Tear Down that Paywall: Why the Best Learning Tools for the Next Generation Should Be Free

In the 1860s, Joseph Dixon invented a cost-effective way to mass produce graphite pencils, which previously had been costly and scarce. Over the next 150 years, pencils became a ubiquitous tool for students and teachers, without which lots of learning wouldn’t have happened.

What is today’s more powerful equivalent of Dixon’s pencil? It’s software. Simple, effective Internet tools and apps that empower students and teachers and support their creativity and quest for knowledge.

I don’t mean online courses or digital textbooks or videos, although those are potentially useful. I’m talking about basic utilities – verb conjugators, math-equation solvers, self-testing tools, worksheet creators, digital flashcards, sentence-writing tools, language audio tools, and other tools that haven’t been thought of yet – the list goes on and on.

We need to dramatically accelerate the development and distribution of these tools, because very few of them (Google docs being an exception) are currently in wide use.

And here’s the key – these educational software tools should be FREE. Here’s why:

1) High-quality software tools are a prerequisite to empowering the next generation of great teachers and motivated students. People are the future of education, not technology. But they need access to high-quality tools so they can teach and learn to their full potential.

2) ‘Free’ is the only price many students (and teachers) can afford. Twenty percent of children in the U.S. live below the poverty line (Census Bureau 2012).  And even above the line, many more people are feeling squeezed – they’re not going to spend extra out-of-pocket money on anything they don’t absolutely have to.

3) The future is about making sure all students have access to great educational tools and opportunities, not just some students. The cure for cancer or the next climate-change breakthrough could just as likely to come from a student from a low-income family or community as from an affluent one. For this to happen, every single one of the 70 million students (and four million teachers) in the U.S. needs access to the best learning (and teaching) tools available.

4) ‘Free’ breaks down barriers to distribution and lets individuals choose what works best for them. Fee-based educational software often has to be selected and paid for by a procurement system, involving school districts, purchasing agents and policy decisions. This process is in place for many good reasons. But no kid (or teacher) ever needed to get approval to use a piece of paper, or a #2 pencil, or to do a Google search. Why should they have to wait for approval for basic digital study tools? If more educational software was free, it would be much easier for students and teachers to compare alternatives and decide what’s most effective.

5) ‘Free’ is how the Internet works, and it’s what people expect. It’s no coincidence that the most broadly used Internet applications and services are free to consumers (e.g. Gmail, Google Maps, Yelp, Twitter, Wikipedia, and many others). The oversimplified reason is economics: digital services tend to have very low (or no) variable costs. So once an app is built, serving millions of additional users doesn’t cost much more. If one competitor doesn’t make their service free, another one will.

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So what’s wrong with the world of educational software? Why are free high-quality tools not becoming as widespread as pencils and paper? Why do most companies have to charge hefty fees for their software tools – $14.95 a month,  $49 a student, $1,500 per year per classroom?

At Quizlet, we know there’s another way, because we’ve been providing free study tools on the Internet for seven years, and more than a million students and teachers currently use our website and apps every day. We make simple and powerful tools that help students with things like language learning, vocabulary, and the memorization and recall of key concepts – tools that enhance what’s possible with pencil and paper, just as Google maps improved upon the paper map.

Most companies can’t or won’t do this, for two main reasons:

1) They have to cover high distribution costs. Many educational software companies have dozens of salespeople on their payroll to sell to school district decision-makers, so they need a lot of revenue to pay those salaries. Software salespeople can make more than $100,000 a year, and they have lots of expenses on top of that for sales calls, travel, etc.

2) They have to satisfy demanding institutional investors. Many software companies raise tens of millions of dollars from institutional investors (venture capitalists or private equity firms), who expect a high return on that investment.  Typically these investors are looking to build ‘billion dollar companies.’ That’s hard to do – if not impossible – when you’re giving away your product to most users for free.

At Quizlet, we have neither salespeople nor institutional investors, but we still have significant costs to develop high-quality software. So, are we crazy to offer access to great study tools for free when we could easily put a pay wall in front of them? Are we sacrificing long-term business strength or opportunity to do so? Not at all. In fact, we believe we will have a stronger business because of it.

