Cover letters and résumés could soon be things of the past thanks to one Mountain View, Calif. ed-tech startup.

MindSumo, founded by Keaton Swett, Trent Hazy, and Rohan Puranik, hosts what they call MindSumo Challenges. These contests test specific skill sets to help companies recruit talent. Currently about 75 percent of its challenges are geared toward engineers.

Companies pay a fee to post contests on the MindSumo site that are open and free to students with current .edu email addresses.

For example, one of the current challenges asks students to propose an algorithm for a visual tracking system that can be used to identify endangered rhinos and protect them from poachers. The winner receives a trip to Kenya, with a seven-day stay at the Ol Pejeta preserve. They’ll tour the preserve and help implement their winning idea.

Facebook, Microsoft, Kayak, Amazon, and others have all signed on to host challenges with the company that began in 2011 as part of the Stanford Student Accelerator StartX. Last year, MindSumo raised $1 million in a seed round funding from investors including Google Ventures, Voyager Capital, and Data Collective.

Swett and Hazy, who are both half Hungarian, originally met one summer while volunteering for their churches in Hungary.

Swett, a 26-year-old Johns Hopkins University graduate and president of the company, said the premise of MindSumo Challenges is to expose students to real world situations, noting that it’s like building a portfolio to prove you’re a good candidate.

“Students don’t know where to go for opportunities they want,” Swett said in an interview with VentureBeat. “Companies find it hard to evaluate their work too, so [MindSumo] provides meaningful engagement and a greater depth of information on relevant skills.”

CEO and Stanford University alum Hazy, also 26, said MindSumo has become the token pivot story for StartX since their ideas were torn down upon entering the incubator. Essentially, they were accepted to the program because they had a strong team, but they lacked a viable company objective.

StartX mentors told them to lock themselves in a room with whiteboards and ask where they saw the world headed in five years. Hazy said this was terrifying.

“Our original idea was to build an opinion app that crowdsourced buying choices,” he said. “We realized you can monetize solutions but not opinions.”

The website has continued to evolve since. On April 22, the company launched Resume Review, which gives individualized resume feedback from a team of industry professionals and recruiting experts. They company now has eight full-time employees.

So, what advice do they have for up-and-coming entrepreneurs?

CTO Puranik and CEO Hazy

“Find the right people to start whatever you want to start,” Swett said. “Most startups fail because of founder issues. It’s also important to be very straightforward about the vision you have and be flexible about it.”

Hazy said that an important phrase to remember during the startup process is the idea of an unfair advantage.

“You have either the connections or skills,” he said. “You need to dig and figure out where you can pull on levers.”

Swett said MindSumo is different from their competitors, such as College Feed and Ready Force, since MindSumo is not just a database of profiles.

Find out more about the startup here.

Top image: MindSumo founders: CTO Rohan Puranik (left), Trent Hazy (center) and Keaton Swett (right). Photo credit: Courtesy

Why do students cheat — and how are they getting away with it?

One unintended use for massive open online courses, dubbed “MOOCs,” is to help professors better understand the mechanics of cheating in online learning.

Bernard Bull, an assistant vice president for academics at Concordia University Wisconsin, will ask his class to cheat for the purposes of anthropological research. Students will then be asked to disclose exactly how they cheated.

The assignment is a unit in a new class, “Understanding Cheating in Online Courses,” which is offered through the Canvas MOOC platform run by Instructure, a course-management company.

This research will come in particularly handy for educators and online course providers like Instructure and Coursera. With a handful of Coursera courses recently approved for credit, the fear is that students will simply perform a Google search if they’re stumped. As the New York Times reports, the solution may be a new technology for remote proctoring, where online test takers are tracked via their keystrokes.

In the meantime, Bull hopes to dig into the psychology behind cheating and to take steps to prevent it. He embarked on a study a few years ago and found that half of all cheaters never get caught, prompting further investigation. According to Instructure, he held off on publishing this research until he could get a better handle on what motivates people to cheat.

One interesting example is a girl who claims a former boyfriend sabotaged her online test by logging in under her user name. But it was a lie — she made up the whole story in order to get a second chance at a test. Bull’s class will explore the reasons that this girl felt compelled to cheat, and whether the current education system can be adapted to prevent such behavior.

Coursera, the online course provider, is one of the fastest-growing startups that is transforming how we learn.

Today, the company announced a partnership with a fellow ed-tech startup, Chegg, and is striking deals with the largest publishers. The goal is to make it easier for students of online courses to access relevant academic content on the web.

Large publishing companies, including Cengage Learning, Macmillan Higher Education, Oxford University Press, SAGE, and Wiley will experiment with offering Coursera students versions of their digital textbooks, delivered via Chegg’s e-Reader. Students won’t be charged to access these materials while they’re enrolled on a course.

“We recognize the importance of forging partnerships with other stakeholders in the education space,” said Daphne Koller, Coursera’s cofounder. “By collaborating with publishers, we are able to provide access to some of the world’s best resources to Coursera students.”

Every few months like clockwork, Coursera announces that more universities around the world have signed up to offer courses on its video platform. The Silicon Valley-based company recently achieved a major milestone when a handful of its courses were approved for college credit.

Coursera was formed by Stanford university professors Koller and Andrew Ng. With the technology proving to be a hit with students, the founders are currently working with California state legislators and local educators to encourage state colleges and university to give credit to online courses.

”The movement is still relatively young, but I’m pleased we’re seeing so many of the best universities committing to teach online classes” Ng told VentureBeat in a recent interview. “This proves we’re no passing fad.”

Top image via Coursera

In his employer’s eyes, Dan Brittingham, a dropout from the University of Michigan’s nursing school, was far more desirable hire than any Harvard grad.

Enstitute’s Dan Brittingham

Brittingham, 24, is one of eleven fellows enrolled in New York-based Enstitute, a college alternative for dropouts and a few recent grads. He was selected by Enstitute’s founders [above] from over hundreds of applicants for demonstrating critical thinking, drive, and an aptitude for entrepreneurship.

The fellows are placed in a two-year apprenticeship –most end up at tech startups. They report to a chief executive, rotate around different departments, and learn deep technical and managerial skills they would not be exposed to at college.

“These kids are hungry — it’s not like a normal intern,” said Nihil Mehta, CEO of LocalResponse, and Brittingham’s boss. “I’ve hired Harvard kids, and can tell you that the fellows have another level of commitment and no sense of entitlement.”

By his sophomore year, Brittingham had started two Internet ventures from his dorm room. When he graduates from the apprenticeship, he intends to raise funding for his third company or join a data scientist team, a job that currently commands in excess of $300,000.

Brittingham (in the blue) with his colleagues at LocalResponse.

“There is no disconnect between the learning material and how its applied,” said Brittingham, who is dipping his toe in various departments at LocalResponse and is picking up technical skills he would not have been exposed to at school.

Enstitute is one of many recent experiments designed to address the so-called technical skills gap. With most colleges failing to endow students with the skills to compete in the digital age, dropout rates are increasing. A recent study, “The American Dream 2.0,” found that 46 percent of college students fail to graduate with any credential within six years.

Enstitute’s founders at the NEXT Leader of the Future award ceremony

“I had to force my way through the system,” said Enstitute’s cofounder Kane Sarhan. He barely graduated from Pace University (he completed the requisite credits online after dropping out several times), but he excelled in two apprenticeships. By 24, he was working as a creative director at LocalResponse alongside Harvard Business School graduate Shaila Ittycheria.

Ittycheria was over $100,000 in debt, and a graduate of the Harvard Business School.

Over beers one night, the pair discussed how Ittycheria could have avoided the MBA. “Shaila got a great network from HBS, but thought she needed that stamp of approval — turns out she didn’t,” Sarhan explained. With that, the pair quit their jobs, and Enstitute was born.

‘Learn by doing’: The apprenticeship

Enstitute doesn’t really care about a fellow’s grades. And neither do dozens of New York tech companies who have agreed to mentor a fellow.

The inaugural class are working at startups like Bitly and Thrillist. They live free of charge with Ittycheria in a loft in the Financial District, and all meals are paid for. They receive a small stipend from their employers of $200 a week.

