May 25, 2023

Episode 279: Don Burton, Founder & Managing Partner of LearnStart

Don Burton has an extensive career at the cutting edge of education innovation and technology, launching, scaling, and exiting companies as well as being a thought leader on the topic of the Future of Education.

He is a strategic advisor, Don worked with McKinsey & Co. consulting on strategies to launch interactive media business units and how to create open innovation within large corporations such as Apple, IBM, Sony, AT&T, Time Warner Cable, Cox Cable, Viacom, and Disney, and with Goldman Sachs advising on exits and acquisitions.

As an intrapreneur, he has built education startups within large companies such as the Walt Disney Company and Kaplan.

Don, as an entrepreneur, has built multiple EdTech startups on his own as a founder, with a major exit to Kaplan/Washington Post.

Don was an angel investor before running EdTech Startup Accelerator programs with Techstars and for his own company, graduating three cohorts who have raised more than $100 million in financing and have an estimated market cap of more than $1 billion. He is currently co-founder and managing partner of LearnStart, a seed-stage venture capital fund focused exclusively on learning, education, and talent with a portfolio of more than 30 startups and excellent fund performance.

Julian:Hey everyone. Thank you so much for joining the Behind Company Lines podcast.Today we have Don Burton, founder and managing partner of LearnStart a leadingedge venture capital fund focused exclusively on education, learning andtalent. Don, I'm so excited to not only bring the audience, your experience,your, your expertise, your opinions, but really, uncover this whole ecosystemaround education technology.

I think, earlier onmaybe 2 20 18, 20 19, people are really kind of gaining traction. Got disrupteda little bit, but still, individuals like yourself are leading kind of cuttingedge ways to not only, make technology and more implemented and more integralin terms of school systems, but also, education platforms, but also really kindof leading innovative ways to restructure and kind of reframe.

And, I read acouple articles that, that you posted about us, so I'll definitely jump intothose eventually. But before we get into LearnStart, what were you doing beforeyou joined and, and, and built, the, the company.  

Don:Sure. So, before I did LearnStart, I I did kind of the quick career arc is Idid professional service stuff.

Like I worked atMcKinsey and Goldman Sachs, and then I did, yeah. My, I, I worked for the WaltDisney Company. So did a little bit of corporate stuff and then I was a serialentrepreneur. And then, luckily got a couple good, singles and doubles. Soexited a couple startups and was able to Angel invest after Angel investing,Techstars approached me to run one of the startup accelerator programs focusedon education, learning and talent, as you mentioned.

Yeah. And that'swhere my startups were as well. And so from there I kind of got into theinvesting side with Techstars and ran a startup accelerator for a couple years.And then eventually got into seed. Capital and seed venture capital investing.And that's where LearnStart has evolved. So, so that's the quick summary.

Julian:Yeah. And it's so exciting thinking about well, even when we think abouteducation and technology, I think a lot of individuals maybe think abouthardware in schools or programs that teach, tech technical skills. But, whatare you seeing in terms of the innovation that companies are bringing to thetable and what are the, the creative waves that they're not only supporting andenabling students or, or people wanting to learn, but also kind of changingthe, the traditional model of learning.

Don:Sure. So, actually the most, most of the exciting, innovative new learningmodels are happening outside of school, right? Because school, yeah. Yeah. Andthe traditional educational institutions are usually the last to change. So alot of innovations happening in the corporate training and learning, lifelonglearning kind of area.

B2C is. Big, goingdirectly to the home and then replacing traditional models. So instead of likeselling, the next curriculum, academic subject curriculum into schools, schoolsthat are kind of reinventing education are kind of more micro schools. One ofthe biggest trends is, instead of just having your traditional.

Public school oryour traditional private school. There's a lot of smaller micro schools poppingup, like Elon Musk, everyone knows him, but they don't know that he started hisown micro school for his kids originally and then he opened that up to all ofthe SpaceX people in la Yeah. And now he's got ad Astra in in Austin as well.

And he's offered itup. To anybody can now come to, his Ad Astra school and, and, and it'sbasically, just, it's a school that looks more, looks a lot more like the realworld. Right. Yeah. Yeah. You engaged in things you care about and you have allthis scaffolding around getting really good at reading.

Right. Arithmetic,but, In the context of doing something that you care about and that'smeaningful to you. So a lot of project based work, a lot of work that looksmore like the real world and then just getting educated while you're doingstuff in the real world. Right? So, and, and that's a lot of micro schools.

We're invested in acompany called Preda Galileo xp. Cato, these are all micro schools in differentparts of the world, and that's a big trend that's doing, education in a verydifferent way and the early adopters are starting to go into to that stuff.Yeah. So, so that's kind of just a quick overview of just all the differentsegments from, birth.

To, past career,what's going on, and there's like, I think it's different in each segment. Butthere are a lot of good innovation in each each segment of the market. So it's,it's an interesting time for the education space.  

Julian:Yeah. And you always think about, obviously it's popular to, to discuss kind ofthe way the traditional model of education gets disrupted.

