Uber, Airbnb, Top Hat

A successful edtech startup founder discusses big changes for higher education.

INTERVIEW | by Victor Rivero 

CREDIT Top Hat Mike Silagadze.jpg“Let’s make education better.” That’s the simple idea that brought co-founder Mike Silagadze (pictured) and Mohsen Shahini together to create Top Hat. Being engineers, they couldn’t resist fixing things – and they agreed the classroom needs fixing. Under their leadership and vision, Top Hat has become top-of-the-market in student engagement software, used by millions of students at three-quarters of the top 1,000 colleges and universities in North America. Mike is an active speaker and lecturer in the higher education, technology and startup communities, having lectured at the Rotman Commerce Entrepreneurship Organization, the ASU GSV Summit, MaRS, Tech Fest Toronto, SAAS North and T­E­Dx­Laurier­University, among many others. He holds a B.Sc. in Electrical Engineering from the University of Waterloo. In this conversation, Mike demonstrates how his company is filled with smart people driven by the clear mission to improve education.

Mike: One of the things that I wanted to make sure we get a chance to talk about, one of the more exciting things that we’re doing is our foray into the publishing phase, and in particular, taking on the textbook publishers and trying to create a unified platform that creates an open marketplace for educational content, to replace what those publishers have been doing with their traditional textbooks. So I’m happy to answer questions, and to give you an overview of how that came about, and everything else that we’re doing.

Very good, then let’s start with what prompted you and Mohsen to found Top Hat back in 2009 in that small apartment near the University of Waterloo in Ontario? What problem were you originally trying to solve? And is that the same problem that Top Hat still solves, at least in part?

Mike: Yeah, for sure. In the beginning—I’ll go back to what the motivation was for starting Top Hat and maybe talk about the broader market that we’re trying to address. When we were first starting out, the motivation for starting the company came out of my experience in undergrad, in Engineering in particular, where the course environment, both the lecture experience, the course material, everything about it — was out of touch with modern students.

The experience was passive, it wasn’t very engaging and, after a pretty short amount of time, within the first one or two semesters, most students didn’t even bother showing up to classes and studied on their own—which I felt was a pretty sad state of affairs, given how much money was being spent both by the students on their university education, and the money that was being spent by the universities in bringing on these courses.


What changed was that smart phones and laptops and mobile technology has become so ubiquitous that it became possible to transform the educational experience from being really passive and not particularly engaging into a radically different experience that was in sync with students’ lives outside of the university environment. 


And what changed was—I should say, even though everyone recognized that this was a problem, I certainly wasn’t the first person to identify these issues. Everyone knew this was a problem. There really wasn’t a ton that you could do about it. What changed was that smart phones and laptops and mobile technology has become so ubiquitous that it became possible to transform the educational experience from being really passive and not particularly engaging into a radically different experience that was in sync with students’ lives outside of the university environment. So that was the motivation for starting the company.

Excellent—then you pulled in some other folks to join with you, some other very driven, very talented people. What were you looking for in building your team in light of your values and the mission? How did you recruit others?

CREDIT Top Hat image.pngMike: There was a general frustration that people had with their own university experiences, where they’re expected to having to pay really high prices for their text books and having this frustrating and not very effective educational experience in most of their courses, so many people were just able to relate to the mission of trying to create a better educational experience and to save students’ money on their text books and course materials. That’s one of the most important things, I would say, and beyond that, being very selective in hiring people. That helps to create an environment where the best people want to work, ’cause good people want to work with other good people.


There’s a graveyard full of education technology companies that had products that were awesome, but just couldn’t figure out how to get them through.


You’re really an edtech startup success story—what elements do the successful ones have in common?

Mike: One of the challenges that many young tech companies have is they create a good product, something that does solve a problem, but they can’t figure out how to actually turn that into a real business. There’s a graveyard full of education technology companies that had products that were awesome, but just couldn’t figure out how to get them through. I think that’s one of the biggest challenges in the education space, is it’s such a difficult market to sell into. And people often have this kind of utopian perspective on it. They think that by just creating a product that gets a ton of teachers excited, that that’s enough. The reality of it is, the revenue model is essential.

