Rise and Fall of Kno EDitorial EDUKWEST

The Rise and Fall of Kno—In Search of a Solution without a Problem?

Last Friday we learned from Intel Education that it acquired digital textbook maker Kno. The sum was undisclosed and the announcement itself pretty short. Intel is excited to welcome the team to the family and happy to integrate the 225k textbook titles to its offering.

The acquisition of Kno boosts Intel’s global digital content library to more than 225,000 higher education and K-12 titles, through existing partnerships with 75 educational publishers. Even more, the Kno platform provides administrators and teachers with the tools they need to easily assign, manage, and monitor their digital learning content and assessments.

The Hard or the Soft Way

I have been covering Kno from pretty much the beginning, when they were still a hardware company. Back in 2010 Osman Rashid introduced the Kno tablet, two giant touchscreens, at the D8 conference. To give credit where credit is due, Rashid and the team were among the first startups who saw the potential of tablet devices in education. And who knows, it might have worked out if Apple did not introduce the iPad a few months later.

Based on the rapid success of the iPad, Kno first wanted to introduce a smaller one screen only tablet but then completely pulled out of the hardware space. Shortly after that, I had the chance to interview Osman Rashid for EDUKWEST. When I asked him if the iPad launch was a setback for the startup. He answered,

“Our long term plan was to be a software company but we were building a tablet because we said in order to prepare education forward somebody has to do something dramatic. And we said we are the kind of company who would go and take that risk.

But we really built our hardware and software platform independently from each other that we were able to strip out the software really fast and to port it to an iPad. And for us internally it was really never a “Oh my god, the sky is falling. What’s gonna happen” because we always said by end of 2012 the dominant player in our financial model would be other tablets, not our own. And we were excited to exclude everything to 2011 what’s competing with the hardware because we didn’t need to.”

Apple’s Second Punch

At that point Kno had raised another funding round to accelerate its growth as a digital textbook platform. But shortly after that Apple had another bad surprise for Rashid and the team. In early 2012 Apple announced its entry in the textbook space. In an interview with TechCrunch, Rashid stated, “We love the fact that so much light has been put on digital textbooks. Now we will fight on who has the better product, more interactive features, and a bigger catalog.”

Fire Sale

Today it is obvious that Kno has lost the fight. According to Om Malik the company was acquired for $15 million which is even less than the $20 million Intel Education itself had invested in Kno participating in the Series C round.

As Om Malik points out, this fire sale is a massive blow to some of Silicon Valley’s top venture capitalists including Andreessen Horowitz, Ron Conway, First Round Capital, and GSV Capital among others. For Intel Education, it could be a bargain.

A Bargain for Intel Education?

Back in April 2012 Intel launched its Studybook tablet. Christopher Dawson of ZDNet was pretty impressed by the device and the ecosystem that Intel Education was working on, stating in an article, “I can almost smell the holy grail…the right hardware, the right ecosystem, the right price. Intel has hit a home run with its Studybook.”

Now Intel Education can add over 225,000 digital textbooks in K-12 and higher education to its ecosystem, which makes the tablet much more interesting and useful than other dedicated devices like News Corp.’s Amplify tablet. Through the library, the Studybook is on par with the iPad and Android tablets in terms of content.

Om Malik closes his piece on Kno with the conclusion that Kno was simply a startup that had a solution to a non-existing problem. Neither textbook publisher nor students felt that there was a need for radical change.

In fact, one of Kno’s main competitors, Inkling, also struggled with its original offer to publishers. The startup then introduced Inkling Habitat, a platform that publishers can use on their own and now seems to be on a stable track to success.

Chegg’s IPO

All in all, the acquisition of Kno by Intel Education came out of the left field. I always anticipated that Kno would be acquired by Chegg, the company Osman Rashid co-founded prior to Kno. Interestingly, there was a period when Kno actually looked like the future of Chegg. But through a number of acquisitions Chegg slowly but surely pivoted away from the dying business of physical textbooks towards a central hub offering a suite of web-based services for students throughout the year.

And just five days after Kno’s end as independent company Chegg will go public. With its IPO on Wednesday, Chegg aims to raise $172.5 million.

First published on edcetera – straight talk on edtech.

Kirsten Winkler is the founder and editor of EDUKWEST. She also writes about Social Media, Digital Society and Startups at KirstenWinkler.com.