Lecture 1 (01:42)
Kim Smith, co-founder and CEO of NewSchools Venture Fund, is a leader in a hybrid environment between business people and educators, who speak different languages and come from different frameworks. A hybrid in this context includes the public sector, non-public sector and business sector. It is difficult to manage a group that comes from such diverse backgrounds, says Smith. A lot of technology companies have to deal with the same sort of dynamic between technologists and business people.
Lecture 2 (03:52)
Smith talks about how a series of experiences prepare an entrepreneur to found a new venture. Entrepreneurship is about solving a problem in a better way and finding a way to make it happen, despite everyone telling you it cannot be done, she says. People did not believe Teach for America would work, but Smith and founder Wendy Kopp realized people weren't becoming teachers because they weren't being recruited and the process to get certified was too bureaucratic. They created a model in Teach for America that solved these problems, and were successful, she adds.
Lecture 3 (02:27)
Smith explains that a theory of change in the social sector is roughly equivalent to a combination of the business model and strategy in the for-profit world. You need to identify a change and have a hypothesis about how to make it happen, she says. This is more complex in the social sector because, in additional to market forces, you have to deal with regulatory forces, emotional forces, social forces, and political forces, she adds. A set of core beliefs are usually taken for granted in the business world, but in the social sector they need to be established. She believes the core beliefs are the basis of the theory of change and help you decide what to do--otherwise you could end up trying to change too much. Though there is always a need elsewhere, a social venture can only take on what falls into its focused mission.
Lecture 4 (01:22)
Smith talks about how focus is crucial for entrepreneurial leadership. It is impossible to do everything so the core beliefs of the venture provide the necessary direction. It is sometimes hard to turn down a project that will help the people you are trying to serve, but a good leader knows what he is able to take on and what he must leave for someone else, she explains. It is important to recognize that change in education is not as easy as moving a policy lever, and therefore entrepreneurs are critical for spurring the desired change.
Lecture 5 (00:42)
Smith talks about how hybrid leaders are crucial problem solvers because they are able to think outside the box. It is very difficult to have no ideas and instigate change if you have spent your entire career in the same sector. Creativity comes out of this diversity in experience and background.
Lecture 6 (01:01)
There is a current shift in K-12 education from a culture of compliance, says Smith. Compliance is not a high enough standard and should not be accepted. Unfortunately, the culture shift to a new standard is uncomfortable since the old system is so engrained.
Lecture 7 (01:51)
Smith explains that venture philanthropy means investing in ventures that lead to greater changes in the overall system to improve education for kids. The entrepreneur is a part of a much larger system and the aim is to leverage the investments to provide the greatest possible impact. This strategy has led to three key activities at New Schools: the creation of a network to generate more hybrid leaders and inform policy makers, a charter accelerator fund to create charter schools, and a performance accelerator fund to help schools become performance-oriented.
Lecture 8 (01:44)
New School Ventures is a non-profit public charity with the sole purpose of creating better opportunities for children who are not currently being served by public education, says Smith. They are unique in that they feel it is important to be able to invest in both for-profit and non-profit entrepreneurs, depending on the situation. Any returns are folded back into the fund and reused.
Lecture 9 (02:23)
In five years, New Schools has given 10,000 kids access to new schools, says Smith. Public charter schools provide an alternative to government-run schools by giving the school much more flexibility while maintaining accountability. She believes this flexibility encourages innovation and increased performance. Other portfolio items include:
1) Teachscape - an online teacher-training program, which uses a video case method of instruction
2) Successforall - a non-profit literacy program spun out of John Hopkins
3) Carnegie Learning - a for-profit literacy program competitor.
Lecture 10 (00:58)
Smith believes that since their monetary values are not large in comparison to the size of the education industry, investments must be leveraged to get maximum effect. New School's helps to leverage their investments by bringing together a partner group that includes venture capitalists, entrepreneurs, and educators, who each bring different strengths and views to the venture.
Lecture 11 (01:04)
Smith says that John Doerr, renowned venture capitalist at KPCB, attributes his success to his ability to communicate and facilitate, above his technological expertise. Technical knowledge is useless if you cannot motivate people to do something with it, she adds.
Lecture 12 (01:28)
John Kennedy said that there is risk and cost to a program of action, but it is far less than the long-range risks and costs that come from comfortable inaction, says Smith. Though it may seem scary to make changes and safe to do nothing, it is not true. A leader's job is to be passionate, figure out what needs to be done, and then be willing to take the necessary risks to make it happen, she notes.
Lecture 13 (02:28)
Smith poses the question: How can companies be profitable in the education sector? She discusses how education is more recession-proof than other industries and how newer schools have shifted their program focus to non-profit.
Lecture 14 (01:29)
Smith believes that the most successful teams combine someone who has experience within the system, someone who understands technology, and a sales expert. The environment of the group has to be team based, with each member having a voice in the company.
Lecture 15 (01:07)
New Schools is non-profit fund with only a social return; any earnings are reinvested into the fund, says Smith. Ventures are chosen for their social impact.
Lecture 16 (02:12)
Smith talks about how New Ventures aims to create systems that are K-12 to provide a coherent experience to children. Incubation is important. New Schools buys run down buildings and turns them into successful schools. They do everything from recruitment to management to building, she adds.
Lecture 17 (02:34)
The charter school system allows the alignment of all the stakeholders: the board, the management, the teachers, and the kids, says Smith. They all are choosing to be part of this alternative system and therefore have a stake in its success.
Lecture 18 (02:10)
Smith belives that parents sometimes do not know what is best for their children. GreatSchools.net aims to make parents more informed about their education choices.
Lecture 19 (03:58)
School finance is inequitable between low- and high-income communities, says Smith. Is it better to try to fix the system or provide alternatives? New Schools funds projects for both options. Most reform efforts to date have focused on only small improvements inside the system. Though most people think of charter schools as competition, says Smith, New Schools describes them as 'co-opitition,' providing an alternative but also helping to encourage improvement in public schools.
Lecture 20 (03:06)
Smith explains that fundraising is very hard in the non-profit sector. New Ventures typically co-invests in A rounds with other venture capital firms, typically newer groups that have an openness to thinking about new solutions and understand the power of entrepreneurs. Generally, deals are in multi-millions with clearly defined milestones over several years.
Lecture 21 (03:22)
Scale is very difficult in the non-profit sector, says Smith. The franchise model is not successful because there is no authority or ability to take away value if a franchise is not performing.
Lecture 22 (02:53)
Smith talks about how the VC model allows for larger investments over a longer period of time. Also, the investment tends to be in organizational infrastructure rather than a service. VCs are more focused on growth than bottom-line success, she says. An entrepreneur must be disciplined and willing to walk away from people who do not share the same values.
Lecture 23 (01:21)
Smith explains that New Ventures measures success in four layers. The first layer of success is immediate outcomes for the kids served by current ventures. The second layer is the ventures' impact on the system. The third layer is the success of New Schools in assisting their ventures. The last layer is the change in the entire system to a performance-based model with greater hybrid thinking.
Lecture 24 (02:56)
Smith believes that extracurricular activities are essential. Funds are being cut currently because, in trying to achieve funding equity, everyone's funding was reduced instead of simply increasing funding to those who needed it. Fixing this is a matter of political will, she adds.