Educational technology or EdTech is a growing industry, valued globally at almost $75 billion in 2019 and forecast to grow 19.9 percent year-on-year to $319 billion by 2027. The pandemic is said to have intensified investments into EdTech, particularly as educational institutions adjust to the new normal.

With that said, education remains to be mostly a traditional industry, led mostly through policy-driven initiatives. It is only now that the need for innovations is driven by consumers. “[A] lot of the technology-led disruption of education is led by consumer demand,” said Sandeep Aneja, the Founder and Managing Partner of Kaizenvest, in an interview with TechNode Global.

In a deep-dive Q&A, we explored the challenges in education, both as an industry and as a philosophy. “The three key challenges, which are to be addressed by education are access, quality, and relevance,” said Aneja.

He highlighted how a mixed approach to financing can lead to ideal results. “[W]e bring different types of capital to different types of opportunities that we’re trying to tackle,” which enables both flexibility and accountability on the part of EdTechs and institutions that Kaizenvest invests in.

Founded in 2010, Kaizenvest has established itself as the only education sector-focused fund manager with private equity and private debt funds, which has successfully implemented a blended finance approach. According to Aneja, this resulted in sustainable impact and developmental outcomes in South, South-East Asia, and Sub-Saharan Africa.

Under his leadership, Kaizenvest has successfully exited 11 out of 15 portfolio companies within the education ecosystem. The firm also closely works with educational partners in the region, such as PHINMA Education–the largest chain of affordable higher education institutes in the Philippines, YOLA–a Vietnam-based English language training company, and TOPPR–one of the top three after-school K-12 learning apps from India.

An MBA holder from the Graduate School of Business at Stanford University, Aneja has 25 years of experience in private equity, investment leadership, consulting, and operations management. Sandeep spent seven years in Silicon Valley prior to Kaizenvest. He was a Partner at Outlook Ventures, serving as a board representative for the firm’s portfolio companies.

Sandeep sits on the boards of various education companies across the Philippines, Vietnam, and India. He is also an established thought leader, having been frequently featured as a speaker on private equity, emerging investments, globally impactful trends, and the importance of continuous research and innovation.

Education is increasingly commoditized, we learned in the interview. This is highly due to a paradigm shift in younger generations, which no longer consider titles and long-term jobs as the end-all-be-all of their lives. This and future generations find more mindfulness and meaning in life, and they want to support it through more sustainable means than borrowing heavily for a four-year degree, for instance.

“[The current generation is] taking a big amount of content, piecing it down into smaller portions, wherein each of those portions is marketable. Each of these portions is monetizable and that is something that’s occurring rapidly across the board,” Aneja said.

Read the condensed and edited TechNode Global Q&A with Sandeep Aneja, Founder and Managing Partner of Kaizenvest.

Sandeep Aneja, Founder & Managing Partner, Kaizenvest
Sandeep Aneja, Founder & Managing Partner, Kaizenvest

Can you tell us more about yourself and why Kaizenvest is focusing on investments in education?

My background is mostly in the investing space for the last 20 years. I was a venture capital investor in the Bay Area and invested in numerous tech startups, and really enjoyed that and wanted to do something more meaningful than just tech in Asia when I returned. It was what appealed most to me at that time because both of my parents were educators. I wanted to dive deeper into it, wanting to disrupt the system and provide better.

My first thesis was on how we could potentially improve education itself because I hadn’t seen a change after about 15 years since I had left India. I wanted to change education itself and make it more meaningful because I had seen some amazing opportunities, and the learning opportunity in the US was just amazing.

I figured I could help level it up. But as we grow older, we come to a point where we are more philosophical and thoughtful about what we do–not just improving education, but improving the world through education. So, using education as a tool, as a means to impact the world for the better–that is where we are today, and that’s our motto at the moment.

You mentioned that you’re also doing other investments or other activities aside from EdTech. Are there also other areas of interest?

Basically, everything we do is in education–all we do is education investing. And everything we do has an element of tech to it. Education to us is EdTech–for us, these are synonymous words.

It has an asset allocation for us. Tech plays a role in education. Thus, we don’t differentiate. Understand that our thinking is a bit different in that respect.

