SXSW EDU took place in Austin last week, and we’ll be reporting on it in our next newsletter! Sadly, I wasn’t personally able to attend, and missed all the sessions, festivities, connections, and the 300+ person Edtech Insiders Happy Hour that we co-hosted along with Finetune, Clever, Tyton Partners, FOHE, and Common Sense.
Here’s some photos from the event so that those of us who couldn’t make it can see just how much fun we missed! ;)
The good news is that not attending SXSW EDU gave me some additional time to think about tech and Edtech and how ideas come to fruition… and recently I’ve gotten some inspiration from, of all places, the music world.
For just a moment, for the sake of our metaphor, let’s think of musical artists as ‘creative entrepreneurs’, songs as ‘ideas’, and top charting hits as ‘breakthrough businesses’! In this metaphor, the record labels who are able to consistently find talent and create top charting hits would be synonymous with VCs and accelerators, right?
With this in mind, let’s examine one legendary studio head: Berry Gordy, Jr. of Motown and what his strategies might mean for us in Edtech investing.
Berry Gordy: The Original Talent Accelerator
Berry Gordy, Jr. was a middle-class kid from Detroit and the seventh child of an entrepreneurial family that had migrated north from Georgia. By the time he was 25, Gordy had been a high school dropout, a boxer, a Korean War vet, a failed entrepreneur (he opened a record store featuring jazz and 3D glasses), an auto assembly line worker, and, eventually, a musician and hit songwriter.
Gordy wrote and produced over a hundred songs for the legendary singer Jackie Wilson and other acts in the mid 1950’s, but realized that writing songs, even #1 hits like “Lonely Teardrops”, for other labels, didn’t create financial self-sufficiency in the music world. To make real money, he needed to own the means of production.
With an $800 loan from the Gordy cooperative family account(!), Gordy founded his own record company and built his own recording studio. He quickly signed 17-year old performer and songwriter William “Smokey” Robinson, a fellow Detroiter who had impressed Gordy with his "Big 10" notebook containing 100 songs he had written in high school.
Berry Gordy Jr. and William “Smokey” Robinson in the early days of Motown.
Gordy, with Robinson in tow, created early Motown hits like “Shop Around”, “Money (That’s What I Want)”, “Tracks of My Tears” and “Please Mr. Postman”. But even more importantly, he developed a method to truly succeed in the music world: own the recording studio, create your own genre, develop artists to sell records across political and racial boundaries, develop a consistent and repeatable process for making hit records.
Berry Gordy (bottom left) playing piano for a group including Smokey Robinson (at back) and Stevie Wonder (second right). Photograph: Steve Kagan/The Life Images Collection/Getty
Yadda, yadda, yadda; the rest, as they say, is history. Between 1961 and 1971, Motown produced 110 top ten hits, including 50 #1 hits (compare that to the Beatles’ 20). Motown’s music defined an era, creating massive crossover appeal to white audiences- and the money rolled in. By 1966, Motown had a gross income of $20 million (equivalent to $192m in 2024), eventually, Gordy sold it in 1981 for $61m ($213m in 2024).
Even after the heyday of Motown in the 60’s, the label continued to find and incubate top talent, from the 70’s (Lionel Richie, Rick James, Marvin Gaye) to the 90s (Boyz II Men, Erykah Badu, India.Arie) to today’s hip-hop environment (L’il Yachty, Migos, Vince Staples).
So… what does this have to do with Edtech investing again?
The lessons lie in the ‘yadda, yadda, yadda’- Gordy’s ability to manufacture chart-topping hits didn’t come by accident. Let’s pull a couple key lessons from Gordy and Motown that parallel the success of accelerators, incubators, and venture studios.
Lesson 1: Relentlessly Seek Talent and Invest in Repeatable Processes to Develop It
"Every day, I watched how a bare metal frame rolling down the line would come off the other end, a spanking brand-new car. I thought 'What a great idea!' Maybe I could do the same thing with music. Create a place where a kid off the street could walk in one door an unknown, go through a process, and come out another door a star."
Gordy’s approach to talent development was consciously modeled after the Ford and Lincoln assembly lines in which he worked before launching his label. He actively created a full in-house system at Motown that could take promising young artists, often from the Midwest, and turn them into bankable global stars. Whether it was Smokey Robinson’s neighbor Diana Ross, local Detroit singer Martha Reeves, the Jackson brothers from nearby Gary, Indiana, or a blind wunderkind from Saginaw, Michigan named Stevie, the Motown machine sprung into action again and again.