Enstitute is a nonprofit, and it’s currently raising $1 million from donors to expand the program.

The upcoming class will have even more options for apprenticeships; corporate-level executives and founders at The Muse, Tumblr, Center for Social Innovation, and NY Tech Meetup just signed on.

Kathryn Minshew, CEO of The Muse, said the mission “struck a chord.”

“The best way to learn entrepreneurship is to observe other entrepreneurs,” said Kathryn Minshew, the CEO of job search site The Muse, who is currently interviewing fellows.

It’s a far greater time commitment than taking on an intern. Minshew is expected to expose her fellow to the full scope of the business, including programming, venture capital fundraising, and business development. “So many of my rookie mistakes could have been avoided by first-hand exposure to other, more experienced technology entrepreneurs,” she explained.

In addition to the apprenticeship, the fellows attend evening events where they hear job tips from inspirational speakers and are offered a supplemental curriculum of online and offline classes. Upon graduation, the graduates receive a certification that encompasses a detailed overview of material.

If employers are looking for something more concrete, each fellow develops a digital portfolio.

Enstitute: Meet Silicon Valley

This week, Sarhan will meet with entrepreneurs and potential donors in Silicon Valley. Already, chief executives are receptive to the idea, and many are buzzing about the opportunity to mentor an apprentice.

“I have hired employees who ranged from college dropouts to Ph.Ds in computer and neurosciences,” said Manish Chandra, the CEO of fashion startup Poshmark. ”I am open to looking at students and young professionals who have demonstrated their intellect and enterprising nature through alternative programs.”

Poshmark CEO Manish Chandra is open making apprenticeships a “core part of the hiring process.”

Enstitute would consider a job at a tech startup like Poshmark or LocalResponse to be a successful outcome for any fellow.

They also encourage graduates to start their own ventures from scratch, join a large corporation (Sarhan says he’s in initial talks with some household name brands), or return to school.

One year into their apprenticeships, none of the fellows have opted to return to college or apply for grad school.

Interested in hiring an apprentice, or are you 18 to 24 and want to apply to the program? Learn more here.

Selling technology to schools is still a formidable task, but it’s a far less expensive and extended process than it used to be.

And because of this friendlier climate, we’re seeing the second wave of education technology tools and a surge in interest from businesspeople and entrepreneurs. But the education field only received 1 percent of venture capital funding between 1995 and 2011 — and educational startups still face a critical shortage of resources.

Oakland, Calif.-based NewSchools Venture Fund was formed 15 years ago to fund technology intended for K-12 schools. To meet the needs of educators and entrepreneurs, the nonprofit discussed its expansion plans this week, including strategic partnerships with venture firm Rethink Education and Zynga.org, the charitable arm of social-game publisher Zynga.

“Education is undergoing a long-awaited revolution,” said NewSchools’ CEO Ted Mitchell [above]. The partnerships will merge “cutting-edge technology with forward-thinking capital on behalf of kids’ learning,” he explained.

Most interesting is the agreement with Rethink Education; according to a release, the New York-based venture firm with $50 million under management will provide a “significant portion of the fund’s carried interest” to New Schools. Rethink Education will hand over an unspecified percentage of its profits from its investments in its portfolio, which includes Pathbrite and EverFi.

“This marks an unprecedented step in the alignment of public and private education investors and a powerful alliance between the two booming education technology centers of New York and San Francisco,” said Rethink Education managing partner Rick Segal in a statement.

Mitchell didn’t provide further insight into the terms of the deal, but he said the donation is “certainly generous” and will boost seed and early-stage funding.

In concert with Zynga.org, NewSchools also just launched a learning games accelerator. Zynga will provide the office space, access to product managers, and $1 million in capital for the first year. Zynga CEO Mark Pincus made the announcement Wednesday, and he referenced the surge in enthusiasm for educational games. “Everybody at Zynga is passionate about having a positive world impact,” he said.

In lieu of the recent announcements, VentureBeat reached out to NewSchools for insight into its investment thesis.

“A few years ago, our inbound deal pipeline was one or two startups a week” said Jennifer Carolan, the partner who leads the firm’s seed fund. “Now we’ll get 15 calls.”

Carolan said they regularly meet with educators to ask about the gaps and pain points. She said infrastructure is still a “massive problem” in schools, so analytics and cloud-based technology is of keen interest. Another focus for the seed fund is high-quality content, including a curriculum to help students learn to code. Carolan also noted the “unprecedented, rapid growth” of the tablet, and will invest in technology for special needs children.

In the previous ed-tech wave in the 1990s, school districts spent the majority of the budget on hardware, not software. Now it’s the opposite. As a result, “technology is finally reaching kids and impacting learning,” Carolan said. “The goal is for kids to become content creators — not just consumers.”

Images via NewSchools’ Facebook 

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

It’s become far easier for ed-tech startups to sell software to schools.

With this shift, a number of new companies have experienced rapid adoption in K-12 school districts. Netchemia, a startup providing talent management tools, claims more than 1,100 K-12 school districts and institutions in 42 states use its services.

The Kansas-based company says it makes easier to recruit, hire, and retain the best teachers and administrators. Today, Mainsail Partners invested $6.5 million to fuel revenue growth by expanding its sales and marketing efforts.

Mainsail Partners’ Jason Payne said by phone that the firm sees a major opportunity in “teacher evaluation and performance” software. Payne has kept an eye on the company for three-and-a-half years, and believes it’s reached an “inflection point” in which it makes sense to invest.

Mainsail specifically invests in bootstrapped companies, meaning they have not taken external funding. This is Netchemia’s first institutional round.

“Developing the best teachers and school leaders is fundamental to improved schools and high student achievement,” said Netchemia CEO Carlos Antequera. “It is a key part of our current national discussion over education.”

Entrepreneur Andy Russell believes most apps and games for children aren’t nurturing learning and are as addictive as candy. He refers to Angry Birds as a “digital pacifier.” So Russell’s company, LaunchPad Toys, is developing games that are grounded in “constructionist learning frameworks” — an insidery term for learning-by-creating.

LaunchPad has traditionally focused on creating digital experiences for kids ages six to 12, but it has just launched a new app for kids as young as three. The team partnered with DreamWorks Animation to develop the new Toontastic app for iPad and iPhone [right], which features characters from the new Shrek movie.

Younger kids need more “spark and a catalyst to kick off their storytelling,” said Russell, so the new app features story-starter videos that introduce a problem or conflict. Kids get to decide what happens next.

“The goal is to make content creation accessible to kids at a very young age,” Russell explained.

Its first iPad app, Toontastic, won the approval of teachers, and hit the iTunes hall of fame. The app was designed in partnership with Stanford’s graduate school of education (Russell is an alumni) and the San Francisco’s Children’s Museum. The app teaches storytelling skills through animating cartoons. Russell says kids have already created 5 million cartoons.

LaunchPad [left] aims to be “the disruptor” in the $15 billion creative toy market. To develop new apps and games, the startup pulled in funding from venture capital firm General Catalyst and Obvious Corp, among others. “We think ‘edutainment’ will be huge — especially for kids,” General Catalyst’s Niko Bonatsos told me. “The long-term vision is neat, too.”

DreamWorks Animation regularly teams up with mobile gaming giants like Rovio (creator of Angry Birds), but it is increasingly open to partnering with ed-tech startups.

“This is a great example of how DreamWorks Animation is embracing new ways of connecting with our audience,” said Chris Hewish, head of global interactive for DreamWorks Animation. Hewish said his team views LaunchPad as one of the “smaller studios that have large ideas.”

The Toontastic app makes money through an in-app purchase, but Russell said he “goes back and forth” on the revenue model. Some app developers have made money when kids buy virtual goods (and parents’ credit cards are attached). According to Russell, kids are purchasing Smurfberries in a manner akin to pumping quarters into a slot machine. “I view that as taking advantage of young children,” he said.

To avoid controversy, the revenue model for the junior app is a little different. For a one-time purchase of $2.99, kids or adults can download the app and access cool features. It’s designed for kids to play together in a small group — each player can pick a Shrek character and animate it.

