Public Goals, Private Ownership
For education companies, the costs of going public often outweigh the benefits.
In the education world, "public" is the thing. We idealize public schools. People who work in public education but send their children to private schools are often quietly – or not so quietly – judged by their peers (even as those peers sometimes quietly make the same choices). Many of today's educational flashpoints are about how to maintain the "publicness" of public education as its deliverybecomes increasingly diverse.
But when education technology behemoth Amplify announced last week it was being sold by News Corp and being taken private by a group of investors and employees, it became the latest example of a previously successful private education company encountering trouble when it became a public company.
Amplify's prime component was the successful and well-regarded Wireless Generation – a company providing a range of ed tech and student assessment services for schools. News Corp bought 90 percent of Wireless in 2010 for $360 million (a figure some analysts believed was an overvaluing of the company). There are plenty of reasons Amplify ran up on the shoals. Education is an inherently difficult business, the Wireless business model was not the same one Amplify pursued, the company grew too fast, and some of the tools and products Amplify offered were just too far in front of the schools market right now.
Wireless also had ideas and products that were out in front, but had successful core businesses to create space for the company to innovate elsewhere. What Wireless didn't have was the constant pressure of stock prices, earning expectations and the short-term thinking plaguing public companies right now.
There are, of course, examples of education companies that have gone public and thrived. Chegg, 2U, Blackboard, Bright Horizons and many of American education's big publishers are examples. And the capital an initial public offering brings can lead to more investment in innovation. Meanwhile, plenty of privately held education companies struggle. But there are enough high-profile failures in the private to Amplify and the Cost of Going Public for Private Education Companies - US News:
