A few months ago I posted some data on this blog that showed the growth of homeschooling in the US with almost 5% of K12 students being schooled at home. I wrote at the end of that post:

This is a trend to watch and, possibly, to invest in

Well, invest in it we did.

Yesterday Rebecca posted our investment rationale for Outschool, a company that offers real time group classes taught largely by very experienced K12 teachers over live video.

I encourage all of you to click on that link and go read our investment rationale. There are a number of interesting trends we are betting on here and Rebecca articulates them well. There are also some examples of classes your kids can take that are amazing.

But what I want to talk about is how important services often start in the fringes and over time move into the mainstream. We are certainly betting that is the case with crypto-currencies. We have seen that with Airbnb (couch surfing>hotel alternative), Uber (ride sharing>car alternative), YouTube (video sharing>TV alternative), and so many other examples.

Homeschooling is a fringe market right now. But education is not.

Outschool can exist with excellent unit economics for the students, teachers, and company because there is a market of almost 2.5mm students in the US who need to learn things like Algebra, European History, Biology, etc, and will pay to do so.

But of course, there are over 50mm K12 students in the US and many more around the world who need to learn these subjects as well and often don’t learn them very well in the legacy schooling model.

When our kids were in school and struggled with a class/teacher/subject, we would get them a tutor to come to our home in the evenings. That is a 1%er solution and is not affordable for most families.

But the Outschool model, because of the scale it has reached in the homeschooling market, is driving down the cost of learning these subjects and can and does replace the high cost tutorial market for a number of families already. As its scale increases and economies kick in, it can reach more students and families desperate to master challenging material.

Great teachers are one of the most valuable resources we have in our society. I can trace much of what I know to a handful of these people.

But school buildings, classrooms, and the supporting Infrastructure for them are very much replaceable with new technology. Outschool is showing a way how to do that.

At USV, we seek to back trusted brands that can open up access to knowledge (and wellness and capital). Many (most?) of these brands start out on the fringes and move into the mainstream over time as they scale and the benefits become obvious to mainstream consumers. Outschool is squarely in the sweet spot of our thesis and I am excited to see what it can do for learners around the world in the coming years.

#hacking education

Comments (Archived):

  1. William Mougayar

    The impact of this rich variety of classes would be quite strong for the rest of world (especially less developed countries), not just the US, but it seems that the pricing is more geared towards developed countries wealth levels.

    1. fredwilson

      For now, absolutely

  2. DJL

    I would assume that a large part of the cost of school is “overhead” associated with school administration.If the “unit cost” of K12 education is truly understood, isn’t it just a short time before philanthropists can start paying for the education of kids in poor areas?

    1. Mike

      There is a social aspect to education but perhaps this could be restructured to capture some of the overhead savings possibilities. Some interesting possibilities, maybe not replace, but augment traditional education? I have a son with some time over the summer. Maybe I’ll check this out.

      1. DJL

        That is what has always bothered me about “home school.” At least 50% of education is establishing “EQ” – learning to deal with social situations and groups. Home school folks should create local groups or “meetups” where the kids could interact.

        1. JamesHRH

          Bigger issues is 2 income households.Daycare is a big part of education, all the way to 16 yo.

  3. awaldstein

    So interesting that this is built on Zoom as a platform. Literally.Sent over to Bill Tai (Zoom’s first investor) as he will appreciate this.

    1. pointsnfigures

      that is interesting

      1. awaldstein

        another example of how powerful the options are and how smart a company Zoom is.i use it every day and honestly never thought about it as a launch platform.

  4. FlavioGomes

    Fascinating. I wonder now if kids only learn social skills exclusively through facebook et al. One of the most important elements of school isn’t the curriculum…its learning direct, analog human interaction.

  5. Kirsten Lambertsen

    Super excited to check this out and that USV invested in it. Bravo!

  6. JamesHRH

    This is, by a considerable margin, your most compelling post in several years.Teaching has always been a calling b:c the economics of traditional teaching limited the responsibility that a single teacher could carry. Consequently, their compensation – which tracks the responsibility they carry, like all compensation – was limited to the impact they could have ( primarily negatively ) when they were reaching 20 odd Grade 4 children.I don’t agree with your stated Outschool benefits of reduced costs & potential for great teachers to have outsized impacts on more students ( they are not ‘wrong’ they are just not what will be unlocked by Outschool).Outschool is going to make great teachers millionaires.Both my kids are being tutored remotely in Math by a great reacher, even though we send them to a top of the rate chart private school here in Houston that does lots of things well but has a current Math Head of Dept who is lousy,People like our tutor – making a nice bump after hours tutoring kids in TX while living in California – will be able to reverse the classroom model, set a strong curriculum for a huge number of students ( think Khan Academy ) at a reasonable price & then charge huge $ for small slices of their time ( think Tony Robbins ).The only trend that is against Outschool is the coming – massive – correction / shakeout in the post secondary education market. It’s going to get gutted, likely by the same model. College will be split into ‘in person, socially driven, huge cost’ experiences & ‘remote, credential driven, low cost’, w the Grand Valleys & Southern NH brands dominating the markets.Get ready for a ton of state schools to close.Compare Outschool to the baseless pandering that America witnessed from Joe Biden here in Houston yesterday, promising teachers more money for the same responsibilities.Outschool is a landslide.