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There are two revenue models for consumer services on the Internet these days – ads and subscriptions. The ad model is declining for three reasons: 1) the smaller screen sizes of smartphones and tablets, where ads take precious space from the user experience; 2) increasing consumer concern about privacy, especially for kids; and 3) prices are dropping because advertisers can reach whoever they want through networks like Google’s for rock-bottom rates.

In response, many consumer Internet companies have successfully adopted something called the “freemium” model, where much of the functionality is given away and only a small percent of users are charged for “premium” features. Companies using this model include LinkedIn, Spotify, Evernote, Dropbox, and others.

The question is, can this freemium model apply to education technology and enable all students and teachers to benefit from free, high-quality learning tools?

We believe it can. Fewer than one percent of our users subscribe to our paid services ($15 or $25/year for a few extra capabilities, like image uploading and voice recording). But more than 100 million people visited our website and apps in the past year. If only one or two percent of those users pay to subscribe, that means we can be strong enough to finance tremendous innovation and still offer free learning tools to a virtually unlimited number of students globally. 

Furthermore, we believe these free learning tools can be of very high quality, and continually improve over time.  On the Internet, quality wins – whether they’re paying or not, users flock to the best product. And a large, loyal user base is what ultimately makes a strong brand and business possible. With a long-term view, we think it is possible to have both a mission orientation (help every kid learn) and be financially successful. We funded our business initially out of our own pockets and later from cash flow, rather than raising venture capital money, for precisely this reason.

Finally, we believe free study and learning tools can be held accountable for providing educational value and effectiveness.  The real cost of any software is the time investment required to use it. We’re particularly proud that hundreds of thousands of teachers have decided to use Quizlet’s study tools in their classrooms. They spend serious hours on Quizlet preparing their materials – we hear from them all the time how worthwhile it is. And more important, they tell us what isn’t working for them and what we should fix or improve (and we do).

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We think more businesses can and should be making free, high quality online study and learning tools widely accessible to all students and teachers, regardless of their ability to pay. Enabling students and teachers is the key to improving education in the U.S. and around the world.

Quizlet founder Andrew Sutherland and I both benefited from a high quality public school education, great teachers, and parents who were supportive of learning and our quest for knowledge and self-improvement. That’s one big reason why our mission, along with building a strong business, is to help as many kids benefit from the foundation of a strong education as we can.

Dave Margulius is CEO of Quizlet, and lives in San Francisco, CA. You can follow him on Twitter, or reach him via LinkedIn or as dmargulius on that Google mail service.

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Pete Seeger and the Power of Staying Power

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[the following is an email I sent out to my team a few days after Pete Seeger’s death on January 27, 2014]

“Congratulations Pete, you outlived the bastards.”

Bruce Springsteen said that to Pete Seeger at a tribute on his 90th birthday, one year after they played “We Shall Overcome” together at Obama’s 2009 inauguration.

Seeger died last week at age 94. He was born in 1920, and spent his whole life singing songs and inspiring generations of people to fight the good fight, for the little guy, for workers, for people on the outs, for peace, and for the planet.

He was Woody Guthrie’s protege, hitchhiking, riding freight trains, and singing in saloons with him in the 1940s, learning and spreading American folk and protest music (“This Land is Your Land”).

He was blackballed by Joe McCarthy and the anti-communist movement in the 50s, but came back even stronger as a force to inspire the civil rights and anti-war movements in the 60s.

He fought GE in the 70s and 80s and forced them to clean up all the PCB’s they’d dumped in the Hudson river.

And up until last week, he lived a simple creative life in the log cabin he shared with his family, chopping wood every morning and holding protest signs (anti-Bush and war) by the side of the road in the freezing cold well into his 80s. He shunned recent efforts to make him into a sainted celebrity – it was never about him, he saw himself as part of a continuing wave of ordinary people pushing for good.

If you want a quick dose of what he was all about, watch this awesome documentary, The Power of Song, available to stream online on PBS, (http://www.pbs.org/wnet/americanmasters/episodes/pete-seeger/full-film-pete-seeger-the-power-of-song/2864/), or buy on iTunes. You’ll be glad you did.