A lot of companies focus more on the tech rather than the user experience, which means lots of features, but not much thought on the experience. I think your philosophical approach is a good thing. Apart from that, what are the trends that you see driving innovation in the EdTech industry and ecosystem?

Historically, a lot of innovation has gone into the architecture of education.

For example, classroom design evolved toward designing amphitheaters and classrooms that have a narrow focus towards the front, where the teaching area is a narrower area than the sitting area. This was an innovation from outdoor learning in the earlier times, under trees and in the open air.

But those things occurred very slowly, and they were taken from one country to another, through merchants and policymakers. But now what is happening is much faster. Education is being disrupted by technology. The second aspect of this is that a lot of the technology-led disruption of education is led by consumer demand.

“[A] lot of the technology-led disruption of education is led by consumer demand.”

Until now consumers were takers of innovation, which was decided by the system of teaching and learning. What should the system do to make the classroom more engaging? Now, consumers are saying, I want this so I can be more engaged. This is the first time it’s occurring in education wherein consumers have a strong voice.

The pandemic has put the discussion of education innovation right in the center of everything. In the past year, for a lot of families, the entire dining table was abuzz with that idea of missing school or of not being able to go to school.

Therefore, we’re wondering if we are missing any learning from the aspect of not going to school. And a lot of families across the board, rich to poor–we’re all talking about the same thing.

For the first time in a long time, the world looked at education very deeply from the same perspective of missing out on something. You start realizing how important something is when you start missing it. Therefore, a lot of the desire to learn more as a consumer puts the focus on the role of education in a family’s life and that of a learner’s.

Therefore, this time the disruption is going to be longer. It’s going to be deeper and therefore it’s a very good time to have this conversation. I want to lay-out the centerpiece of my conversation with you today: Education is being disrupted, and It is a systematic process of giving instruction in a time-limited manner, in a formal setting.

“Education is being disrupted, and It is a systematic process of giving instruction in a time-limited manner, in a formal setting.”

I said systematic–it’s formal, it’s time-limited. However, because it’s been disrupted last year, this meant students did not go to school or college, or preschool. There is an increased focus on something that will have continued. And that’s learning.

Learning has continued for a lot of people–not for everyone. And what is learning? Learning to us is a continuous and cognitive process of acquiring and mastering knowledge and skills anytime, anywhere in any setting. It’s flexible in terms of where you achieve it and how you achieve it, and what you target.

“Learning to us is a continuous and cognitive process of acquiring and mastering knowledge and skills anytime, anywhere in any setting.

It’s not just knowledge, it’s not just saying that I’ve completed this amount of content. It’s not just content. It’s about the learner as well. And it’s not just about receiving instruction. It’s interactive–through a continuous cognitive process. This is the centerpiece of the disruption that has taken place. Through EdTech, the shift is from education toward learning, and this shift has been definitely accelerated by the pandemic.

In action: Yola, one of Kaizenvest’s portfolio companies

There’s a shift toward a more commoditized approach, such as learning through watching or joining online courses as an alternative to attending university. Is this also part of the trend that you think can make a positive impact on education?

Oh, absolutely. It is another important part of the future that’s taking place, evolving right in front of us.

Essentially today, one of the differences in the generations that younger kids belong to is how they view work. Work and jobs have previously been thought of as the main pursuit of human beings’ life–earning a living, making a living, working hard, and proving the point, making a difference.

That is no longer true for those in the current generation. They care about bigger things. They care about climate. They care about equality. They care more about sensitivity to everybody. They care about a work-life balance. They care about living more from the get-go.

So what do they care about? They care. They are definitely going to be interested in learning to earn enough and living as well. Clearly, that is going to disrupt where education is headed because the future of work is changing.

That desire to learn is changing, wherein students are saying, “Instead of committing myself to a four-year program where I come out looking like anybody else, I’ll take a six-month program in a boot camp format in a particular domain, which will get me to the same level of earning that a four-year program may get me to”

Or, “I’ll take a six-month data science course, or a three-month course in marketing online, perhaps combine those two and I’ll be already at the intersection of those two bodies of knowledge and become an innovative person available as a consultant.”

Then, “As a freelancer, I don’t need to get a job to have a career. I don’t need that. I need to work on my own terms. And I’m a commodity that has value to add to you.”