The LaunchPad Toys team see an amazing opportunity to help kids learn and grow up to become independent thinkers. It’s a similar line of thinking to Salman Khan, the-educator-turned-entrepreneur behind online course provider Khan Academy. At an ed-tech conference yesterday, Khan remarked that we need a “large creative class” and that students have to learn to question authority rather than sitting passively in classrooms.

“These tablet devices are like digital arts and crafts,” said Russell. “I want to turn kids into makers, producers — and not just content consumers.”

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At the NewSchools Summit this afternoon, the former head of Chicago’s public schools said he believes that technology not only improves access to education but also graduation rates. In a discussion with Steve Jobs’ widow, Laurene Powell Jobs, Duncan referred to many schools and universities as glorified “dropout factories” and called for teachers and parents to “knock at his door or the governor’s door” and demand better for their children.

U.S. Education Secretary Arne Duncan in conversation with Laurene Powell Jobs, the president of the Board of College Track.

Duncan has made significant steps in his tenure as education secretary — although his efforts have incurred significant criticism from the National Education Association. Duncan has secured increases in Pell grants for students to attend college, and he is a supporter of innovation through programs like “Race to the Top” and “Investing in Innovation.” Additionally, he has helped secure an additional $10 billion to avoid teacher layoffs and $500 million for a national early learning competition.

But these efforts are not nearly enough, and Duncan conceded that “we have so far to go.”

“Until parents say my school needs to change, politicians will continue to talk the talk but not walk the walk,” he said. Duncan said he’s frustrated by the way that the education dialogue has been consistently shoved to the corner and hasn’t been the center of a national conversation. “Education wasn’t a big issue in the [presidential] debates,” he noted.

What can technology entrepreneurs do to help?

Massive open online courses, dubbed MOOCs, have captured the attention of educators, state legislators — and motivated investors to open their check books. As we reported, a bill was recently introduced in the California State Senate that would force the state’s public colleges and universities to give credit for online courses.

Online courses are traditionally the realm of higher education, but Duncan views an opportunity for expansion to K-12. Stanford and MIT professors are currently teaching courses like basic algebra, Spanish, and molecular physics on Coursera. Why can’t middle school teachers?

Duncan asked, “Can we find ways to scale the amazing teachers we do have?” He noted that there should be a way for an inspirational teacher at a charter school in Tennessee to instruct 50,000 a day. “The MOOCs are at the top of my list,” he said.

Related: Ed-tech entrepreneur Sal Khan spoke earlier this morning at the New Schools Ventures Summit about his vision for education.

Technology can also help kids with special needs, and Duncan suggested that the new crop of apps can help them “break through.” He didn’t proffer any specific examples, but he suggested that parents need to start using richer language with their children, and certain educational games can help.

From a policy perspective, Duncan said his plans are to drastically increase salaries to $120,000 to $150,000 a year for the best teachers and $200,000 for principals. “I’m trying to make an investment,” he said, as good teachers are responsible for turning out future leaders who will contribute to the economy.

After addressing a number of ongoing problems (schools closing down, the burdensome cost of college, and more), Duncan concluded the discussion on an optimistic note. “I think what we’re going to do in the next few years will change education opportunity for future generations,” he said.

Check out the agenda, and catch the best talks from the NewSchools Venture Summit on EdSurge’s LiveStream.

Top image via Flickr

BURLINGAME, Calif: Salman Khan, founder and CEO of Khan Academy, spoke this morning at the NewSchools Venture Summit on his vision for education in 2028.

Khan drew a terrifying comparison between factory workers on the assembly line, who move when a bell  rings every hour, and today’s classrooms. The educator-turned-entrepreneur said that what we need now is a “very large creative class,” meaning students who are passionate about learning a variety of subjects.

“It’s no longer about sitting passively and not questioning authority,” he remarked. “You have to be able to question authority.”

Khan Academy is best known for its computer programming and design courses, but it offers thousands of instructional videos. The goal is to help students and adult learners pick up new skills at their own pace.

“We won’t have five thousand people who can help on cancer research. We will have five million people,” Khan predicted, and was met with applause from the audience of teachers and ed-tech entrepreneurs.

Khan concluded his talk by making the promise that his “dream” will seem a lot more reasonable and mainstream in 2028. “This thing we call education will be widespread and a human right,” he said.

Check out the agenda, and catch the best talks from the NewSchools Venture Summit on EdSurge’s LiveStream.

The Federal Communications Commission announced today it has hired Michael Steffan as the director of digital learning. In his new role, Steffen will lead initiatives to expand access to broadband Internet in schools.

FCC Chairman Julius Genachowski explained, “Broadband and digital tools have game-changing potential for education.” Improving connectivity is a first step toward teachers and students taking advantage of the new education technology.

The appointment is timely given that senators, like John D. Rockefeller IV, are pushing for an extension of the 2010 E-rate program, which subsidizes Internet services for schools and libraries. The FCC believes that these institutions should offer lightning fast connections to the web.

The FCC, which is currently the largest funder of Internet Connectivity in K12 schools across America, has endorsed E-rate reforms. In January, Chairman Genachowski called for the nation’s mayors to bring one-gigabit Internet access to one community in each state by 2015.

Steffen will draw on experience bringing connectivity to America’s most remote school districts. Most recently, he served as the Chairman’s legal advisor on wireline, international, and Internet policy issues. During that time, he oversaw the creation of the Connect America Fund, a broadband infrastructure program for rural America.

The FCC has stepped up its involvement in education, but is also concerned with other sectors, including health care. Last month, the commission appointed Matthew Quinn as Director of Healthcare Initiatives. In this role, Quinn is helping to facilitate the availability of medical devices that require spectrum; and ensuring that rural hospitals and other health care facilities have required connectivity.

Top image via Shutterstock

Pearson has acquired Learning Catalytics, a cloud-based learning assessment system developed by two Harvard professors, for an undisclosed sum.

Learning Catalytics’ tools for the interactive classroom were developed and tested at Harvard. Faculty can ask open-ended or critical thinking questions, and students answer on a tablet, laptop, or mobile device.

This helps professors determine which areas require further explanation, so they can automatically group students for more in-depth problem solving. Professors can understand students performance in real-time — even while lecturing.

The news was announced in a company blog post today, with Learning Catalytics’ Eric Mazur citing Pearson’s “global reach” as an attractive quality. According to its website, Learning Catalytics won’t be shut down — it will still be available to current and new customers.

Paul Corey, Pearson’s higher education president, said Lukoff will continue to develop the product in accordance with the company’s product roadmap. In an interview, Corey said he was impressed by Learning Catalytics’ formative assessment platforms, which are “integral to Pearson and online learning growth.”

“”We have no imminent plans to change the brand of the standalone product,” Corey confirmed. But Pearson’s MyLab and Mastering products will be enhanced by Learning Catalytics’ capabilities.

Pearson claims to be the leading learning company in the world; it’s certainly one of the largest and most powerful. But it has been accused of failing to innovate at the pace of the new crop of ed-tech startups. To stay current, the company launched an accelerator program, and makes strategic acquisitions.

The strategy doesn’t always work; as we reported, Pearson-backed Alleyoop shut down in March. 

Learning Catalytics cofounders Mazur and Gary King will continue to consult for Pearson and the third, Brian Lukoff, will join Pearson’s engineering team.

Top image // Shutterstock

Online course providers typically target students, but Udemy is going after an underserved group: professionals.

The San Francisco-based company launched “Udemy for Organizations” today to help companies train their employees. The available courses include soft skills, like people management and public speaking, as well as training in common programs, like Adobe Photoshop or Microsoft Excel.

A small business might decide to buy twenty licenses for the marketing team to refresh their understanding of Excel — Udemy offers a popular Excel for beginners and intermediaries online course. Alternatively, if the CMO has been knee deep in spreadsheets for years and has knowledge to share, employees can create their own Udemy course.

The company will be rolling out its new corporate training and development program during the coming weeks.

