Introduction

um worked with egler on that report we're going to work again this year on a couple of reports about what's happening with L&D and particularly with AI um

I've chaired the learning Technologies conference for 25 years I've run my Learning and Development Global

sentiment survey for for 11 years I do a lot of writing and speaking in this field and I also work with the VC firm um emerge education which does early

stage checks for startups in L &d um so that's me filling the space while everybody else gets in place so we all ready to go brilliant so we've got a

Panel Introduction

panel which is fola Dugen from uh from Economist group and media house

Ventures Jamie from Jamie Bowmont from soapbox Labs yep and Ben or Ben words

from Bright time okay uh I'm going to ask them very quickly to introduce themselves I'm going to ask you to introduce yourselves very quickly with a

quick sh of hands so we know what we've got then we're going to launch into some

questions so F do you want to quickly tell us who you are great hi I'm Fila dougen uh as as um Don just said Economist I run Economist education and I also am an investment Committee Member at media house Ventures which is one of

Europe's largest edtech and future of work funds we do series a series B investing um and previously I've worked in digital transformation in the record business in publishing in media in newspapers and many other sectors but 10

years in edtech we had a great discussion earlier on about the he head days of do com boom and it's all it's all a bit familiar isn't it yeah yeah

yeah so I was my records when MP3 com and Napster were going live and I was head of digital for Europe and international so that was a really interesting time I had some great people in my office fantastic lots of

lawyers Jamie uh so I'm Jamie um I've sort of sat on both sides of the of the aisle over the last sort of five years in the education space um the last two and a half years I've been coo at Soak boox Labs uh it's an AI company that's

built speech recognition for kids um that is underpinning and going into a lot of uh educational product uh prior to that I was managing partner at Lego Ventures helping the LEGO brand um establish its thesis and strategy uh to

grow in the education space yeah I mean I'll keep mine short because I introduced myself earlier but uh I'm a partner at brigh eye we invest an early stage um edtech companies um

across Europe um I started uh my career in startups I spent 10 years in startups um uh at the beginning um had some successes and had some failures and then immediately prior to Bri prior to brigh ey I ran um The Venture fund for the

night Foundation which is a$2 and a half billion dollar Foundation based in Miami investing specifically in edtech and media startups I've been investing in edtech since 2010 uh which uh you know long before it was

cool awesome can I just can I just give a big can we give a big hand to the panel and also to Josh for putting together a pretty impressive panel here thank you Josh thank you panel all right

um I want to get a quick feel for who's in the room so I described myself as I mean I started programming computers when we called it programming literally

the machines I worked on an hour in the national museum of computing in Bletchley that's how old I am and how how little my programming is are any use

but I describe myself not as a technical person but an L & D person so if you if you're an a learning person you you think you're the learning person put

your hand up don't be shy thank you right uh go B old hand going straight in the air

fantastic if you think you're a technical person you can be both a technical person yeah okay so we got

technical got learning okay if you're more in education yeah okay quite quite a lot of education and if you think you're more

in the workplace than education okay so right we've got basically everybody covered there so we've got Fair representation for every group so we

just got to try to answer in such a way that that we'll touch base with everybody if possible all right

Discussion on Chat GPT and AI Impact

we've obviously got all set up right and we've asked questions beforehand we've been thinking about it the first

question that that I wanted to look at with the panel was we've we've all got a bit of a history in this we've been there we've done it we've we've seen

perception and my my big thing is how perception changes over time the big thing that changed perception was the end of November 2022 with the launch of chat GPT so what did that do what did the launch of chat GPT do for people's perceptions about AI what it can do what it can't do uh in general never mind just generative AI but AI in general because it seemed to blow everything up

do you want to start off then yeah I mean the context here is is uh you know I'm not asking for sympathy as an investor but empathy as an investor right um and so you have to think about um as somebody who's been investing in this space for a long time um you could for a long time afford to to sit um fairly far from the frontier of of um of technology and still um build big edch companies or invest in big tech companies because often the frontier was in some other industry and you were bringing whatever best practices were um in some other um industry and then you know adapting that for Education which is a relatively conservative industry um