Therefore, this shift in the way people are going to be working–they’re already talking about how work is changing, the way they want to learn, and how to spend money. It’s called microlearning, right? They are taking a big amount of content, piecing it down into smaller portions, wherein each of those portions is marketable. Each of these portions is monetizable, and that is something that’s occurring rapidly across the board. So, I think that kind of addresses, or maybe acknowledges that what you’re thinking is correct.

“[The current generation is] taking a big amount of content, piecing it down into smaller portions, wherein each of those portions is marketable. Each of these portions is monetizable and that is something that’s occurring rapidly across the board.”

In some markets, there is the constraint of ballooning debt for education, right? So, this trend can also address pain points like that.

Give us three key challenges that you know, that educators, learners, and innovators, need to address or need to overcome. 

The three key challenges, which are to be addressed by education are access, quality, and relevance. You can take any problem that any entrepreneur is trying to solve, any school is trying to solve, and put it under either the access bucket, or the quality bucket, or the relevance bucket.

Access is about inclusion: socioeconomic inclusion, gender inclusion, including different types of learners, special learners, or fast learners through active time personalization, and inclusion of people who are working or earning and learning at the same time who may have other life commitments and cannot always go to school at the right time.

“The three key challenges, which are to be addressed by education are access, quality, and relevance.”

The second challenge worth solving is quality. Just because a student is going to school or college doesn’t mean they’re getting educated. It means they are going to school or college!

Until now the value of quality was only visible to learners and to parents two years down the line, a year down the line, 10 years down the line, etc., right? A lot of parents, a lot of students themselves, didn’t know how to assess the quality of their own education, except through peer comparison and anecdotal information.

But now for the first time, through EdTech, quality can be measured more actively on a day-to-day basis on a learning outcome basis, engagement basis, and the productivity of the cohort that graduates from those systems. So, these analytical trivial systems are definitely something that we can look forward to that can help us tackle the quality challenge.

The last one is relevance. Let me give you a higher-level thought process. If education were really impactful, if it were really meaningful, then we would see less strife, fewer wars, less pain in the world because people would see the world through a similar lens across the board and we’ll have somewhat, less strife, I suppose.

That’s another part of a bigger philosophical aspect that the education system is trying to tackle–making sure it is relevant to society at large. I’m pretty sure any company that’s in EdTech can be bucketed into one of these areas and understand which of these challenges they are trying to solve. The clearer the data, the clarity they have for themselves, the better it will be for the market.

Team photo from PHINMA, one of Kaizenvest’s portfolio companies

How you are making a difference in ensuring access, quality, and relevance in this industry?

We think that there is no one-size-fits-all approach. We are investors. We make investments in education entities, but we bring different types of capital to different types of opportunities that we’re trying to tackle.

Let me explain: When it comes to solving a big access problem, it is really about transforming the mindset of the buyer. That really is about mind-shaping. So, you need to throw money at it–branding money. Therefore, you need to raise a lot of money to change, to solve an actual problem. Right? That’s number one.

“We think that there is no one size fits all approach. We are investors. We make investments in education entities, but we bring different types of capital to different types of opportunities that we’re trying to tackle.”

To solve the quality problem requires a bunch of engineers and thought of thinkers who come together and create the most engaging content and solutions for the learners. Therefore, I need to not invest so much money, and the quality of money has to be focused on more tech and more innovation, to address quality problems.

But broadly, what we are doing differently is this. Number one, we are not just in one country. We are across two continents: We are in Asia and in South Africa and Rwanda. So, we are in Sub-Saharan Africa and Asia, and we keep the lessons learned from one country, one region, to the other. So south-south collaboration is critical.

We, for example, are running an experiment in South Africa in the early childhood development space in partnership with the USAID through blended finance. We are making sure that we can support a very critically underfunded segment and make it more accountable. That’s the early childhood development segment. That’s one approach. It’s a combination of debt and grants that is rightsizing the capital to the problem at hand there.

Whereas in Asia, for example, with PHINMA Education in the Philippines and other companies, we’ve invested through private equity because they are higher-growth entities, and they are able to support the customers that they have, the learners, through a higher growth innovation-led approach.

