Move Over Harvard and M...

Lectures are often the least educational aspect of college; I know, I’ve taught college seniors and witnessed how little students learn during their four years in higher education. So, while it’s noble that MIT and Harvard are opening their otherwise exclusive lecture content to the public with EdX , hanging a webcam inside of a classroom is a not a “revolution in education”. A revolution in education would be replacing lectures with the Khan Academy and dedicating class time to hands-on learning, which is exactly what Stanford’s medical school proposed last week. Stanford realizes that great education comes from being surrounded by inspiring peers, being coached by world-class thinkers, and spending time solving actual problems. To give a little background, last week, Harvard and MIT made headlines with the launch of EdX, a joint online education initiative that will place lectures from the best instructors online, complete with reading material, automated quizzes, wiki-style forums, and a tailored assessment of progress. Essentially, EdX slightly expands the existing MIT OpenCourseWare with some basic forum and feedback technology–technology that has been around since the dial-up days of the late 90′s (and what universities have had since the invention of the Scantron). MIT OpenCourseWare has been wildly popular, with over 125 million lifetime visitors ; so, the new EdX will certainly be useful for the existing base of MIT students who use it in deciding their course schedule and those in the public who want to enhance a neatly organized syllabus of readings with some occasional online chats. But, saying that EdX is “the biggest change in education since the invention of the printing press” ignores the fact that lectures are often the least educational aspect of college: after four years of instruction, research shows that many students haven’t mastered basic reasoning or communication skills . Students forget most of what they hear in lecture and then only recall 40% of the tested material two years later. Lectures do little for students actually enrolled in the school, let alone the millions of online users who will study part-time, without a supportive community or frequent feedback from a professor. So, last week, two Stanford professors made a courageous proposal to ditch lectures in the medical school. “For most of the 20th century, lectures provided an efficient way to transfer knowledge, But in an era with a perfect video-delivery platform — one that serves up billions of YouTube views and millions of TED Talks on such things as technology, entertainment, and design — why would anyone waste precious class time on a lecture?,” write Associate Medical School dean, Charles Prober and business professor, Chip Heath , in The New England Journal of Medicine. Instead, they call for an embrace of the “flipped” classroom, where students review Khan Academy’s YouTube lectures at home and solve problems alongside professors in the classroom. Students seem to love the idea: when Stanford piloted the flipped classroom in a Biochemistry course, attendance ballooned from roughly 30% to 80%. Skeptical readers may argue that Khan Academy can’t compete with lectures from the world’s great thinkers. In response, Prober and Heath point to a recent one-week study that compared the outcomes of two classes, a control class that received a lecture from a Nobel Prize-winning physicist and an experimental section where students worked with graduate assistants to solve physics problems. Test scores for the experimental group (non-lecture) was nearly double that of the control section (41% to 74%). “Students are being taught roughly the same way they were taught when the Wright brothers were tinkering at Kitty Hawk,” they explain. After a revolution, an organization should bear little resemblance to its former self. Harvard and MIT have merely placed the 20th century education model online. Stanford, on the other hand, is completely doing away with the old model of the “sage on the stage” and embracing a learning environment that mirrors life forever connected to the world’s information. [Image via the University of Waterloo .]

President Obama’s Tech ...

We’re thrilled to announce that two of President Obama’s technology gurus, Todd Park , the US Chief Technology Officer, and Steven VanRoekel , its Chief Innovation Officer, will be joining us on stage at TechCrunch Disrupt NYC  on Wednesday, May 23. Big Data has been all the rage this year, and the government is a massive stockpiler of lucrative datasets in energy, health, and range of other fields. As former Silicon Valley brethren, Park and VanRoekel want to open up the floodgates on the government’s data warehouse in a way that’s useful to savvy entrepreneurs and the nascent “civic startup” industry (think Code for America ). After a joint-announcement of their upcoming agenda, Park and VanRoekel will be joined by myself and Matt Lira, the Digital Communications Director for House Majority Leader Eric Cantor. Lira has been an open government tour de force in Congress, helping to open up the beleaguered branch to legislative transparency and direct democracy . While the panel will be mostly business, we’d be remiss if we didn’t also discuss the role technology has in the actual democratic process. For instance, Park’s predecessor, Aneesh Chopra, made inroads with platforms such as We The People , a petitioning tool that gave the public the same media access that the White House Press Corpse has to get answers from the President. We’ll discuss the federal government’s role in increasing the public’s influence on and access to policy. We hope the panel will be especially valuable for attendees, as the panel was curated so entrepreneurs interested in big data, civic startups, and egovernment could meet the speakers and find out how to advance their ideas. See you in New York.

Under New JOBS Act, Mor...

