March 30, 2012
Archive for April, 2012
David Jones, Jr. at TEDx: Health Not Healthcare — Reversing the obesity epidemic through lean technology (video)Wednesday, April 18th, 2012
Saturday, April 14th, 2012
Rip Empson is a writer and rabble-rouser at TechCrunch. He covers startups, music, social, mobile, health, and education. You can reach him at rip[at]techcrunch[dot]com → Learn More
A year ago, Peter Thiel called it a bubble. Whatever you call it, the cost of attaining a college degree has skyrocketed to the point of absurdity — to the point of one trillion red flags. Student debt in the U.S. recently pushed over $1 trillion, and the average debt per student now stands at more than $25K. (And 30 percent of students are more than 30 days overdue on payments.)
StraighterLine, a Baltimore-based startup, is one of many young companies trying to find a solution to these rising costs, through online education. Founded in 2010, StraigherLine offers a low-cost, subscription-based service that allows students to take a variety of accredited, general ed courses online. And, now, with the goal of bringing its service to a wider audience, the startup has announced that it has raised $10 million in series A funding.
The round of financing was led by New York venture firm FirstMark Capital, with contributions from City Light Capital and existing investor Chrysalis Ventures, among others. The company said that it will use its new capital to accelerate its outreach to colleges, employers, and students, and focus on building a viable, next-gen market for credit-bearing, web-based general ed courses.
With unemployment remaining fairly high and with non-traditional students (older people, single mothers, workers retraining) returning to academia, competition for already-scant resources is growing. Institutions are struggling to carry the load. Yale recently decided to add 250 students to its incoming class, which cost the university a quarter of a billion dollars.
Luckily, as online content distribution media have matured, the quality of online ed is fast-improving as a number of startups, like Khan Academy, 2tor, ShowMe, Udemy, Udacity, Grockit, Lynda.com, and the Minerva Project are all showing how video, mobile devices, games, and advanced web platforms can transform distance learning into low-cost, viable supplement (if not alternative) to on-campus learning.
StraighterLine, too, is focused on bringing price transparency to online education, offering general ed courses that students generally take (and are often required) during their freshman and sophomore years, like Algebra, Biology, Calculus, U.S. History, and English Composition, to name a few — on the Web. If we say the average price for a private institution is about $32K per year, StraigherLine’s pricing compares favorably, with the option to pay $100 a month, plus $39 for each course started, $399 per course, or a full freshman year education for $1K.
Included in this pricing is free live, on-demand instruction, although if students choose to buy a textbook, they have to do so separately. But the cool part is that the startup’s courses are ACE Credit recommended and can be transferred for credit to a number of degree granting institutions. Over 25 grant credit today, with more than 200 universities across the U.S. having accepted post-review.
There aren’t yet many “big name” institutions accepting StraigherLine credits, and obviously it will be important for the startup to expand its list of participating universities if it hopes to reach the tipping point. But the model is certainly an appealing one, as it means that students can participate in a flexible, low-cost education and transfer into institutions that accept its courses for credit, significantly reducing the cost of a four-year degree. A degree that they eventually receive from the universities themselves, not StraighterLine.
It’s also all about quality when it comes to online education, something 2tor has been religiously focused on and is raising big money to take the necessary steps to ensure. StraighterLine, on the other hand, doesn’t have to offer an Ivy League education like that which Minerva is setting out to build, as long as it offers those quality, prerequisite courses that students can knock out on their way to an on-campus degree. In this way, it can provide a great complement to community colleges and equivalent feeder programs into four-year institutions.
The company said that it is working towards building out its platform so that it can begin to offer the kind of robust online education (multimedia, interactive content, live, on-demand instruction, employment resources, etc.) that is now expected of distance learning. It also plans to boost its offerings around placement, career training, and is hustling to engage the employer community so that its educational platform maintains relevance to students’ futures, beyond just being an easy way to knock out first-year requirements.
The founder and CEO of StraighterLine, Burck Smith, has experience building online educational programs, having sold his online tutoring and support services company, SmartThinking to Pearson early last year.
For more on StraighterLine, check ‘em out at home here.
StraighterLine Raises $10 Million To Expand Marketing & Build Next Generation Market for College CoursesFriday, April 13th, 2012
For Immediate Release
April 13, 2012
Baltimore, MD – StraighterLine (www.straighterline.com) announced today that it completed a $10 million financing. Led by FirstMark Capital (www.firstmarkcap.com), a New York City-based venture capital firm with a history of successful investments in online, consumer-focused and education businesses, the financing will accelerate StraighterLine’s outreach to colleges, employers and students. Further, it will extend StraighterLine’s existing offerings to include a next-generation market for credit-bearing, online, general education college courses. City Light Capital (www.citylightcap.com), a pioneer in impact investing, also contributed to the financing. Returning investors include Louisville-based, Chrysalis Ventures (www.chrysalisventures.com/).