  7. pointsnfigures

    Agree that this is a huge market. I disagree with Rebecca’s explanation of some of the reasons for the investment-yet it’s a good venture investment into the space.Government spending on education is not down. Teacher salaries are not flat.The largest problem with the current structure of the US educational system is teacher’s unions and their lack of ability to embrace change. (Unions are like that).It will be interesting to see how the adoption rate goes. Typically with these sorts of innovations its the wealthy adopting first which allows the company to commoditize the product so the less wealthy can afford it. Of course, when it comes to public school education, it’s the kids in the poorer areas of the country that need access to better education the most.There is an undercurrent among one tribe in our country (conservatives) to abandon public schools because of the subpar education they deliver, and the things that they teach when they deliver it.

  8. Salt Shaker

    In the U.S. 44M collectively owe $1.5 trillion in student loan debt. The ability to pay down that debt is virtually impossible for many, while the lack of low disposable income among this group certainly isn’t good for the economy. If we can bail out Detroit, we can bail out students, particularly when the value prop for a good education seemingly is on the decline. The model is broken, and it’s all being funded on the backs of the young. An internet based education—cerrtainly at the college level—is still perceived as inferior, despite offering greater efficiencies. Is this a product and/or a marketing problem?

    1. sigmaalgebra

      Too many students want to go to the prestige universities, and those are research universities where the cost per classroom hour of teaching is up off the charts.A good alternative is a good four year teaching college. In some four year colleges or community colleges, the quality of the content is too low, but there are some really good four year teaching colleges. And many states have second tier colleges and universities that concentrate on teaching — those can be relatively inexpensive.Also, generally, good students — and academics is convinced that there are too few of them — without a lot of money can get a LOT of financial aid.There is a big question about what to teach that will be terrific for a career lasting 40 years, but nearly no one has a good answer there.