So what does this have to do with us?

For one, excellence: Seeger was the best at what he did – an awesome musician, singer, songwriter, and promoter of his own and other artists’ work.

For another: inspiring kids. When Seeger was forced off the airwaves and blacklisted so he couldn’t get jobs, the only gigs he could get were as a music teacher at schools and summer camps, and playing the college circuit. So he spent the late 50s and early 60s cultivating a whole generation of kids with songs about the past and the future, about hope and fighting for good against the larger forces of greed, corporations, discrimination and abuse of power.

When I was four in 1968, my parents had Pete Seeger albums playing nonstop in our house (thanks for that!), and that music inspired something in me like it did many other people.

Finally, Seeger had staying power, and he just kept getting better. Through decades of ups and downs he kept singing songs, loving it, jamming with other great artists (Johnny Cash, Bob Dylan, Springsteen), and believing in people and that good would triumph. At least for him, living a long (and good) life turned out to be not about money and fame but about just enjoying what he was doing and sticking with what he believed. And along the way, he wasn’t afraid to be different, to forcefully and with conviction swim against the tide (‘the bastards’).

I won’t editorialize any further other than to say that I hope we as a company and as individuals can aim to do all of the things Seeger did: Be excellent, inspire LOTs of kids, have staying power and have fun while we’re at it!

Dave

For more info on Pete Seeger:
http://www.nytimes.com/2014/01/29/arts/music/pete-seeger-songwriter-and-champion-of-folk-music-dies-at-94.html
http://en.wikipedia.org/wiki/Pete_Seeger
http://www.pbs.org/wnet/americanmasters/episodes/pete-seeger/full-film-pete-seeger-the-power-of-song/2864/
- check out his music on Spotify or YouTube

The Boston Globe and the Asteroid That Smashed the Newspaper Industry

I woke up this weekend to the news The Times had finally sold off The Boston Globe to a local investor for a paltry $70M. And the buyer didn’t take The Globe’s hefty pension obligations. So the NYT essentially gave it away, just to be rid of it. I was there when they bought it for over a billion dollars 20 years ago. But now the business is a shadow of its former self, with circulation and revenue slashed in half, and bleeding cash. Ouch.

The news sparked memories of my three years at The Globe in the mid-’90s, in the last days of its glory as a mighty Boston institution. Even then, it was clear that an asteroid was coming.

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In 1995, one of the less progressive-minded Globe executives told me they’d put the Boston.com logo on the truck fleet “when hell freezes over.” This finally happened around 2002.

I joined The Boston Globe in September 1993, fresh out of business school, as their guy in charge of getting the newspaper online - making the case for an aggressive digital investment and getting it done. I was the only one in the building with “online experience” (I’d helped Knight Ridder’s San Jose Mercury News do their first deal with AOL).  I stayed up nights researching and writing the business plan, coming to the conclusion that online media posed a serious threat to the newspaper business.

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CEO Weekend Project: How to Hang Swings in Your Office

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Let’s face it – you need a break from the firehose of decisions, meetings and stress that comes with being an Internet company CEO. My suggestion: attempt a fun, ambitious, slightly harebrained construction project!

Last weekend I tackled just such a project: hanging old-school tree swings in our office. It was both physically and mentally refreshing – and as a bonus, I got some cool points from my team, which should last about a week. Here’s how I made it happen, and how you can too.

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Will Electric Cars Swamp the California Grid?

Tuesday night I attended an energy geek fest, and was shocked. The email had made the event sound like a snoozer: PG&E representatives discuss their views on electric cars.

But sparks started flying right away, as two Tesla engineers tore into the utility folks for being slow to provision new charging stations, but mostly just cause they seemed to want to tear into them.

The big aha for me was realizing the PG&E folks truly believe that plug-in cars could be the biggest wave to hit the grid since air conditioners and refrigerators. And that the energy grid today might be like the phone system circa 1993 at the dawn of the Internet: it doesn’t know whats about to hit it.

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