So, wherever the system is stable and looking for growth, we will go with equity, and we’ll take those lessons, for example, from PHINMA and apply them in Sub-Saharan Africa. We apply and take lessons from Sub-Saharan Africa, then apply them to other countries. We are rightsizing capital in two areas.

And then, of course, it’s imperative upon us that we measure. We measure and report on whatever improvements our companies realize and share them with our investors and with the world at large, by writing white papers, by writing case studies, and even co-authoring chapters in books, et cetera, to make sure that our work is carried, and people understand. So, there is a larger force of investors like us who can make more change. That’s something that we’re working on, which is I think is very different from how others are tackling this.

You mentioned something about the right-sizing of capital, as well as measurement and reporting on improvements. You provided some concrete examples and case studies on mixed or hybrid finance in South Africa. In Southeast Asia, do you have any key examples of right-sizing these investments?

We invested in PHINMA with the express purpose of investing in an entity that brings affordable higher education to the masses in the Philippines and Indonesia. There, the idea was to provide courses such as accounting, nursing, criminology, teaching, etc.–which have an immediate value in terms of a job upon graduation, as compared with liberal arts-type programs, which are really focused on building other skills. We went for programs which are providing employability and high-quality graduation from these programs.

So PHIMA has now nine institutions under its umbrella, and these institutions are spread all over the country, all over the country, across islands, and one in Indonesia. The pandemic struck them really hard, amid our invested equity in them. So obviously a lot of the students who had migrated from smaller cities to the larger cities, like Cebu or Manila, had to go back home. They couldn’t hang around and pay rent in Metro Manila or larger areas and wait for schools to open–and the schools are not opening. So, they went back, but PHINMA had an obligation to bring them into the learning fold. So, they created something which is very innovative and that’s where equity comes in–because equity drives innovation.

Equity is looking at “What can you do?” Take some risks right now in a combination of technology and pedagogy. Bring those innovations together to create a new solution for the customer in real-time, which can support their learning needs.

And that is why equity is the right capital for PHINMA. What they did is something called RAD learning–remote and distance learning–which is a combination of providing mobile phone access to carriers such as Globe and Smart over Facebook Live in combination with printed materials sent home and combining those two and some face-to-face classes where possible.

They took different methods of teaching and learning to create a learning atmosphere for the child at home. This even included bringing students from the same neighborhood into one bubble-like setting to create an opportunity for them to learn in a social setting, far away from school or college where they couldn’t go.

They were able to support 75,000 learners through that. This is the amount of risk taken in a matter of three months is only possible through external capital, given that they have the accountability to deliver the returns and at the same time support the learners.

I think if it were less rent-seeking capital, then the amount of innovation would also be less. I think that should clarify the thinking we have in Southeast Asia around rightsizing capital to the market needs and positioning.

Toppr, one of Kaizenvest’s portfolio companies

How would you define sustainable impact or sustainable difference in the education sector?

Traditionally, impact in education has been discussed and achieved through mostly grant capital from the likes of foundations, Government, etc. These include, for instance, the Bill and Melinda Gates Foundation, and multiple other global and local foundations that give grants to education entities, which is nice.

Grants are very powerful, but they lack accountability. Also, grants are increasingly being stretched toward numerous directions, and they are being pulled away from education toward healthcare, to support in communities, to marginalized areas, as well.

So, grants are limited. It’s not like people are just going to have unlimited grants. The world is therefore shifting from grant-led to accountability-led impact.

Accountability-led impact is sustainable because, for the first time, it’s asking questions around the new metrics of impact. It seeks returns and the ability to understand what achievement has been realized because of the presence of that capital. Return-seeking capital’s role brings accountability.

Smart capital is a combination of return-seeking capital and grant capital. And that’s what we call blended finance. It brings in the patience of grants together with the accountability and focus of return-seeking capital. This helps in migrating the system of learning to an entrepreneurial-led system that embraces innovation more rapidly and evolves more rapidly than a policy-led system.

Entrepreneur-driven change is going to be much faster and truer to the ground needs than policy-driven change, because policies are protecting for yesterday. Very few policies are ready for tomorrow. When the change is taking place every day, that tomorrow is not even achievable by policy, so entrepreneurs have to change today.

