K– 12 education should abound with opportunities for entrepreneurial activity. Here we have a vast yet loosely coupled industry that serves 50 million students, encompasses more than 95,000 schools in 15,000 districts, employs more than 6 million people, and expends upward of a half trillion dollars annually. Given widespread concern about current performance, it would seem fertile ground for innovation and enterprise. Yet public schooling in the United States remains at its core a rule-bound, government-centric quasi-monopoly largely consumed by the politics of apportioning resources among longtime stakeholders. This closed ecosystem alienates creative problem solvers while erecting bureaucratic barriers against those who would devise new solutions. The result is a sector where successful entrepreneurs have historically been the rarest of beasts.
Over the past two decades, many efforts to infuse K– 12 education with innovation and enterprise have flamed out or settled into cozy symbiosis with the status quo. Today, an unprecedented (if still small) number of entrepreneurial efforts are taking root in the rocky soil of elementary and secondary education. Those who crack the constraints of our hidebound system— well-known names like KIPP and Teach For America and a handful of others— have become educational celebrities. And rightfully so. Their handiwork may be our best chance to provide U. S. children with a world-class education in the 21st century. They are deserving of both admiration and thanks.
However, as with so much of celebrity culture, there are traps for the unwary. Here, after making clear why successful education entrepreneurship is so hard, we explain why those who clear the many hurdles are not likely— and ought not be expected— to crusade as well for sweeping policy reforms.
Obviously, many entrepreneurs have no desire to produce systemic change— charter operators who wish only to operate a few good schools, virtual-school companies pursuing simply a reasonable profit, or alternative hiring ventures that seek only to bring more talent into the nation’ s classrooms. It is the few “ change agent” entrepreneurs who are seeking to recast schooling. These leaders are often featured— in conferences, TV shows, and magazines— as the voices of reinvention.
Our focus is on just this subset of entrepreneurs who seek to transform core features of K– 12 education, such as who teaches, how schools are designed, and who operates them. To date, their numbers are small and their scale modest, but the best known among them are prominent indeed, including Teach For America (TFA), the Knowledge Is Power Program (KIPP), High Tech High, National Heritage Academies (NHA), the New Teacher Project (TNTP), New Leaders for New Schools (NLNS), K12, and Edison Schools. Some are avowedly nonprofit while others strive to make money for their owners. All are mission-driven; they seek to boost the quality, productivity, and diversity of American elementary and secondary schooling via entrepreneurial innovation and efficiency.
The New Entrepreneurs
Entrepreneurs of many sorts are striving to find new and better ways of delivering K– 12 education and to put themselves and their organizations on the map. Profit-seeking education management organizations (EMOs), like Edison and National Heritage Academies, look to create new schools and operate them as charters or under contract with school systems. Their nonprofit cousins (known as charter management organizations or CMOs), such as KIPP, High Tech High, Green Dot, and Aspire, typically underwritten by philanthropists, seek via invention and replication to create better school options for needy kids. Technology outfits, such as APEX, K12, and the Sylvan spinoff called Connections Academy, feature distance learning and virtual schools. “ Human capital” innovators include Teach For America, New Leaders for New Schools, and the New Teacher Project.
The enterprises named above, plus dozens (but not hundreds) more, have established beachheads of innovation in particular locales. Some have built strong reputations for quality (e. g., KIPP) and for attracting new people into education who produce spillover benefits (e. g., the remarkable record of TFA alums). Sometimes they’ ve had state or federal policy help, through permissive state laws (e. g., charter laws, alternative certification laws), discretionary grants, or earmarked funds (e. g., KIPP gets money from Congress; TFA recruits benefit from AmeriCorps). Many have obtained local assistance from a friendly (or desperate) superintendent willing to provide funding, space, and a hand through the bureaucratic jungle. At bottom, however, what they’ ve done is squeeze into local markets and then cut deals that enable them to operate in those venues.