“Rising education costs and declining graduation rates are among the foremost topics in the country. StraighterLine impacts both by driving the convenience and savings of online learning to the student,” said Amish Jani, Managing Director at FirstMark Capital and newly appointed member of StraighterLine’s Board of Directors.
“By bringing price transparency to online education, we believe StraighterLine can harness the attributes of online companies that have been successful in other industry verticals.” Says Josh Cohen, Managing Partner at City Light Capital, “Student debt is one of the most pressing problems facing the United States today. Adding affordability and accessibility to higher education is perfectly aligned with our investment thesis. StraighterLine presents a clear solution.” StraighterLine, with its low cost, subscription-based model and self-paced, online college courses, has been recognized as a pioneering force in higher education by a variety of education thought leaders, including The Chronicle of Higher Education, Inside Higher Ed, U.S. Chamber of Commerce and leading news organizations like The Chicago Tribune, The Washington Post, Forbes, The Huffington Post, The New York Times and Fast Company.
“By providing a more affordable and lower-risk pathway into college, StraighterLine drives cost savings to the payer – whether student, taxpayer or employer” says Burck Smith, CEO and founder of StraighterLine. “Given the national discussion on college cost, student debt and degree completion, StraighterLine’s business model is timely.”
Currently, the StraighterLine curriculum offers thirty-eight entry-level college courses online including College Algebra, Precalculus, Calculus I, Calculus II, Business Writing, Introduction to Biology, Introduction to Biology with lab, General Chemistry I, General Chemistry I with lab, English Comp I, English Comp II, Accounting I, Accounting II, Managerial Accounting, Macroeconomics, Microeconomics, Business Statistics, Anatomy & Physiology I & II, each with a lab option, Medical Terminology, Introduction to Psychology, Introduction to Business, Introduction to Criminal Justice, Introduction to Nutrition, Introduction to Sociology, Western Civilization I, Personal Finance, United States History I, Student Success, Pharmacology I, Pharmacology II, General Physics I, General Physics I with lab and two developmental courses, with another 9 new courses slated for launch during the first half of this year.
Course credits transfer to StraighterLine’s partner colleges and universities or through the ACE Credit service.
StraighterLine partner colleges and universities include the following institutions:
- Albany State University
- American College of Dubai
- American InterContinental University
- Ashford University
- Assumption College
- Capella University
- Charter Oak State College
- Colorado State University-Global Campus
- Concordia University Chicago
- DeVry University
- Excelsior College
- Granite State College
- Jefferson Community and Technical College
- Kaplan University
- LaSalle University
- Nazarene Bible College
- New England College of Business
- Potomac College
- Thomas Edison State College
- Thompson Rivers University
- University of the Incarnate Word
- University of Phoenix
- Western Governors University
- WGU Indiana
- WGU Texas
- WGU Washington
About FirstMark Capital
Based in New York City, FirstMark Capital is an early stage venture capital firm investing in visionary entrepreneurs who are creating new markets with innovative technology solutions or fundamentally changing existing markets by applying a fresh approach or new business model. FirstMark partners early in a company’s lifecycle, offering deep industry insight, a broad network of relationships and the operational expertise to build lasting businesses. Select historical investments include Riot Games (Acquired by Tencent Holdings); Duck Creek Technologies (Acquired by Accenture); Netgear (NASDAQ: NTGR); Boomi (Acquired by Dell); StubHub (Acquired by eBay); Netegrity (Acquired by CA); OutlookSoft (Acquired by SAP); and Navic Networks (Acquired by Microsoft). Current investments include: Pinterest, Knewton, Aereo, SecondMarket, Shopify, Lot18, and Lumosity. For more information, visit: www.firstmarkcap.com. For more thoughts on the StraighterLine investment, please visit Amish Jani’s blog: ajnyc.wordpress.com.
About CityLight Capital
Founded in 2004, City Light Capital is a venture capital firm based in New York seeking market-based solutions to major social problems. The firm invests in early stage companies in the Safety, Education, and Energy and the Environment sectors. For more information, please visit http://www.citylightcap.com.
About Chrysalis Ventures
Chrysalis Ventures manages one of Mid-America’s largest funds for early-stage and growth investments with approximately $400 million under management. Since 1993, we have invested in over 65 companies, primarily in the Healthcare and Technology sectors. With headquarters in Louisville, Kentucky, Chrysalis has offices in Cleveland, Pittsburgh, Ann Arbor and Houston. We seek to partner with entrepreneurs to build enduring businesses in industries undergoing significant transformation.
StraighterLine has been recognized as a revolutionizing force in education by major news organizations and the U.S. Chamber of Commerce for offering students online courses that earn real college credit for just $99 a month. Fast Company named StraighterLine one of the “10 Most Innovative Companies in Education.”
In order to facilitate the award of credit, StraighterLine has forged partnerships with leading accredited online colleges and universities. A student ultimately earns a degree from those institutions but realizes tremendous savings and convenience by starting with StraighterLine.