Udemy COO Dennis Yang

“We have formal education on our platform — but much of it is skill development and life-long learning,” said Dennis Yang, Udemy’s COO, in an interview.

Udemy is one of the well-known providers of massive open online course — dubbed “MOOCs.” While it’s rival Coursera has focused on enlisting lecturers from top colleges like Harvard and Stanford to teach college-level students, Udemy has excelled at professional and corporate training.

It’s also a potential revenue opportunity; Yang said it’s free for customers to register to Udemy, but the company charges for some courses. In future, they will consider offering a site-wide license for larger organizations.

One of the biggest challenges for MOOCs is to convince people to take courses for the sake of learning. For this reason, Coursera received widespread attention from educators and policy-makers when a handful of its courses were approved for college credit. A few months later, a landmark bill was proposed in the Senate to force California’s public colleges and universities to give credit for online courses.

Yang said they will leave it up to the organization to provide “branded recognition” for employees that pass one of its corporate development courses. The hope is that employees will earn promotions and salary boosts by picking up new skills from Udemy, and continue to enroll in its online courses.

Top image via Shutterstock

Education is already accessible online. Now it’s going open source too.

Nonprofit edX is less well known than Coursera and Udacity, its for-profit competition. But it also offers online courses from top universities for free.

Today, the organization is making available some of the code that powers its site open source. EdX announced that it will be releasing source code to its XBlock software on GitHub under the Affero General Public License.

Anant Agarwal, the MIT professor who serves as edX’s president, said in an interview that online learning is the “greatest innovation in education since the printing press.”

This is a first step toward open sourcing the entire edX software platform, a vision Agarwal has been committed to from the beginning. But for now, the interactive course modules built around this code will only be usable with the edX service.

Edx was founded by MIT and Harvard, and has subsequently grown to 12 university partners. Founded in 2011, it is one of the pioneers of massive open online courses, dubbed “MOOCs.”

Educational institutions and independent developers can use the code to deliver a collaborative learning experience — not just simple text and video. In the future, edX plans to offer consulting services, similarly to RedHat for Linux, to bring in additional revenues, which it will share with its university partners.

One of edX’s major goals is for universities to offer credit to students who complete a course. Along with its competitor Coursera, edX is working with the American Council of Education (ACE) to recommend courses that are worthy of college credit.

In California, online education is being widely-discussed as a potential solution for budget-strapped colleges. With thousands of students unable to register for oversubscribed courses, a bill has been proposed in the Senate to force the state’s colleges and universities to give credit for online courses.

photo credit: National University via photopin cc

Pearson-backed edtech startup Alleyoop is closing down, effective March 31.

The Boston-based startup launched in February 2012 to help teens become better prepared for college, and it has grown to 100,000 users.

It’s unclear why Pearson is pulling the plug, but a spokesperson said they have been attempting to innovate in the space for years.

When it first launched, the startup was hailed by the press as the “Zynga for learning.” Alleyoop’s design is reminiscent of a game — students can sign on through Facebook Connect and then search for homework help.

“Fundamentally, we’re focused on big problem of how you help a teen take control of their future,” Alleyoop President Patrick Supanc told Mashable when the site first launched.

The plan appears to be to hand off existing users to the company’s partners. “Soon we plan to share a bundle of very special offers from our trusted learning partners to help you continue your preparation for college,” an email to the site’s users reads.

A spokesperson sent over a full statement to describe how the site will “wind down” in the coming month. Ed-tech blogger Audrey Watters tweeted the news this afternoon.

“Pearson “incubated” Alleyoop with the goal of helping teens to prepare for college and careers.  After three years of design, development, and beta testing — we’ll be closing Alleyoop on March 31. The Alleyoop team will work to facilitate a smooth transition for the online community of users and business partners as we wind down the site.

Innovation is a process of trial and error driven by rapid iteration and risk taking. Over the past few years, we’ve tried some new things and learned a lot.  We’ll build on and apply the lessons learned from Alleyoop and its talented team, such as how to engage and motivate students using adaptive learning and gaming techniques, in new ways in new ventures. From our Research and Innovation Network to our new Catalyst program for ed tech start-ups, we remain deeply invested in developing and scaling effective new models for improving achievement, access and affordability in education.”

Ed-tech entrepreneurs will be spoiled for choice when it comes to picking an accelerator or incubator program.

Education’s old guard Kaplan and Pearson unveiled their new startup programs in a bid to stay relevant. This immediately led to commentators questioning whether these companies are too “corporate” to guide startups in the right direction.

As GigaOm points out, a deluge of new ed-tech accelerators have launched in recent weeks, including Boston’s LearnLaunchX and New York’s Socratic Labs (check out EdSurge’s interactive map of ed-tech startups here). Last year, there was only one: Imagine K-12.

Pearson is channeling behemoths like SAP and Microsoft with their loyalty building startup initiatives. The company won’t take any equity, but the program’s participants will have access to product experts and tools, the opportunity to present at a demo day, and a $10,000 travel stipend.

Meanwhile, Kaplan’s accelerator follows the usual model. The test prep giant is teaming up with TechStars (which is providing $20,000 in funding to each of the founding teams in exchange for equity), and entrepreneurs will spend three months intensively working in New York City with mentors from a lineup that includes Kaplan CEO Andy Rosen, Treehouse CEO Ryan Carson, and Washington Post chairman Don Graham.

For companies like Kaplan and Pearson, this is an opportunity to be part of the future of education-technology, whether it’s developer tools, online learning initiatives, or brain training games.

“Teams aren’t limited to traditional classroom education nor K-12,” TechStars’ CEO David Cohen said in a blog post. “We’re looking for teams that are thinking outside of the box on a big scale.”

However, Dan Carroll, cofounder of ed-tech startup Clever, said he’s seen plenty of ed-tech companies “fizzle out” in recent years because they didn’t communicate well with teachers and schools.

“If education-specific accelerators follow in the path of Imagine K-12 and do a great job connecting startups with savvy pilot schools and teachers, they can add a ton of value,” said Carroll, a former teacher and alumni of elite accelerator Y Combinator. He suggests that Pearson and Kaplan use their “district sales expertise” to benefit the startup ecosystem.

At the very least, these accelerators will generate a good deal of hype around the ed-tech space. But commentators remain unconvinced that it will be generate a slew of high-quality startups led by experienced entrepreneurs. It’s worth noting that these accelerators haven’t invited teachers to come on board in any official capacity.

Faculty associate at Berkman Center for Internet and Society professor Rey Junco made the case that ed-tech founders rarely consult educators when they are designing their products for classrooms. He remarked in a recent post on VentureBeat about the failings of ed-tech startups — many of them venture-backed:

“Startups in other fields don’t behave this way. Imagine a genomics startup that didn’t talk to medical researchers and didn’t base their products on research in the biotech field. Such a company would never exist, let alone be funded by a venture capital firm.”

Likewise ed-tech writer Audrey Watters has already expressed distaste about the new crop of ed-tech accelerator programs.

Kaplan and Pearson incubating edu startups. Gross.

— Audrey Watters (@audreywatters) February 20, 2013

So what are your thoughts? Will these lead to a flooded market of cash flush, poor-quality startups? Or are these new accelerator programs a positive development? Leave a comment below.

Ed-tech company Kno has the support of Silicon Valley venture capitalists, but it has struggled to find its niche, until today.

Kno’s CEO Osman Rashid is confident about a product that can turn a boring PDF into an interactive ebook in “minutes.”

This new publishing tool was originally called “Evolve,” but due to a potential patent issue, the company changed the name to “Advance.” Rashid said in an interview that Advance was initially built for internal use, but they started getting requests from the largest book publishers, including McGraw Hill Education and Wayside Publishing.

Publishers can submit a file to Kno, which can be updated with rich multimedia content, including videos, audio, websites, 3D objects, calculators or simulations. Publishers can add a new interactive element at anytime, then instantly push that new element to all the readers of their digital book.

Advance has a competitive edge over competitor, Apple iBooks, as it is available for iPad, Android, Windows 7 and 8. The company also competes with interactive e-book publishing platform Inkling, which recently launched its online ebook store.

