Partnering or disrupting. Diplomats and Mavericks. The case of Edtech.
More journal scrolling: Eisenhardt and Volmar.
I’m sitting in the library at the Oxford University (Saïd Business School) today. It is not an especially beautiful library, but it is a great place to sit and write. I’m in the UK for a board meeting and to attend a conference, so I thought I would come a day earlier and hang here.
I have an alert in google for about 20 academics, one of them is Kathleen Eisenhardt. She should be more well known outside academic circles than she is. The model she created with Santos, CDC, for claiming, demarcating, and controlling a market, has become an essential component of my toolbox for scaling start-ups. And she is one of the foremost thinkers on management research methodologies too. Check out her papers here.
At the risk of stating the obvious: VC funds require their investments to be commercially successful, otherwise they don’t get to return capital to their investors, and relatively quickly they cease to exist. At the same time, as a society, we want innovation in our most pressing social issues, in education, housing, defence, healthcare and more. Many of these challenges require non-market solutions. We need bridges then, between commercial and institutional innovation.
A fascinating study
It is this intersection that this latest paper explores (The paper is not yet formally published in the journal but google scholar found it). I think it was presented at a recent conference at the The Mack Institute at Wharton.
Eric Volmar and Kathleen Eisenhardt examine two edtech start-ups in the MOOC space, one she calls maverick, the other diplomat. The maverick sets out openly to disrupt universities, the diplomat seeks to partner. They explore in some depth, over multiple years, how these strategies evolve.
The first process (Maverick) is a competitive, learning-centric path that begins with a vision of being a substitute for incumbents, and initially emphasizes learning about the nascent market. The second process (Diplomat) is a cooperative, diplomacy-centric path that begins with a vision of being a complementor to incumbents, and initially emphasizes gaining legitimacy in the field.
The paper is fascinating on multiple levels. I found the diplomat approach especially interesting, because it illustrated how both the start up and the academic institutions learnt to cooperate effectively. Working well with slow moving institutions like universities or health departments can be really challenging for start-ups. Segueing, rather than pivoting.
This model has parallels for healthcare, transport, social services, pensions and other fields where the startup is “forming a strategy in a nascent market while changing an established field.”
There is heaps of research which focuses on start-ups disrupting existing incumbents. but on the question of creating a market in an established field like higher education, there isn’t much.
Yet while valuable, it is unclear how these learning processes operate in established fields like education, national security, and healthcare where the pace is often slow, non-commercial norms and behaviors may be relevant, and mantras like “move fast, break things” may violate field values like safety, privacy and reliability
The paper does an excellent job in taking us through the challenges of both firms, and the MOOC hype and the more prosaic aftermath.
Both businesses are successful, but their strategies and paths to success were quite different.
I’m sure that folks from the edutech industry could guess which company is the maverick and which is the diplomat. I’d urge anyone building a start-up that needs to work with institutions to read this paper.
I usually append a song or tune that has a vague link to the post’s theme. This time Helene Grimaud. “for her latest concept album The Messenger, she has created a pianistic dialogue between Mozart and the Ukrainian-born contemporary composer Valentin Silvestrov.”
It is rather lovely.