  9. sigmaalgebra

    ForBut what I want to talk about is how important services often start in the fringes and over time move into the mainstream. Yes, a common idea is to attack a large market with an effort focused on a small part of the whole, with an entering wedge, and expand from there. I’m planning that for the public launch of my startup, but I am not hoping it will work without some more thinking and considerations and would assume that those two would be needed generally.ForOutschool is squarely in the sweet spot of our thesis and I am excited to see what it can do for learners around the world in the coming years. Dad was big in/on education: From him I learned that many people have thought for many years that some such change would, could, should work. Sadly, so far it essentially hasn’t.Dad’s only slightly in jest put down observation was:Each time there is some new technology, lots of people say it can automate education. Attempts are made, and the result is failure. We already know what the best education is — Aristotle sitting at one end of a log and the student at the other. For the “technology”, we can count paper, the printing press, the mimeograph machines, motion picture film, DVDs, and now cheap motion picture cameras, video editing, and the Internet.Here is a shock: Sure, for each school subject, find a dozen of the best teachers, get some of the best producers, writers, directors, cinematographers, and for each important K-12 subject put together a polished, tested, just fantastic set of lessons and whole courses as movies. Then have the kids watch the movies.Well, we have long had many examples of those high end production qualities with series that last for years on TV, but where are the films of comparable production qualities plus good educational content for K-12? The answer is tough to find down to sure they don’t exist.E.g., the US has long had a really big Department of Education with big bucks: If they thought that some good movies would help, then we should have the movies and have them easy to find.Lesson: Something’s wrong.In some subjects, some kids of K-12 age do really well outside of school. Examples of the subjects are violin good enough to play in a symphony orchestra, piano good enough to play Beethoven and Chopin, competitive swimming, competitive ice skating, basketball, football, soccer.Lesson: In some subjects, the kids do really well now and have for many decades. So, in a major sense, what is “wrong” is not the kids.With some irony, computing, the Internet, and Web are crucial for the envisioned new efforts in education, but in the computer industry, while software developers are crucial, nearly all the necessary learning of the operating systems, programming languages, key algorithms, API (application programmer interfaces), integrated development environments, various cases of data base is self-taught. In particular, I have never seen an effective or even worthwhile video on computing.Lesson: There is a lot of effective self-inflicted and administered learning and education going on now.Still for K-12, something’s wrong: I’ve never seen an effective movie or video clip on a K-12 subject. The best I saw was a lecture on plane geometry by Andrew Gleason — the penultimate example of overkill! But there was only one lecture of maybe only half an hour. So far I’ve never been able to find the film or even a reference to it on the Internet. Some of the top Google searches turn up comments I posted about the lecture at Hacker News. Gleason’s lecture is terrific, but it’s gone with the wind.Lesson: Even when there is terrific material on film, people can ignore it.My history courses were so academic they never got past year 1800. So, they ignored all the wars, economic depressions, epidemics, etc. since 1800. Mesopotamia? Yup. The Council of Trent? Certainly. WWI, WWII? Nope. So, I tried off and on, with books and video documentaries to learn more. Maybe I did get more than could be expected from a GOOD K-12 course in European History. But I still don’t know of any good materials for teaching European history.So, I would have three concerns:(1) For K-12, currently the home schooling people may already have about all the materials they want or would care about.(2) For “learners around the world” there is a language problem: It’s tough enough to get good K-12 materials in English; for the same in several other languages the situation has to be much tougher.(3) At some point, there may have to be some one on one communications between students and teachers, and, if it is good, that promises to be expensive.Of course there is the TV series by Kenneth Clark Civilization and corresponding book of the same title. The first lecture is athttps://www.youtube.com/wat…with “277,592 views” — small for YouTube.Ah, in his second lecturehttps://www.youtube.com/wat…he says the cause of the explosion of Medieval cathedral building was due to the organizational abilities of the Christian church. He fails to mention the increased agricultural productivity of the Medieval warm period, c. 950 to c. 1250.He also fails to mention the importance of domestic animals — dogs, cats, horses, cows, sheep, goats — on agricultural productivity and then the productivity of iron and steel.But, if want a course in European History, at least back to the beginnings, then the Kenneth Clark lectures look pretty good, a bit opinionated but, still, with a lot of good, objective content. Alas, the lectures don’t appear to be very popular.Yes, we all have seen a lot of the just astounding work that Hollywood, especially the George Lucas Industrial Light and Magic (ILM), have done with CGI — computer generated imagery. Those production values could be terrific for a lot of K-12 courses. Getting people to get much education from such materials stands to be another challenge.Bluntly, at least in the US, K-12 is not just about learning but also baby sitting, that is, keeping the kids off the streets and out of trouble.Home schooling needs a lot of time of some relevant adults (relatively high ratio of adult hours per student hour) and, thus, is expensive, whatever the teaching materials are. This expense may be a severe bottleneck.In really simple terms, no one did anything at all meaningful with motion picture film for K-12; I don’t see anyone doing much better with the Web and, say, HTML, JavaScript, and MP4.Addition:Okay, okay, I looked for what looked like a good first calculus course on the Internet. Long ago I gave up on Khan Academy although maybe they have some good material now. I tried the MIThttps://courses.edx.org/cou…WOW! It’s POLISHED! It goes down easier than warm milk! We’re talking pedantic!!! The lectures appear to be about five minutes each. Although they are like traditional blackboard lectures, they are beautifully done. In case the audio quality is not so good, and it’s not up to Hollywood or good TV, there is well done text on the right side.It’s EASY. Could learn that in about the 8th grade.It’s a bit superficial, omits all assumptions about what functions do have a definite integral, e.g., want to integrate over a compact set a function that is continuous almost everywhere with respect to Lebesgue measure, but I guess we can forgive their not mentioning that in a first course. Also, they are likely doing just the Riemann integral. Also they seemed to be integrating from numbers a to b with a <= b, but for line integrals and some important generalizations in differential geometry and exterior algebra, crucial to relativity theory, need to consider carefully integration from b to a. Also, really, the definite integral is not “finding” the area under a curve but DEFINING the area under a curve. It would be nice, then, also to show that this definition of area is a good one! We DO want a good definition of area — trust me on this one!But super tough to have video lectures on first calculus better than what MIT did there. And can watch all the lectures for free. If want a course certificate, then maybe have to pay $100. So much for the really high cost of a college education!I never took freshman calculus: I got a book, studied carefully, and then started a good course in sophomore calculus. So, I’ve taught such calculus, taken much more advanced courses where such calculus was a prerequisite, applied it, and published peer-reviewed original research building on it but actually never took it! I should have started in middle school.Lesson: If people want to learn calculus well, just get a good book and dig in. Don’t really need anything like the MIT course. But with that MIT course, no excuse for anyone not being able to learn calculus.So, for learning calculus on-line via self-teaching, with the MIT course that need is now solidly solved.Next problem?

