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Seattle’s invisible tech industry by Frank Catalano

Having spent a February week at a major technology industry trade show, I was delighted to see key Seattle-area companies well-represented on the Austin exhibit floor.

The 450 exhibitors included DreamBox, co-founded by a Microsoft veteran and now backed by Reed Hastings of Netflix; GlobalScholar, run by a former Amazon.com and Drugstore.com executive and recently purchased by Scantron; McGraw-Hill’s Center for Digital Innovation with its Planet Turtle virtual world; Qwizdom, one of the top players in hand-held devices showing its new QTopia digital environment; and several others.

If you live in Seattle you may never have heard of these local firms. Perhaps that’s because the conference was the Texas Computer Education Association 2011 conference, and the companies are among the many Seattle-area firms in education technology.

In a city where the Bill & Melinda Gates Foundation makes headlines every time it talks about education reform or with the grants it issues in that arena, local companies actually providing the cutting-edge tools and digital technologies are virtually invisible. Not just to the general public, but to the tech community here as well.

As someone who has straddled both consumer and education technology markets over the past decade, I’ve been puzzled by this lack of awareness. It’s not just the companies who were at the Austin conference that have low local visibility, but other established Seattle area K-12 firms like Giant Campus and Apex Learning (both forces in online learning), Headsprout (K-5 reading instruction), and more. My conference litany didn’t mention every Seattle exhibitor. Even Microsoft had a small booth, focused on cloud computing and teacher professional development, though I’ve heard the bulk of its business lies in other markets.

Why does the ed tech industry have this unexpectedly low profile on the home turf of the Gates Foundation?

1) It is not easy to understand the market. Getting companies and products to K-12 school customers is a complicated and frequently convoluted mess. It combines the worst of government/B2B sales (differing state and federal regulations, long sales cycles) with the worst of consumer sales (finicky individual customers, be they educators or students). Plus, the terminology and products aren’t necessarily mainstream or part of our collective memory of our school years: adaptive web instruction, interactive white boards, classroom response devices (requiring one panelist at another recent conference to field the question from a puzzled parent, “What are they doing with their thumbs?”). Trying to succinctly communicate how it all works to an outsider is maddeningly complex, a puzzle-wrapped-in-an-enigma-sealed-in-an-egg-shape-to-be-celebrated-by-Lady-Gaga kind of complex.

2) Few venture capitalists understand the models. Not a lot of tech investors seem to truly understand how K-12 education business models work (even fewer than those who understand higher education business models). Those tempted to learn may lose interest when they hear, as was described at the recent Ed Tech Business Forum in New York City, that it’s a “get rich slowly” business. Still, some do, and a few high profile edtech acquisitions of late -- Wireless Generation by Rupert Murdoch’s News Corp., GlobalScholar by Scantron -- seem to be increasing interest … and valuations.

3) Local industry support structure is missing. While there are national trade associations for education technology companies (such as the Software and Information Industry Association’s Education Division, which holds the aforementioned Ed Tech Business Forum), local technology trade groups never seen to have taken much sustained interest in edtech. The Washington Technology Industry Association, Northwest Entrepreneur Network and others have great general, horizontal efforts but no ongoing groups or initiatives that target education technology, unlike the occasional local focused efforts for energy (clean and green tech) and health care technology.

Remedying one, two or all three of these conditions would help local education technology companies’ profiles and may spur further growth and innovation in the Seattle area.

The solution may be organic, albeit long term. I’ve seen a dramatic narrowing of the gap between consumer and edtech expectations and products over the past few years as even young teachers can now wear the overused badge of “digital native.” Or it could be as simple and short-term as an existing local tech organization deciding this is worthwhile outreach (perhaps prodding a well-worded news release from a certain Microsoft founder).

But with school education reform increasingly on the national, as well as the Gates Foundation, agenda, it might be nice knowing who around here is trying to digitize it.

Frank Catalano is a Seattle-based consultant on marketing, branding and product strategy for education and consumer technology companies. He blogs at Intrinsic Strategy and tweets @FrankCatalano. This essay originally appeared on the Seattle technology news site TechFlash.com.