And, I, I wannathink back in terms in terms of what are the signals that, that you're seeingin, in terms of what's causing the need for this disruption? What are some ofthe. Is it measurables? Is it standardizations of tests, becoming decreasinglylow? Or is it outcomes that we're seeing not be positive or, or having negativeeffects, or not reaching, what our standards or expectations were?

What are some ofthose signals that we're seeing for this innovation to really becoming, moreand more popularized in for at the forefront rather than just for, the elite individualswho have the means to, to create, structure programs.  

Don:Understood. So, so yeah. So some of the signals are certainly that, you look atsome of the data yeah.

The government hasspent, I think, since the seventies. It's, the statistics are wild, and I haveit in one of my blog posts that I can share with you directly. Yeah. But thestatistics are something like we've, we've tripled the amount of money in realterms, not inflation, inflation adjusted dollars.

We've tripled theamount of money we spend on education, yet the results. Have not improved atall. Mm-hmm. So I, I can't think of a sector where you, of the economy,anywhere, that if you spend three times as much, people are satisfied if youhave, zero improvement on outcomes or anything else.

And I think that,we've had this kind of industrial age model. That really did serve, the, thekids at ages ago, to get these notational systems of reading, writing,arithmetic, you needed to kind of get, isolate yourself in these school systemsand learn these very difficult notational systems.

I think it's much,again, it's, you still need reading, writing, arithmetic, but in today's world,you need to think critically. You think you need to think creatively, you needto be a practical problem solver. You need to communicate, you need tocollaborate and to have social intelligence. So there's, there's so many.

Skillsets that weneed. And focusing on just the core academic skills isn't enough. Yeah. It'snecessary. Not sufficient anymore. And I think people, really woke up duringthe, the covid days when schools were locked down and everyone was forced to godo online learning. Parents could look over their kids' shoulder and see.

Geez, whateverthese experience are that we're offering in the classroom, they're not thatgood in the classroom and then they're really bad when they're in Zoom schooland you don't have the personal connection in a classroom. So, so I think,everyone expected amazing amounts of change to happen, during Covid and postCovid.

And there certainlywas a one, a ton of online learning happening during Covid, but it was kind of,The quality of the learning was just kind of replicating what we do intraditional classrooms, and it wasn't very exciting. And we've had kind of apullback since the c since Covid, right? Or yeah.

Since people beenback in the classrooms and and the, the change pace has not continued at thesame rate and it, and it really should be. And I do believe that there's a, alarger debate going on about what kind of experiences are we providing our kidsand what kind of outcomes are we looking for?

And again, I justthink the outcomes of the old industrial schooling model just aren't sufficientfor today's innovation age and the changes we have today. So, so the, that'skind of some of the drivers is just, and I think awakening awareness reallyhappened during covid of, yeah, there, there, there's.

There it might be,there might be a better way, right? Yeah. Yeah. I think a lot of people do believeschool's broken, but they really don't know what that better way is. And Ithink we're just inventing that now and it's gonna be an exciting period inthis time because education has not been known as, your advanced technology.

We're really gonnadeploy technology in innovative ways. It's been a laggard in the use oftechnology. And I do think that we're kind of reaching a tipping point whereeducation, is, is going to be using technology. They're gonna be usingtechnology in very different ways than just delivering a traditional yeah.

Schooling modeleducation. So again, we're kind of at the very beginning of that. But I thinkit's gonna be e extremely, lots of change, lots of innovation happening. Yeah.In the next, five to 20 years.  

Julian:Yeah. And, and seems to, obviously rely on a, a, a lot of innovative foundersand, and the technologies they're bringing in terms of their local environmentand how that affects, because it's such a big, I don't wanna say problem, Iguess even industry, right?

Education is such ahuge industry in and of itself that it does rely on the small innovators. Butthinking about education, as from a founder standpoint, wanting to break in,wanting to develop something that's gonna help or benefit people, whatever my.I guess problem set that I'm going after, it's not a traditional industry thatI think, is very lucrative, and, and, and, and in terms of pricing models andbuilding kind of a, a business model around it, it's difficult to say chargeconsumers because typically you're, you're giving people who don't haveresources.

Resources. How doyou kind of advise your founders to create kind of business models or ways to,have a value driven system and also, price it in a way that isn't so reliant onconsumers, but maybe on partnerships or other things. We'd love to hear yourresponse to that.  

Don:Yeah, I think that business models differ by the different segments.

So if you look atthe, sure. At the corporate training markets, obviously business SaaS modelsare very popular, right? So businesses can afford to have an a per employeerate, and every employee that's using this education or training platform, theycan pay a. SaaS model type of subscription, which, which is very, been a provenbusiness model for lots of different b2b startup founders.

And I think it is areally good model that if you look at Udemy, most of their sales, they startedas a B2C where they were selling to customers, but now, the vast majority oftheir revenues comes from. Business with employees being able to access theplatform and learn whatever they wanna learn on the Udemy platform.