Since launching in 2009, the well-funded startup has worked with about 80 publishers to bring more than 200,000 higher education and K-12 digital books across a variety of platforms, including tablet devices and smartphones.

In the early days, the founders had intended to sell mobile hardware to help students learn. But tablets came along, so Kno made the shift to digital textbooks.

Kno has raised about $70 million in funding from firms like Andreessen Horowitz and SV Angel and is under pressure to produce some revenue-generating tech. Rashid said the product will be available to publishers free of charge, so it’s unclear how the company will make money in the long-term.

Image credit: patrisyu // Shutterstock

It’s almost midnight, and you’re stuck on a math problem that is due first thing in the morning.

In stressful situations like these, online tutoring startup Instaedu can help. The Silicon Valley company specializes in finding stumped students a tutor or homework assistants at any time of day or night.

When the company launched, its core innovation was the pay-by-the-minute model, and the on-demand access to tutors. But with its new features, the startup is moving into the realm of personalized learning.

The Instaedu team is honing its abilities to better match its students with tutors based on their academic needs and interests, so they’ll be tempted to set up regular sessions.

Currently, there are 1,500 tutors signed up from top colleges like Harvard and MIT, but the founders aren’t disclosing the number of registered students. Tutors are paid a fixed rate of $20 an hour (Instaedu keeps the rest), and working hours are flexible.

The tutors connect with students using video chat, text chat and document editing — it’s all online, so there are no travel costs. Alternatives include Edoboard, which provides tutors with online tools, and TutorCentral.net.

“The goal is for our students to get to know tutors better before even having that first lesson,” said Alison Johnston, Instaedu’s 25-year-old cofounder (pictured above). So the new features also make it a bit easier to schedule a regular time to meet with the best possible tutor. They include:

• Real-time messaging so a student can chat with a tutor before scheduling a lesson (this makes it easy to connect with a tutor who is currently online);
• “Smart messages” for students who need to be matched with a tutor that can help with an advanced or niche subject;
• Tutor reviews which are displayed publicly so students can browse tutor profiles.

Instaedu has raised just over $1 million in seed funding from the SocialxCapital Partnership.

Won a place at a four-year college? The odds are against you that you’ll graduate in less than six years — if you complete your program at all. There are an estimated 37 million people in America that have some college experience, but no degree.

If there is a technology solution to this problem, Canadian startup Desire2Learn, wants to be the first to market. With its third acquisition, the well-funded ed-tech company is exploring how predictive analytics can reduce the time it takes for students to graduate college.

Jeff McDowell led the acquisition of “Netflix effect” software Degree Compass

Today, the company has bought the much-hyped “Netflix effect” software for an undisclosed sum. The product is called “Degree Compass,” and it is the brainchild of Tristan Denley and a team of developers at Austin Peay State University, who received a $1 million grant from the Gates Foundation.

It works by helping its users select courses based on their academic interests, and the success rates of students with a similar set of competencies. Inspired by sites with recommendations engines like Netflix and Pandora, the algorithm combs through hundreds of thousands of previous students’ grades and transcripts to make its highly personalized suggestions.

Degree Compass pulls its data from the student information system (SIS), so it can be installed in any university, regardless of whether its a customer of D2L’s learning management system.

According to Jeff McDowell, D2L’s business development and marketing lead, this buy-up will create social value and generate revenue for the already profitable company. “The next evolution in this space [ed-tech] is the analytical layer with all the data that is generated about students and schools,” he said by phone.

McDowell said he was recently approached by Denley to discuss ways to commercialize the software (see below), which was already being used by colleges across Tennessee. This morphed into a conversation about a potential acquisition, with Degree Compass’ developers and data scientists joining the D2L team.

Students get course recommendations in the form of star ratings.

D2L has been building its own analytics toolset for teachers and administrators since it launched in 2009, and saw an opportunity to reach students. The company’s software-as-a-service tools are used by 700 K-12 and higher-ed institutions throughout North America.

Degree Compass is likely to be folded into D2L’s existing set of products in the long-term. “I suspect it could happen,” said McDowell, who added that Denley is under contract to provide ongoing “innovation and evangelism” and help the company connect with college students.

“The ROI on this is huge,” he continued. “If the product is able to save two students from dropping out of college, the tool has paid for itself.” McDowell would not reveal pricing information at this time.

In September 2012, we reported that Desire2Learn had received the largest infusion of investment capital in Canadian startup history. The Waterloo, Ontario-based company pulled in $80 million from New Enterprise Associates (NEA) and OMERS Ventures, the venture arm of one of Canada’s largest pension fund managers.

Top image via Lasse Kristensen // Shutterstock 

In an effort to show off its array of online courses, the University of California has poured millions of dollars into promoting its UC Online system. But as the San Francisco Chronicle reports, only one person from outside the UC system has taken a class.

For its operating costs, UC Online took out a $6.9 million loan from UC. Since the earliest meetings in 2010, it has spent about $5 million, with most going to a marketing company.

Back in 2010, prestigious universities like Harvard and Stanford began to offer their most popular courses online free of charge. In subsequent years, the movement known as the Massive Online Open Courses (MOOC) has caught on. In recent months, universities began to accept them as a form of college credit.

On sites like Coursera, over 700,000 users worldwide can pick and choose from hundreds of courses in the humanities and sciences from dozens of elite universities.

With all the competition in this space, it hasn’t been an easy run for UC Online, given that many of its classes cost over $1,000. The university was only able to attract one high school girl, who paid $1,400 for an online precalculus course at UC Irvine and four units of UC credit.

In a recent interview with VentureBeat, Coursera founder Andrew Ng said their approach worked because they took the time to “build up communities around the courses.” He explained, “Too often, universities had been putting up videos on the web and hoping for the best.”

UC has achieved better results with its student population. Seventeen hundreed UC students are taking 14 classes that launched last year. Keith Williams, the interim director for UC Online, told the San Francisco Chronicle that these courses were developed by the faculty and had undergone rigorous peer review.

Funding for public schools is in short supply. To ensure that the project doesn’t circle the drain, Gov. Jerry Brown — a Democrat who’s had to aggressively cut California’s budget due to multibillion dollar shortfalls – got involved with the UC Online project. He invited popular MOOC provider Udacity to show UC how it’s done.

During a visit in November, Brown made a comparison to the U.S. Postal Service, “a venerable institution being upended by digital change.”

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

This is a guest post by Troy Williams, President of Macmillan New Ventures

The past five years have seen a tremendous boom in education technology (“ed-tech”) startups that are pushing the boundaries of online and hybrid content delivery and learning experiences.

Unsurprisingly, investments in education technology have more than quadrupled from the time I founded my first edtech startup in 1998.

The result has been the emergence of a new teaching model, one that shifts content delivery beyond the walls of the classroom. We’re seeing big advances in adaptive learning platforms from established players like Knewton and upstarts like Brainscape and Cerego; YouTube and Sal Kahn are looking for ways to produce more instructional videos; and online course builders like Udacity, Coursera, and Peer2Peer University are democratizing instruction by way of Massive Online Open Courses (MOOCs).

The development of online, offline and hybrid learning environments, along with the spread of the flipped-classroom model, all fueled by the tremendous growth in ed-tech dedicated capital forces us to reevaluate student and instructor interactions when they are physically in the classroom.

The question now is: Considering all the recent advancements that push learning outside classrooms, what new innovations are being developed to help teachers engage students from within classrooms?

Embedding real-time data into the classroom

While the flipped-classroom has its advantages, it requires knowledge of what students have learned or accomplished in their time outside of class.

A common solution is to give a quick poll or quiz at the beginning of class to focus students’ attention on the material at hand and provide teachers with a sense of what the class understands, instantly, before in-class activity begins.

Devices take this one step further. Student Response Systems encourage engagement and provide instant feedback about learning and understanding. Instructors can ask a question at any time during a presentation or activity and students now have the ability to key in their response. Results can then quickly be displayed immediately to the instructor or the entire class.

Classic examples of these systems are Turning Technologies and Promethean ActiveExpression2, while newer companies like Class Dojo and Clever are doing some innovative work to make it easier to share data and record real-time feedback.

