Starting today, company officials from across the education industry will meet in Scottsdale, Ariz., for the ASU/GSV Education Innovation Summit, an event that in a couple of years has morphed from anonymous date on the conference calendar to a jam-packed schmooze-fest of entrepreneurs and corporate executives of all stripes. Education entrepreneurs and CEOs share space with philanthropists, politicians, higher education leaders, federal officials, academic scholars, and many others.

Touted by its sponsors as “Davos in the Desert,” the three-day event this year has attracted an characteristically eclectic group of scheduled speakers who include former Florida Gov. Jeb Bush, Netflix founder Reed Hastings, U.S. Commerce Department Secretary (and investment firm founder) Penny Pritzker, and even former NBA great Earvin “Magic” Johnson. Check back on the Marketplace K-12 blog throughout the week for my coverage of the event.

Past ASU/GSV attendees know that much of what occurs at the summit takes place out of sight—in private rooms, quiet nooks, coffee shops, and restaurants throughout the sprawling Phoenician resort where the summit is being held. That pitching, networking, and dealmaking among entrepreneurs, established companies, investors, and others with a business interest in the education space play out off-stage, all week long.

For a perspective on the summit and the overall state of the K-12 market, I caught up with Deborah Quazzo, a founder and managing partner at GSV Advisors (and a school board member for the Chicago school district) who’s helped put the event together.

Highlights from our interview are included below (questions and answers have been edited for the sake of clarity and brevity):

Q: ASU/GSV has become a juggernaut. What’s behind its growth?

Quazzo:  Part of what we wanted to do was to get people into a room who did not always get in the same room to talk about innovation in education. …We think the conversation becomes more substantive and more action will be realized if we believe more people got in the same room. This year, we made sure that we got at least 100 educators there in the K-12 sector [supported by philanthropies and others]. Every year we’ve tried to reach out to more groups.

The second piece is that there continues to be continued, incredible enthusiasm across the sector, whether from a philanthropic, or investment standpoint…for addressing some of the issues we have in education, and innovation in education. You can see if in the first-quarter numbers on the for-profit side [as well as from foundations]…if funding represents enthusiasm as a proxy, enthusiasm for engaging the sector continues at a pretty high pace.

 

Q: One criticism of big ed-tech events is that they don’t do enough to involve K-12 teachers. GSV has increased efforts to make sure educators are represented. Why did you see that as important?

Quazzo: We think action happens when conversation happens…it’s really important for groups to effectively mash-up, and have direct conversations, so people understand where points of pain are…We want to have conversations around [issues such as] procurement, which is something everyone complains about in the K-12 market, and [find out whether] some of these activities around the testing of innovative products can help mitigate issues around procurement, and help get districts comfortable with seeing results, and research-based results at the classroom level, before making large purchases.

 

Q:  What are some of your thoughts on the biggest changes in the ed market over the past five years?

Quazzo: One is the obvious, which is that we have a population of digital natives, and that’s coming through in the student body, and in the teacher [population], and [in] a lot of activity that’s just happened in the last 12 to 18 months in terms of purchase activity that’s being driven by leveraging digital technology into the classroom. …We’re seeing a driving down of cost and an increase in access to these technologies. We all need to make sure they’re getting to the right students.

[Past conference attendees] have talked about the holy grail of adaptive learning and personalization. We are there. Technology and innovation can be leveraged to reach every student where they are. You go to classrooms every week, and you see the spectrum.

 

Q: We’ve written about the massive flow of investment into K-12 companies, most of them focused on some version of ed-tech. How should we judge the impact of that investment, and how do you evaluate it?

Quazzo: There are a million ways to judge it. A person who’s made an investment will probably judge it on returns. Everyone talks about the investment dollars, but in K-12 in particular, it’s impossible to decouple that from the philanthropic dollars—the Gates foundation, the Walton foundation, the Broad foundation, whatever, those dollars have been stunning, and have been very innovation focused. …We’ve tried to [adhere] to this idea of judging success on “return-on-education.” Because everybody gets so hung up on [the question of] ‘Is [the organization] a for-profit, is it a nonprofit?’ In our mind, tax-status should be completely irrelevant. What should be important is, whether it’s a product or service or whatever, a return-on-education is reducing cost, leveraging the learning leader, and increasing access to education.

