 6. Closed to the
press, the event will be held at a "small venue in
midtown," says Wenger. "We are bringing together entrepreneurs,
academics, educators and others for a day of round-table discussion."
The fortunate invitees hope to "learn
from the best, share ideas and energy about education revolution, and
leave with actions on how to go faster," says Dave Schappell, CEO of
TeachStreet Inc., who is flying into New York from Seattle to attend
the event. Backed by Madrona Venture Group and Bezos Expeditions, TeachStreet leverages the Web to connect local instructors with students
in Seattle, Portland, Ore., the San Francisco Bay area and Denver. - Mary Kathleen Flynn
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