Jonathan A. Knee
- Published in print:
- 2016
- Published Online:
- January 2019
- ISBN:
- 9780231179287
- eISBN:
- 9780231543330
- Item type:
- chapter
- Publisher:
- Columbia University Press
- DOI:
- 10.7312/columbia/9780231179287.003.0002
- Subject:
- Business and Management, Corporate Governance and Accountability
The IPO of Edison Schools in 1999 was the culmination of building optimism about the potential to transform public education for the better. Edison represented the powerful proposition that a private ...
More
The IPO of Edison Schools in 1999 was the culmination of building optimism about the potential to transform public education for the better. Edison represented the powerful proposition that a private company could deliver better public schools for less money, leaving taxpayers, investors and children better off. The messianic force behind Edison was Chris Whittle. It failed spectacularly as did widely publicized ventures before and since. The story of Whittle’s ability to continue to raise money from sophisticated individual, institutional and corporate investors over more than twenty years to pursue his educational vision is remarkable on many levels. Following the twenty year trail of unhappy investors in Whittle’s various educational efforts reveals much about K-12 business models and the suspension of disbelief in educational matters by the otherwise sophisticated.Less
The IPO of Edison Schools in 1999 was the culmination of building optimism about the potential to transform public education for the better. Edison represented the powerful proposition that a private company could deliver better public schools for less money, leaving taxpayers, investors and children better off. The messianic force behind Edison was Chris Whittle. It failed spectacularly as did widely publicized ventures before and since. The story of Whittle’s ability to continue to raise money from sophisticated individual, institutional and corporate investors over more than twenty years to pursue his educational vision is remarkable on many levels. Following the twenty year trail of unhappy investors in Whittle’s various educational efforts reveals much about K-12 business models and the suspension of disbelief in educational matters by the otherwise sophisticated.
Jonathan A. Knee
- Published in print:
- 2016
- Published Online:
- January 2019
- ISBN:
- 9780231179287
- eISBN:
- 9780231543330
- Item type:
- book
- Publisher:
- Columbia University Press
- DOI:
- 10.7312/columbia/9780231179287.001.0001
- Subject:
- Business and Management, Corporate Governance and Accountability
The past thirty years have seen dozens of otherwise successful investors try to improve education through the application of market principles. They have funneled billions of dollars into alternative ...
More
The past thirty years have seen dozens of otherwise successful investors try to improve education through the application of market principles. They have funneled billions of dollars into alternative schools, online education, and textbook publishing, and they have, with surprising regularity, lost their shirts. In Class Clowns, professor and investment banker Jonathan A. Knee dissects what drives investors' efforts to improve education and why they consistently fail. Knee takes readers inside four spectacular financial failures in education: Rupert Murdoch's billion-dollar effort to reshape elementary education through technology; the unhappy investors—including hedge fund titan John Paulson—who lost billions in textbook publisher Houghton Mifflin; the abandonment of Knowledge Universe, Michael Milken's twenty-year mission to revolutionize the global education industry; and a look at Chris Whittle, founder of EdisonLearning and a pioneer of large-scale transformational educational ventures, who continues to attract investment despite decades of financial and operational disappointment. Although deep belief in the curative powers of the market drove these initiatives, it was the investors' failure to appreciate market structure that doomed them. Knee asks: What makes a good education business? By contrasting rare successes, he finds a dozen broad lessons at the heart of these cautionary case studies. Class Clowns offers an important guide for public policy makers and guardrails for future investors, as well as an intelligent exposé for activists and teachers frustrated with the repeated underperformance of these attempts to shake up education.Less
The past thirty years have seen dozens of otherwise successful investors try to improve education through the application of market principles. They have funneled billions of dollars into alternative schools, online education, and textbook publishing, and they have, with surprising regularity, lost their shirts. In Class Clowns, professor and investment banker Jonathan A. Knee dissects what drives investors' efforts to improve education and why they consistently fail. Knee takes readers inside four spectacular financial failures in education: Rupert Murdoch's billion-dollar effort to reshape elementary education through technology; the unhappy investors—including hedge fund titan John Paulson—who lost billions in textbook publisher Houghton Mifflin; the abandonment of Knowledge Universe, Michael Milken's twenty-year mission to revolutionize the global education industry; and a look at Chris Whittle, founder of EdisonLearning and a pioneer of large-scale transformational educational ventures, who continues to attract investment despite decades of financial and operational disappointment. Although deep belief in the curative powers of the market drove these initiatives, it was the investors' failure to appreciate market structure that doomed them. Knee asks: What makes a good education business? By contrasting rare successes, he finds a dozen broad lessons at the heart of these cautionary case studies. Class Clowns offers an important guide for public policy makers and guardrails for future investors, as well as an intelligent exposé for activists and teachers frustrated with the repeated underperformance of these attempts to shake up education.
