Company Spotlight: Argos Education

A digital-first education publisher, focused on student outcomes

Sep 11, 2021

Happy Saturday!

This is the second of two spotlights on recent angel investments I’ve made. The first, featuring Nectir, can be found here. Slight Substack snafu yesterday, so this turned into a Saturday post rather than Friday.

I’m going to return to Sunday news round-ups for the foreseeable future, but am thinking about other ways this newsletter could grow. I hope you don’t mind seeing more experiments in the months to come.

With that, lets learn a little bit more about Argos!

What is Argos Education?

Argos Education is a digital publishing platform for education, built to allow author autonomy while safeguarding student outcomes.

There are two ways Argos diverges from the current education publishing market:

Allows authors to independently publish courseware replacements for textbooks: Today, the market for authoring textbooks is monopolized by a select group of professors and almost completely inaccessible to newcomers.
Allows instructors to source course materials in real time, according to the needs of each course: Today, instructors are forced to choose between expensive publisher materials and fragmented Open Educational Resources (OER), with limited ability to alter course based on how their class is performing.

Launching in early 2022, the platform will enable a prospective course author to log on, build a course leveraging Argos’ modular building blocks, and receive software-generated feedback on their course. The course (or individual customized building blocks) can then be offered in the Argos marketplace for use by other instructors — and be purchased by students.

Conceived by grizzled industry veterans (*ducks*) Curtiss Barnes and Michael Feldstein, Argos is on a mission to bust open education publishing, an industry in which three of the four largest companies were founded in 1844, 1888, 1808. The fourth, young upstart Cengage, is a juvenile 62 years old.

Argos is on their way to mounting a credible challenge to these giants. Importantly, they are doing this in collaboration with universities and university partners rather than in a silo. Argos’ product is built on an open-source framework leveraging resources from Carnegie Mellon, Arizona State University, and Unicon. Just yesterday, they also announced their first institutional investment from Western Governor’s University.

Argos has the potential to host a proliferation of new learning materials and is on pace to serve 100K+ students in 2022. The incentive to create and test new materials could not come at a better time for an industry that only recently prioritized digital materials and struggles mightily with digital outcomes.1

Now that you know a little bit more about Argos, let’s talk about the three things I consider when looking at any Angel investment: People, Product, & Market.

People

One of the most important recent trends to hit company-building is the power of having a strong user community. While Curtiss and Michael are impressive in their own right, the community they are building is even more powerful.

Any mention of community has to start with Michael’s blog, e-literate, which I, and 12,000 others, have been reading for the past 16 years. Michael’s dedication to being a champion for students and for learning science have earned him respect on both the academic and industry side of EdTech.

Additionally, for the past ~6 months I have been attending “Blursday” happy hours on Thursday afternoons, hosted by Curtiss and Michael. While not associated with Argos, over 800 different people - university leadership, public EdTech company CEOs, SMEs on Learning Science and AI Ethics, EdTech investors, you name it - have dropped in on these sessions, contributing to a conversation I now actively carve time out for each week. If the Argos team can channel even a little bit of this energy into product evangelizing, they will be off to the races.

In a more traditional business development sense, Curtiss and Michael have - using dark arts previously unknown to the EdTech sector - also found a way to bring 3 of the largest and most reputable universities in the US together in a common cause. Carnegie Mellon, Arizona State, and Western Governor’s have all agreed to lend technology, become pilot adopters, and/or invest in Argos.

Product

One of the hardest parts of building an EdTech product, particularly one in the Higher Ed courseware market, is balancing user demands for privacy and interoperability with a feature set sufficiently differentiated that a professor will change a course shell they have been using for 20+ years.

Argos found two partners to help solve this problem - Carnegie Mellon University (CMU) and Unicon. Through CMU’s Open Learning Initiative (OLI), Argos built their product foundations on top of decades of digital learning research valued north of $100M. Through OLI, Argos’ platform building blocks will launch with the flexibility to handle mastery learning, game-like experiential learning, and any number of additional pedagogies.

Through a joint venture with Unicon, one of the most experienced EdTech development shops in the US, Argos immediately put OLI’s technology to work in a product with all of the important privacy and interoperability standards pre-built.

By leveraging CMU’s technology and JV-ing with Unicon, Argos effectively skipped years of thankless development work to get to a product that will be deployed at scale this January, ~12 months after development began.

Market

Publishing is one of those industries that everyone kind of knows is big, but rarely thinks too hard about. In Argos’ case, the way I estimated the size of their initial market was by looking at them as a simple textbook replacement.

I considered the ~20M full-time equivalent students in US Higher Ed taking 4 classes per semester and enrolled in 2 semesters per year, or 160M textbooks needed per year. Now, a student doesn’t necessarily use a textbook for each class, so you might haircut this number to 80M, or even 40M, to be conservative. At an average price of $60 per license from Argos, that equates to a $2.4 - 9.6B initial market.

A brief note on textbook pricing: A new physical textbook can cost as much as $300-400 and much of today’s discussion of textbooks centers around the Open Educational Resources (OER) movement. I am a fan of OER, but think it makes the conversation too black and white - do you support affordability (via OER) or product innovation (via the publishers)? Argos effectively straddles this line by letting authors choose both OER and paid materials and set their own prices for each course / building block.

If you don’t believe the math on my napkin, you can think about Argos taking a small slice of the global education market, which HolonIQ estimates at $140B across HED and K12. Either way, I believe the market is large enough to answer the question I ask when considering an investment - “Is it crazy to think that the company could grow to $X size by Y time in this market?” In this case, $X is $1-2M and Y is their next fundraising round in 12-18 months.

There are, of course, a number of other questions you could ask about this market:

How have the incumbents adjusted their strategy due to COVID?
How are newer, publisher-adjacent players like Chegg already shaking this market up?
What role do traditional OPMs like Coursera, 2U, and Noodle play in this market? How will that change?

For me, these are all important questions to ask. But, having the opportunity to work with a team that knows this space and has built a beautiful, scalable product in < 12 months outweighed any concerns I could come up with.

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Normally, I try to stay un-biased in this newsletter. In this case I am, pretty obviously, quite biased. For a list of other biases that might creep in, see here: