The 'venturesome' economy
Nowadays, though, I am scared. Through many failures and some successes, I have come to see what venture capital does to industries. While I spent my entire career looking for innovation opportunities, I have lately realised that disruptions can be literal and really destructive. Of course, my age explains my scepticism, but that also allows me to see things in context.
Also, the reason I am scared is personal: I chose, early in my career, to be in education. That's what I have done for over twenty years now, not just working in it but also reading, thinking and talking about it. There was venture-talk in education for some time and the first time I tried was in the 90s: But the pandemic has accelarated this and suddenly education, particularly Edtech, is the darling of the venture capital. Knowing what venturesomeness does to industries, I am scared.
As the popular culture will have it, the venture capital 'wakes up' sleepy industries and infuses entrepreneurial spirit in it. It breaks vested interests and creates new possibilities: New consumers come in, technology creates new springboard and everyone lives happily ever after. The publicity industry celebrates the 'entrepreneur' as the new hero - he that slays the regulatory dragon and unleashes the great creative spirit!
But exactly the opposite happens in reality. The easy money flows to the VC firms, which are manned by ex-Bankers joined in the hip with vested interests. They are as establishment as they can be: The Donald Trumps of the Sand Hill Road (or equivalent). They scoff at the hardworking entrepreneurial fool and spend Thursday afternoons at Country Clubs instead of work desks! They don't create the technology disruption: They follow it. Those industries where consumer profile and preference are changing, new technologies and ways of doing things are emerging and regulatory oversight is drooping - they target those to make money! As they go in, they create the short-cycle bubbles with all the wrong incentives, usually not through creating value but by destroying the social contract that underpinned the activity. The reward structures are changed - away from the hard-working entrepreneur to the disconnected speculator who could care less for the lives of workers or consumers! And, we know how it ends: The bubble ends, the big guys get out and the small guys get stuck, entrepreneurs are burned for life and the industry goes backward. Disruption it is - indeed!
I am scared that this venturesomeness is coming to education. There is all that excitement about valuations and people getting rich overnight. Those entrepreneurs and professionals who made money the foolish way - by working hard - are now waking up the promise of easy money and flashy recognition. Of course, they know that if you read about a hot industry in the newspaper, it's already too late: But such lure, when cheered on by self-interested media, is hard to avoid. The Pandemic made it worse: All those schools caught like deers in headlights followed the media stories and suddenly arrived at EdTech overnight and the regulators, clueless to regulate something unprecedented, meekly gave in. There was money to be made - so the VCs swooped in!
Sadly, I am beginning to think that when it ends, education will go backwards rather than forward. There is just too much incentive to do useless stuff, do smoke-and-mirrors edtech and hope that some fool will give money to that. The speculators are out in drove and what was a perfectly good industry is beginning to fall prey to speculators of all kinds. We all know how lotteries work: little losses of a lot of fools make up big prizes for a chosen few! We are at that time again.