Devices and response systems are just one application of real time data applied in classroom. For example, a statistics class at UCLA used a response system to create an active learning environment by turning student responses into a data set for students to experience statistical concepts of distribution and variability. Real time data created in classroom, in this case, made the lesson more tangible for students while providing detailed engagement data back to the instructor.

New devices in the classroom give both student and instructor data to enrich the activity at hand. As devices permeate the classroom, students are primed to having more meaningful peer-to-peer interactions.

Classroom devices encourage peer learning

Teachers that leverage new classroom devices, such as an iPad or other tablets, can foster greater student-to-student interactions. These devices can be shared and passed around the classroom easily—they don’t require a keyboard or mouse ‘driver’ and keep students focused on the discussion and not the device itself.

We know that active inquiry, authentic debates and peer conversations are some of the best drivers for increasing student understanding. Even though hybrid and online learning environments do their best to build peer interaction and learning, nothing can quite replace the benefits of having students collaborating in a room together.

For example, question and answer services like Piazza allow both students and instructors to ask and answer questions, capturing and preserving the buzz around an in-class activity on smartphones and tablets. Digital textbooks from Inkling now can let students share notes and highlights from within their experience, and polling students [there’s a drafting bust here] during a lesson can serve as a jumping off point for small group debates or prompt discussions.

A summer program in North Carolina aimed at preventing student drop out is a standout example I’ve seen recently. Administrators equipped students with tablets and video production apps and tasked the students with creating a visual story over seven weeks. Devices combined with innovative curriculum help students improve their writing skills and reduces the risk of students leaving the program. Check out students using ShowMe to create lessons to share with their peers, or Storyrobe to create digital stories.

In addition to driving peer interactions and learning, devices can be used to virtualize activities and simulate demonstrations.

Simulations and interactive demonstrations can help

Typically, physical in-classroom demonstrations are too cost- and time-intensive to happen very often. Alternatively, many computer based simulations relegate students to a keyboard, mouse and screen, limiting peer interaction.

However, devices like 3D projectors and motion capture technology are becoming more widely assessable and can bring simulations and demonstrations to life by making them interactive and accessible to the entire class. For example, instructors can use 3D projectors to demonstrate a biology lesson by explaining anatomical structures and demonstrate physiological functions of organs, such as the heart. Students and instructors can revolve the image of the organ and expose cross sections to reveal different blood flows.

Probably the most well known example of these technologies becoming mainstream is the Xbox Kinect. Real Illusion’s iClone is used by teachers and students to simulate scientific principles like planetary motion, physics and machinery dynamics.

In another example, a teacher could set up an intentionally incorrect simulation of a chemical, mechanical, or biological process and ask students to manipulate it with their hands (using motion capture devices) until they corrected the error.

One high school in Cardiff, Wales has students use motion capture to conduct a virtual orchestra by waving a conductor’s baton, and learn foreign languages by moving parts of the body. Not only are the concepts brought to life in front of the entire class, but students can use the devices to put their skills to practice in a way that engages tactile and visual learners.

3D motion and video capture can also change the way distance learning is delivered and experienced. Check out this video of students attending a 3D virtual class where they can control their virtual images with gestures and their natural body motion.

How can we maximise classroom interaction?

Today’s classrooms are becoming truly interactive; in fact, they’re keeping pace right alongside the shift toward the flipped classroom. The list of examples goes on—and I encourage you to include other strategies in the comments.

Of course, none of this works without teachers, nor do these examples replace good teaching. But as it turns out, teachers aren’t as averse to using digital devices like tablets, clickers, and smartphones as you might think.

But this is more than just a “back to the classroom” call.

It’s about addressing the opportunities of the physical classroom and taking advantage of the invaluable time students and teachers have together. Imagine how powerful this can be: Empowering our students when they are in and out of the classroom to accelerate learning. We need is both of these learning models to address the real-world needs of our students and schools.

Troy Williams is President of Macmillan New Ventures, where he is responsible for identifying emerging technologies and trends that will have a major impact on student performance and outcomes. From 1998 to 2007, Troy was President and CEO of Questia Media, Inc., an early online electronic book offering that he founded and sold to Cengage Learning. 

Troy is an adjunct professor at NYU, where he teaches the capstone thesis course on starting new businesses in the Masters of Publishing program. He holds a Bachelor of Arts from Rice University and a J.D. from Harvard Law School. He currently resides in Greenwich, Connecticut.

Top image courtesy of Kiselev Andrey Valerevich, Shutterstock

This is a guest post by professor, Reynol Junco

We’re in the middle of an Educational Technology (“ed-tech”) startup boom.

Research by GSV Advisors shows a sharp increase in investments in education companies almost doubling between 2007 and 2011 to $930 million. Data from the National Venture Capital Association shows that investment in ed-tech companies has almost tripled between 2002 and 2011.

It’s no surprise that the number of ed-tech startup companies has grown exponentially and will continue to do so into the foreseeable future.

The market is flooded with these startups and clearly, there is a great deal of interest from venture capital firms.

Many ed-tech startups typically build their product because one of the founders had a particular issue in college that they think can be addressed with a new technology or by building an education version of an existing technology.

For instance, a founder might think “I used to forget to bring my chemistry book to class so why don’t I develop a cool app that automatically texts students right before a class where they need a book?” (Please note that I did not base this example on a real startup; however, I wouldn’t be surprised if such a product existed). Other ed-tech startups have an idea they think should result in improved student outcomes and they run with it.

I hate to break it to you…

This may come as a surprise to ed-tech companies, but you’re not going to invent the next big thing by shooting in the dark. Without knowing the research on how students learn and develop as well as the literature on how technology affects student outcomes, the chances of your startup magically creating student success are almost nonexistent.

Indeed, it’s not the technology that generates learning, but the ways in which the technology are used.

Ed-tech startups rarely, if ever, talk with educators about designing their product. You’d be surprised at the number of emails I get asking me to comment on a product after it has been conceptualized, built, and tested. I have dubbed these messages “tell us how cool our product is” emails.

Startups in other fields don’t behave this way. Imagine a genomics startup that didn’t talk to medical researchers and/or didn’t base their products on research in the biotech field. Such a company would never exist, let alone be funded by a venture capital firm.

Yet, in this new boom investors are more than happy to fund an ed-tech startup whose employees have never bothered to read a single piece of educational research. My fellow academic rebel Audrey Watters famously commented about a $2.5 million investment in Codecademy, “Wow, bullshit badging and shitty pedagogy wins the day in ed-tech investing.”

Educators and researchers who know about how students learn know that there is nothing special about Codecademy. The flashing lights and pretty buttons fool the venture capital firms and foundations that invest in these kinds of startups. Since funders also know next to nothing about how students learn, of course these ideas sound amazing.

Where’s the data?

Lastly, there is the issue of adoption of new technologies by educational institutions. Higher education faculty and administrators are already distrustful of startups because there is inherent skepticism about for-profit ventures. Ed-Tech companies have no data showing that their product does what they say it does. Indeed, in their Unleashing the Potential of Educational Technology report the U.S.’s Council of Economic Advisers politely wrote, “It is difficult for producers of these technologies to demonstrate the effectiveness of their products.”

It’s actually not that difficult to demonstrate effectiveness, it’s just that startups have been unwilling and/or do not have the expertise to do so. Having evidence is crucial in convincing educators to adopt a new technology — don’t tell them that your new technology is effective in improving student learning, show them.