CoSeRa has verysimilar model. Pluralsight had the tech thing, so that's, that's very commonand popular in the business side of things. And you can charge per course aswell, but I think what, what. The most successful business model in thecorporate training market has been a subscription per head.

And, again, it kindof gets in there and it stays for a long time and has great retention and thatthat's a really good business model for the, for the corporate environment.Higher ed, what you're seeing is more experimentation with how do we fund whata student's doing? So you, you've heard of the ISAs and all that type of stuffwhere the students are, Hey, you pay a little bit upfront, but then you pay onthe back end.

Once you get a job,you get a new skill. It gets you a new job on a great career, digital careerpath, and you'll, you'll pay back the education while you're, getting paid. Andit's a much more affordable way than, paying for a graduate degree of going toNYU Film School and saying 80,000 a year.

You go to a companylike Creator up and you actually get jobs. Producing, digital media forcompanies and all sorts of different needs, and you learn why you're gettingapprenticed and, and getting paid. And you get better and better and better andbetter jobs and higher and higher pay as you kind of, start at the entry level.

And move up. Sothere's lots of interesting, and the, and these could be higher, different,different alternative pathways to higher ed. Instead of getting a film degree,go to creator up and just start working in the, in the film and tv. Yeah. Anddigital media space. So there's lots of that type of experimentation happeningin the higher ed and early career area.

And then, and, andeven, even some of the changes that are going on in, in universities like wewe're invested in a company called Podium, which kind of outsources a whole newdepartment. So like, if your college doesn't have data science, you can go topodium, you can, white label, their kind of data science program and you canget a minor or a major and you can just like have a, a degree in a box or aminor in a box.

And they, they havean online thing, they have professionals teach it, and you get really good atdata science or some other type of technical skill. And so they, they actuallyroll those out. To regular universities, but it's a very different program onceyou're in a regular university, but you do get credit for it in a university.

And then if you godown to. That's higher ed. If you go to K-12, most of the interesting stuff ishappening b2c. And it could be like summer camp business, like, the hottesttopic in the country these days or around the globe is generative ai. Right?Right. We're, we're invested in a company called AI Camp and they teach Kidshow to become, prompt engineers and how to become AI experts, from middleschool on up and, and it's, more that summer camp model, like, summer campafter school programs that, that's a big, big industry, 30 billion plus type ofindustry with summer camps and and afterschool programs.

And those are B2Ctypes of opportunities. And there's a lot of interesting B2C opportunities inthe K-12 space much more than a. A major innovation in the traditional school,as I mentioned. Yeah. And so, and then, and then early childhood, there's stufffor parents, there's new ways, like everyone knows one medical, which kind ofthe general practitioner office one medical had a really innovative model.

Yeah. Happenedthere, that's kind of being replicated for, birth maternal care that we'reinvested in a company called Millie that does reinvents like one medicalreinvented general practitioners. Mm-hmm. Millie is doing that for maternalcare and once you, you're pregnant, there's a much different way to get.

Port while you'repregnant. There's a company we're invested in called Brave Care that does thatfor pediatrics. So, so you're seeing like, that wouldn't innovative one medicalmodel happen in these kind of more Yeah. We, we think of human flourishing and,and, and so we want innovation and transformation and all these differentsegments of human flourishing.

So those are,Education, learning and talent because it's really important how you get your,your start in the world. Yeah. And so we, we both invest in Millie and braveCare. And then we have parenting stuff like Baby Sparks that can get you a lotof support in your home. And again, these are more.

Subscription basedmodels, right? Mm-hmm. So your insurance pays for, maternal care and andpediatric care, but things like baby Sparks, which is parenting support withinformation and classes and courses and all that stuff, that's a subscriptionmodel. Yeah. So you can sign up for this level of subscription or this level ofsubscription, and again, pretty good retention, especially in the early yearswhen parents don't have a lot of support and they haven't kind of outsourcedtheir their education to, to different institutions.

They will utilizethese kind of B2C education offerings. And so across the spectrum you're seeingdifferent business models for different segments and there are a lot of goodmodels. One of the bad models is. Knocking on doors at K-12 district officesand trying to sell your stuff into districts, that's a really frustrating,fragmented, yeah.

Byzantine system oftrying to get your product out there. And yes, that, that's the kind of, whenpeople think of EdTech, they think of that type of sales thing and, and it'snot. But hey, we've got business SaaS, we've got consumer subscription, likeNetflix subscription models, so we've got a lot of really interesting models.

It's just not inthe traditional systems.  

Julian:Yeah. And thinking about, I, I read one of your articles and was talking aboutthe, the reinvention or the future of education and thinking about how, howthese all impact the structure in which we learn. I would love for you to just,illuminate the audience on kind of the, the, the thesis behind that and, andin, in, in a way that really kind of reinvents the structure of not only, notthe information we ingest, but also how we go about learning that and ourrelationship to it, and then the mechanics behind it and how that kind of.

Creates a wholedifferent ecosystem versus a more traditional lecture model or even even smallgroup kind of collaboration is a little bit outdated or, or it's still useful,but we need to add on top of that. We'd love to hear.  

