East Coast Vs. West Coast EdTech: Which Coast Is Right for Your Startup?
Location, location, location! Just as in real estate, retail, or taxes, location can make a substantial difference for the success of edtech businesses. From the early startup stages to the major steps in expansion, every company will inevitably face a decision based on location. In the U.S., the two major coasts of edtech—East and West—offer different benefits. There’s no magic formula, but considering edtech trends from coast to coast can help determine the best fit, depending on the needs of your company.
We’re currently on the West Coast covering the ASU-GSV Summit, so this topic has been on our minds lately. After speaking to entrepreneurs and experts in edtech from four U.S. cities, we hope to delve deeper into the conversation.
Motivation Behind Innovation
To first understand the different environments within edtech, we can look at the primary motivation behind the industry. Edtech wouldn’t be a solution-driven industry if the education system didn’t have potholes and bumps.
Christopher Nyren is an edtech investment expert who founded Educated Ventures to connect companies with advisors and venture capital. His not-for-profit Educelerate functions as an network community for edtech startups.
Nyren suggests that the people who start edtech companies are most often those who have experienced limitations in education, whether as a teacher, publisher, investor or technology engineer. Even parents, who are hyper-aware of their children’s learning, can spark innovation.
“They have a four-year-old child, so they look at their schools and are dissatisfied with them and say, ‘I can disrupt this,’” said Nyren.
“Some of the change in education has been innovative teacher-driven and sometimes innovative schools-driven, rather than entrepreneur-driven,” said LearnLaunch co-founder and partner, Jean Hammond.
Some regions overlook the industry as an opportunity for change because they think they understand education more than they actually do.
“Certainly in K-12, if your state is testing best in the country, you may not think you have a lot of problems that you need to solve,” said Hammond.
The West Coast: Where the Money Is
The majority of West Coast edtech is consumer-based, largely in part by the empires surrounding Google, Amazon, and Facebook. Many edtech companies in Silicon Valley are mobile learning apps, while investments are high volume and high stakes. “The West Coast is more aggressive,” said Nyren.
Miles Lasater, founder of One University Network, started his first companies in Connecticut. The California native returned to the West Coast and relocated to Oakland, California. It was more of a personal motivation than a business decision.
“For me, it was going home,” said Lasater. He says the San Francisco Bay Area has “tremendous access to talent,” but advises businesses to take into account the “higher cost environment.”
East Coast: Only a Stepping Stone?
Edtech on the East Coast is primarily institution-based: It’s all about selling to K-12 and higher-ed. Companies like Blackboard in Washington, D.C. and Houghton Mifflin Harcourt in Boston focus on mobile and web interfaces, animation and media for school implementation.
Andrew Cohen started Brainscape in New York City and expanded two years later to a second office in San Francisco to handle all things tech-related.
“The tech talent on the West Coast is magnitudes better than on the East Coast,” said Cohen.
Technology engineers tend to live on the West Coast because the East Coast views engineering as a commodity rather than a necessity, he explained.
While he feels it was the best decision for his business, having two offices isn’t ideal. “It’s a pain,” said Cohen. “I’d rather have everyone together.”
Boston, New York and Baltimore are among East Coast cities low on edtech funders. “We don’t have any edtech specific investor funds in Boston. We have some general purpose investors who also do edtech,” said Hammond. She argues that the higher concentration of investors in Silicon Valley isn’t a trend isolated to edtech, but applies to every industry in the country.
If most investment leads to California, then the question arises whether companies who start on the East Coast should stay. Hammond witnesses many startups expanding after participating in the LearnLaunch accelerator program. “The people who start in Boston as a whole stay in Boston,” said Hammond.
But Nyren referenced companies like Battery Ventures (which has two offices in the San Francisco Bay Area, in addition to its offices in Boston and Israel) as examples of a conflicting trend. “All the Boston or D.C. V.C.s have left…they moved their offices to Silicon Valley or New York,” he said.
Boston is no “magic bullet,” said Hammond. “We think it’s a great ecosystem with lots of warm people who want to share their expertise,” she said, “but we don’t necessarily think it’s magic.”
The Midwest: Fly-over Land
Nyren noted the Midwest is another substantial player in edtech that often gets overlooked, as he calls the region “fly-over land” or a “third coast.” Companies in this region include Renaissance Learning in Wisconsin and Credly, ThinkCERCA, and Classkick in Chicago.
But even companies in the Midwest are moving to California’s coast. EdModo, a social learning network that connects teachers to their students, was created by two school district employees in Chicago. Now the company is based in San Mateo, California.
Although outside of the Midwest, Austin also holds the headquarters of a number of growing edtech companies, like Civitas Learning and Compass Learning. This trend isn’t exclusive to edtech: According to Forbes, many technology companies are heading to Austin for its lower taxes, affordable real estate, and sense of community.
Comparing Apples and Oranges
With so many factors to consider when comparing these regions, we can stand to question the impact of these edtech trends.
“Silicon Valley will always be the center of innovation,” said Nyren. So is it necessary for East Coast and Midwest companies to relocate? “If they want to gain investment,” he said. “If they want to generate successful models they should stay on the East Coast or Midwest.”
“There’s some truth to stereotypes like that,” said Lasater. “But I do believe there’s been more blending…too stark of a contrast would be overblown.”
Lasater believes it doesn’t necessarily matter where your headquarters are, because many companies shift depending on whether they’re reaching students and parents directly or whether they’re reaching institutions. Sales and marketing will be altogether different.
“Now I think both coasts are harmonizing,” said Cohen. “There shouldn’t be much of a difference because the world has moved to working remotely.” Many companies already use email and Skype to correspond with teachers and students, in addition to traveling regularly.
“There’s no right or wrong here,” said Hammond. “Each company has to go through its own path.”
So…Where Do I Base My Company?
There may never be one prime location for edtech to thrive, largely because education problem-solving is necessary coast to coast, on every continent. But if you’re an unsettled startup, or just considering a growth-induced move, here are some takeaways from edtech experts that might help inform your decision.
- Solutions and ideas come out of familiarity. Establish your company in a community in which you hold experience, whether it’s your home state or college town.
- Work off of connections. Often the place you hold the most connections can be the best foundation. Once you’ve branched out your professional network, your company can expand as well.
- Because so much can be done through the internet, consider alternatives to costly headquarters. Hiring in multiple cities and working remotely may lend you more opportunities and connections than planting in one place.
- If you don’t have many connections where you are, find a mentor who can introduce you to like-minded investors and advise your development. Accelerator programs are a great place to meet mentors.
- Even if you’re based in one location, you can attend edtech conferences in cities around the world and forge international relationships. This can not only provide investor and institutional connections, but bring a broader perspective to your company’s mission.
Correction: Text in the section entitled “The Midwest: Fly-over Land” has been edited for the sake of clarification.
Jennifer is a Boston-based freelance journalist who has covered emerging fashion and New York Fashion Week for Papercut magazine. When she isn't talking people's ears off, she studies art history and reconstructs thrift clothes into her own designs.