Here are some suggestions for getting it right:

1.  Collaborate with an academic when developing your product. You don’t have to have an educator or a researcher directing what you do, but at least get some input so that you know you are building a product that might have some utility.
2. Assess your outcomes. In business-speak this usually means “provide financial figures to show you are being successful;” however, what you must provide to educators are data that show that using your product does what you say it does. Did you develop an app that’s supposed to increase student lecture attendance? Then design a study with your academic collaborator to evaluate differences in attendance rates between app users and nonusers. Remember, data are the lingua franca of academic circles.
3. Refine your technology based on assessment data. This goes beyond bug fixes and UI design. In collaboration with your academic collaborator, you’ll likely discover ways to make your product more robust in doing what you want it to do. Recently, my colleagues and I published a paper showing that using Twitter to continue discussions outside of class was positively related to student engagement and learning; however, using Twitter as a back channel for in-class discussions was not. If your outcome studies don’t yield a positive effect, at least you’ll have some great data with which to refine your product.
4. Publish what you find. No matter what you believe about the current academic publishing process, the academic culture values results presented through peer-reviewed academic publications more than blog posts, presentations, and “white papers” (a phrase I absolutely despise, but that’s a topic for another day). Not only will you have clout in academic circles when you publish data, your academic collaborator will have an additional benefit of working with you (another publication) that will help them in their tenure and promotion process.
5. Learn about the culture of academia and help academia learn about the culture of startups. This will help you understand institutional resistance to new technologies in education as well as help you understand how to best approach your new academic partners.

Reynol Junco is a Faculty Associate at the Berkman Center for Internet & Society at Harvard University. He researches the impact of social technologies on college students. Follow Rey on Twitter and read about his research on his blog.

The opinions expressed in this article are those of the author, and they do not reflect in any way those of the institutions to which he is affiliated.

[Top image credit: wavebreakmedia ltd/Shutterstock]

Ed-tech company Duck Duck Moose collected $7 million for its educational apps for children. The company designs and develops original apps that have met with impressive success amongst parents, children, and investors.

The interactive games incorporate creative visuals, stories, music, and expertise in child development to teach kids important early educational skills. The team consults with teachers and students to make sure the user experience is engaging and constructive.

There are options to suit every childhood inclination. Draw and Tell lets kids tell stories using digital crayons, paint brushes, colored pencils, and stickers. Projects can even be animated, with voice recordings added in. On Word Wagon, Mozzarella the mouse leads simple vocabulary games, while Blue Bear guides young ins through basic math on a playground. I was dangerously close to downloading Princess Fairy Tale Maker… for “my niece.”

Thus far, the company’s 14 paid apps have been downloaded 2.4 million times. The products have also won dozens of awards, including three additional Parents’ Choice Awards this month.

With this first round of investment, Duck Duck Moose will expand its team in order to add more apps into its library. The funding was led by Sequoia Capital and Lightspeed Venture Partners, with participation from Stanford University.

Read the press release.

For the founders, “social” is the missing ingredient in the way that loans operate. By taking advantage of social networks, SoFi is turning wealthy alumni into lenders who pocket a check every month. Students connect with real people (not faceless banks) and default less, and SoFi can offer them a fixed interest rate of 5.9 percent. It’s far lower than a private bank loan or Federal Stafford/PLUS loan.

“The value proposition is obvious to students and alumni,” said Mike Cagney, the company’s cofounder and CEO. “For us, the opportunity is to fix a broken market.” Read more about the company’s recent fundraise here.

SoFi cofounder and CEO Mike Cagney.

SoFi originated at Stanford’s Graduate School of Business (“the GSB”), where over 60 percent of students take out loans to fund their education. It’s the ideal testing-ground for SoFi: Many alumni are engaged, entrepreneurial, and have cash to spare. Before I jumped on the SoFi bandwagon, I had a few questions for Cagney about the challenges of launching a new lending model, and where the company plans to go from here.

VentureBeat: When did you decide to uproot traditional student loan models?

Mike Cagney: We piloted the idea during my fellowship at the GSB, but I have been thinking about this problem when I was in the hedge fund world. [Cagney is the cofounder of Cabezon Investment Group, a global macro hedge fund] At Stanford, everyone was talking about the intersection between social and finance.

We decided to borrow from the microfinance model: The lender is engaged not because of the economics but the affinity as well.

We raised a $2 million fund and lent out $20,000 dollars to 100 students. We were able to deliver a lower loan rate and return a piece to SoFi. After, we sat down with the students and alumni to talk about how we could connect them. On the back of that success, we expanded to a broader number of schools and expect to be in 250 in a couple months.

VentureBeat: It sounds promising. But what happens when a student defaults on a loan?

Cagney: No one has defaulted, yet. There are a few things worth mentioning here: If your income falls below a certain level, or if you’re unemployed and can’t pay your payments, they are deferred out for you. There are the same protections from a legal standpoint as private education loans. We’ll use similar methods to collect, like a civic action. Ultimately, the alumni are taking the default risk. But if a student defaults, their alumni network will see to that — their reputation will be at risk.

VentureBeat: Not all students are the same. Stanford students have a higher earning potential and a lower rates of student loan defaults. How much could you really learn from that pilot?

Cagney: It’s a unique place to pilot, but you can get myopic that the rest of the world looks like that — it doesn’t.

VentureBeat: On that note, why not be flexible with the interest rate? Shouldn’t it depend on the school?

Cagney: We like this whole egalitarian interest rate. That said, there are schools where the default rate is so high, it would never work. If you can’t get SoFi to work in your school, you might want to look long and hard at what the education costs relative to the opportunities it brings.

VentureBeat: How will SoFi make money?

Cagney: We raise money from alumni, put it in the fund, and collect a management fee of .75 percent and service fee of .5 percent from the fund. We were a revenue-generating business on day one.

VentureBeat: One of your investors is the CEO of Renren, China’s largest social networking site. Any international expansion plans?

Cagney: The next thing we’ll do is set up an alumni fund for international students to attend school here in the U.S. Further down the road, we may expand to other countries, but I don’t have the luxury of thinking that far ahead.

VentureBeat: Would you connect alumni lenders with students based on their major or professional goals?

Cagney: We’re not that granular yet. Each school has its own fund, which serves both undergrads and grads. But if a student wanted to go into the nonprofit world when they graduate, and an alumni wanted to support them, there’s a capability to be specific about ways to help.

VentureBeat: Are your investors SoFi lenders?

Cagney: They are. I think it went a long way to validate the thesis of what we were trying to do. Steve Anderson from Baseline is an alumni investor in the Stanford Fund. [Anderson is also an investor in the series A and B rounds] It gave him a front row seat, and he got a check every month on his investment.

VentureBeat: What’s next for SoFi?

Cagney: We’ll build out the customer support side of the business. Also, we plan to set up a balance to prefund loans. When we go into a school, we will set a dollar limit. We will stop when we can raise enough alumni capital to take our million dollars out. It gives us a balance sheet that can make us aggressive.

Image via Shutterstock 

First music, and now online education. Inspired by the success of Spotify, education technology startup, BenchPrep, has transformed into a subscription-based service.

Now, for $30 a month, you can access test prep (GRE, LSAT, SAT, and more) and a variety of courses on your laptop, smartphone or tablet device. The Chicago-based company, which launched in 2011, differs from a free online course service like Coursera, as its curriculum-based courses and test prep are supplemented by licensed textbook content from publishers, including McGraw Hill, O’Reilly Media, and Pearson.

BenchPrep will continue to offer its professional and certification courses on a per-course basis but has shifted to a subscription model for its courses tailored to high school, college, and grad students. As opposed to paying up to $100 for lifetime access to a single course, students can pay $30 a month to access hundreds of courses.

“This is more aligned to the education-as-a-service model,” said cofounder Ashish Rangnekar, meaning that users can dip in and out of learning at any time. Rangekar uses the example of a corporate finance student, who can go back and brush up on introductory finance in a few clicks.

According to Rangnekar, this has disruptive potential and may be an alternative to traditional higher education. “But in the near term, we see this as a complementary tool.” BenchPrep says it wants to replace basic entry-level college courses, so universities can focus on advanced or research-driven courses.

In the future, BenchPrep will expand its focus to tuition so students can get the extra help they need. It’s no surprise given that the competition, Course Hero, recently acquired Cardinal Scholars, a tutoring service. The startup is also investigating ways to use data and analytics to pinpoint gaps in users’ education and bring personalization to the learning experience. Read more about this trend here.

BenchPrep is used by 275,000 students. After raising a $6 million round from NEA and Revolution Ventures, it entered the lucrative textbook market and expanded its range of courses to include information technology, medicine, healthcare, finance, and insurance education. By the end of the year, it will add another 500 courses.