Don:Yeah, so, so you think about, first principal innovation, right? And so, so ifyou think about the schooling model, if we had to invent the best way to getpeople confident at the world, at different skills and different areas of theworld, different domains.

Different fields,you probably would not invent. The, the modern, what we have as the schoolingsystem, like where you send people off, you lecture them, you, they have totake good notes and then study their notes and then, and, and do a multiplechoice test where they give the answer back of, multiple choice stuff.

It, that's reallynot how to get competent in the real world. The, the best. If you're reallygood at schooling, that predicts. That you're gonna be really good atschooling, but schooling is just one small activity, right? It's fairly narrowactivity. If you think about it, what students are asked to do well, it's likememorize information and then regurgitate that information on multiple choicetests or something.

Yeah. That's notreally paid for in the real world. And to get competent at all the differentSTEM fields or all the different creative areas, or all the different businessfunctions and, and stuff like that. You. Need a totally different set ofcompetences. And, and so, so I think what we're starting to understand andstarting to, to do is good to go back to the first principles about how dopeople learn.

People learn byhaving really rich experiences. Like, I, I come into a situation, it's richsituation. It has a real context. And I have expectations about what's gonnahappen and I'm gonna do X, Y, Z P, dq, and then all of a sudden I get in thatcontext and boom, things don't happen like I expect.

And it's like,whoa, why did that happen? Right? And And you have to learn. You have to like,oh, I was surprised. And now with that kind of surprise, it's like, well, whydid that happen? What did I think that was not accurate? And then how can Iadjust my thinking and how can I get from point A to point B? As effectively aspossible, and I have to learn and get over barriers in order to make changehappen.

And that's whereyou really learn. So if you think about human learning, we, we, we are, we'reamazing learners. We learn 24 7, we're always learning. Yeah. The, the matteris, What kind of quality experiences are we having that get us up a competencecurve? Mm-hmm. And so I think what's, what's happening, and I'm not certainwhich article you're thinking about, cuz I have a number of blog posts

It's dc, or when you go to You know what we, what what I, what Idescribed there is that, We're really starting to just go back to these firstprinciples and rethink how do we support and scaffold people getting competentin the real world. And again, the schooling model isn't really a, a greatmodel.

It's kind of a blipif you think about it. Like, humans have been around for more than 200,000years. We've always learned within the context of the real world, like forhundreds of thousands of years. And then during the industrial age, we did haveto learn these complex notational systems, but we kind of, threw out the babyand the bathwater because if you could be a great blacksmith, but you couldn'tread right.

Arithmetic, wedidn't want that. But now we, you can be do great radio writer arithmetic, but you'rekind of are abstracted from the real world and you're not competent at solvingreal world problems and real world issues with real world skillsets. And so Ithink what we're gonna see moving forward is this combination of kind of like,pre-industrial age schooling model.

You had,apprenticeships were very popular. You're gonna have a combination ofapprenticeships with more of an explicit intervention. That's a real. Expliciteducational intervention with goals about how to get you more competent. Butit's not gonna be isolated and abstracted in a, like a school classroom that'snot related to the real world.

You're gonna bringthe school into the real world and have educational interventions that makethat experience much richer for you. So you get. More competent, more quickly.And I use examples in that, in that blog series. Like I, I was a businessanalyst at McKinsey and Company right when I got done with undergraduateeducation.

And, I, I performedwell at undergraduate education. I thought I'd just jump in and of course, I'ma smart guy from a good school. I'm gonna do great. It's like, holy moly, the.Thinking that required at the business analyst program at McKinsey cause istotally different. And they did an amazing job of scaffolding you because youget thrown into a community of experts who are really good at business problemsolving, and they kind of.

Scaffold you allthe way up the curve cuz you're working with people that have been doing it foryears. They correct you. They give you feedback, they intervene in the endproduct that you're producing and they tell you what's good, what's not, andwhy. And then you, you, you just learn on steroids when you're in this kind oflike expert community of practice.

And, and I think,Bringing the school to the real world context is a big wave of stuff we'regonna see. Because in order to get competent at stuff that the world needs, youneed to like, go into the world, find a really good high performing communityof practice, and then work with them.

And as you workwith them, you get really good and really competent in stuff. Yeah. So that's,that's kind of like a fundamentally. We're gonna go back to first principlesabout how do people get competent at real world, skills and that's how you doit. And so we're gonna, yeah, I think we're in the very early stages of a majorshift to a different form of education.

Just like the shiftwhen we were an apprentice and didn't have. Didn't know the notational systemsand, and industrial aid schooling model was invented. Now we need an inventedmodel for the innovation age. And what we have now does not produce the outputthat we need for the innovation age. Yeah. So we're gonna have to reinvent itand we have to go back to first principles to reinvent what does good qualityeducation, learning and confidence development look like.

Yeah. And, andwe're at the beginning of reinventing that.