In my view, all this flow [of investment] has been incredibly positive. It’s driven this accountability, funding of these digital technologies has allowed us to look at their outputs, their efficacy in ways that we couldn’t before. That’s been an incredibly important result of philanthropic and investment dollars…

It’s created more competition. Schools and districts are seeing more products and solutions. Whether all these organizations are successful or not, we’re seeing all kinds of solutions for teachers and principals. There’s this very rich menu of things. On the negative side, maybe it’s confusing, but on the positive, [that menu] didn’t exist before.

 

Q:  A common criticism of the flood of venture capital and investment into K-12 is that it creates a skewed system of winners and losers, in which many of the best ideas get ignored, and those deemed to be on track to produce strong profits get supported. Is that criticism on target or not? 

Quazzo: I think [that critique is]  a disconnect. How can you be successful in financial returns if you’re delivering something nobody wants?. …I’d love for someone to show me an example of a company that hasn’t been able to get funded that has a great management team, [has a strong] business model, that is bringing a great, efficacious product into schools that wasn’t successful. I can’t come up with one. If in fact companies are still being successful, and they have terrible products, then that is a deep flaw around people not looking at a return on education. …At this point, districts, schools, principals, teachers are really thinking about, ‘How do I double-jump these outcomes?’…There’s so much data around efficacy. I just cannot personally believe that product is being purchased that’s bad, at scale, when a company has a really bad product. I’d love for somebody to show me an example of that.

Q: The investor Marc Andreessen has said he’s skeptical of backing companies that are trying to sell directly to public schools. What do you think of that idea – avoiding a company that’s trying to sell directly to school districts?

Quazzo: No self-respecting venture capitalist would touch the K-12 education segment from 2000 to 2010-2011 for all the reasons Marc Andreessen cited….I’m not criticizing him, but if we can’t push forward on educating students, we’re in a bad place. There are certainly people who aren’t going to touch it…procurement can be byzantine….on the good news side, we’ve seen both philanthropic and private investors really go to the mat in terms of funding new ideas in innovation into the K-12 system. We’re also seeing incredible scaling happening for the first time at many companies in K-12, even ones that have to deal with the procurement process, and we haven’t seen that before, in way we’re seeing it now.

 

Q: So what is the key for companies you see selling directly to schools?

Quazzo: You have to be solving a problem that the district or school is trying to solve. You need to know where you’re selling and into the right place. Most large districts have RFP processes, but you need to really have a solution, because these guys don’t have time to waste.  [Some people sell at the school level]. Principals have some discretion, and if you get scale, you can have conversation at the district level having proven that there’s a demand for your offering. [While many districts have RFP processes], there are companies that have free or freemium offerings that have seen really high rates of adoption. There are different ways to approach it, whether it’s a district sale, or a school-level sale…there’s a list of 20 or 30 businesses that have seen very material adoption, or revenue growth in the last few years because of demand at the school or district level. We’ve never seen that before.

 

Q:  Matt Greenfield, on the Rethink Education blog, recently argued that fears of an ed-tech bubble are in some respect off point: The real issue is that there are too many companies investing in the same things—like the digital textbook space. Do you agree?

Quazzo: I don’t really agree with that. I think you’re tilting at the wrong windmill. …Not every investment is going to work. You’re going to bet on different management teams and bet on different ideas, and I think you’re seeing pretty good ideas across the spectrum. You’re even seeing people find white space...So we’ll certainly see some bunching, people funding too many stuff in a certain sector, and I’m sure I’ll  sure I’ll be a victim of that. But I also think you’re seeing a very big spread of people covering large areas….It’s giving incredible options for teachers and principals about what works for their students.