Ed-tech is on fire! Desire2Learn, a startup that has bootstrapped for over a decade, has raised its first round of venture capital funding from New Enterprise Associates (NEA) and OMERS Ventures, the venture arm of one of Canada’s largest pension fund managers.

The startup hails from Waterloo, Ontario, the birthplace of Research In Motion (RIM). With this announcement, the region is hitting the headlines for far more than its gadgets — according to Thompson Reuters, this is the largest ever investment in a Canadian software company.

Desire2learn (“D2L”), which specializes in cloud-based teaching tools, plans to use the funding to hire more staff and step up its marketing efforts. Since it launched in 2009, it has expanded to 700 customers and 8 million students, according to John Baker, Desire2Learn’s founder and chief executive officer.

In an interview with Reuters, Baker stressed that the company has been profitable for years, and had already approved plans to fill 170 open positions before the financing deal was completed.

“We have built a high-growth profitable organization over the years and we want to continue to see that continuing to grow,” he said.

NEA, the Menlo Park-based firm that specializes in early stage information technology companies, has bet big on education technology. In recent months, the venture firm recently poured millions into fast-growing online education site, Coursera, and educational social network, Edmodo. It recently raised a $2.6 billion fund, one of the biggest in venture capital history.

NEA partner Jon Sakoda said in a statement that with its software-as-a-service (SaaS) solution, Desire2Learn is uniquely suited to meet the needs of the largest educational institutions in the world. ”As the $1 trillion-plus education market shifts from older legacy products to best-of-breed cloud solutions,” Sakoda said, “Desire2Learn is the clear market leader.”

Still, the startup faces strong competition from Blackboard Inc., an educational tools provider which sold to private investment group, Providence Equity Partners for $1.64 billion. In 2009, the companies resolved a heated three-and-a-half year legal suit over an e-learning patent. Moodle, an open source competitor, launched in 2002, claims to serve over 50 million users.

Read more here about the next multibillion dollar ed-tech company. 

Its headquarters will remain in Canada, but Desire2Learn has already extended its suite of tools to schools and colleges across the U.S..

E-Learning Image via Shutterstock

Academia.edu, a website that has crowdsourced 1.5 million academic papers, has given university professors the capability to track who’s actually reading their academic papers and research.

In its initial incarnation, Academia.edu was designed as a social network for researchers to connect with each other; it was described by the Chronicle of Higher Education as a “Facebook for nerds.” The San Francisco-based startup has been around since 2008, and it boasts 1.7 million members. After pulling in $4.5 million in funding last year, the site has focused its energies on building analytics around its catalog of freely available research papers.

Founder Richard Price (pictured left) claims that this is a step forward in enabling academics to measure their social and professional influence. The metrics available include a map highlighting the countries that are driving traffic, and which search engines and specific keywords are generating hits for users’ profiles and research.

Price, a young British entrepreneur (check out his profile here), moved to the Bay Area and started the site after achieving a Ph.D in philosophy at Oxford University in 2007.

My bet is that this will likely be part of the site’s long-term monetization strategy, as the analytics are valuable and could be offered as part of a premium service.

The real value proposition for professors is that they can set up profiles with more information than a university profile page typically contains, including links to research papers or personal blogs. One early adopter, Richard Kahn, a professor in the education department at Antioch University in L.A., said that he joined the site because it helped him seem like a “legitimate and influential player in my fields of expertise.”

However, one of the challenges the site will need to overcome is that university professors have typically been slow to embrace social networking sites. For those that are connected, they are overwhelmed with choices such as LinkedIn to Facebook, and it’s a hassle to keep all their online profiles updated with fresh content. The startup will also need to compete with a growing number of sites that are bringing scholars online, like Mendeley.com, ResearchGate.net, and Zotero.org.

Academia.edu and its competitors haven risen with the open access movement. Ed-tech startups like Coursera (read more about the site’s growth here) Udacity, and Course Hero all claim to be democratizing education by bringing academic courses to anyone with an internet connection.

In California, there is an average of one college counselor for every 1000 high school students in the public high school system. That means counselors can offer about ten minutes of their time per student each year. Unigo, which began with the goal of building the best online college guide, is moving into a new space, looking to solve the crunch in places like California with by offering virtual college counseling through streaming web video.

Launching the virtual guidance was an effort to diversify Unigo’s revenue stream. But founder and chief executive says it has helped grow the site’s web presence as well. “We’ve been doubling our traffic every month since September and have now reached more than 1 million unique visitors a month,” Unigo founder and chief executive Jordan Goldman told VentureBeat by phone.

In September of last year, Unigo raised $1.6 million from McGraw-Hill. It was an unusual move for the textbook giant, which had never made a venture capital investment in a startup before. But it makes a lot of sense given Unigo’s new strategy. McGraw-Hill had the reputation and connections to help Unigo negotiate deals with school districts who want to cheaply expand the amount of college guidance they can offer to students. Purchasing remote video time for students is a lot less expensive  and more flexible for school districts than hiring additional full-time staff.

“There are really two sides of this story,” Goldman VentureBeat. “School districts are overwhelmed by the number of students who need help. At the same time, the law says these counselors can’t offer their services to students from their own schools after hours. Private tutoring is extremely expensive, in the thousands and even tens of thousands of dollars. So there is a real need for a more efficient way to match the supply and demand.”

Unigo is working to sign up college counselors who can earn extra income by offering their services to students who are not getting enough help at their school. Once it has a big supply of opinions from students and counselors, Goldman says Unigo plans to begin offering this data to colleges in the form of market research. “We are going to be the best resource for raw, unfiltered opinions from students and counselors about specific schools.”

In January Unigo officially relaunched as  a marketplace for college guidance, shifting the focus on its homepage to highlight 1-on-1 help from admissions and financial aid experts. McGraw-Hill is clearly hoping that the burgeoning world of online education and college guidance will help to make up for its declining textbooks sales, which have dropped each quarter for the last year and a half.

“It’s not like I was born with special cognitive abilities. I trained myself to have an incredible memory, and those are skills other people can learn,” he told VentureBeat by phone. Cooke and his co-founder, the neuroscientist Greg Detre, have raised $1.05 million for a new startup, Memrise, to help the masses leverage Cooke’s legendary memory tricks.

“The hilarious and tragic thing about memory training is you spend so much time inside your head,” Cooke explained. Serious students of memory, like Joshua Foer, who trained with Cooke and chronicled the process in his best seller, Moonwalking with Einstein, wear earmuff and blinders while practicing their mnemonic techniques. “But one of the things that makes a something really memorable is if it was fun for you, if you engaged with it.”

Cooke and Foer would tell themselves elaborate stories, associating vivid images with the sequence of numbers they had to recall. Memrise takes a similar tack, teaching people Chinese characters, for example, by transforming each one into an animated sequence.

Instead of having people train in isolation, Memrise incorporates elements of gaming and crowdsourcing to keep users engaged. “We’re not trying to train people to perform the heroic feats of a memory grand master. We want this to be a fun, collaborative experience, like World of Warcraft, that just happens to be about learning.”

Memrise is offloading a lot of the hard work that goes into memory training: generating striking images and reminding the brain to recall the memory on regular basis. Cooke says that returning to a memory is crucial, and the Memrise has algorithms that learn when a student needs a friendly reminder, via an email say, to recall a certain lesson. Prof. Detre has worked on the timing and calibration of the learning curve on Memrise, as well as ways in which to keep very similar memories, whether its words that sound alike or characters that appear very similar, as distinct memories in the mind of the student.

Right now the service focuses on languages, people can Mandarin, French, Spanish, and Italian. The hope is to eventually expand to all topics. The startup recently paired with The Guardian newspaper to help readers memorize different kinds of herbs.

Investors include Avalon Ventures, Balderton Capital, Matt Mullenweg’s Audrey Capital and Lerer Ventures. They’re joined by a host of Angels including Nabeel Hyatt, head of Zynga Boston, Jeff Hammerbacher, former head of data at Facebook, and Bill Warner, founder of Avid.