To understand the behavior of these entrepreneurs, one must appreciate the precariousness of their situations and how thoroughly these individuals have relied on “ inside” negotiations and sympathetic officials. KIPP’ s founders were so frustrated by the Houston school district that Mike Feinberg famously sat for hours on the hood of Superintendent Rod Paige’ s car, waiting for him to leave the office for the day so that he could plead for a place to open the first KIPP Academy. The creators of the Washington, D.C., SEED school, a winner of the Kennedy School’ s 2005 Innovations in Government award, had to lobby the requisite language through Congress, then win city council backing for the necessary provisions, before wedging their new boarding school into the upper floors of a museum. In 1995, with TFA on the ropes from financial instability and a scathing attack by influential professor Linda Darling-Hammond, who argued that TFA teachers were ill-prepared for the challenges of today’ s classrooms, founder Wendy Kopp needed the Carnegie Corporation and other influentials to convince TFA’ s backers not to turn off the funding spigot.
Keep in mind, too, how small, even marginal, these entrepreneurial ventures are alongside the behemoth of American K– 12 education. TFA deploys 4,400 new teachers at a time in 22 regions, within a public-school workforce of 3 million teachers. NLNS produces about 150 new principals a year and operates in just six districts. Fourteen years after its founding, Edison is running 157 of some 95,000 U. S. public schools, NHA enrolls 30,000 students in 51 charter schools, and KIPP, despite its extraordinary fame and widespread demand, has so far bestowed its esteemed brand on just 53 schools. Aspire Public Schools still encompasses just 16 schools, while Steve Barr’ in 10 schools.
These operations tend to cluster in a few communities. There are only five cities— Washington, Baltimore, New York, Chicago, and San Francisco-Oakland— in which TFA, New Leaders, KIPP, and Edison all operate. A few other cities, like Philadelphia, Memphis, Indianapolis, and New Orleans, are relatively welcoming, but the list of truly receptive districts does not require more than ten fingers to tally. Meanwhile, even in friendly markets, entrepreneurs generally account for only a smattering of schools, students, teachers, or principals.
Reliance on a few “ micromarkets” gives enormous influence to those who make the rules in those locales. Entrepreneurs must ensure that their offerings are palatable in the few places where they’ re welcome. This means that Edison, for instance, will twist itself into knots— altering its school design and personnel practices— to land 20 schools in Philadelphia, even though, in theory, there are tens of thousands of schools that it could be pursuing, hundreds of which are judged by No Child Left Behind to require “ restructuring. ”
Even in receptive locales, only narrow slices of the schools and services are truly open to entrepreneurs. When it outsourced management of some schools to private firms, for example, Philadelphia limited contracting to the district’ s persistently low-performing schools. New York’ s schools chancellor Joel Klein aims for 50 charters in a district with more than 1,000 schools. Chicago’ s “ Renaissance 2010” project involves just a fraction of the Windy City’ s public schools. What looks from a distance like a wealth of opportunities soon reduces to a handful of “ entrepreneurial” states, a few ardently pursued districts, and a short list of real openings.
Some enterprises have been able to enter slightly broader markets. Aspire Public Schools and High Tech High have won welcomes in multiple California communities. But even such ventures, while successfully expanding within a familiar state, find their reach limited. High Tech High found its ability to grow beyond California so constrained that it stopped trying. Aspire has no intention of attempting to venture beyond state borders.
Opposition from political constituencies within and around public education, including teacher unions, school administrators, and school boards, has thwarted the spread of K– 12 entrepreneurial activity. Because successful growth frequently requires statutory amendments or regulatory exemptions (e. g., raising the cap on charter schools, getting a waiver from traditional licensure, working a special wrinkle into the teachers’ contract), entrepreneurs must navigate multiple shoals where foes can wreck even highly seaworthy enterprises.
The obstacles are legion. New Leaders for New Schools has had difficulty convincing districts to place its talented nontraditional principals, and even more frustration working with education schools and state licensing agencies to credential them. KIPP, despite a stellar track record educating disadvantaged youth, has found its expansion efforts slowed by local opponents who claim that charter schools are at war with public education. In communities like Dallas and San Francisco, Edison Schools has been the victim of political campaigns orchestrated in large part by the teacher unions, and the firm’ s moves to manage district schools have been hobbled by stifling provisions in collective bargaining agreements. The New Teacher Project finds its efforts to help districts recruit sorely needed instructors undercut by local personnel officials who routinely object to these outsiders or understate the cost of district recruiting (creating inaccurate comparisons for TNTP’ s pricing).