I think what chat GPT did was bring the frontier directly into um education in a way that honestly um people hadn't most people in the industry hadn't before I mean obviously soac Labs soac slabs and others were out there in front but there there weren't a lot of people who said oh I need to be at the frontier and primarily that just cuz teachers and students were adopting it much quicker you know like immediately right and so um you know so one that that changed and then obviously um I think I think uh overnight basically everybody's boss whatever industry you were in was like what are you doing about what are you doing about AI so there's this tremendous bottomup um adoption and this tremendous top down pressure to be to to to um pay attention um and so as an investor what it meant is we started to pay attention um in a way that probably we we hadn't before um and um you know we talk about what that means but that's that's immediate impa that's great this

management my magazine thing is a real issue when the manager comes in says typically they've just got for playe and they've read a magazine on the plane and suddenly everyone's got to do what's on the front cover of Fortune or whatever or The Economist Jamie do you want to

just pick it up yeah so I think I AI has been around for a long time and we've all been subjected to AI in so far as like what you watch on Netflix is or what you buy on Amazon or um the way that social media hacks our attention is all built off of AI but chat G PT was this moment um where it became to the public attention I think one of the reasons it came to the public attention is because with natural language input um you suddenly make it accessible to everyone everyone can ask chat GPT a question everyone can see the response everyone can start to play around with prompts um and suddenly that that attention and the pace of change of that and the and the level of Engagement that you can get with that has captured I think a lot of um what is happening in the education space it's notoriously I think an industry which has been very very slow to innovate um and that for me is the thing that chat GPT has disrupted so the conversations we've had with a lot of our customers at soapbox over the last few years um well certainly over the last sort of 12 to 18 months is what does this mean for us um and now we see a sense of urgency to adopt and change our business models right and think about how we are going to do things over the next 18 24 six months to start to tap into this because otherwise we see it as a as a real threat to our underlying business model f do you get that same sense of urgency yeah I I well

yes I do so just to agree with my esteemed colleagues in the panels brilliant uh so just a couple of observations to add a CH GPT is a step change for Education very sucely put uh because uh AI is all of a sudden able to write and it's able to talk you know full sentences whereas before um in technology and educ ation it was mainly in providing Administration and um running schools and running lmss running LPS Etc but now but not so much actually in the teaching but now with chpt and L language models you can actually see AI being used really obviously and everybody can feel it and see it and themselves that you can use the AI actually in teaching and in the classroom which just where was immediately taken up so I think I think it has the ability to really um really shift forward the use of technology and that therefore the scalability and the democra democratize ability of education and and and be and Technology will really drive more powerful educating and more outcomes so I think it is really as a step chain for Education as far as it's being being word as investors I mean it's a different thing seeing seeing a technology and then turn it into a product or a service and a company and selling that to people and building a business that's a whole different CLE of fish and just because AI exists as we saw very well from the examples earlier on doesn't mean it actually is ready to be you know deployed at scale for high prices which is what you know we would want to see we want to see a model that actually people pay for I mean business model that people pay for I think I think it's a really cool thing I mean there's for people who want to use AI in learning and education whe education or in the workplace there's this gap between the promise and the extraordinary things you can do with jant GPT or indeed any generative Ai and the reality of use cases which seem very thin on the ground but it's it's always like that though there's always a Vanguard and then there you know the technology curves but there's always the Gartner hype curve there's always the Vanguard and then there's actually what's being used and then and then you've got education which is usually decades behind and most corporate infrastructure so there's always a long you know stretch a longer stretch between what's Leading Edge and then what's what's and I suffer this a lot of the learning Technologies conference because the the exhibitions on the ground floor you got a lot of people selling stuff and you've got the conference up here on the third and second floor and people always say darn the people on the exhibition floor aren't actually selling all the stuff we're talking about what's happening and of course what happens is three years later they are selling it but you've just got to catch up and of course then three years later the audience is saying well Don they're not talking yes okay but wait three years and they will be selling it there's always that lag isn't there let's talk about how that's affecting business right now by the way what we're trying to get to here is this sense of where are we going with the future as what Joshua referred to earlier this sense that what gets funded becomes the future not everything becomes the future future then what what's your success rate maybe 10% of companies might I me a great a great Venture investor you know you're right 30 35% fantastic all right okay

brilliant and the rest of them won't do but everything well they won't no they won will fail necessarily they won't be brilliant exactly but everything that is

in the future every company that is doing great work three five years in the future was a startup so what's going to be hot now that's what we're trying to explore here what's hot now that's going to be big in the future it's a different

