The following interview is part of a series of discussions I conducted on the Financial Health of the U.S. Education System. The idea spawned from conversations I had with Jess Gartner, CEO and founder of Allovue, a noted connector in the space bringing voices in financial management together. During last summer's Future of Education Finance Summit, Gartner popularized the term #EdfinTech and it has been gaining steam ever since.
I sat down with Nicole Neal, CEO of Noodle Markets, to discuss the state of the U.S. education system from a financial point of view. The good news according to Neal - we are investing heavily in education in this country, about 700 billion worth. The bad news - we aren't performing well in comparison to other countries. Comparing 15-year-olds throughout the world, the U.S. ranks only 25th in science and 35th in reading, even after concentrating on Common Core improvement.
The answer is not more money, but rather how money in education is being spent. By broadening the conversations around purchasing transparency and obtaining the appropriate vendor data and district information, Neal believes waste can be avoided. The end result - future dollars going to thought out and applicable educational tools that truly improve a level of mastery for students.
Interview with Nicole Neal - Noodle Markets
Rod Berger: Well, Nicole, I'm looking forward to this conversation. We were talking off-air about the current state of the U.S. education system from a financial perspective. I think that Noodle Markets is really interesting - what you're doing by providing opportunities for schools, districts and just people interested in understanding the business side of education. Where a potential opportunity may lie in doing business that will then help students and teachers.
Let's use that as a backdrop. What are your thoughts on where we are and how does your work help you understand this information at a more complex level than the average person?
Nicole Neal: Sure. If I think about where we currently are, there's good news. The good news is that as a country, we invest heavily in education. I think the numbers - and you probably have these numbers better than I do - but, let's just say in the order of about $700 billion was spent from 2014 to 2015 on education. From a spending standpoint, we can say that as a country, we take education seriously.
I find it discouraging when I look at how we perform against other countries and begin to analyze the information. If we look at the latest piece that came out in December 2016, I think we're 25th in science across 15-year-olds, and I think we're 35th in our reading. We decreased although there was a lot of activity around Common Core and how we were hoping to move the needle for students.
The thing that's disheartening is that we are investing in education, but we're not getting better. The question becomes "Why?"
RB: Yes, the question is why? Some say that we already spend quite a bit of money on per-pupil expenses. Are we trying to throw money at the problem? I'd be curious to know what you see from a purchasing perspective? Is there anything that we can gain from information around purchasing? We want results from an achievement level, but it's more about what we're spending our money on, right?
NN: Right.
RB: We see folks that want to see what we're spending our money on, right?
NN: Right.
RB: Should we put money on LMSs? Should we be spending money on tablets? Or, should we increase spending for professional development? What are your thoughts on that?
NN: I think you hit it right on the head. Right now, I believe we may be throwing money at the problem. We're not adding the level of transparency that says, "What are we spending the money on? Is it really effective in a classroom? Are we trying to take a solution and make it one that fits all?" We are not spending enough time looking at how schools are spending money.
What I've seen in my role in the Noodle Markets is that there's a lot of waste. We're buying products, then proceed to put them on the shelves and not implement them. We have districts that are spending different amounts of money for the same product, and they have the same demographics. Meaning, it's the same size pool district.
If we spent a little more time thinking about purchasing, and consider the fact that purchasing impacts the tools that are in the hands of teachers and students, then maybe we would see a shift in the right direction. I'm certainly not the person who is standing on the podium and saying, "This is going to change everything," because it's not. But, we've got to do something, and we have to start driving these important conversations. That's what I'm trying to do with Noodle Markets.
Let's have a conversation about purchasing transparency. Let's figure out where we can pull money out and put it towards valuable things that we can't afford right now; because we're spending so much on learning management systems or tablets that are, respectfully, overpriced for some of the smaller school districts and more discounted for larger school districts. That's one major challenge that we face.
I think the other challenge is that we are an antiquated system. Our world has become digital. Now I go into younger grade classrooms and see a lot of technology. But, we're still not a public school industry embracing innovation to its fullest capacity. It takes a long time for school districts to embrace where we could gain some economies with the technology that we have today. It's an antiquated system that's very manual. It's okay to be manual. But, there's a lot of red tapes tied to purchasing and how do you break that? How do you pave a new path away from the ways schools have always operated?
RB: Some would say probably, Nicole, that information would be powerful in that regard. Noodle Markets, for those that know, it's having a very comprehensive database of vendors out there, so there's information.
NN: Yes.
RB: Are you seeing different points of information that people want to understand, and you want to understand as a company? Gleam more information and become a more informed marketplace because we're asking better questions, we're putting together better datasets?
NN: Absolutely. Some of the things that we're doing as we become an aggregator of information is differentiating vendors. Then you can see that every marble isn't blue. This vendor is focused on special education and great with helping third graders, and this vendor also has special education products, but the demographics that they serve best are high schoolers. Being able to understand this information is one point.
Then there is pricing. We have a partnership with SmartProcure - a large data company. We can then take that information and cross walking it with how districts are purchasing products; how those prices vary in different school districts, then pushing that informing the districts.
The other thing that we're doing involves aggregating third party reviews. Being able to get teachers to start weighing in on the efficacy of products that they're seeing in their classrooms and starting conversations within the classroom, school, and districts about the products that are working well for the particular group of students.
Those are just three things that we're doing, and we believe that by pulling all of those things into a market network where we can find it all in one place is how we start really empowering educators through information.