One of the keys to success for Top Hat has been effectively, we all always thought carefully about our business model, and we were able to figure out how to go directly to professors and students and drive adoption, rather than being bogged down in very painful university-wide institutional adoption decisions. So, one of the keys to our success has been figuring out a business model to go directly to professors and students.

You talk about active learning. Isn’t most learning at least aspiring to be active learning? Perhaps you could address what ‘active learning’ means?

Mike: Yes, certainly. Everyone wants to—active learning is not some new concept. It’s been around for probably centuries in one way or another. The challenge is that historically, without the aid of technology, implementing active learning was very expensive because you needed to have very small professor-to-student ratios. Whereas, with technology now, you can use smart phone, laptops and other mobile devices to enable professors to create an active learning environment in their course.

CREDIT Top Hat image2.pngExamples of active learning is taking the traditional text book experience, which is very passive and even in most electronic versions, it’s still a very passive experience—so what Top Hat does, is create an active experience with the text book or whatever material by embedding in it assessments, videos and interactive elements so the student isn’t just passively sleepwalking through the blobs of text. Instead they are engaging with the material, and they are actively interacting with the content.

Similarly, with the homework and with the in-class experience, instead of just passively sitting there, the students are interacting with the professor and with fellow students during the course of the lecture, and that radically transforms both the outcomes and the students’ enjoyment of the material.

Is this sometimes akin to a game-show style format? Is that fair to say, or is it a lot more than that?

Mike: When it comes to the textbook experience, there are a couple core components there. The first is embedded interactive elements like videos and various demonstrations. Instead of just reading text on their laptop or mobile device, the students are watching these videos and interacting with these elements. For example, in a chemistry course, they might be asked to draw a chemical or molecule. There’s also embedded assessments where the student might be asked to arrange a few components to see how they fit in, or they might be asked to do multiple choice or a word answer type question, fill-in-the-blank and all kinds of other activities, as they’re going through the material. And in real time, they’re getting feedback on how they’re doing, so they get a sense of, “Am I understanding this material? Am I developing a mastery of it?” So that’s a really important part of the experience.

In the classroom, there are various activities like discussions and games that the students could play, which I guess could resemble a game show, but I would say it goes beyond that, in that the activities can be more sophisticated, like tournaments and interactive exercises in the classroom, it really transforms the experience into something that’s much more active.

How is it watching an idea grow into a real-life company with tens of millions in funding? Would you say there’s a bit of a culture shock there? Are there repercussions from such a rocket ride, and would you even characterize it as a rocket ride?

Mike: Yes, it’s been a pretty awesome experience. Certainly, the most exciting aspect of it is solving the problems that I had as a student. My experience, as I mentioned, was that I found that the textbooks were really dull and not very engaging, the lecture environment was pretty passive—so just being able to watch millions of other students get a different, more engaging, more active experience, and to have them save money on their course materials—is very rewarding. That’s been pretty exciting—and, just going through the journey of different scales: from a handful of people all the way up to hundreds of people now. The role of the founder changes pretty drastically as the company scales, and that’s been a really fun experience as well.

Some companies get someone experienced in leading larger groups, in others the original founders grow into the role; it may be very different being in a startup situation as opposed to running dozens or hundreds of people.

Mike: Right. For sure, yeah. Absolutely. Not everyone can do that.

And you’re doing it. Alright, on to another question: what are your thoughts on education these days?

Mike: I guess that’s a pretty broad question. I’ll talk with it, and lay out what we’re trying to do. Historically in the higher education space, the market for course material has been dominated by the textbook publishers, and for professors, the publishers these days do a lot more than just provide the textbook. They provide them with the book, the test that they use for their assessment, with a homework system that they can use to assign online homework to their students, with PowerPoint slides — and whatever they need for their lecture, and so on, and so on.

CREDIT Top Hat image3.pngThe publishers have been, historically, the trusted adviser to the professor for all their course needs. The challenge with that is that the publishers are not technology companies, so what they’ve done over the years is they’ve acquired a variety of different elements and they’ve tried to cobble them together in to some sort of offering, which right now is very poorly integrated and massively overpriced, and just creates a really bad experience for students. It’s a sad state of affairs.

And most people complain about the cost of tuition prices going up, where the price of textbooks and course materials have gone up even faster than that—three times faster than the tuition prices. So, it’s a really bad situation that we’re in. That’s a core frustration that I have as the founder of Top Hat, and our mission is to address that.