Current Investment Trends in EdTech

environment now chat gpts raise expectations things are really hot and fast there's this urgency but also valuations went through the floor and suddenly people are having to operate a much different model it's not about capturing market share now is it it's about having to operate your business so

how is that affecting what is an attractive proposition now Jamie do you want to think about that yes I think um I mean the first thing I say like valuations are a double-edged sword if you get a valuation that is too high okay it's it's less dilutive at the early stage um but then you have to maintain all of the expectations through the cycles to do an up round and then another up round and then another up

round um but I think what the current environment has really done for startups is it's made people be very strategically focused um and improved operational execution um and made companies think about what is a business model here that will ultimately be sustainable um the benefit of that is you get really good um companies that have thought about their technology thought about their product those are the ones which will build

traction um what you can't do um and you know this is something that we've focused on a lot over the last couple of years um you know you have to talk talk about what you're not going to do as well as what you are going to do and what you can't do in in sort of the current environment is spend a huge amount of money um which is more expensive money than it used to be um chasing dreams and trying to buy traction when the product isn't there and when the fit isn't there so I think um there is a greater um a greater requirement on companies

that are growing Technologies there's a there's a much higher bar to and threshold to cross when talking to investors um and probably a better quality filter as a result I think that's that's from what I'm hearing that sounds right that it's harder to get the money but if you do get it actually you've got something something and you could probably run a business as well does is that

resonating um yeah I mean I I Echo everything you're saying I mean so the uh portfolio companies that we have of media house have now they're focusing on operating operational discipline focusing on you know what business are we in who are our competitors how do we compete how do we win those sort of fundamental questions and also looking at metrics that measure the business um but these are companies that have reached product Market fit and it's just a question of what their timing is in terms of the investment going into grow market share uh so it's not it's a

different thing from something that's at seed I think there's a lot of opportunity in seed still in series a if you're if if the product that you have that you think you have is a really good match with what the market needs and if you look at one toone Shoring or personalization learning where there is lots of proof that says one toone tutoring is actually the most effective way of teaching somebody something and you have a way of doing that well then you know that that that's that's going to be a big opportunity so I think there's still money going into really fantastic ideas very early stage uh really great entrepreneurs at different stages but there's still opportunity for dreams to to qu back to there still opportunity for can isn't that a great message to take away we're not stopping that but isn't a great message to take away there's still a chance to dream that's that's great to hear fantastic Ben what's your what's your view uh I

mean valuation specifically honestly early stage hasn't the valuations haven't changed that much um uh the bar is higher so you know on balance what it

takes to get funding um has has changed a bit and certainly you need a story about AI your story can be AI doesn't affect us at all I mean that's an that's

still an okay story honestly these days it's a pretty sexy story um but like but like um you know because honestly AI I mean this is not the subject thing but

like if you think about it um nfx is a venture fund out of Silicon Valley one of their quotes that I like quoting recently is is that AI is magical but it

is not your competitive mode right like it is not your competitive mode right like there are these huge companies you saw they're making this technology

available to everybody right so so if that's what you're building your business on and that's it it's really really um uh you know is very uh easy to

get competed away um and so so you know to some extent if you can say hey look this has nothing to do with AI that's really sexy because then I don't have to

worry about how many other people are trying to build this thing at the same time you are um uh so so a long way of saying sorry to get back to your

question um seed valuations haven't changed that much later stage valuations have changed a lot they've come down um a fair amount um and um the bar for

getting um later stage funding is quite high and has things to do with operation you know profitability unit economics product Market fit say the number one

reason you know companies die is because they think they have product Market fit and they don't and they spend against something that they actually don't have

um that can be true honestly sadly at series a and series B um as it it's less um common but it is it can be true much lighter stage right um and so sorry just

and then the one exception is AI companies right like AI companies but like really truly AI native companies um you know are are you can ignore

everything I just said right um um but um often in the learning field you know there are companies that are growing quite quickly on the back of AI but

usually it's you know real Revenue based and there is still Revenue multiple even at later stage so thank you in a minute I'm just I'm going to ask everyone to

wrap up with a just a quick view of what what would they what do they think is the horse to back or what would they be excited about looking at where should

people be thinking about to V in stuff for the future but we've got like four minutes and I always run to time and this is my favorite app nothing to do

