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.
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.