There's been a lot of talk recently that the tech industry may be experiencing another bubble, as we're seeing a flood of big investments in a lot of Internet companies, often at what seem like rather high valuations. Venture capitalist Fred Wilson won't use the word "bubble," but he did recently point to "storm clouds" in the industry, suggesting that "the competition for 'hot' deals is making people crazy and I am seeing many more unnatural acts from investors happening. If it were just valuations rising quickly, I'd be a bit less concerned. But we are also seeing large deals ($5mm to $15mm) getting done in a few days with little or no due diligence. Investors are showing up at the first meeting with term sheets."

It isn't sustainable.

As a tech journalist, I pay attention to these trends on an industry level. It's my job. And I won't lie, I've reacted to a couple of recent high profile investments lately with a furrowed, confused look, muttering "This can't end well." But hey, what do I know? I studied folklore not finance in graduate school.

Regardless (or perhaps because) of my academic training, my interest in investment -- bubbles and otherwise -- in the education space is different than my attention to other areas. I want to see investment dollars flow. I want to see innovation. I want to see some of the smart entrepreneurs I meet and talk to funded. It's not simply because I root for (ed) tech startups (which I do). I root for education, I root for educators, and at the end of the day and the most important thing of all, I root for students.

So I worry about, to use Wilson's terms, "unnatural acts from investors" playing out badly in education technology. I worry that education may be "hot" but that investments may not be "smart." Granted, I am not concerned so much about the fallout from burst bubbles on the pocketbooks of investors (my apologies to all involved). But I worry that "bad investments" might be blamed on the education industry and not on the tech industry part of the equation. I worry that investors will again be wary of backing ed-tech projects. I worry that education just won't seem like a worthwhile place for investment. I worry people will stop paying attention.

And then again, I worry that certain people are paying attention. I worry that certain folks are investing. I look at a $360 million acquisition for Wireless Generation -- a company that handles student information systems and played a part in the development of the personalized learning School of One technology -- by Rupert Murdoch's News Corp and I want to shout "This can't end well."

Different "storm clouds" altogether.

Audrey Watters


Hack Education

The History of the Future of Education Technology

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