SolarCity , the cleantech company backed by Tesla and SpaceX CEO Elon Musk, filed for an IPO this past week. But there’s hardly been a peep about it compared to most offerings. That’s because under the recently passed JOBS Act, SolarCity didn’t have to publicly share anything about its financial performance when it filed. This is unlike LinkedIn and Pandora, which had to publicly release three years of data in filings that were more than 150 pages long. In SolarCity’s case, the company merely put out a two-paragraph statement saying that it had confidentially filed with the SEC and planned to have an IPO. This is the new world under the JOBS Act, which was hastily passed last month . SolarCity qualifies as an “emerging growth” company , or one that’s had less than $1 billion in total revenues in the most recent year. If SolarCity does move forward with an IPO, it won’t have to release data to the public until 21 days before the investor roadshow. On top of that, those documents won’t have to meet the same auditing requirements that more mature publicly-held companies have to address. It will also only have to show two years of data, instead of three. At least two other CEOs I’ve talked to who run later-stage companies and are planning to file in the next three to 12 months say they would consider it. But they’re leaning toward the old route because they’re concerned about how investors will perceive confidential filings. ( The SEC FAQ on confidential filings is here. ) Are the changes good? Are they bad? Honestly, it’s hard to say because regulation usually has long-term ripple effects that are hard to see without hindsight. So let’s consider. The JOBS Act was really a mix of several ideas: crowdfunding, loosening the 500-shareholder rule and the relaxing some of the post-Enron, Sarbanes-Oxley rules that made it expensive for smaller companies to go public. It gives companies more flexibility in staying private or going public. On the one hand, it’s less difficult to become publicly-traded. But it’s also easier to stay private too since a company doesn’t have to release financials until it has more than 2,000 shareholders excluding employees, up from the previous 500-shareholder limit. Net-net, it’s hard to say how this will affect the average time-to-IPO. While private secondary markets have become more important over the last five years, they are simply not large or liquid enough to give venture firms the exits they need right now. So companies still need to tap public markets. This could change over the next 10 years though. Who thought founder liquidity would have become as widespread as it is a decade ago? The downsides to confidential filings are obvious: The public gets left in the dark for a little bit longer (though not forever). The two years of financials, instead of three, means less data to show the kind of hockey-stick growth curve that investors usually like to see. Giving “emerging growth” companies a five-year grace period to adjust to new auditing requirements means fewer controls to prevent the kind of disastrous accounting restatement that Groupon had to make earlier this year . (No, the current rules did not prevent the Groupon snafu, but does that mean we should make them even weaker?) Now let’s go onto the positives. So first, an IPO candidate can covertly test market appetite. If there isn’t as much demand as they thought, they can pull out without the negative publicity. Secondly, if the IPO window suddenly shuts down because of market volatility like last August, the company’s not left dangling out in the open for the better part of a year. The world has also changed quite a bit since 80 years ago, when the original legislation establishing these rules was passed. Three weeks is eons in an interconnected world where bad news spreads faster than you can say “tweet.” There are also plenty of investors like Yuri Milner’s DST and other individual accredited investors who have stepped up in secondary markets on the belief that the modern online and social media provides more than enough information to make educated investment decisions. (But Milner gets special access given how much he invests and SecondMarket usually requires the company to make some disclosures, but the company gets to choose what and with whom they share their information.) Overall, confidential filings don’t seem bad in and of themselves, so long as the public eventually gets the information before they can trade the stock. But as we loosen regulations, we should always remember that the system only works if investors have trust in the companies and documentation they’re seeing. What people forget is that what we have now was born out of the Great Depression, when regular people lost or were swindled out of untold fortunes. When the original Securities Act was passed in 1933, president Franklin D. Roosevelt wrote a letter to Congress, saying that the “issue of new securities to be sold in interstate commerce shall be accompanied by full publicity and information.” He went on to say that the old Latin saying, “Caveat Emptor,” or “Buyer Beware,” should be expanded to read “Let the seller also beware.” He said, “It puts the burden of telling the whole truth on the seller.” That burden isn’t, well, so burdensome in private markets. For pre-IPO companies, the reality is that most of the sources that journalists and the public have access to are people who are highly incentivized to make the company seem better than it really is. It’s no coincidence that most of the media attention on Groupon before it revealed its financials was all rah-rah all the time. Most every source that journalists had access to were investors or employees. These were the people who plowed nearly $1 billion into the company thinking it would be a quick 2 or 3X return by the time the lock-up ended. In fact, in several cases so far this year like Groupon and Zynga, private secondary markets — which have less information and are much less liquid — have been far more generous with the valuations they award . Ironically, in this tech “blubble” or whatever you want to call it, it’s the public markets that have been more judicious.