Julian:Yeah, it's, it's so exciting because it's like, like you were saying, thescaffolding is, is being constructed, but the need is there. People are usingdifferent, even social channels that were for connecting and communicating nowfor learning and, and development like TikTok and so, and Instagram and allthese different, different channels in, in new and, and creative ways to learnand people are craving it.

And and, and, andit's really, I think, imperative that we create not only some structural round.Around it, but some fidelity and validity around the, the practices and, andwhat's, what's true. And, and if it's not a hundred percent true, how do weunder uncover it? Yeah. And build some curiosity in that as well.

Don:Yeah. And, and, and again, and one thing that's really important, like we'vehad progressive schools, so to speak, like, oh, we're gonna do project basedlearning and stuff, but you, but, but it's really important, as you justmentioned, there needs to be rigor and accountability, right? There's aperformance criteria.

And if you just gooff, And do your own little architecture project on your own with three kids ina school project, but you never get the kind of rigor that, what does goodarchitecture look like, right? What kind of skill sets do you need? What? Whatis the developmentally appropriate spiral where you start with this kind of,entry level project and you move up to really highly, highly competent?

Expert type ofprojects and there is a pathway with, there's serious performance, seriouscriteria about what does good architecture look like. Yet, if you just do thatin a project-based learning, you're not gonna learn much, right? Yeah. You got,you've gotta really find an expert community of practice to plug into thatknows what those.

Performances are.So at McKinsey and Company, it wasn't like, oh, progressive education. I canjust do what I'm interested in and I'm interested in this project and isn'tthat great? I'm gonna go have some ideas there. No, a client has a real problemthat needs a real solution. Yeah. And it's gonna work or not work.

And there's real performancecriteria that. Everybody lets you know about there's rigor and accountabilityand we really need that, and we need that kind of plugging in to real worldcommunity of practice. And that's what we've been missing, even with the bestprogressive education out there. Yeah.  

Julian:Yeah. And shifting gears here, thinking about LearnStart and, and the companiesyou've been working with, the bets you've made tell us a little bit about thetraction. What, what's exciting about, the current companies you're, you'reworking with and invested in. But what's particularly exciting about the nextphase of LearnStart and, and what you're gonna be working on?

Don:Sure. So we, we've invested in a lot of companies across all those differentsegments, so we're kind of agnostic, we'll, we'll look at any segment of theeducation market from birth to, senior citizen type of opportunities, etcetera. Yeah. So we look at everything and we look at all the different producttypes within those, and, and so basically, again, as I mentioned, I'm mostexcited about the kind of innovation that's been going on in the corporateworld just because, yeah, it immediately, trans results immediately translatesinto better performance for a company and they can tell the difference, andthey're willing to pay for really high quality product that makes a differencefor their employees.

Right. So, so, backin 2013 when I was running one of the Techstars Accelerator programs, weinvested in Degreed and Degreed. Is what's called an ex a learning experienceplatform. And it's a new mm-hmm. New terminology. We used to have learningmanagement systems, right. And learning management systems was just, hey, goover to this warehouse and find the course about, compliance type of stuff.

Yeah. Like, Youneed to know about diversity, you need to know about alcohol abuse, you need toknow about, this, that, or the other thing. And you had to go watch thesedifferent videos or different curriculum that you kind of had to check the box.Yeah. And that's what learning management systems were all about.

Because peopleneeded to go through these courses or the company needed to check you off thatyou did this. And, and, and that was a silo. And what the greed came along, inthe, in the 2010s. And they basically said, geez. There's real skills that yourbusiness units need, like, so if you're at and t, they were going through ahuge transition from the old telcos to a mobile trying to be an innovativecompany, and they had some really amazing kind of ways of aligning the skillsthe company needed.

With what theemployee wanted. So if you're an employee, it's like, wow, I'd really love tolearn coding, or I coding, Bo bores me to death. I wanna learn kind of digitalmarketing and go to market strategies and all this kind of cool stuff. Or Iwanna learn creative stuff. So the employees would say, I wanna learn theseskill sets, and at and t or other corporates would decide, Hey, here are theskillsets that are really important for us to be successful in our sector.

And then we'llmatch you up, like, you wanna do this, you wanna do this? We'll put you on alearning pathway that gets you competent and we'll pay for it. So instead oflike, you used to have corporate programs where it's just like, oh yeah, goback to college and we'll pay for half of it, or something like that.

But no, they, thiswas Degreed helped companies align the skills they needed to be successful inthe marketplace with. You're already existing employee base and what theywanted to get better at, they could raise their hand and tell you what theywanted to get more competent at, and then you could help 'em up that learningcurve and that competence curve.

And so Degreed wasone of the first guys out there and invented this thing called the LearningExperience platform. And they'd been doing really well. They were, they're oneof my first unicorns, like I invested in them. Back long, long time ago. Andthey're one of the first unicorns, in the existing portfolio.

One of thecompanies that's performing fantastically is that podium company that I talkedto, to you about that, that sells kind of a major or minor in a box and sellsit to a university to white label. Right. Creates a data science department atany university overnight. Right? Yeah. And so, so it's doing really well becauseit's practical.