And we think the way to solve that is to create just one integrated platform that includes in-class engagement, online homework and interactive textbooks, and allow professors access to a marketplace where they can collaborate and develop interactive content together.


The way that interactive content has been created and delivered is massively outdated and overpriced, and we’re trying to fix that.


That’s ultimately what Top Hat is trying to create, is this interactive platform that operates an integrated teaching experience, from the in-class to homework to the interactive text. So my view on the education space is that the way that interactive content has been created and delivered is massively outdated and overpriced, and we’re trying to fix that.

You’ve answered this in various ways already, but as we are EdTech Digest, I’d like to provide you with an opportunity to directly address this question: from your perspective, what is technology’s role in education? 

Mike: Yeah. I can easily talk to that, give a little bit more color on the marketplace, which is what we’re excited about. If you look at other industries, like hospitality or transportation and many others, we’ve seen a transformation in those industries from a centralized model to a peer-to-peer, decentralized model.

I’ll give you specific examples around that. With transportation, what you’ve seen is taxi companies, which are centralized and operates and delivers services to people in the cities, replaced with a model like Uber, where instead of a centralized entity that owns the inventory of vehicles, Uber just connects drivers to passengers together through a decentralized platform.

And you’re seeing the same kind of thing in hospitality with Airbnb disrupting the hotel industry. Where previously, hotels have owned this inventory and delivered a service, whereas with Airbnb, what it’s doing is enabling people to share their own inventory of homes to create a better experience at a lower cost for users.

So, you see these moves in disrupting the currency industry, going from a central bank type model to a peer-to-peer, decentralized currency model.

You see these shifts happening across the board.

CREDIT Top Hat image4.png

And I think that a very similar shift has to happen in the textbook publishing space, which is where, instead of publishers owning the textbook and spending huge amounts of money developing these books in a centralized process, what needs to happen is a peer-to-peer model, where professors can collaborate with each other to develop that content and deliver that content to their users without most of the revenue going to some intermediary like a textbook publisher.

And that’s what Top Hat is trying to create with our content marketplace, on top of this platform, this teaching platform that we’ve created.

I think that’s going to be an incredibly powerful transformation in the education space, because it radically changes the way educational content is being created. I think that’s going to be a huge trend in the education space, and we’ll make a massive impact.

So we’re super excited about that.

Wow, I’m really glad I asked that question. This is fascinating. You’ve shared your insights across higher education to tech and startup companies. You’ve talked at ASU-GSV and elsewhere, give TEDx type of talks; any words of wisdom to entrepreneurs in the edtech space? Any key points you might want to articulate to them here?

Mike: With the education technology space, one of the most important things, as I mentioned, is figuring out how to go to market. My words of wisdom would be that rather than starting from a product-first approach, a better approach is to first figure out the problem that you are trying to solve, and the way that the problem is going to translate into a business model. [Not doing that is] what kills most education technology companies, I would say.


I think that’s going to be an incredibly powerful transformation in the education space, because it radically changes the way educational content is being created. 


That is helpful. Who has been helpful and inspiring to you? Who are your inspirations?

Mike: I’d say a lot of the traditional inspirations that most entrepreneurs in general have. Specifically, folks like Elon Musk and Larry and Sergey at Google. Those are always — I kind of look to them as companies that we try to emulate. And we’re making a really big difference. We’re a very mission-driven organization, and at the same time, we’re building really large business.

Does your Electrical Engineering mindset of looking at problems and coming up with solutions inform your current work? In other words, did your degree and your own higher education work out to be useful to you in leading a successful company?

Mike: I would say in a very broad sense, an engineering mindset helps, but I would say I wasted my electrical engineering education. Most people who study engineering end up doing something different, and end up going into software in one form or another.

Do you regret that?

Mike: No, it was a great education. I don’t regret it.

Victor Rivero is the Editor-in-Chief of EdTech Digest. Write to: victor@edtechdigest.com 


edtech-awards-2017-white-header.pngTop Hat is a 2017 EdTech Award Winner for “Best Higher Education Solution”. The 2018 EdTech Awards program is open now, click here for a 2018 entry form.  


 

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