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Education and health startups may be ‘cloaked in nobility,’ but how good are they, really?

When you cover education technology and digital health, it’s easy to get caught up in the public goodness of it all. The companies in these sectors aren’t just trying to chase the next billion-dollar idea, they ostensibly want to bring change and improvement to two areas of society that need it. But it’s important to remember — especially as investors pour upwards of a billion dollars into each of these sectors — that simply carrying the banner of education or health isn’t “good” in itself.

At the EdGrowth Summit this week in New York, Andrew Kassoy, co-founder of B Lab (an organization that certifies socially responsible business) put it well when he said:

“This industry, in particular, is one — and there are some others like healthcare and clean tech — which is cloaked in nobility. We’re providing a public good at some level or another and so what we do must be good. And I think it’s a pretty good idea to ask whether that’s always true. I’m not in the education field, but I know plenty of folks who are education investors or who are entrepreneurs running education businesses who, I wouldn’t say they don’t care, but that’s not why they’re there — they see a market opportunity. And I think it’s useful to be honest about where that’s the case and where there are other entrepreneurs or other investors who really are truly driven by the mission and profit is not that important. And then where people are on the spectrum, because usually people aren’t one or the other, they’re somewhere in between. That kind of clarity, and the transparency around measuring impact and communicating who you are, can drive who your investors are and what you’re able to achieve.”

Kassoy was speaking on a panel about how entrepreneurs, executives and investors build companies that are simultaneously market- and mission-driven and, to me, his comment was one of the more refreshing ones offered by the speakers.

Will Ethridge, COO of Pearson North American Education (s PSO), also took part in the panel but emphasized “false dichotomies.” “I don’t think there is a trade-off between being mission-driven and being profit-driven,” he said.

Thankfully, Kassoy called him on the comment, arguing that if you’re a public company, your obligation is to maximize shareholder value. So if you decide, for example, to bring your products to poorer people without the resources to pay for those products, that affects your bottom line. And, he added, if you’re a startup with “hot money” interested in a fast exit, you won’t have the chance to control your mission for very long.

I don’t think mission and market motives are incompatible. But I agree that it’s important to look at companies in the context of what’s really driving them and consider the compromises they may make in the pursuit of their goals, as well as who benefits most from the value they create and to what degree. There are always trade-offs — if companies want to be trusted, they need to give windows into how they’ll draw their lines and be honest about where they stand.

2 Responses to “Education and health startups may be ‘cloaked in nobility,’ but how good are they, really?”

  1. Ki Mae,
    Really, really you state “Thankfully, Kassoy called him on the comment, arguing that if you’re a public company, your obligation is to maximize shareholder value……”
    So instead of reporting I get your take on “free market” and public good, etc. First off, if the market can’t make money providing a product or service then it will not exist. If the product or service does exist, prices always drop, so the poor can eventually afford a “Big Screen” TV. The only way for non-market services or goods to exist is through charity or the use of force on the citizens by taking their property. As long as the “public” education system fails but continues to demand more and more money – provided by citizen’s taxes – which are taken by force, people will demand market solutions not “do gooder” solutions.

  2. Education Is Important
    Ekatarina Rosenlund

    Why is education important? Parents know why it’s important for their child to get a well education but, does the that child know how important it is. Exactly, why is education important? What are details that make it important?
    It is very easy to explain the importance of a education. No person can survive properly without education. The means of education only one’s potential can be used to maximum extent. Education tells people how to work without the major flaws. Through education can only make separate identity. It’s most important in life like our basic needs. with the beginning we learn how to interact with society and make friends.
    Education is essential as it paves the path leading to you fitting in with society. It wipes out all the wrong beliefs in our minds. it helps create a clearer picture so we no longer stand in a cloud of confusion about the things we learn. Education also brings up questions and also helps us work out ways to find standard answers to them. Education is about knowing that everything has a science to it, it is about learning to reason everything till every individual question meets a reasonable answer. It can lead us to a different path which may be the better choice than the one we’re on now.
    The path you choose now could change the outcome of your not so hopeful future. Getting a good and reasonable education can change that for the rest of your life. Education has a toll on people and they may not even notice it. If you want to find out the impact of education on any individuality, you better do an intense observation to the ways of well-educated people and then compare them with an illiterate person. You would get a clearer picture of the education and it’s accurate concept. Education is one of the important factors which formulate the way of a person. Education is a productive factor in a person’s life. It is everyone’s right to get. The training of a human mind is not complete without education. Only because of education a man are able to receive information from the external humanity, to notify him with past and receive all essential information concerning the present
    This is supposed to tell you to stay in school and not drop and be the best you can be and that it’s. Or i could give you a million reasons to get a good education. Instead I write to you and tell you that’s it’s smart but you probably know that.
    The first thing that strikes someone about education is the knowledge gain. Education gives us knowledge of the world around us. It gives us a different perspective on life. People debate over the subject of whether education is the only thing that gives knowledge on different things. Some say, education is the process of gaining information about the surrounding world while knowledge is something very different. They are right. But then, information cannot be transformed into knowledge without the catalyst called education. Education makes us capable of interpreting things correctly. It’s not just about lessons in textbooks. It’s about the lessons of life.
    According to Manali Oak, ” People use different words like ‘cultivate’ and ‘civilize’ for synonymous with educate. That says it all.”
    What would someone do if they couldn’t get an education? What if you couldn’t read or write? What if you were stuck not knowing anything that’s true? What if you only knew what people told you? What if you were stuck with some factory job and you absolutely hated it? You could kids what you knew because you don’t know anything or learn anything.
    The biggest part of growing up is the choice to get a better education or stopping there. There are pros and cons to the idea of education. “ Education is the most powerful weapon which you can use to change the world.” Nelson Mandela said to make an impression on the younger generation. He wanted us to make a change in the world and be the better part of it.
    People say that the younger generation is very impressionable, and that we should learn from our elders’ mistakes. If that could change the way our generations’ education is formed we could change the world. We could that generation that makes a change in the way our country is falling apart. We could be the people to put our own two feet on the ground and say no.