“Entrepreneur-driven change is going to be much faster and truer to the ground needs than policy-driven change, because policies are protecting for yesterday. Very few policies are ready for tomorrow.”

Therefore, the capital they utilize is a critical part of their own desire to change. That’s the thought process. Sustainable impact, therefore, is the one that provides a stronger, more self-sustaining system, after the capitalist partnered with the provider and also brings measurements to the table.

I’m happy to provide measurements like the UN SDGs 4, 5, 8, 10, and 17: 4 being quality education, 5 being gender equality, 8 being decent work and economic growth, 10 being reducing inequality and 17 being sustainable development.

These are the five critical SDGs that we at Kaizenvest target through all our investments. We measure what progress has been made. We set targets and we measure achievement against those and report that as well.

Policy is more reactive, and entrepreneurship is more proactive.

What is the philosophy of Kaizenvest in investing?

When we talk about innovation in education, we talk about our learning. We talk about innovation having three components: tech-led, pedagogy-led, or ecosystem-led.

Tech-led is where an engineer will come and essentially present the best AI-led personalization algorithm that’s changing the way students are engaging with the learning system. That’s an example of our tech-led entrepreneurial world: innovation with ICT for instance.

Pedagogy-led is where the system of teachers and learners will come together and create a system where it changes the flow of teaching. It doesn’t just revolve around a stage-on-stage philosophy of teacher in the center of a classroom or on the stage and teaching, but it revolves around the learner and brings out the teacher as needed. Maybe through a video lesson, followed by some doubt-clearing sessions in-person followed by some self-practice sessions, followed by mentor support.

So that chain of events that sits together is innovative pedagogy. You can imagine an ecosystem-led approach wherein the whole system can be changed in terms of how student financing is taking place.

Until now a lot of student financing was taking place through a focus on the credit of the parents. Now, how archaic is that? The earning ability of a student is not determined by the socioeconomic background of the parent. Absolutely not. For some students, their earning ability is determined by what course they’re taking, what they’re learning, where they are learning.

So now a lot of the systems are innovating and focusing the way credit is measured in education, based on the learning quality that the students receiving, not based on the credit quality of the parents–that’s a systemic shift.

If you now take these three things and put them together, you can imagine the company taking the personalization aspect from tech, taking the pedagogy innovation aspect of the new chain in which training is occurring. Combining those two creates a new EdTech innovation, right? That is a company taking together two or three innovations and bringing them together, which makes it a sustainable EdTech company. And such companies are in our portfolio.

Team photo from Varthana, one of Kaizenvest’s portfolio companies

What criteria do you use in deciding on companies or technologies to invest in? Is there any specific metric or industry? Is it the team, or is it the idea? Apart from funding, does Kaizenvest also provide support in other areas, such as acceleration, etc?

The first part of what we look at is identifying the problem that the company is trying to solve and their articulation of the problem. Most entrepreneurs are easily able to articulate the product features but have a very difficult time articulating the problem they’re trying to tackle and why they’re trying to tackle it.

That’s a critical point–of us trying to figure out whether we want to partner with the company, because until you have razor focus, clarity on what problem you’re solving and why you’re solving it, and how you’re different from others in your view of that problem. And over time, you’ll lose the edge. You’ll become just another company chasing metrics, not a company trying to solve a bigger problem that needs solving.

So that requires, firstly, clarity of thought on the part of the founding team and a sense of purpose, not just about making the next billion dollars. The key questions we ask are: What is the problem? What’s the innovation? What’s our unique position in terms of identifying that? And what is the team that you built in solving that problem?

“The key questions we ask are: What is the problem? What’s the innovation? What’s our unique position in terms of identifying that? And what is the team that you built in solving that problem?”

If you are going to pick a big problem and trying to solve it, then you’ve got to have the ability to attract some of the best talent out there to leave their great jobs and join in your journey. And that requires your ability to lead and inspire people. So, we look for clarity of thought, inspirational ability, leadership ability. We look for execution capability within the team that can be put together. Those are very critical things for us as we look for companies to work with.

The second aspect is how we try to assist the company. So, I’ll give you two examples. One is we have a process that we’ve put together. It’s called BOOST model. “B” being business intelligence, “OO” being organization and optimization, “S” being sales and marketing, and “T” being technology.