Entrepreneurial ventures face internal constraints, too. KIPP’ s biggest limitation has been identifying enough capable school leaders. Though TFA currently receives nearly ten applications for every slot, its commitment to admitting only the best candidates impedes its growth, as do limits on funding. CMOs are challenged with respect both to philanthropic seed capital (even the giant Gates and Walton foundations have their limits!) and staff capacity. Precisely because the field of education has not nurtured a large cadre of entrepreneurial individuals, growing ventures often run up against stark personnel shortages. This is especially true for those in unsexy middle-America locales, less so in the coastal cities that beckon cadres of new college graduates.
Success via Accommodation
The bottom line is that those education entrepreneurs who succeed in this generally hostile environment do so by compromising and accommodating in order to win friends, make allies, and evade enemies in the locales that comprise their micromarkets. They’ ve acclimated to a stark reality: the change-averse public-school establishment is itself their principal client, customer and sometime regulator. Innovation normally occurs only when that establishment allows it— and only up to the limits that it allows.
While many status-quo education leaders are well versed in explaining what can’ t be done, the new entrepreneurs are the MacGyvers of the sector. Like the hero of the 1980s TV show, they display a remarkable capacity for getting things done— even if the tools at hand are only duct tape, bubble gum, and an oilcan. What sets entrepreneurs apart is that they are creative, passionate, and inexhaustible. Those who launched KIPP, TFA, NewSchools, Edison, and TNTP routinely worked more than 100 hours a week while scrambling about the country with no surety of success or even job security. To keep themselves and their teams inspired, they need to believe that their ingenuity and sweat will ultimately yield success. Those engaged in such exertions have little time or use for policy debates; they pour their energy into working with, around, and through whatever barriers exist.
In truth, entrepreneurs have scant incentive to “ crusade” for changes in the ground rules. Such behavior will only rankle establishment figures and stir new resistance. Instead, each entrepreneur focuses on the sensible, plodding, arduous work of growing within the existing rules— and winning exemptions from those rules while ruffling as few feathers as possible.
Few entrepreneurs lobby for large-scale reforms, testify, write sharp-edged articles, give speeches damning anachronistic policies, or otherwise actively engage in efforts to influence public policy or shape opinion. They are visible, often wildly so, but seldom critical. One notable exception is The New Teacher Project’ s biting exposé s of dysfunctional district hiring practices and teacher contracts. For playing this invaluable public role, TNTP has been rewarded with political headaches and union vitriol. TNTP was forced to fund the work out of operating monies because no donors thought it a worthwhile investment. Far more common are efforts to soft-pedal differences with the status quo. Entrepreneurs we spoke with for this piece told us frankly— “ know that I’ m not going to give you anything critical” and “ of course we have to make nice with the district in public. ” (These same individuals are vastly more outspoken, and often bracingly critical, in private.)
In public, there are any number of ways to pull punches and smooth edges. Consider, for example, the results of a 2005 TFA survey of its participants showing that 91 percent of them thought schools should expect inner-city students to achieve academically at the same level as students from wealthier backgrounds— a powerful boost to reformers’ insistence that all children can in fact learn far more than many are expected to today. Those results drew much attention, and TFA promoted them with gusto. Yet program leaders took pains not to indict traditional colleges of education or district officials for failing to prepare or recruit more such teachers. The multipage press releases announcing the survey results included not a single sentence even glancingly critical of anyone with a role in the status quo.
The same prudential behavior was on display in Edison Schools founder Chris Whittle’ s noted 2005 book, Crash Course, a volume promoted as a “ revolutionary” treatise on school reform. Business pundit James Glassman wryly noted that Whittle took care to assure teacher unions and educators that “ they have nothing to fear from him. ” A scarred veteran of the entrepreneurial trenches with many vivid stories to recount in private, Whittle has learned to eschew confrontation and employ feel-good rhetoric, even writing in an open letter to union leaders, “ Though teachers are your primary constituency, I know that your organizations care deeply about children, too. ” He promised that, under his proposed reforms, “ union ‘ profit margins’ would actually improve. ” Avoiding divisive policy proposals, his major recommendations are for Washington to spend more on education research and to launch new programs to train teachers and principals— though even there Whittle is careful to explain that he doesn’ t mean to criticize existing programs. While “ there are those who believe that America’ s teachers colleges are part of the problem, ” he “ leave[s] that to others to debate. ”
The Price of Reticence
Entrepreneurial reticence is understandable, even justifiable, but it also carries risks. Because entrepreneurs have reason to avoid speaking blunt truths to power, the prominence and achievements of some have been used to excuse existing arrangements. This is particularly true in districts where outstanding schools run by entrepreneurial personalities are invoked as evidence that the rules are not so onerous after all. Some districts embrace entrepreneurs as a way to present a “ reformist” face while declining to adopt their innovations as general practice. A single KIPP school, a virtual school option, an “ alternative” high school operating under unique funding arrangements, a handful of TFA teachers, or a summer school program operated by Edison serves this function in many districts.
