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 

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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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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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.

This is a guest post by Dale Stephens, founder of the “UnCollege” movement 

At the 2007 EG Conference for youth and young adults, Kevin Kelly told the audience that 10 years ago no one would have believed the Internet was coming, least of all him.

If someone told us that we would all be connected and have access to literally all of the world’s information, we would have said that it was impossible. What I’m here to say today is that education is being transformed by technology. The future is here, but educators and deans, the ones who hold the gauntlet, are choosing not to believe it.

I run UnCollege, an organization that believes that college isn’t the only path to success. The idea was forged during my time at the Thiel Fellowship program (fellows are given $100,000 to forgo college and “make something amazing”). Of course, many people would disagree with the sentiment that I’ve created something worthwhile. In fact, critics say I’ve created something destructive. Naturally, I disagree.

Why do I believe that college is not the only path to success? It’s the technologies that we’ve grown accustomed to. But the problem is that not everyone is seeing the ramifications of what this access means.

We now live in a “connection economy.” You can access someone just by emailing them. You can connect to people through social media, and I’ve corresponded with, and have met, thought leaders through the Internet. What you’re looking at is, as Seth Godin puts it, “the connection machine.”

I’d argue that the access you get from being connected levels the playing field. Now, you can complete an internship with a Silicon Valley startup, even if you live in the middle of Idaho. Being connected means you get access to people who you normally couldn’t even shake hands with. Now, all you have to do is reach out and you’re in. I’ve gotten backed by the first investor of Facebook, launched a social organization that’s barged its way into the pages of The New York Times and CNN, and have connected with thought leaders I would have never dreamed of speaking with. How? It’s because the Internet connected me to them. Twenty years ago, who knows — if I’d dropped out of college, I may have just ended up smoking pot in my parent’s basement.

But I’ve been able to marshall online resources to avoid that frightening fate. I’d argue that technology has intensified the resources we’ve grown accustomed too so much that it’d be a huge mistake not to take advantage.

Unlike college, the beautiful thing about these resources is that they’re practically free. Online courses, internships, apprenticeships, apps, videos, and essays now offer not only the latest, but the best education you can get.

If you’d like to completely recreate the college experience for the cost of free, you can just use Massive Online Open Courses (often referred to as “MOOC’s”) to replace lectures. These include Udacity, Khan Academy, and M.I.T Open Course Software. (Here’s a list of the best resources we’ve found. Not only are they free, but you can learn at your own pace. You can’t pause real professors.)

Now, we have connection. Now, we have the resources. What do colleges have? They have an arbitrary credibility marker, and besides that, they very well could be broke. But they aren’t — and it’s because we’re still buying into the big myth. Technology has, and will, change education. When you see people looking up philosophical texts on their iPhones, how can you still say that education is limited to the walls of a college?

Ten years from now, speakers will remark on how far we’ve come and how surprising this would have seemed a few short years ago. Technology will make education even more accessible and more reliable than it has today. The real question is, when will the educators in charge finally start to believe that?

Dale Stephens is the founder of UnCollege.org, author of Hacking Your Education to be published on March 5th from Penguin, and a 2011 Thiel Fellow. 

ABC keyboard image via Elnur // Shutterstock

We give abundant advice to founders about how to make startups succeed yet we offer few models about dealing with failure. So here’s mine.

In my experience, living through failure has six stages:

• Stage 1: Shock and Surprise
• Stage 2: Denial
• Stage 3: Anger and Blame
• Stage 4: Depression
• Stage 5: Acceptance
• Stage 6: Insight and Change

While I had been part of a few failed startups, none of them had fallen squarely on my shoulders until Rocket Science Games where my business card said CEO. It was there that I lived through all six stages and came out the other side a changed man.

Failure

Stage 1: Shock and Surprise

We raised $35 million and after 18 months made the cover of Wired magazine.The press called Rocket Science one of the hottest companies in Silicon Valley and predicted that our games would be great because the storyboards and trailers were spectacular. 90 days later, I found out our games are terrible, no one is buying them, our best engineers started leaving. With 120 people and a huge burn rate, we’re running out of money and were about to crash. This can’t be happening to me.