Newvem Raises $4M From ...

EXCLUSIVE -Startup Newvem , which offers a SaaS based service for Amazon/AWS customers that aims to help businesses spend less money and gain more value from Amazon’s cloud infrastructure, has raised $4 million in funding from Greylock Partners with participation from Index Ventures and Eric Schmidt’s Innovation Endeavors, as well as angel investors, including David Strohm, George Kadifa, and Maurice Werdegar. As part of this financing round, Greylock’s Erez Ofer is joining the Newvem board of directors. Basically, Newvem’s KnowYourCloud Analytics is a free SaaS solution for Amazon AWS customers, that provides a 360-degree view of AWS cloud usage, revealing issues and anomalies in their cloud, and recommending actionable insights that help solve not just cost efficiency, but security, availability, and utilization issues. Newvem will analyze and determine whether a user’s environment is meeting expectations from a cost, availability and security perspective and detect and notify where it is not up to par. The app is built for Business Managers, IT Managers and Dev Ops to “get to know” their clouds, so they can better see what resources are being used and not used. Cloud spending can be expensive and Newvem aims to help users pinpoint where to optimize their resource usage and budget consumption. Integrated with AWS, Newvem tracks down-to-the-minute resource usage, learns the behavior of every resource, and identifies service level variations and life-cycle events. You can see some of the common mistakes that companies make when spending on Amazon Web Services here. These include picking oversized instances, provisioning too many instances, failing to make the right trade-offs when selecting instance types and leaving instances running idle. In the future, Newvem will continuously and automatically gather numerous streams of cloud operational data, analyze and learn the usage patterns, automatically detecting potential problems, pinpointing anomalies, and identifying trends in cloud deployment. Basically, the startup analyzes all of this data from a multitude of sources and recommends where you can allocate or not allocate resources to optimize spending. Newvem was founded by Zev Laderman, who has sold two IT companies, including Aduva to Sun Microsystems and Tradeum to VerticalNet; and Ilan Naslavsky; a former Lead Engineer at Sun. Laderman tells us that since the launch of its free products, 300 customers are using KnowYourCloud Analytics, which is currently in private beta. The new funding will be used to build out the SaaS’ analytics engine to provide additional insights in what provides value for customers. In the future, Newvem will be expanding to other public cloud services including Rackspace, Microsoft Azure, HP Openstack and others. “The plans are to take current service to to other public services but we still see so much growth in Amazon and are focused on becoming deeper and broader in analyzing AWS data,” Laderman explains. He adds that Newvem also want to tackle hybrid cloud platforms. There are a number of startups that want to help companies save money on AWS and other cloud services. But Newvem has a compelling take on optimizing cloud spend, considering the data analysis angle. And the company calls their approach “analytics-driven cloud management.”

Enterprise Data Softwar...

Splunk , an enterprise data company, will be making its debut on the public markets this morning after pricing its IPO at $17.00 per share (this is up from the range of $11 to $13 per share). At this price, Splunk is valued at a whopping $1.57 billion. Splunk, whose stock will begin trading on the Nasdaq today under the symbol “SPLK,” raised $230 million in the offering. Splunk is a provider of intelligence software used to monitor, report and analyze real-time machine data as well as terabytes of historical data–located on-premise or in the cloud. For example, Splunk indexes and makes searchable data from any app, server or network device in real-time including logs, config files, messages, and alerts. Clients can also monitor distributed deployment across thousands of servers in multiple data centers; manage the infrastructure of a cloud platform-as-a-service (PaaS); monitor performance of cloud- delivered SaaS solutions and monitor hybrid SaaS/hosted models. Clients include Credit Suisse, Bank Of America, Comcast, Salesforce, Zynga, LinkedIn, T-Mobile, Swisscom, Shutterfly, Heroku and the US Departments of Labor and Energy. The company has over 3,700 customers, including a majority of the Fortune 100. For fiscal 2009, 2010 and 2011, Splunk’s revenues were $18.2 million, $35 million and $66.2 million, respectively, representing year-over-year growth of 93% for 2010 and 89% growth for 2011. For the fiscal 2012 year ended Jan. 31, Splunk pulled in $121 million in revenue, an 83 percent increase from the previous year. In 2009, 2010, and 2011, the company took a net loss of $14.8 million, $7.5 million and $3.8 million, respectively. In 2012, Splunk’s losses increased to $11 million Splunk has raised $40 million in funding from August Capital, JK&B Capital, Ignition Partners and Sevin Rosen Funds. For Splunk, this IPO has been in the works for some time now. In 2010, Splunk’s CEO Godfrey Sullivan told us that the company had plans for an offering in 2012. We’ll see what enterprise companies take Splunk’s lead in entering the public markets in 2012.