The small scale of today’ s entrepreneurial ventures in K– 12 education creates a further problem. Because entrepreneurs have generally migrated to well-defined and reasonably hospitable markets where they can forge alliances and cut deals, the existing “ micromarkets” can feed the impression that entrepreneurship in education is inherently a limited, marginal, even ad hoc, activity, a sideshow that offers no systemic solutions. We have all endured a million speeches along the lines of “ charter schools [or vouchers] are well and good for the kids who attend them but they’ re no solution to the problems of public school systems that will forever be attended by the overwhelming majority of kids. ”
The very newness of education entrepreneurship further limits its role in policy change. If we were more accustomed to this form of innovation, individual entrepreneurs would have greater leeway to speak out on large issues— as well as more cause to compete with one another. One hopes that today’ s activity will gradually yield such a world.
Different Paths to the Same Goal
In the meantime, clear voices need to be heard on behalf of wholesale reform strategies. But they’ re different voices. It’ s wrong to expect successful entrepreneurs to lead the advocacy charge. Reformers and entrepreneurs operate in different spheres. Advocates work in the world of ideas, talk, access, and influence— where visibility and controversy are useful tools. They raise money and enjoy influence to the extent that they appear to affect policy deliberations. They are able to focus on abstract goals— like test scores, teacher quality, or school choice— in debates divorced from the challenges of making reforms actually work in situ. Entrepreneurs face a different calculus, especially for-profit entrepreneurs seeking to maximize return on investment. They gain little from visibility, nothing from notoriety, and have no incentive to argue theoretical aims. Sticking to their knitting means finding ways to make their enterprises work today in specific places, not agitating for massive changes in the ground rules.
Serving as field marshals for large-scale policy change is the proper role of advocates, whose interests do not always coincide with those of entrepreneurs. Indeed, advocacy groups are typically tone-deaf to some challenges facing entrepreneurs— such as the need for human capital, better R & D, increased access to venture capital, back-office services, and incubation— and are thus unhelpful at cultivating the full set of reforms that might help entrepreneurial ventures to prosper. If advocacy organizations wish to pave the way for more entrepreneurial activity, they need to attend to such issues. A classic example is charter advocates settling for state laws that underfund charter schools, even embracing the argument that “ charter schools can do it for less” in order to get the law passed, though experience shows that this accommodation can cripple actual entrepreneurs in practice.
If entrepreneurs can be “ too nice” in a public forum, self-styled reformers can be too vague— choosing to bang familiar drums like “ teacher unions, ” “ school choice, ” “ accountability, ” or “ incentives” rather than talking clearly and concretely about the mechanics of reinventing K– 12 education. The challenge is first to recognize that reformers and entrepreneurs pursue different (if ultimately complementary) goals, and second to maximize the extent to which each is mindful of the other’ s requirements for success.
There are two paths to policy change. One is advocacy and agitation; the other is demonstration, the production of “ proof points” that new models can work better than the status quo. Both are needed. But it’ s a common and unfortunate mistake to imagine that they’ ll both come from the same places, or to proceed as if that were so. If today’ s entrepreneurs do a really good job, as many do, without saying a word, they will gradually make the education world more receptive to this mode of activity— and to the policy changes that would facilitate it.
Frederick M. Hess is director of education policy studies at the American Enterprise Institute and executive editor of Education Next. His most recent book is Educational Entrepreneurship: Realities, Challenges, Possibilities (Harvard Education Press, 2006). Chester E. Finn Jr. is president of the Thomas B. Fordham Foundation, senior fellow at Stanford’ s Hoover Institution, and senior editor of Education Next.
Last updated February 23, 2007