Stage 2: Deny any of it was your fault

In my mind, I had done everything the investors asked me to do. I raised a ton of money and got a ton of press. We hired everyone according to our plan. It was everyone else who screwed up. I did everything right.

Stage 3: Get angry and blame everyone else

This was the fault of my cofounder since he was in charge of game development, it was the engineers who bailed on me, it was the sales and marketing people who didn’t tell me how bad the games were, it was the VC’s who refused to put any more money in the company, it was Sega’s fault for making a bad gaming platform…

State 4: Get depressed

When the inevitability and magnitude of the failure sunk in, I slept in a lot. There were days I’d get up late and go to bed again at 5 pm. I lost interest in anything associated with my past industry. (To this day I still can’t play a video game.)

Redemption

Step 5: Gradually accept your role in the failure

A few weeks after leaving, I began to think about what I should have done, could have done, and pondered why I didn’t do it. (I didn’t listen, I didn’t act, I didn’t own my role as CEO, I wasn’t prepared to do what was right or leave.) This was hard and didn’t happen overnight. My wife was a great partner here. I often reverted to Stages 2 and 3, but over time I took ownership of my primary role in the debacle.

Stage 6: Gain insight and change your behavior

This was the hardest part. While I stopped blaming others, understanding what I could change in my behavior took long months. It would have been much easier to just move on, but I was looking for the lessons that would make my next startup successful. I looked at the patterns of behavior, not just at my last company but also across my entire career. I learned how to dial back the hubris, get other smart people to work with me – rather than just for me, listen better, and act and do what was right – regardless of what others thought I should do.

Epilogue

For my next startup I stopped the behaviors that drove Rocket Science off the cliff. We established a team of founders who worked collaboratively. When my co-founders and I got the company scalable and repeatable, we hired an operating executive as the CEO and returned a billion dollars to each of our two lead investors.

Now when I listen to entrepreneurs who’ve cratered a company, I listen for their stories of failure and redemption.

Lessons Learned

• Six stages of failure and redemption
• Don’t get stuck in Stages 2, 3 or 4  - move forward
• Don’t skip acceptance of your role
• Gain some insight so you can change your behavior—then commit to the challenge of doing it differently the next time

This post initially appeared on Steve Blank’s blog. Blank is a retired serial entrepreneur now teaching entrepreneurship at UC Berkeley, Stanford, and Columbia.

Background: Shutterstock

Grockit, a startup that applies social learning to online test preparation, has raised $20 million in new funding. The investment is part of a partnership with Discovery Communucations, which led the round, and the two companies will work together to promote Grockit’s new product, Learnist.

Learnist launched to the public in May and expanded Grockit’s domain beyond standardized testing. The site looks a lot like Pinterest for online learning. Users can view lessons in a user-friendly board format as well as build their own and share. The platform supports over 30 types of embeddable media.

There is content on a wide range of topics, spanning art and design, business, education, food, music, politics, science, sports, technology, and travel. The selection is curated and comes mostly from a “small army” of teachers who know how to present information in a meaningful manner.

“Learnist lets users curate content online in a way that is sequenced, so it functions similar to a lesson plan,” said CEO Roy Gilbert in an email Q&A. “Unlike other online boards, Learnist allows users to upload a wide variety of media, including full Wikipedia pages, Google Maps, photos, and images, to name a few. The core differentiator for all Grockit products is that they include social, gaming, and mobile components to help students learn from and teach each other wherever, whenever.”

Before joining Grockit in 2010, Gilbert served as an officer in the US Navy and spent seven years working at Google, where he led Global User Operations, led Google’s operations in India, and launched the business operations for Gmail.

The company was first founded in 2006 by Farbood Nivi. Nivi migrated to the US from Iran as a child and has spent most of his career in education. He worked for the Princeton Review and Kaplan, where he witnessed first hand the power of social earning. Nivi founded Grockit, and then Learnist, with the goal of making education as engaging to today’s students as possible.

Learnist has grown to hundreds of thousands of users, largely driven by the introduction of the iPhone and iPad apps at the end of August.

Through this partnership, Discovery will create a dedicated channel for its content on the Learnist web, iPhone, and iPad platforms. Students will be able to learn from this material, while Discovery will benefit from seeing how people interact with its content.

