Netflix’s founder saves the day for one education software startup

The Hechinger Report has been publishing excerpts from Richard Whitmire’s book On the Rocketship: How Top Charter Schools are Pushing the Envelope. In this third and final installment, Netflix founder Reed Hastings steps in to take over DreamBox.

CHAPTER 25: Danner (and Reed Hastings) Discover DreamBox

March 2010: Palo Alto, Los Altos, California; Bellevue, Washington

It’s almost a cliché to say that business plays out differently in Silicon Valley than in, say, Philadelphia or Kansas City, but it’s true, and the fate of DreamBox Learning illustrates the point. John Danner “discovers” DreamBox and mentions his discovery to his friend and Rocketship supporter, Netflix founder Reed Hastings. After Hastings sees DreamBox in action at a Rocketship school, he e-mails his friend Dan Kerns, DreamBox’s chief architect (the two worked together several years earlier; in Silicon Valley, all the best software engineers know one another) to say, nice job. Kerns e-mails back saying, funny you should write now; we’re out of money; nobody’s been paid in a while, and we’re going to have to close or get sold. So Hastings buys DreamBox. Just some startup good ole’ boys who know other startup good ole’ boys doing business quickly and cleanly.

That chain of events started with Danner’s search for adaptive software to use in Rocketship schools. “We were looking for a very specific thing, a piece of software that would work for fifty or one hundred kids in a computer lab, so that when they got confused they didn’t have to raise their hands and ask for help from an adult because with that many kids having an adult remediate all the problems just didn’t work.” But Danner couldn’t find that software, anywhere. “The companies just didn’t look at the world that way. They thought you needed an adult, that it was the job of the adult to get the kids back on track.”

But that didn’t make sense to Danner. This was 2009. Software writers could easily make their program adapt to the student so when the student got confused the program would loop back and address the weakness. Why was adaptive software so hard to find? Well, say the software salespeople, that’s just not how we do it. We write our programs like linear textbooks: students do this lesson, then the next lesson, and if they get stuck they raise their hands. Danner was astonished, but he kept looking. “So we searched for around six months and then we found this company called DreamBox that was doing a math program the right way. When a student got stuck you’d see this thing pop up, ask a couple of questions, and then based on those answers the activities that student was getting would change. It was in tune with what the kid was struggling with. Our first thought was, ‘Why are these the only guys who are doing this?’”

After visiting the DreamBox team in Seattle, Danner knew he had found his program. Rocketship started using DreamBox for its math program, which led to Hastings seeing the program, which led to Reed Hastings purchasing the company. Hastings didn’t want to own the company, so he structured the purchase through a gift to the nonprofit Charter School Growth Fund, a transaction worth around $11 million. “I’m still active in California education politics,” said Hastings. “I didn’t want people to think I was doing this to make more money. If it’s financially successful, the rewards don’t go to me.”

At this point, Ben Slivka bowed out of the company he had created. “It was clear we were not profitable all along. … the choice was to take the bird in the hand or try to stay independent and find more money. Reed made an offer and it was the best deal we had, so we took it.” Taking over as CEO of DreamBox was Jessie Woolley-Wilson, a former executive with Blackboard. “Within a year she turned the company around,” said Danner, “and now they are selling millions of dollars of software … the core lesson here is having a great product while doing bad sales work will get you every time. This company would have died. One reason we were excited about working with them is we wanted to use DreamBox as kind of a script to get to the rest of the software industry and say, look, if these guys can do this type of adaptive software so can you.”

Today, DreamBox has plenty of competitors. In fact, anyone visiting a Rocketship school will see that DreamBox isn’t the only math program teachers like to use. ST Math, many of the teachers will tell you, is more visual and allows students to work with more independence. All this is light years away from what Danner found when he first started his search for adaptive software and found none. “We would ask the designers why they built their program around a teacher always standing there, and they would tell us the teachers are there anyway so they might as well help. That was kind of crazy.”


POSTED BY Richard Whitmire ON June 19, 2014

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