Professionaldriven, you're developing a real set of competences around data science that'svery employable. Wow. So, so they, yeah. People in that university can get thatdegree or that minor and then go get a job because people want that datascience skills. And so, so, so they're doing really well and they've got areally interesting business model.

And so, so again, Ithink there's a lot of different ways in these different segments, whether,whether it's corporate, whether it's higher ed and alternatives to higher ed,or even. These micro schools like Preda and Elon Musk, add Astra, that's kindof a whole new way of doing education and it starts to play with some of thosefirst principles that I've kind of outlined in my blog post series.

So, so there's alot of really interesting stuff and we've invested in a, a ton of differentopportunities and had really good success like degree and podium and AI campand, all these different, Preda has been very successful as a micro school inArizona. The money in K-12 can follow the student much more easily than inother states.

So if you're aparent and you said, oh, I wanna sign up for a micro school like Elon MuskMicro School or Preda Micro School, you get the money that the state would'vespent. At this school, you get it. Mm-hmm. To, to go to whatever school youwant, as long as it's an improved school. And so Preda, offers something up.

Parents don't haveto pay a thing, they take the money from the state, and then they get to go toa micro school for, instead of going to the alter, the traditional stuff. Yeah.And those types of models, those types of models are happening and they're veryinteresting. The other big thing that's happening in the States is this thingcalled education savings accounts.

So it's like themoney following you, it's not. Fully, like Arizona has a much bigger price tagthat follows the kid, but these education savings accounts, if you wanna gofind innovative education alternatives, they're out there and the state isstarting to fund you if you're in the K-12 space. And, and you can sign up fora micro school.

It's not likehomeschooling, which is a huge responsibility for the parent. But there'sbetter tools for homeschooling. But even more importantly, you can place yourkid in a school and they will. Find the right opportunities and the rightexperiences for your kid. And they can do that digitally with local pods.

So you getsocialization with other kids in your local area, but the curriculum is moredriven by a national online provider. Yeah, so, so again, lots of reallyinteresting stuff and we've had success in almost every segment. There's someway to skin the cat in every segment.  

Julian:And what, and what would you say, are some of the main, drivers behind thatsuccess?

Is it. The, the ophow, how the founders are operating. Is it some kind of, the, the way youapproach how you go to market, what, what kind of continuous dis success andthis consistency behind in, in these different segments that have differentmodels, have different challenges, what would you, what would you say would,would be a, a, one of those pieces.

Don:Yeah, I think, three, three things from a business building point of view. Oneis, your customer value proposition, like how much better is your customervalue proposition than what's, what's available out there, right? Soentrepreneurs have done really good at. Like Degreed invented something thatwasn't really happening very much.

Right. So it was areally wonderful customer value proposition. Then the go-to-market strategy, asyou mentioned, that, that's important too. So you gotta have a, a great productthat's highly differentiated and then compelling to the user. And then you havea, have to have a great go-to-market strategy because, just trying to getconsumers through Facebook or Google ads, that's really expensive.

And so you reallyhave to figure out. Innovative ways to go to market and get to your customer.And, and that's almost, as equally as important as getting a great product isgetting great distribution and being able to get it in the hands of theconsumers that want it. Right. And then lastly, we always look at, when we'relooking at companies, how good are they at the business unit economics, right?

So what's thebusiness model? Yeah. How are they making money? What, what's the process bywhich they, you know, how much are they spending? How much are they, renting?Yeah. What's the cost case, what's the revenue and what's the unit economics looklike? And the best entrepreneurs and the best startups are really good at allthree of those things.

And we're lookingfor all of those. I would say we start with the customer value proposition justbecause if you don't have that, the other two don't matter. So you really havecompelling customer value proposition is the, is the way to go. And that'swhere we start with this. How big of a problem space is this, how, how good arethe people and the founders and being able to, to take advantage of this opportunity.

So, so you know,those are just a few of the things that we look at when we're trying to decideon which startups do we wanna place a bet on.

Julian:Yeah. Yeah. I like this next section. I call it my founder FAQs. So I hit youwith some rapid fire questions and then we'll see where we go. So, firstquestion I would like to open it up with is, what's particularly hard aboutyour job day-to-day?

Don:One thing that's really hard is just, making that assessment. Cuz there's aninfinite amount of entrepreneurs and you'd love to support all of them becauseall of them have passion, they have heart, they wanna make a change in theworld and they feel like really passionate about that change they wanna make inthe world.

Yeah. And so you'dlike to fund everybody. Yeah. But you can't do that. And we've got, we've got areturn, to our, in order to attract the capital, we have to provide greatreturns to our investors. And so you really have to be discerning. Yeah. Andyou have to let people down because you're not investing in their company.

So the hardestthing is to say no. Especially when you really like the entrepreneur. Youreally, are rooting for them and you want them to go fight the good fight, butyou're not, it's not gonna, the proof or the evidence isn't there yet, or,you're not a hundred percent certain so you can't make the investment.