B: We request all our entrepreneurs that we work with to be data-led, which requires business intelligence. If you do not have a data office in the company today, we request the company to set up a data office. We request the company or even the CEO to have a chief of staff that’s data-driven, who will produce the right data for the CEO and the team to look at periodically. That way, you know exactly what’s happening with the company and the customer.

OO: What we like to do for every company is to optimize the organization by saying, if you are trying to be a profit-led company with one product, then you need to have one product owner, we need to have one operations officer, one finance block.

However, if you’re going to have five products, then you need to have a leader for each of those products, and you need to have accountability at product level shared services.

Designing the organization is not an accident. It cannot be just because you feel there’s a vacancy, you hire. It has to be a thoughtful process, which is based on the type of business you’re running. And for the type of business, organization design has to vary, and that is something that most companies do not understand. They take it for granted, thinking, “I’ll fill these six positions and I’m done.” That’s usually a mistake. So, we try to work through that as well.

“[D]esigning the organization is not an accident. It cannot be just because you feel there’s a vacancy, you hire. It has to be a thoughtful process, which is based on the type of business you’re running.”

S: A lot of the educators and innovators are so focused on product and their own pedagogy, they forget that they have to sell it and they feel shy about selling it actively. That cannot be. Thus, bringing up sales and marketing orientation and making that a core part of the DNA of the company is something that’s critical.

T: If you are not today are using technology in the operations or customer outreach, then, of course, you’re missing out.

In addition to the BOOST model, we have access to grant capital, and with the grant capital from our investors, which we bring to the company in the form of technical advisory support and peer support, and that they can hire some of these third-party companies to understand if they can create experiments.

They can create risk-free experiments through the support of grant capital as well. So that also helps our companies in getting into areas which equity won’t allow them to, because grants can let them go out and try new things more easily.

What is the advantage of the blended finance approach to investing in EdTech?

One point to note to this is that there’s a bunch of private capital that’s looking at education wanting to enter the segment, but they do not understand the risk. They feel uncomfortable with a lot of the risks in the system, such as schools shutting down, schools not paying back, or students not being able to make the payments.

It’s not that the sector is risky. It is that their understanding of the risk is not very clear that they don’t want to step in. But they’re eager to play a role because they see education as a key transformative sector. So, they’re sitting on the fences.

Grant capital can take on some of the experimental aspects and therefore de-risk the role of the private capital. So, grant capital has a strong role to play in motivating private capital to enter the sector, thus it becomes blended finance. Using grants to drive private capital into the sector is also another way of thinking about the role the capital has to play. Of course, this makes clients happier because they see more accountability and more capital coming in.

Suppose you were a grantmaker, you can participate in more schools as a grant provider and have a wider impact by mixing your grants with private capital. This way, you can scale the number of schools you can impact or education technology companies you can impact by blending in finance with private capital than doing them through grants alone.

Photo from Varthana, one of Kaizenvest’s portfolio companies

How do you see the future of education in the context of technology? What’s your vision, or what are you working toward in the long run? 

Education is right in the middle of unprecedented transformation right now. The world is asking the right questions for the first time, and entrepreneurs are responding with path-breaking innovation. So that’s occurring actively at the moment.

As tech is going mainstream, the amount of capital that’s being invested annually in Asia alone has increased 10 times over the last five to six years. People are seeing EdTech and learning innovation at the core of where the world is headed, including the future of work and the way the world is designing itself around the role of learning itself.

“[Growth in capital] is occurring because people are seeing EdTech and learning innovation at the core of where the world is headed, including the future of work and the way the world is designing itself around the role of learning itself.”

Is learning for the purpose of achieving a title next to your name? Or is learning for the purpose of living a better life and a more purposeful life? That mind shift is not tangibly visible to a lot of people, but it’s a certain mind shift that has occurred already. And we will be seeing a lot of disruption because of that, and the education system is getting ready for that as well.

We are seeing in the future a learning system that supports education in a more flexible manner. That will become more mainstream, and regulation of these parallel systems will be more flexible. So, consumers will therefore for the first time drive policies. And they’ll likely create a more choice-led learning system as opposed to having choices limited, for example by geography.

