Calling the Tune

A friend of mine used to work as a consultant and financial analyst, mostly for entrepreneurial companies that were still owned by the person who started the business. I once asked him what the most difficult part of his job was, and he told me that “people who have made a lot of money think that means they are smart.”

Over the years I’ve known quite a few successful entrepreneurs, and most of them have born out the truth of my friend’s observation. It explains a lot about their behavior, and it’s a good thing to keep in mind when you’re trying to conduct any sort of business with them.

There have been wealthy entrepreneurs in America since the founding, but there were two generations that produced an extraordinary number of highly gifted and uber-rich business people. The first reached its zenith in the late 1800s, a period which came to be known as “the Gilded Age.”

They were the men who industrialized the United States, who built the railroads, steel mills, and oil refineries. They made thousands of innovations across every field of commerce, and made things such as cars, cameras, refrigerators, phones, and radios affordable for the average family. We remember their names, such as Vanderbilt, Rockefeller, Carnegie, and dozens of others, partly because they endowed many of our great educational and cultural institutions.

I’m sure they were smart people, and probably thought so, but they rarely micromanaged these organizations. In fact, most of them established foundations that stood between themselves and the causes they supported. As the historian Robert Bremmer wrote in his book American Philanthropy, the foundations made funding decisions “with greater intelligence and vision than the donor himself could hope to possess.”

The second great generation of entrepreneurs is the one that seems to be reaching its peak right about now. Originally led by Bill Gates and Steve Jobs, the stage has now been ceded to Information Age magnates such as Sergey Brin, Mark Zuckerberg and Jack Dorsey. Like the so-called Robber Barons before them, they have changed the world, and also created vast wealth.

Unlike their predecessors, though, these guys don’t merely wish to change the world, they want to fix it as well, and they think they know how to do that. In a June 6 article in The New York Times entitled, “The Silicon Valley Billionaires Remaking America’s Schools,” author Natasha Singer examines the efforts of tech moguls to transform education.

One of the larger initiatives is a nonprofit organization called Code.org, founded by Hadi Patrovi, a 44-year-old Iranian immigrant and former computer science major at Harvard. Patrovi sold his startup voice-recognition software business to Microsoft, became an early Facebook investor, and now is on a mission to make code writing a curriculum staple at every high school in America.

With over $60 million in donations from technology giants, Code.org has set out to achieve its goal through a three-pronged strategy. It designs curriculum and tutorials, trains teachers to apply the lessons, and lobbies state governments to alter education laws and regulations. The plan seems to be working, as Code.org claims to have trained 57,000 teachers and affected changes at 24 state legislatures.

Some of the same people that support that effort also have their own ideas about the deficiencies in American education, and those ideas are often related to the manner in which those people made their fortunes. Cofounder of Netflix Reed Hastings, for example, believes that the acquisition of data on individual students is the key to teaching those students, just as data on consumers is key to providing them service value.

In 2009, he discovered a commercial math program called Dreambox that operated much like Netflix. As students complete lessons presented in the form of video games, Dreambox records every click, every pause, every move of any kind, and accumulates around 50,000 data points for every hour a student runs the program. It then applies algorithms to all that information to yield suggested instructional strategies to teachers.

Hastings did not invest directly in Dreambox Learning, which is a private company. What he did instead is to start donating many millions of dollars to a nonprofit charter school fund, that would then buy the program for schools. It is now being used by more than 2 million kids.

Marc Benioff, the founder of Salesforce.com, has taken a different approach. In 2013, his local school district in San Francisco asked for his help in buying technology upgrades for its classrooms, and he decided that he would give the district much more than it was asking for. He pledged $100 million over the following decade to fund math and science curricula, teachers and equipment in the district.

Although he disagrees, it appears to outsiders as though Benioff has designed his approach to resemble the venture capital world from which he comes. A nonprofit division of his company reviews annual grant proposals from dozens of principals and other administrators in the district, and funds those that it considers to be the most innovative and promising.

Venture capitalists, of course, expect that many of their seedlings will fail to bear fruit. They continue to water those that do.

One of the most famous tech moguls, Mark Zuckerberg, has taken a more direct tack. He and his wife, Priscilla Chan, visited a school several years ago that was run by a nonprofit charter school group called Summit Public Schools, and were impressed with the software that Summit had developed. Like Facebook, the program was designed to be customized for each individual user. Students choose their own assignments and work at their own pace, with teachers operating more as troubleshooters than lecturers.

Zuckerberg provided a team of Facebook engineers to improve the software and make it accessible to schools throughout the nation at no cost. From an installation base of 19 schools in 2015, the program will reach several hundred this fall, and Zuckerberg hopes to cover the majority of America’s 25,000 high schools within the next decade. Given his track record, I wouldn’t bet against him.

The educational community is not universally enthralled by the brilliance of the tech titans. Among the many complaints are that the efficacy of these programs has never been proven, that kids are used as guinea pigs, and that teachers are often cut out of the loop. Some critics even argue that the whole movement is simply a self-serving effort to produce employees for the industry.

I don’t question the intentions of the philanthropists, nor their problem-solving acumen, but I do object to their tactics. If they have ideas for educational products, I would like to see them introduce those products through the marketplace, the same as the rest of us.

Sure, billionaires are smart. So are parents, teachers, administrators, school boards and taxpayers.


You can e-mail Kevin at kfahy@fwpi.com.

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