And we, we, we makeone inve for every investment that we hear. We probably make one out of, 200companies that pitched to us. We only bet in and put investment in one out of200. So it's, that's the probably the most challenging and disappointing justcause you would love to support everybody, but you can't.

Julian:Yeah. Yeah. And thinking about the founders that you do support when they havethat, those foundational pieces kind of in place? Yeah. They, have kind ofstrong, market fit. They, they, have, have strong go-to-market strategy. They,they've done all the thing operationally to be strong, foundationallyunderstand that the unit economics to legal and attack markets, what would yousay?

I think about,managing people as a huge headache in terms of, variables that you kind of areoutside of your control. And, thinking about founders and their experience,there's managing people, there's client relationships. What do you see a lot offounders kind of consistently needing to kind of, I guess, adapt to, or adaptto being that, it's, it's non-traditional.

You typically havean evangelist or someone who comes from an industry they may not have, broughtor built out a team. So that type of skill set is, is a huge learning curve fora lot of founders. What would you say kind of keeps them up at night when thinkingabout, building and motivating teams?

Don:Yeah, so. Interestingly, I do feel like entrepreneurship is, is a really toughand lonely game because usually if it's you and one co-founder, like, you guyshave the weight of the world to really make this opportunity happen and stuff.So yeah. So you kind of feel that pressure and you feel that like, the burnrate and what you've got in the bank and what you're burning per month, thatkind of runway Yeah.

Keeps gettingsmaller and smaller and smaller with each month that passes. So you feel theintensity. And the pressure to really, get it to work, get the customers tolove it, get the customers to start spending money. And so that pressure. Isreally important. And there's not a big team, right?

Like you, it's,it's the two founders and then you've got people that you're hiring that mightnot have the same kind of pressure that you do because you're putting in money,right? Raising money from people. But I think, managing that type of stress,you gotta kind of be built for it and you gotta know what you're getting intobecause, sometimes entrepreneurship sounds very sexy, but you really do have tolove the problem that you're trying to solve and you really have to like, Bemanic and obsessive.

Yeah. About, about,kind of wanting to really solve this problem. And if it's just like, oh, I'mjust doing this for fun and to make money, I. It's gonna be a really tough haulcuz there's just so many pivots and iterations that you have to make to reallykeep moving your company in the right direction.

Mm-hmm And so Ithink, for from a founder's point of view, you know that's really challengingand you really gotta love and be passionate about what you're doing. Forsure.  

Julian:Yeah. Yeah. And being that like a lot of founders have to work with, say,remote teams for instance, how are they able to communicate that?

Is, is it through,kind of cultural esta culture, establishing, kind of, meetings or, or sessions?Yeah. Is it reinforcing them through different practices? How do they do that?How do they communicate to keep everybody in focus?  

Don:Yeah, no, I think Scott Galloway just wrote a, a blog post about storytelling.

Yeah. And, youthink about the entrepreneur, he really has to be a master storyteller, right?Because you're, you're trying to get all your employees aligned on a vision,and you have to make that a vision, sound exciting, and get people's energy uparound it. You have to get investors excited about it.

You gotta get yourcustomers excited about it. So, one of the key skill sets. For any entrepreneuris storytelling. And that's for, and if you're doing it online, it's even moredifficult than in when you're in person. Right? So you gotta be a greatstoryteller. You gotta bring your energy, bring your passion, and be articulateabout where we're going so that people understand it and they're like, yeah,I'm with you.

Let's go. Right?And so that to me is like the key skillset is storytelling.  

Julian:Yeah. Yeah. What's something that you, you've seen even maybe in yourexperience as well, something that founders are not necessarily good at in theonset of their entrepreneurial journey, that you, you, they can be better atkind of joining on or focus on or develop skills now.

Even if they're inthe midst of building the startup, that could help kind of impact their overallbusiness outcomes and, and themselves as a leader. Anything coming to mind?Yeah.  

Don:Yeah, no, I, I just read recently some article that said, or some quote thatsaid, first time founders focus on the, the, the customer, the CU customervalue proposition, what's the product?

And, the productneeds to be great. Yeah. And second time founders focus on go to marketstrategy, right? Because in other words, it's kind of like the first time youjust, like, you're so obsessed with the product, you can have a great productand yes, a great product does help you sell through and he helps word of mouth.

Yeah. But youreally have to be, have the same sort of passion and experimentation aroundyour go-to-market strategy and what are the channels that are gonna give youthe lowest. C, cost per acquisi, cost acquisition of a customer. You gotta getthat really low. And you gotta be really creative about how do I find my customers?

How do I go tomarket? What channels can I use? What direct sales, what, what's the best wayand the cheapest way to get my product out to the globe? And that's reallychallenging when Facebook and Google are charging you a ton of money. For eyeballson any given, search result or anything else.

So, so I do thinkthat again, just people, when you're a first time founder, you're more focusedon the product. When you're a second time founder, you kind of expand yourhorizon more and you really understand how important go to market is, orbusiness unit economics, as we've talked about.