Audience Q&A and Panel Discussion

with nothing to do with the AI it's called The Big Clock app which I used to keep me on track it gives you a big clock uh does anybody have a question

they'd like to throw at the panel about what's happening there isn't a question

about what would you set up as your Ideal Company because that's what I'm going to ask got a man right at the back

yes please yeah something we haven't discussed tonight and I actually think it was a sh in in in the l space was right and the idea of working and how

that is fundamentally changed the approach I'm interested in in the panel have the same this mix of you know this

remote working or remoteness yeah and not in the classroom space and Ai and is that a factor in I'm I'm going to take

that and I'm just going to add something to it to to the panel if I may um because my own research um Global

sentiment survey which I'm launching tomorrow shows there was a pandemic effect in terms of people's sentiment

during the pandemic there was a lot more positive feeling about coaching and about social learning which then faded

away after the pandemic so it's almost like we dis rediscovered Humanity only to forget it as soon as we came out of

lockdown so the pandemic lockdown had an effect it has prompted much more remote working and we've not gone back to 100%

classroom delivering is that a disruptor is it an opportunity what is it well it accelerated the um the exceptions of

online learning at all levels in the organization yeah so so then so senior learning and working as well learning

and working yeah and and I think the fact that and then they with that with the sustainability arguments as well in

companies now have people are sticking to more remote learning uh Zoom learning and that that then pushed the pedagogies

for online learning to to to raise their game and um and and you know and then that opened up that premium market for

online learning so that's I think that that's been just disrupted the online learning space in

that sense generally for the good actually I think yeah Jamie yeah so I think um there is an aspect of um online

or asynchronous learning which is great for convenience um but you lose something

certainly from a motivational point of view when you're doing something on your own and you're doing something that is

perhaps linear or passive consumption of content I think what we're getting now and where AI is going to start coming

into the picture is trying to make that content more engaging and less passive um more tailored to you and more um

interactive and iterative in the way that you learn um and to Don's point of earlier like there's a threeyear lag

between what's happening over here and what's being sold over here um I think you know the Confluence of of those

factors is going to come together over the next couple of years and there has definitely been sort of a pandemic

effect and then a reversion back to the mean um but I think with AI now coming into the mix that has the opportunity

over the next 3 years to start filtering in and making some of those asynchronous learning experiences um more motivating

more engaging fascinating really good points SP very quickly uh no I mean I think I agree with everything that was

said I think a or sorry Co created a lot of false signals unfortunately right um and so particularly in K12 space um

where everybody's like oh we're just gonna learn online forever now and it turns out kids are still kids and that's

not really a good format for most um kids um I think for for work and University learning um probably it's

more a lot of that stuff um sticks a bit more but I I do think the engagement piece um that main like negative thing

that came out of um Co was people were you know willing to engage in stuff when they were locked in a box but the

engagement um um didn't last much longer um and so so I do think like AI is potentially the way out of that but you

know anyway that's the the big challenge the big challenge in my picked up on the survey when during the lockdown was

people saying we are really struggling to engage people they've all got Zoom fatigue that was the constant theme that

came through so it it had a real effect great question thank you so much we are at time going to ask our panel to wrap

Panel's Investment Insights

up in 30 seconds if they could invest in or build or just look out for something that was a really good idea or a theme people should adopt what would it be and

this is all gold right you can go away take these ideas and invest them straight away gu funding absolutely

absolutely so Ben what what would you what would you start with what would you get my 30 seconds my takeaway from uh

investing in learning for you know almost uh better part of 15 years now is um people don't like to learn as much as you think um Unfortunately they love

knowing stuff they hate the the the banging their head against the wall and being wrong most of the time which is what learning is um and so if you have a

way um to motivate um folks um um to get through that banging of the head then i' would be super interested I that is worth videoing by itself perfect yeah

Jamie um so for me I think um Mo has been mentioned already uh it's about finding somewhere where you've got a moat where you're bringing value that no

one else has and that comes from proprietary data sets that can't be easily replicated um so for us at

soapbox um we were built all of our technology was built on a library um of kids audio you cannot go on the internet and find and search for hours and hours

of kids audio so what we had was unique and couldn't be replicated and that's why it had value perfect so unique data

motivation uh so I would go for skills because I think skills are absolutely fundamental so I'd go for really imass of skills onet to one training all

provided by technology and just scale that because I think that'll be brilliant and that oneto one training using some of this person one two one

two one two AI one two AI wow one two whatever yes but but a scalable thing digitally scalable yeah yeah that's so effectively coaching coaching SL yeah

especially tutoring coaching Absol but a structured way you know m to the the person indiv individualized yeah absolutely I do watch this field a lot I

I'm deeply involved with that I think this is all super advice and I recommend you take it I want to say a big thank you to our panel I'm going to hand you back to Josh thank you everybody