It is now more outcomes-focused and accountability-led systems that are taking place as opposed to more input-focused.

A stark example of that is the licensing for a college is often dependent on the number of books you have in the library. How archaic is that now? The current generation uses e-libraries, which are probably unending. And how do you measure that in the licensing infrastructure? I think that this input-led system is going to give way to output-led systems.

Would you say that there is a generational aspect to it? These investments in pedagogy and education-will we see the changes in the short term or will it take years to achieve the innovations?

When I was growing up, the conversation was really about “What’s my degree going to be in?” It was not ever about what other things I really want to learn. The conversation has shifted away from that.

A degree is to make a living, and you’re assured you won’t be in poverty, which is still important. In addition, people are saying, “Okay, now that you won’t be in poverty, you have choices. Can you actually take a short course that focuses on skills?” If it makes you happier in life and makes you more fulfilled, maybe it’ll also lead to better living standards in the future. Perhaps it can be an alternative, even as hedging or even as a new skill or differentiator.

As the world is getting automated, individual-level differentiation is becoming more and more important. The traditional system of education was created to support a world operated by administrators and people who could run businesses and companies in a very predictable, structured manner. That’s no longer the case.

Now it’s the world of innovation and creativity. How do you support a world of innovation and creativity by producing more accountants? Not possible.

“The traditional system of education was created to support a world operated by administrators and people who could run businesses and companies in a very predictable, structured manner. That’s no longer the case.”

But today, students are enjoying better access, for example by participating in an online course to learn design from the best designer from IDEO at Stanford. I think that is just an amazing opportunity for kids today.

So, this conversation has shifted from only doing one thing to being able to experiment with different things now. Some families are already at a point where they can say, “Okay, shun the degree, go for what you really want to do in life.” Because we have seen that happen.

In the future, you will see children not saying, “I want to grow up to be a doctor, a journalist, lawyer engineer, or a teacher.” They will say “I’ll do various things. I will try different things and I’ll see what excites me. Maybe I’ll change it over time. I won’t have one career. I’ll have multiple careers in my lifetime, and I might become a photographer for a while. Go travel the world for five years and take those experiences and come back and do better digital art in an office for three years when I feel more settled.”

How does the aspect of culture and socioeconomics affect such decisions? How is EdTech approaching the cultural reality that some people want traditional degrees in order to be job-ready?

Until around 2019, the first EdTech companies in India were focused on the top half of the pyramid, and they were focused on English. They focused their innovation on personalization, on practice, on making things available on mobile devices and laptops.

This enabled students to practice their lessons at home, for $300-$800 a year for additional learning service. A lot of families have the money, but certainly, those families below the middle of the pyramid did not have that capital.

So, what happened in the last two years? A term has emerged called the NHB–Next Half Billion. And it is possible to have that term because it’s a billion people in India, right? NHB refers to the lower segment of society who have the same tech-savvy ability. They just don’t have that access, but they have devices, and they have some ability to pay.

So, the next set of innovators are doing the following. They’re not just focusing on the English language; they’re focusing on the local dialects. And by the way, surprisingly, the market size in local dialects is huge there. So, the next wave of investments is going there.

They are making students comfortable in what they know and then teaching it using a combination of English and dialects so they become increasingly more comfortable.

A lot of the students at the bottom of the pyramid are super smart and hungry for knowledge, but they don’t have the confidence. They don’t have the global outlook yet. Their outlook is limited. Thus, broadening their outlook and making them more confident is a critical aspect of the NHB process.

With this new approach, instead of asking for $800 a year, they are asking for incremental amounts–$20 to $30 a month or even paid on a course-by-course basis. Thus, students can drop out, come back, and pick up where they left. It’s a more flexible engagement approach, which makes it creative.

“The innovation here is having a combination of finance, tech, and pedagogy–all three things coming together to create a new approach.”

I’m just taking one example. There’s a lot of tech innovation and pricing innovation that’s taking place.

The innovation here is having a combination of finance, tech, and pedagogy–all three things coming together to create a new approach. The same things will occur in the Philippines, guaranteed. The world operates in similar ways in south-south learning lessons will transfer.

Those are just some thoughts for us to consider as we’ve seen the role of innovators in addressing the next half billion or the lower segments of society.