Specifically, Motown offered everything a young artist needed to succeed: world-class songwriting, production, incredible in-house musicians, singing and dancing lessons, quality control mechanisms, distribution, and even an in-house finishing school designed to teach the young singers how to represent themselves, and Motown, in any setting. Artists were required to spend two days a week training in the Motown studios in Detroit, no matter how big they got.
“...when I met the artists, they were young, they came from humble beginnings and not all, but some of them, were rude and crude and from the street and the projects. Well, with me it is not where you come from, it's where you're going. I told those artists, this artists development is going to be different... you're gonna graduate and become a great performer and you're gonna appear in number one places around the country, even before the King and Queen.
- Maxine Powell, Head of Motown’s In-House Finishing School (Source)
Diana Ross and The Supremes meeting Queen Elizabeth, 1968.
This is a mature version of how accelerators or venture studios (should) work: identify promising (often local) entrepreneurs, and then arm them to the teeth with the tools and processes they need to succeed: mentors, funding, lawyers, pitch practice, demo days, cloud service credits and anything else they will need to break through. Just like Motown, accelerators use economies of scale (central access to services, investors, and expertise) to move companies through their own internal ‘assembly lines’.
Y Combinator is, at its best, the ultimate example of this model: in 20 years, it has helped accelerate over 4,000 startups, from Stripe to Gusto to Zapier to Sense.ai. To get to that kind of scale, you need repeatable processes and methods. That said, YCombinator’s hit rate is certainly much lower than Motown’s, and recently has gone through much tougher times, so there is plenty of room to tighten the screws.
Of course, the long list of Edtech companies founded through Y Combinator (including Outschool, Panorama, NoRedInk, Codecademy, Podium, Clever, ClassDojo, Prenda, Remind, Goalbook and many others) is a testament to the power of this approach.
Lesson 2: Transcend Genres and Politics To Find Bigger Markets
The 50’s and ‘60s were an era of great racial turmoil in the United States, and Black music had historically been separated into specific categories, like “Soul” or “Rhythm & Blues.” In the 1940’s, there was even a separate top 10 chart for “race records”.(Side note: In case you were thinking this history of segregation is behind us, consider that Beyoncé became the first black female artist to ever top the Country music charts last week.)
Gordy and Robinson were deeply conscious of the complex racial dynamics at foot throughout the Civil Rights Era, and invested in a number of strategies to ensure that their music wasn’t marginalized. Early in the 1960’s, Gordy actively created and marketed his music as its own genre (“Motown: The Sound of Young America!”) which recorded everything from pop to political anthems to show tunes. Gordy hired white representatives, including Motown’s very first employee Al Abrams, to sell their music to radio stations and land their artists on magazine covers. Gordy even, early on, actively hid the faces of his Black artists from record covers to try to convince mainstream radio stations to play their music. To make music that everybody wanted to hear, he had to find ways to leap the gatekeepers.
Motown branded itself as “The Sound of Young America/The Motown Sound” to avoid being ignored as “R & B” or “Soul” music only for Black audiences.
“On Motown’s first day [12 January 1959] there were five people there. He sat us down and said: ‘I’m gonna start my own record label and we’re not just gonna make black music. We’re gonna make music that everybody can enjoy. We’re always gonna have great beats and great stories and we’re always gonna make quality records.’ We accomplished all of that.”
- Smokey Robinson
"The simple genius of what he did was to say, 'We're going to make music, and we're going to market it to everyone. But we're not going to call it this kind or that kind of music.' Instead, he called it Motown. It was one of the few times in history when we didn't refer to something as heavy metal, soul music, etc. We call it Motown, even though it is rhythm and blues, even though it is soul, even though it's pop music. That was (Gordy’s) brightest business decision."
- Jason Hanley, Vice President of Education, Rock and Roll Hall of Fame and Museum
Not that Motown was ‘color-blind’- later, as the largest black-owned business of its era, Motown became a strong advocate and contributor to the Civil Rights Movement, and by the end of the 1960’s, Gordy had hired New York Times reporter and activist Junius Griffin as Director of Public Relations (who would later be the Hollywood lead of the NAACP and coin the term “blaxploitation”). After the assassination of Martin Luther King, Jr., Motown Records published his speeches.
“(Landing the Supremes on the cover of Time Magazine in 1965) really opened the doors everywhere else — ‘Hey, we can put black people on a cover that will sit in people’s living rooms for a week, and they won’t cancel their subscriptions. So we saw every magazine cover, every front-page article, not just as a breakthrough for the Supremes or the Temptations or whoever, but as a breakthrough in the civil rights struggle.”