Yeah. So, so that,that, that, again, that's kind of a general trend. And then every individual isa little bit different, right? Like your strength and weakness profile isdifferent than mine, different than Fred's, everyone has like, what kind ofmistakes I'm gonna make depends on what my profile of strengths and weaknessesis.

And so I find thatindividually, it's different for everybody, right? So, yeah. So it's, what youneed to grow and, and learn about is different and, and you come into itdifferent depending on who you are.  

Julian:Yeah. Yeah. I'd love to ask this next question because I love how, my guestskind of e extract knowledge out of anything that they ingest.

So it's, whetherit's, books or people who has, impacted you the most, things that you kind ofstill use to this day. Anything in terms of books or people come to mind.  

Don:Yeah. Well, it's interesting in education, I mentioned first principles, so, soin other words, if you go back, like you, you look at, thought about what is ahuman being and how do you become fully realized?

You could go allthe way back to the Greeks and the foundation of Western civilization, whichare the kind of first principles like Play-Doh. Like if you think aboutPythagoras and Play-Doh, they had. Philosophy academies. It's becausephilosophy wasn't something you just studied so you can get good answers on amultiple choice test.

Yeah. Philosophywas how do I live my life? As effectively as possible. How do I just, mm-hmm.I'm here for whatever short period of time I'm here. How do I live the bestlife possible? They would live together in a community that thought about thatand practice that. Like, okay, we're gonna do this differently.

Yeah. Like thestoics and the pla, the Plato's Academy and Path's Academy, they were all like,I'm gonna live this and I'm going to go. App, make applications of all thephilosophy that I have. I'm gonna go live it every day, every minute of mylife, right? And so I think you go back to first principles.

I really love allof, really understanding how all these great thinkers thought throughout theages. And then what can we, there's now cognitive science. Kind of takes all ofthat and tries to, there's a guy named John VivaKi who does a YouTube seriescalled like something like Waking Up from the Meaning Crisis.

And, we, we really,yeah. How do we humans, we need meaning in our world and we need that kind ofpassion to live a great life. And then cognitive sciences are really kind of,Understanding that in a much more profound way, there's different types of knowing.It's just not conceptual.

Propositionalknowing it's participatory, knowing it's purpose, perplexed perspectiveknowing. And it's like, procedural knowing there's all these different knowingsthat we use, our whole person, not just our heads. Yeah. And, and cognitivescience is really taking that on now. And so, I think there's a lot of great.

Cognitive sciencebooks out there from the neuroscience like Antonio Demasio who wrote DecartesError and On Knowing is his latest book. He, he talks about the neuroscience ofall of this. Yeah. And you can go all the way from neuroscience to psychologyand anthropology and it's just really good.

There's just a tonof great stuff out there.  

Julian:Yeah. Yeah. Don, it's been such a pleasure chatting with you. Last little bitis, is did we leave anything on the table? Is there any question I didn't askyou that I should have? Or anything that we didn't talk about that you wantedto bring up? Anything left on the table here today?

Don:Yeah, I will just summarize that, real school is the future of education iskind of my motto, and that we're really, when I say real school, instead ofthis artificial environment, like a classroom, you really need to bring thelearning. Into the place that you're doing the activity and where you're tryingto perform something in the real world.

I'm trying to get,yeah, to be a better kite boarder. Well, I need to go get in, feedback whileI'm kite boarding, right? Or, or anything. Whether I'm trying to do digitalmedia production or whatever it is. You really need to have the school embeddedin you performing. Within that context.

And so I, so I callthat real school instead of like old school. And yeah, that's, I think gonna bethe future of education. And and again, we have to invent it from firstprinciples and we're just at the very beginning processes of doing that. Butthere's gonna be a lot of exciting stuff out there.

There already is alot of exciting stuff out there and there. And parents can take advantage of allthis stuff. They don't have to wait. 20 years, yeah. They can go do real schoollearning with their kids and, and all of us can go do that right now. Andgenerative AI is just making it easier. So, you're gonna have your ownindependent tutor just help you get confident at whatever you wanna getconfident at.

You just grab yourgenerative AI and you're off and running, right? So, yeah. So yeah, there's alot of exciting stuff coming down the pike, so, stay tuned.  

Julian:Yeah. Donna, it's been such a pleasure learning about you as an earlyentrepreneur about how you impact current entrepreneurs with LearnStart and,and ways.

Not only you thinkabout building companies, but building companies in the education sector.Really, really thinking about, these outcomes and these, these value drivenoutcomes that really not only. Impact businesses positively, but areincentivized similarly with their customers and really kind of push theenvelope.

So last little bit,Don, is where can we find you? Give us your LinkedIns, give us your Twitters,where can we connect and be a fan, but also support Lean Start and what you'reworking on.  

Don:Yeah, so at Don Burton on LinkedIn and then my blog post series that we'vementioned a couple times is at Medium. So it's medium slash DC Burton.

So that amazing areprobably the best places.  

Julian:Cool. Don, thank you so much for being on the show. I hope you enjoyedyourself. Absolutely.  

Don:My pleasure. Great to talk to you. Have a great evening.

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