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DIY, Incubate or Accelerate?

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Matt Candler is growing people who are growing educational solutions. His New Orleans-based incubator, 4.0 Schools, is based on the concept that most organizations start as an idea and go through a five-stage process: itch-->hunch-->test-->launch-->scale.

Matt and his team "live on the left side." They mentor people through the first three stages:

  • Engage in dialog about the future of education
  • Develop problem solvers and define problems correctly
  • Launch cheap prototypes to build a user base and coach most promising

"I want to change the nature of the people in this business," said Candler. He points to Chef Danny Meyer, author of Setting the Table who provides a powerful example of paying attention to the customer and an intense focus on execution skills.

Candler encourages the Fellows that work with his team to focus on building prototype solutions at pain-points in the system--real solutions to real problems.

The goal of the nonprofit 4.0 Schools, said Candler, is to "create some structure for people that have some interest in building more innovative solutions." It's the place to begin the process of constantly iterating.

Heather Gilchrist created Socratic Labs, a new, for-profit accelerator to work with educational solutions a bit further along than the Fellows that benefit from 4.0 Schools. Gilchrist gained first-hand startup experience as a Grockit co-founder. She's launching her accelerator in New York City--second only to the Bay Area as startup central.

Gilchrist, who organized a recent Startup Weekend EDU, found NYC an "interesting Petri dish--the time and place is right." She added, "As the cost of startups comes down, we can support would-be ed-tech entrepreneurs more effectively and give them resources, networks, and infrastructure--a pathway to becoming a successful entrepreneur."

There are three kinds of entrepreneurial support organizations, according to Gilchrist, that have been active in the entrepreneurial space and are becoming more common in the learning sector:

  • Co-working space : Companies pay to be there, some becoming more resource heavy, some offer learning experiences (e.g., GeneralAssemb.ly).
  • Incubators : Offer more resources that co-working space, often run by nonprofits focused on a sector or a city, companies usually get in free (e.g., 4.0 Schools).
  • Accelerators : Companies are selected and resident for a defined period of time, they receive some funding and services in return for an equity stake.

Socratic Labs will work with two cohorts of 10 companies each year. They receive legal and web hosting services, brand development, and public relations support, education, and technical mentoring. Like the west coast edu-accelerator, ImagineK12, the process culminates in a demo day where the companies pitch potential funders.

From the outside, it looks like 4.0 Schools and Socratic Labs focus on growing companies but the real focus is people development. Gilchrist said, "We focus on the people with the best experience and the best chance at building great solutions."

Should I incubate or accelerate? If you don't have any startup experience, you'll benefit from spending time with people that do. Matt's team runs an Engagement program "for folks who are curious but not clear what role they might play - they feel the itch--they have a hunch about an area of pain to be relieved."

Their Development and Launch work is for folks who have an idea or better. The network of hundreds of folks who have gone through 4.0's Engagement program serve as beta testers. Just about anyone who was considering a startup would benefit from some time at 4.0 Schools. Given the need and demand, the sector would benefit from an incubator like Matt's in every major city.

What about an accelerator? That's a tougher decision because you'll probably give up six percent of your company in exchange for a place to work, some good advice, and some exposure.

Co-founder Tim Brady said, "ImagineK12 is appropriate for startup teams that have both an understanding of a problem they want to solve and the technical capability to build the solution. We are looking for teams that want to build a for-profit sustainable business aimed at the K-12 market."

ImagineK12 has worked with three cohorts of 10 edtech companies. Applications for the fourth cohort, which starts in January 2013, opened last week and are due by the end of October.

"The program is not appropriate for people/teams not committed to the business fulltime, nor is it appropriate for teams with an idea but no technical capacity to execute it," added Brady.

Accelerators like ImagineK12 or Socratic Labs may work with a great team with only a vague notion of what they wanted to do, as well as companies which had a fully developed and launched product. But Geoff Ralston, former Yahoo executive and one of Brady's partners said, "Our sweet spot is brand new companies with an idea and the ability to execute on that idea."

If the startups get $100,000 in value (cash, rent, advice, and exposure), the six percent they typically give up isn't a bad deal (it values their company at $1.6 million). But it's a lot of dilution up front for a more experienced team that doesn't need as much handholding and may be able to garner a $4-5 million valuation from investors.

Most edtech projects and startups benefit from expert advice. The growth of edu-incubators and accelerators is part of an expanding support based for innovation in learning.

For more, see Schools 4.0 Sweeps Startup Weekend NYC EDU Awards.

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