  10. Julie Lerner

    Rightly or wrongly, the concept of homeschooling is scary to me because of the religion/moral tie in and the limit on engaging with people that are different different than yourself. I found this graph from Edweek Market Brief. Do you think that this will evolve over time?https://uploads.disquscdn.c

  11. Luke Thomas

    As a homeschooled kid who lived in the middle of nowhere, I would have loved Outschool. My parents did a great job, but it would have been awesome to sync up with a domain expert on something like computer science. My parents would have gladly paid for this.Our only alternative at the time was to go to the library (there was no high speed internet at my house).Excited to see where this goes.

    1. pointsnfigures

      check out brilliant.org, would be interested in your opinion

    2. Tom Labus

      The library is a way out of anywhere and free.

  12. Vasudev Ram

    Good post, Fred, and good to see more action in the education / e-learning space (a field I am interested and work in, as I said elsewhere in this thread).Also, great starting sentence (and a true one) by Rebecca in that post:https://www.usv.com/blog/we

  13. Conrad Leonard

    If outschooling is the future, where are the great teachers you need to drive it going to come from? Traditional schools do more than train the students. They train the teachers. Great teachers, like great soldiers and great politicians, weren’t born that way and nor even did they walk out of teacher’s college that way; they got that way through experience (much of it pretty terrible) of the school system. So you better have a plan to contribute back to that otherwise this particular model you’re promoting seems to me nothing less than an extractive exercise that will doom the source of the value you’re trying to tap into.

  14. cavepainting

    Music and sports have largely been unbundled from school. Why not other specialized subjects where school does not do a good job of imparting understanding and providing inspiration?Things like KhanAcademy are great but they are self-serve and primarily a supplement to traditional school. Things like Kumon and Mathnasium (multi-billion $ retail businesses) are used for offloading math training and practice, but they are not learning focused and assume that the student is getting quality instruction elsewhere.Outside of personalized high-priced tutoring services, there is no instructor-led learning alternative that can replace/complement K-12 school on an a la carte basis.So, yeah, this is a real need and opportunity and Outschool looks interesting.

  15. ErikSchwartz

    Big fan (and customer) of Outschool.

  16. toddgeist

    I’ll be very curious to watch how this progresses.(For context, I helped found and am the president of the board of an alternative education non-profit that runs an unschool/homeschool learning center called One Spark Academy)I am, frankly, skeptical. Educational success at the K12 level is primarily driven through relationships. I think we will figure that out at some point, and when we will suddenly understand that most important thing we can do to fix k12 is to make sure that teachers have about 10 to 15 kids in a class and around 50 to 75 total kids that they have the time the space and the energy to focus on, so that meaningful relationships can form between them.Tech solutions to this problem tend to focus on scaling access to resources. Think online courses and Kahn Academy. But in this case the limiting “resource” is a SPECIFIC teacher’s time attention. You can’t just substitute any teacher at any time no mater how good they are, because relationships take time to form and become meaningful.The same can be said for peer groups. Any 5 to 10 kids you throw together is not the same as a group of kids who have been working together for some time.While I appreciate that video chat with a small group is a new approach, that is better than just video lectures and quizzes, unless this platform allows a teacher to have really good relationships with just 50 to 75 kids, and unless those kids can form meaningful relationships with the teachers and peer groups, it will just be a slight improvement to the other online courseware already out there.True educational change will happen when we figure out how to put MORE Teachers to work with LESS Students per Teacher, and I suspect that it also needs a real physical space not an online virtual one.But I’ll definitely keep my eye on this. 🙂

  17. JamesHRH

    Children of sports stars do the reverse – they home school to train more & then play for local district HSs.https://www.sbnation.com/ml

  18. Vasudev Ram

    Interesting information, Jeff. Thanks for sharing. As a guy interested in education and e-learning, it’s good to hear about such developments. I’ve been working in this area from a long time, in my own small way; e.g. here is my blog page about my software training services:https://jugad2.blogspot.com…with course outlines and testimonials.I’m also interested in the possibility of collaboration with any AVC readers (company or individual), since I’ve done content creation for e-learning startups too, e.g. for Python course material, in this space, and also for either project or product development. I have some successful product building experience too – see:my Codementor profile at https://www.codementor.io/v…andmy blog About page at https://jugad2.blogspot.com…for my xtopdf toolkit:http://sildes.com/vasudevra…which is used by a few well-known organizations, among others, and about a database middleware product I led a team on.(Edited for clarity.)

  19. FlavioGomes

    There is something to be said of a well executed Tango :)Likewise my friend.Best,Flav

  20. sigmaalgebra

    Church youth groups.Also some Hollywood quality movies explicitly on socialization, with a grounding in the psychological basics of affection, bonding, membership in groups, anxiety, aloneness, libido, etc.For now, exercises: Explain the points about socialization with the psychological foundations in the movieshttps://www.youtube.com/wat…https://www.youtube.com/wathttps://www.youtube.com/wat