I am not sure how this only came across my radar this morning given its publication 2 weeks ago, but Union Square Venture’s “research”/investment thesis on online education was an interesting development for me to observe given my previous background in finance. The “research,” which has been widely noted as rather slim (and not so much research of any sort but rather a scattered collection of media articles), was not all that original given the existing chatters of the space— but obviously it provided a good anchor point for the “tech/product/investment” community to share their thoughts a la Techcrunch style. Rarely would one see 100+ comments on any of the popular education tech news and blog sites, when 10+ already signifies unusual momentum. So, there is some silver lining to this thing: at least it got some people talking and perhaps thinking a bit more about the space, even if it can be uninformed enthusiasm layered on top of an uninformed starting point.
Kudos to USV because as is the case in many, many sectors, there are plenty of folks who argue that you must keep this sort of knowledge locked up and proprietary.
I think that is generous, and perhaps also a little naive. There are two things to note here 1) USV is not doing this out of some altruistic purpose to inform others; there is a very strong PR element to what they are doing and also in shaping how they want the sector to develop. 2) An investment thesis in a few dozen words is not truly proprietary; an investment thesis exposited with data and knowledge that only you have access to is truly proprietary. On this, USV divulged little (and I doubt they would share much); this is where the true value of their knowledge lies and it will not be given away easily.
I am sure that educators and perhaps even entrepreneurs, heck, anyone that hasn’t been in the industry, would be appalled to learn what really goes on in financial industry to “evaluate” and “predict” investments. There is a lot of art that we comfort ourselves as science: a weak linear regression based on <10 data points, a heavily guesstimated financial model, some words extracted from periodic publications. But even that presents the more effortful side of the “research” that takes place; on most days it is an opinion disguised as some revelatory trend that can only be derived from “industry experience”. Worse still, even when there is much research effort that takes place at times (usually in consulting, not as much in finance), the research is either forcibly interpreted to fit the bill rather than fully exposited for its ambiguity, or built upon a scientifically questionable methodology. But consulting houses and banks and funds will continue to publish their research: because they want to be seen as thought leaders and indirectly have a hand in influencing the way the sector forms (through partially self-fulfilling prophesies; psychology and PR drive more Wall Street fluctuations than actual financial happenings).
Finally, I want to comment on Christina Caciopo’s response to Greg Wilson on the quality of their research. To USV’s credit, they responded very politely and constructively to these criticisms. One thing stood out to me in their defense of why the research consisted mostly of popular media articles.
Busy people won’t read narrowly-focused papers reporting micro-progress on nano-topics — they need overviews they can absorb in a hurry, because they have nine other meetings this week to prepare for.
This is true, but this does not logically prevent a research house to do the proper research then digest it for people to read. You can sift through papers and still produce informed, succinct summaries. What she really means (but perhaps doesn’t realize) is that “busy” people have a hard time tolerating ambiguity. It doesn’t make for feel-good investment thesis, and it doesn’t make for the emphatic positing of a thought leader. (And on the nomenclature of “busy”: not for a second do I believe that a partner at a VC fund actually produces substantially more work than, say, a Georgia Tech professor. I am not saying he produces less. But certainly the two are on par).
What I am left wondering by myself is— why is it that it is the “busy” but “uninformed” people that get to shape the biggest decisions? We cannot always rely on “them” to be informed; perhaps what we should be asking ourselves is why we try not to ask for a larger voice in choosing what gets support—or not, in the sector.