- Al Abrams
Tech accelerators and incubators would be wise to take note: Motown’s ability to transcend and escape the believed boundaries of traditional ‘genres’ is instructive.
The most successful accelerators actively work across ‘genres’, lending their name and approach to companies that would be considered far apart in traditional tech categories (in tech, this would be SaaS, E-commerce, B2B, Healthtech, etc.). The biggest accelerators and Venture Studios have essentially created their own genre- a “YC” company can garner respect and an imprimatur of quality, regardless of its traditional bucket.
Other large accelerators have also breached traditional genre barriers:
500 Startups boasts successful alumni that hail from widely different parts of the tech ecosystem, like Canva, Reddit, and Carbon Health, as well as Edtechs like Applyboard, Chalkable, Springboard, Udemy and Epic!
Techstarsaccelerated Uber, Sendgrid, PillPack and Owlet, all wildly divergent spaces and models, as well as Edtechs like Degreed, Newsela and Preply.
Plug and Play has supported companies as diverse as Dropbox, Paypal and Pinterest, as well as Edtechs like Workera and Course Hero. As an ‘elite’ accelerator, Plug and Play has found a way to brand itself without ever being caught up in labels like “FinTech” or “Consumer”.
Lesson 3: Be Scrappy
Finally, we shouldn’t forget that despite the high polish of Motown artists, behind the scenes, Gordy was as lean and scrappy as he could be. The Motown headquarters and studio through most of the 60’s was a converted house in Detroit that Gordy dubbed “Hitsville, USA”. Artists would sleep on the couches, record in the basement, and eat from the vending machines (which were converted to work for the blind).
Gordy hustled musical talent from the streets of Detroit and pinched pennies to survive. He set up a used two-track recorder in the small house at 2648 West Grand Boulevard that became Motown "headquarters." His father did the plastering and repairs and his sister did the bookkeeping. His vocal studio was in the hallway and his echo chamber was the downstairs bathroom. "We had to post a guard outside the door," Gordy says, "to make sure no one flushed the toilet while we were recording." - Source
Conclusion
Leaning on outside industries can offer new perspective and reframe a field that many of us in Edtech are deeply submersed in. I pulled on just one music industry example in this article, but there are so many more that come to mind when thinking about uniquely effective and repeatable routes for discovering and nurturing incredible talent; I can’t wait to write the follow-up about the very different style of Seymour Stein, who discovered the Talking Heads, the Ramones, Madonna and Depeche Mode, among others.
Are there other industries that you pull inspiration from when it comes to Edtech investing or Edtech strategy more broadly? I’d love to hear what you think – leave your thoughts, inspirations, and ideas in the comments and I’ll take a look and respond!
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Laurence Holt and Jacob Klein recently compiled an up-to-date AI in Education map! Laurence has spent the last two decades leading innovation teams in for-profit and nonprofit K-12 organizations. Jacob is currently Head of Product at TeachFX.
Accenture announced that it has agreed to acquire Udacity with the purpose of accelerating Accenture LearnVantage: a new service designed to help leaders across industries identify gaps in relevant tech skills and then provide industry-specific training needed to fill those gaps at scale.
As the battle to release the fastest and most advanced AI model continues, Anthropic released their Claude 3 models last week. Claude 3 models offer new features and faster computing, with new offerings like the ability to effectively analyze visual media, improved accuracy, conversing in non-English languages like Spanish, Japanese, and French, and more!
As always, the release of more advanced AI models means more possibilities for AI based edtech companies to work with.
On Edtech released an updated graphic for the LMS market share for the US & Canada in Higher Ed! They also share some thoughts on where the market is now and where it’s going.
Podcast Deep Dive: Interviews From The Common Sense Summit
We have had some amazing guests on The Edtech Insiders Podcast in the last few weeks! One of our stand-out episodes is a series of lightning speed interviews from speakers and attendees at the first Common Sense Summit on America's Kids and Families hosted by Common Sense Media!
The conference brought together advocates, researchers, youth leaders, policymakers, and other experts to take stock of America's kids and families and explore solutions to the most pressing issues across four core topic areas: kids and technology, youth mental health, early childhood education, and K–12 education.
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MT Note: While Inkitt is not, strictly, an EdTech company, I expect companies like it to have a substantial impact on EdTech. See also notes on Klarna’s chatbot and Stack Overflow’s Google deal below