RB: What do you think the impact is on the vendor community once we pull a marketplace together like this? Are we seeing more competitive pricing? Are we finding that they're more creative in their pricing models that better fit education?
NN: All of the above. That's what we want, right? That's the kind of synergy that we want. We want those vendors.
First of all, the vendors often don't have the resources to market to 15,000 school districts. We are creating a place where we're bringing all of those districts together to allow vendors to get found. We're really excited about their ability to surface those innovate vendors.
The second piece is that, yes, when you have more vendors competing for business, you decrease price and you increase quality. That's really where we're pushing to spur innovation. We want districts first to say, "Hey, wait, there's a gap in your product, and we really need you to extend it this far. Let's partner together and let's close that gap." Imagine what happens when there's another district that needs the same thing.
Now, that district is partnering with another district that's partnering with a vendor, and we collectively come together. We start changing and pushing innovation into an industry that's lagging behind.
RB: How do you find education playing a role? I don't mean education in a standard sense, but meaning your role at Noodle Markets and educating the market itself. I would imagine there would be a role of educating so that schools understand there are questions that can be asked that maybe they haven't asked in the past. Just like we're talking about vendors.
How has that played out with your time there at Noodle Markets, when you think about almost another parallel of having to educate the user on how to look at the marketplace, right? I think we do it in our private lives and our communities. But, education seems to be a different animal in that way. How much of educating the market have you had to do as a company to get everyone involved up to speed?
NN: Quite a bit of educating. I have a great marketing team, so we have built a lot of partnerships. This is a big problem that we're trying to solve, and Noodle Markets isn't the only one solving it. It's important to go at it from a partnership standpoint; from partnering with Digital Promise, John Hopkins University, the Virginia Jefferson Accelerator, a lot of people who are trying to solve it, that's one way that we're working collectively to educate educators.
Then, we're also pushing out and asking them to do more Request for Information (RFIs) and more Express Quote Request (EQRs.) This way they are going out and doing the work that makes it easy for them. Finding more information about vendors and doing the necessary due diligence so that they can make sure they're making the best purchasing decision.
RB: I'm so glad you brought up the RFI. I think people, especially from the vendor side of the entrepreneurs, struggle to find a way to penetrate the education market because they fear that it's going to go straight to Request for Proposal (RFP).
NN: Yes, right.
RB: How are they going to keep legacy systems, how are they going to communicate their value proposition when you've got knockouts basically in these RFPs that are potentially written for certain vendors.
NN: Yes.
RB: It's not something that's potentially discussed in that regard. Is that something you see more of with the RFI?
NN: Yes.
RB: Basically, we're looking for "Help us build this out."
NN: Absolutely, and that's part of our education. When a curriculum director comes and says, "Hey, Nicole, we want to use your platform," the first thing we say is, "Let's push out an RFI or a quote request and let's see what's out there so that you're educated more about the process."
When we started Noodle Markets, we thought that we would penetrate the RFP market more aggressively. Part of our business that has blossomed and taken off has been exactly that, the RFIs. It's been fantastic to see the educators embrace that as a way in which they become more educated about their options.
RB: Well, we appreciate your time, Nicole. I think this is a very important topic. Understanding the marketplace within the context of education is a very eye opening one and one that we should pay attention to as we see what happens in 2017. Thanks so much.
NN: Thank you.
RB: Once again, I'm Dr. Rod Berger.
About Nicole Neal
Nicole is a visionary leader and pioneer at building transformative educational products. As the CEO and Co-Founder of Noodle Markets, she leads the company in its mission to enhance efficiency and transparency within the education landscape by revolutionizing K-12 purchasing. Prior to joining the company, Nicole was the President of the Education Solutions Group at CORE Education Consulting and Solutions, Inc., a publicly traded company, where she oversaw a staff of 300 employees and managed a portfolio of formative assessment, intervention, and content solutions for districts and states serving the Pre-K, K-12, Employability, Special Education and Higher Education sectors.
Nicole also served as the Senior Vice President of Major Accounts and State Services for Pearson Education Inc., one of the world’s largest education publishing and technology companies. Prior to Pearson, she served as Senior Vice President of Client Services for Schoolnet, Inc. Nicole holds a Bachelor of Science in Computer Engineering from Binghamton University’s Watson School of Engineering and an MBA from the University of Maryland University College, where she graduated with distinction. Nicole started coding when she was 11 years old. When she is not working, she enjoys encouraging young girls to code and to be the best that they can be.
Follow Nicole Neal on Twitter
Recommended Reading:
What is the future of education finance?
Who are the leaders in education funding?
Venture capital investment making education news
Additional Reading:
The Washington Post - Here’s who Trump invited to the White House to talk about schools. The list says a lot about his education priorities.
Chicago Tribune - CPS freezes some school spending on nonpersonnel items
The Philadelphia Inquirer - Public schools step up fight to win back charter students
About Rod Berger, PsyD.
Dr. Rod Berger is President and CEO of MindRocket Media Group. Berger is a global education media personality and strategic influencer featured in The Huffington Post, Scholastic, AmericanEdTV, edCircuit and in EdTechReview India.
Audiences have enjoyed education interviews with the likes of Sir Ken Robinson, Arne Duncan, Randi Weingarten, Sal Khan along with leading edtech investors, award-winning educators, and state and federal education leaders. Berger's latest project boasts a collaboration with AmericanEdTV and CBS's Jack Ford.
Follow Dr. Rod Berger on Twitter