StraighterLine’s courses are evaluated and recommended by the American Council on Education’s College Credit Recommendation Service (ACE CREDIT). In addition to the institutions with which StraighterLine has a direct relationship, more than 300 other schools are reported to have accepted StraighterLine coursework for transfer credit.
Currently, StraighterLine offers 38 entry-level college courses online in the Sciences, Humanities, English, Math and Business.
For information, visit www.straighterline.com or call 202-507-7020 or 1-877-str8erline (1-877-787-8375)
Entrepreneurs often find conversations with venture capitalists to be somewhat schizophrenic. In a blink, the questioning can veer from, “Why would anyone use your product?” to, “How do you scale when everyone uses your product?” This can easily make a confused entrepreneur answer, “Um… what’s most important?” For me, both as an entrepreneur and a venture capitalist, there are only two types of problems: Problems you want to have, and problems you don’t want to have.
I recently met with a terrific entrepreneurial duo. Theirs was the classic partnership: one of them was the charismatic sales and business leader; the other was the technical and visionary brains of the operation. Their product was a web-based software application for health insurance companies. They met while they were both working for an insurance carrier, and instantly connected over their mutual aggravation with the same problem.
Their frustration spawned an idea, and then a company. They toiled away for a year, bootstrapped the product to life, found a first customer, and made that customer deliriously happy. Sales force? Development strategy? Support organization? Investors? They had none of that. A product that a customer loved? That they had.
Until this point, their work had been hard: They were coding 24/7, trying to convince others to help for free, selling the product, and pretty much giving up on eating or sleeping. But their decisions were easy: Nothing else mattered if they didn’t have a product and a customer.
Now they were coming up for air and realized that their problems were getting harder to prioritize. Hire sales people or developers? Pursue investors or customers? Customize the product or insist on the cookie-cutter model? Provide high-touch or self-serve support?
In the urgent “now-now-now” frenzy of an early-stage/high growth company, problems fly around like trucks and cows in the eye of a tornado. This is when judgment matters – how does the entrepreneur approach these whirling problems? Which do you avoid, which do you embrace, and when?
Entrepreneurs who succeed eliminate the problems they don’t want to have – a bad company culture, lack of focus, tepid user response, a small market, or a lousy revenue model. Once those are gone, they’re hopefully left with only the good problems: the market’s too big, there are too many customers, not enough employee talent, too much demand for new features or services, and often, copycat competitors.
When confronted with competing problems, I focus on just two things:
1. Eliminate the “don’t want to have” problems first, and in the right order, so you’re not wasting time and money;
2. Be honest with yourself on whether you’ve actually eliminated the problem or are just caught up in your own passion.
Ultimately, staying disciplined and self-aware is easier said than done, but worth the effort.
by Alastair Goldfisher
A couple of weeks ago when Norwest Venture Partners announced its investment in health care cloud provider ClearDATA, the firm said it was the third time it had worked with CEO Darin Brannan. His previous startups Verio Inc. and Website Pros both resulted in IPOs.
So here’s a question for VCs: Do you prefer working with entrepreneur that you’ve worked with before?
I asked that question today during a panel I moderated at Partner Connect 2012 on How to Find a First Class Entrepreneur. The panel featured Jeffrey J. Bussgang, general partner of Flybridge Capital Partners; David Jones Jr., chairman and managing director of Chrysalis Ventures; Scott Kupor, partner and COO of Andreessen Horowitz; and Edwin Poston, general partner and co-founder of TrueBridge Capital, which is an investor in Flybridge and Andreessen Horowitz.
“Great entrepreneurs fail,” said Bussgang, but past failures are not a deterrent to backing an entrepreneur again. “What matters most is whether that entrepreneur has the humility and blueprint to do it again.”
The panelists agreed on that note, and Jones added: “I’ve made money off of those who previously failed.”
Poston pointed out that some of today’s highest valued VC-backed companies, such as Facebook, were started by first-time entrepreneurs.
In terms of geographic preference, the panelists agreed that good entrepreneurs can be found anywhere. Kupor, whose Silicon Valley-focused firm is based in Menlo Park, Calif., says geography doesn’t matter as much as whether there’s a supportive ecosystem and entrepreneurial culture.
That was a refrain echoed by Poston: “We have a big belief in California. It’s easier to acquire talent there and achieve an exit.”
Jones, who acknowledged that he invests in health care and tech companies in the “flyover state” of Kentucky and in surrounding regions, said there are pluses and minuses to investing based on geography. But what matters most is whether the entrepreneur has the right skills set. ”Proven entrepreneurs have fire in the belly,” he said.
“The question is whether the East Coast can generate a mega winner,” Bussgang said. Bussgang, who teaches a class on entrepreneurship at the Harvard Business School, said that although, entrepreneurs can be found anywhere, the next hot spot for entrepreneurs may be in the Big Apple, where his Boston-based firm has already opened a branch.
“In my class, a third of the students want to go to New York to be entrepreneurs. Not hedge fund managers, but entrepreneurs,” he said. “They used to want to go to Silicon Valley or Boston, but New York is a becoming a talent magnet for entrepreneurs.”