EDUKWEST Sunday Review

Sunday Review: Viki acquired for $200 million, Textbook Scam and Socratic Soap Opera

EDUKWEST Sunday Review

Rakuten acquires Viki for $200 million

The first time I heard about Viki was when Darien Brown, back then co-founder of YongoPal, told me about the startup off the record. That must have been in 2010 or maybe 2011, a long time ago if you count in startup years.

Back then, they were working on the angel round with Dave McClure’s 500 Startups and Darien said that this would be huge. Actually Viki already was kind of huge back then, showing tremendous community growth.

Viki is a great example for the power of communities around shared interest and content. Users spending hours on the platform to translate TV shows and other videos including time tagging the subtitles. Of course, there are also users who take care of quality control etc – all non-paid work. The return is basically the work of the other users and Viki’s growing library of content.

We wrote a review of the site over on Fair Languages if you want to dive deeper into the process of translating South Korean soap operas.

From the business point of view Viki is probably one of the startups that followed the rule “it’s easier to ask for forgiveness than for permission”. Instead of trying to make deals with the content owners from the start, Viki proved that they could add value by offering crowdsourced translation services based on (probably illegal) content on the Internet. Thanks to Viki’s huge community the platform can now offer translation services not only at a competitive price but also in a short period of time.

It is hard to say what Rakuten is going to do with the platform and its community but the power of such a global network of unpaid translators is pretty disruptive. So it’s no surprise that Google was among the potential bidders though I predict that Duolingo is their acquisition target.

Textbook News

Here is another reason why some people don’t want physical textbooks to go away: you can make some nice cash on the side. Students have sold their used textbooks to the next generation for decades, something that won’t be possible with digital textbooks as most models now involve time limited rental and DRM.

But that’s not the story of the week. Between 2008 and 2010 at least four school districts in Los Angeles were victims of a group of school librarians, office technicians, a campus supervisor and others who sneaked out textbooks only to then resell them to the schools they originally came from in some cases. All in all the group cashed in around $200.000 before they got caught. Corey Frederick, a “businessman” and the mastermind behind the scheme now faces 19 years in prison.

In other textbook news 9to5Mac reports that iOS 7 is going to feature textbooks in the iBooks store. Lately, there have been quite some reports on how people use their smartphones and interestingly more people read books on phones than tablets. So adding textbooks to the mix makes sense, I guess. End of July digital textbook platform Inkling debuted their iPhone app.

The Socratic Labs Soap Opera

Last but not least, I want to talk briefly about the Socratic Lab train wreck that played out over the week. If you are into this kind of stuff (I admit that I have enjoyed the drama quite a bit) you should definitely go back and read the post that started it all on David Cohen’s blog.

Here is a short rundown of the events. Cohen published an anonymous email in which a founder describes his/her horrible experiences in another incubator in juicy details. Although Cohen said he took out all the identifying content of the email it took the Internet basically no time at all to identify the accelerator in question, New York based Socratic Labs, the awefull director, Heather Gilchrist and the anonymous founder, Julian Miller of Learnmetrics. The story was so effed-up, it even made it on Valleywag.

Now there is of course a lot of he-said-she-said and I cannot judge who is right, who is wrong and what actually happened at Socratic Labs. But one thing’s for sure: this is a clear sign of an edtech incubator bubble.

Betsy Corcoran pointed out in her piece on edSurge that

Very much like many startup companies, Socratic has been a “lean startup.”

I think, this mindset is a recipe for disaster and comes close to the saying “The blind leading the blind”. Sure, another saying tells you that it is enough to be the smartest person in the room but in this situation that was clearly not the case, at least not for Julian Miller.

You cannot run such a program coming from a startup and simply hope for the best. At this part of the post I wanted to point out that Socratic Labs could possibly learn something about web design from their incubated startups etc, but interestingly the website now redirects to Socratic’s much better looking Angellist profile. A pun lost.

I am sure that this won’t be the last story about the rapidly growing accelerator and incubator scene. Places are limited in the established programs while the number of edtech founders is growing.

Kirsten Winkler is the founder and editor of EDUKWEST. She writes about Social Media, Digital Society and Startups at KirstenWinkler.com and the future of learning at Disrupt Education. You can follow her on Twitter, Facebook or Google+

  • gilchristh

    Hey Kirsten,

    I’m disappointed that you, like so many others, have decided to make a snap judgment based on one unverified voice. I think you’ll find information emerging in the days to come that might change your mind. It’s a shame that so many people took this as an opportunity to pin their own baggage to it. I have certainly extracted several valuable lessons from the situation, and I hope before it ends that others do, too.

    • http://kirstenwinkler.com KirstenWinkler

      Hey Heather,

      thanks for your comment. I took the time to follow the events over the week, read your opinion piece on edSurge, read the comments from the other folks so I won’t say that I made a snap judgement.

      As I said, I can’t comment on the actual events at Socratic Labs – the whole issues is more or less a soap opera, anyway. But you clearly showed that you are on top of the things, got engaged in the blogs and trenches and presented your point of view.

      My main point is that I don’t believe that accelerators or incubators should be run as “lean startups”. I believe that there is more value when the team is far ahead of the startups and even comes from other areas like classic publishers or Fortune 500s.

      But of course I could be wrong – if you like you could share your thoughts on this (accelerator lead by startup folks vs. established players) in an OP-ED on EDUKWEST :).

      • gilchristh

        Happy to chat, and definitely to consider sharing more. In short, my
        opinion is this: it’s not up to me to tell a company what to do or what
        not to do. It’s my job to open up as many doors as possible, doors that
        might take them many months or even years to find, let alone open. My
        goal is to build relationships that I can then plug them in to, and
        create systems that help them keep costs low and productivity high. What
        I have done or not done is irrelevant, so long as I can help them get
        more opportunities more quickly. Ultimately, what they do and how they do it is up to them.

        If you want to chat more, I’m heather@socraticlabs.com.

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