This marks the fifth round of institutional funding for Grockit and is by far the largest. Over the course of six years, Grockit has raised a total of $24.7 million. This $20 million almost doubles that amount. Summit Group also participated in this round, along with previous investors Atlas Venture, Benchmark Capital, Integral Capital Partners, and GSV Capital Corp.

Grockit is based in San Francisco.

The company announced Wednesday it has raised $4 million in funding. Index Ventures, Richmond Park Partners, and existing investors participated in the round. The full press release is below.

 Index Ventures Leads $4 Million Investment in Mindshapes

Mindshapes launches Magic Town with stories licensed from leading publishers including Hachette Group, Simon & Schuster and Penguin Group

LONDON, ENGLAND and NEW YORK, NY – MAY 30, 2012– Interactive learning company Mindshapes announced today that it has secured a $4 million investment from Index Ventures, Richmond Park Partners and existing investors.

Mindshapes was founded in 2010 by Chairman Shukri Shammas (co-founder of Macrospace and Playfish), CEO David Begg (co-founder of Active Hotels and Tom Dixon), CTO Sami Lababidi (co-founder of Macrospace and Playfish), CCO Christian Dorffer, and CFO Tareq Naqib. Mindshapes is pioneering the development of multi-platform, interactive educational games for children and adults. Mindshapes has also produced nine highly acclaimed educational apps for iPad, iPhone and iPod touch.

Mindshapes is the developer of Magic Town, the first virtual world based on picture book characters. The websitewww.magictown.com launched on May 16^th, and the iPad and iPhone app will launch this summer. Magic Town’s e-learning platform, which is designed for children aged 2-6, features stories licensed from 15 of the world’s leading children’s book publishers including Hachette Group, Simon & Schuster and Penguin Group. At launch, Magic Town was home to more than 70 popular picture book stories including the Winnie the Witch, Elmer, Little Princess and Aliens Love Underpants series. By the end of the year there will be a total of 200 stories, making Mindshapes the leading publisher of popular interactive picture books.

Mindshapes is also set to revolutionize the online language learning space with the launch of Language City, the first interactive language learning game for the social networking generation. “Language City London” targets 16-30 year olds around the world who want to develop their conversational English skills. The game immerses users in a chapter-based situational comedy, filled with quirky London characters. Users will also be able to buy access to premium chapters based on licensed entertainment brands. “Language City London” launches this summer, with other cities and languages following shortly thereafter.

Ben Holmes, Index Ventures’ Partner said: “We see interactive fiction and education products for both kids and adults as massive opportunities. Rarely have we seen such a compelling combination of content, product and team as exists atMindshapes. We are delighted to be investing in the company and look forward to supporting this exceptional team as the business develops.”

David Begg, Mindshapes CEO said: “We are delighted that Index Ventures led this round. Index Ventures’ deep experience, working closely with management teams to drive rapid growth in technology businesses will be of great benefit to Mindshapes. Index have been a great supporter of the founding team in the past and we are looking forward to deepening that partnership.”

About Mindshapes

Mindshapes’ mission is to change the way children and adults learn through interactive game-play. The company was founded in 2010 and has offices in London, New York and San Francisco. For more information, please visit www.mindshapes.com

We reported when Schoology won the bid for the tech savvy Palo Alto school district. The service has been busy signing up massive school districts, most recently closing on Jefferson, Colorado, one of the 50 biggest school districts in the nation. Schoology founder Jeremy Friedman says the startup now has over 1 million users.

Amish Jani, a partner from FirstMark who led this round of funding, has deep experience in the educational sector, having invested in other heavy hitters like Knewton.

“Having known them for over a year and watched them grow from almost nothing to approaching 1 million users and thousands of school districts in a short period of time was very impressive.  You don’t see that very often in this space,” Jami told VentureBeat.

Jani sees Schoology’s strength in its diverse set of tools: “This is not simply a fun LinkedIn for teachers and students to connect, but a powerful platform that can build robust tests, incorporate grading, embed content from around the web, create robust controls for administration, integrate deeply with existing third-party school systems for information retrieval, and even provide great visibility tools for parents.”

Schoology founder Jeremy Friedman says the new funding will go towards hiring technical staff and bringing on a serious sales force.

“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.

Launchpad Toys wants to create a suite of creative play tools to reach kids on those devices: touchable, fun games that help kids learn to use digital platforms to accomplish digital tasks.

In a presentation at Y Combinator’s Demo Days today in Silicon Valley, we talked to co-founder Andy Russell. During the startup’s presentation, Russell explained that the most popular toys among kids today are tablets, smartphones and multi-featured gadgets like the iPod.

Russell’s company wants to channel the desire for digital toys into something helpful and constructive: simple play to get kids learning about how to create things with digital tools, eventually helping to level the gender, racial, class and economic barriers many face.

The company is planning to release several applications for kids of all ages to play creatively. The first of these apps is Toontastic, an iPad application that allows children to animate their own cartoons. Along the way, kids learn about storytelling elements, music and narration. Already, more than 165,000 cartoons have been created, and the app was added to the App Store Hall of Fame.

“I saw the movie Big when I was 8, and I decided I wanted to be Tom Hanks,” Russell told VentureBeat. “I was a toy designer for Hasbro, and the iPhone came out. I thought that would be the end of the industry. For years, I was stuffing electronics into toys. In the end, we needed to start stuffing toys into electronics. So I left for grad school, and started building a prototype.”

With a minimal amount of funding with an investor who understood and had previously worked on education software, Russell and his co-founder Thushan Amarasiriwardena got Toontastic off the ground.

“For all of our products, we take a play pattern and a learning goal and we match them together,” Russell. “For Toontastic, we took a puppet theatre and brought it to life in a digital platform. The learning goal was storytelling – conflict, resolution, characters, setting. And we teach that through Toontastic.”

Kids also learn to tell different types of stories — mystery, adventure, romance — and earn genre badges as an incentive for doing so.

Not only is the app fun and educational, it’s also got a revenue stream. In addition to selling the app for $1.99, the Launchpad Toys team is also going to be creating and selling virtual toys, such as extra characters and backgrounds, within the app.

Another interesting facet of the entire digital play concept is storage. “You think back on all the stuff you did as a kid, they’re lost. These things can go into a digital archive,” said Russell. Also a boon to many a space-starved parent is the fact that these artifacts are stored in cyberspace rather than meatspace, which means no deciding what to throw away, no packing drawings in boxes. etc.

Eventually, Launchpad Toys hopes to create between eight and 10 apps around creative play patterns, “all the classic play patterns — Easy-Bake Ovens, drawing, modeling, Erector Sets, Tinker Toys,” said Russell.

Toontastic is aimed at kids in the 5 to 10 years old range. “We want to go as low as 3 or as high as 12,” Russell said. The company is currently focused on touchscreens and mobile devices, but Russell can envision creating gestural interfaces or TV-friendly apps and features, too. “It’s about hands-on play.”

Finally, we asked Russell if he thought his startup could change the world. He told us, “In the textbooks I grew up with, if there was anything about Sri Lanka, it was 30 years old. And now, with a flick of my finger, I can learn about the culture and develop friendships there…

“I believe that kids can learn from each other as well as or better than from adults. Peer learning is about your friends and cousins, those close to you. But with tools like this, you can learn from kids halfway around the world.”

Stay tuned for ongoing coverage of new Y Combinator comanies from the 2011 class.

Image courtesy of fritzon.

A first glance Udemy looks like a mix between a social-networking and a video-sharing site. The creator of a “course” can upload presentations, videos, and even write blog posts. If a user finds a course they are particularly interested in, they can subscribe to it and ask questions via discussion boards. Lastly, creators can set up live virtual sessions with whiteboard, presentation viewer, chatroom, and file-sharing components available to use.

None of that may sound particularly unique, but the real difference may be the range of tools provided. For example, EduFire and Supercool School are really focused on live learning in virtual classrooms, not sharing educational content. A website-building service like Weebly, on the other hand, is all about sharing educational content, without a live or strong collaboration component.

California-based Udemy, founded in February 2010, has been in development for over a year and a half and has received no funding to date.