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Last year we moved to a new neighborhood. As with all moves, there’s some acclimating, like locating a new dog-walking route, finding the closest bus stop to get the kids to school, and figuring out where to go food shopping. Fortunately, groceries aren’t a problem. Our new house is minutes from Ralph’s, and 10 minutes from Costco and Trader Joe’s, home of the much loved rolled chili & lime tortilla chips and dark chocolate covered almonds. But shoppers beware! According to a dutiful employee now posted to the top of the Trader Joe’s shopping cart escalator, thanks to some missing teeth in the gears, three shopping carts recently flipped over on the descent, spilling groceries everywhere and making a monumental mess of the mechanism.
But it turns out we had one more proximate option. Driving in the other direction, I noticed a grocery store with Amazon Fresh plastered across the front. Exciting news for this loyal Prime customer! I pulled into the parking lot, eager for a new shopping experience.
It was definitely new, like no grocery store I’d ever visited. First, it was impossible to find anything. Aisles seemed organized by an insane algorithm. Plus they were marked inaccurately or not at all. The food itself was piled higgledy piggledy on the shelves (higgledy piggledy, not Piggly Wiggly; Piggly Wiggly is a Marie Kondo masterclass in comparison). And what was in the piles was bizarre. I didn’t recognize any of the brands. Not because Amazon Fresh had store brands. They just seemed off-label, as if food companies didn’t want their actual brands appearing in this retail hellscape. One grocery consultant described Amazon Fresh’s offerings as “eclectic.” Further complicating my shopping trip, “Fresh” was a misnomer. Most of the produce looked awful – spoiled or on the way. And while I didn’t dare buy meat, other customers have gone on record about “deli foods… either not being labeled correctly or… intentionally sold past their ‘best by’ date.”
The whole point of Amazon Fresh was technology: smart carts that allow shoppers to Just Walk OutTM, a smart cart that would save you from the checkout line. (Clearly food itself was a secondary concern.) And yet during my visit, the technology wasn’t working, which somehow made it impossible for the cashier to ring up posted discounts. Although I never visited the Soviet Union or shopped there, I feel like I’ve done both after visiting Amazon Fresh.
So it didn’t surprise me in the slightest when Amazon announced in January that it would close all 60 Amazon Fresh stores in the U.S. What was surprising was Amazon’s accompanying statement attributing the closure to never quite finding “a truly distinctive customer experience”; years from now, I may still have nightmares about the distinctive Amazon Fresh customer experience.
What is it about tech giants that makes them think they can do anything? Probably because that’s what their billionaire founders think. They go grocery shopping – or at least they used to – so of course they can design a better grocery store. But while a bad grocery store can ruin an afternoon (or escalator), it’s unlikely to ruin someone’s life. Unlike schools, and therein lies the risk. Because tech billionaires went to school – or at least dropped out – they think they can design a better one.
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It all started in 2013 when one of the hottest Silicon Valley startups was AltSchool. Founded by a former Google executive, AltSchool was the latest in a long line of disrupters attempting to reimagine K-12 education via tech-enabled personalized learning (see e.g., Edison Schools, Knewton, News Corp’s Amplify). AltSchool raised nearly $200M from billionaires like Peter Thiel to create the first “full-stack school.” The company hired engineers from Google and Facebook to build a unified software platform for delivering curriculum, assessments, and tracking learning progression rather than grade levels.
Sounds great, right? As Amazon Fresh and the Trader Joe’s escalator demonstrate, running physical campuses is messier than making software. Parents weren’t excited about excessive screen time, indecipherable progress reporting, or having their kids used for live product testing. Teachers weren’t excited about being disintermediated by software, constant data entry, and requests for structured product feedback. Silicon Valley investors weren’t excited that their K-12 tech startup couldn’t scale like their other tech startups because each site needed to be acquired, permitted, and built out. More important, even at high tuition, the unit economics of 60-student “micro schools” made no sense in prime urban real estate and didn’t come close to covering tech-startup-product-team overhead.
AltSchool seemed like such a good idea that Elon Musk, who plays poorly with other billionaires, decided to go it alone. This was the birth of Ad Astra. In 2014, Musk hired one of his kids’ teachers to found a micro school focused on harnessing project-based learning for math and science. According to Musk, “I just didn’t see that the regular schools were doing the things that I thought should be done. So I thought, well let’s see what we can do. Maybe creating a school will be better.”
Ad Astra began operating out of Musk’s home in Bel Air, Los Angeles’ wealthiest neighborhood. Its first class included five of his own kids + three other children of SpaceX employees. As with AltSchool, there were no grades. The school eventually relocated to SpaceX so students had room to build flamethrowers and give TED talks. Not needed: subjects that technology would soon render irrelevant like music and languages. Also not needed: children of rank-and-file SpaceX employees, most of whom couldn’t figure out who to talk to in order to try to get their kids into the school. But after Musk’s kids aged out and went off to a normal high school, Ad Astra was summarily kicked out of SpaceX, putting an end to this vanity project for the carriers of Elon Musk’s genome.
Not to be outdone, in 2016 Mark Zuckerberg launched his own school. The Primary School was an effort to provide integrated school + health services to children on campuses in East Palo Alto and San Leandro. A tuition-free private school, Primary School focused on social-emotional learning through small group instruction. The student experience was tech-light – beyond typical Chromebooks, limited to outcome tracking and data integration across education and health.
All three billionaire schools are now defunct. AltSchool closed its campuses in 2019, changed the name to Altitude Learning, and pivoted to licensing its learning management system to other schools. That lasted two years before selling the software and winding down. After being kicked out of SpaceX, Musk’s Ad Astra pivoted to an online school for project-based learning.
Primary School lasted until last spring when 550 Bay Area families got some bad news. According to the New York Times, “parents were invited by school administrators to a breakfast of bagels, fruit and Starbucks coffee and were abruptly told of the closure, but given no reason. They were left staring at one another dumbfounded.” The real reason, according to one student: “Mommy, the guy who’s been giving money to our school doesn’t want to give it to us anymore.”
At least Primary School wasn’t a vanity school. But it turns out that one reason Zuckerberg didn’t send his own kids may have been that he’d set up an even more exclusive school in one of the homes on his Palo Alto compound; for Zuckerberg, Primary School was “for thee, not for me.” As Town & Country reported, “a mile away [from Primary School], behind a high wall of hedges, the billionaire and his wife, Priscilla Chan, were running a private school out of a house at their Palo Alto compound for two of their daughters and a dozen other children. And they were doing it in violation of city code.” When it became apparent that Zuckerberg’s own kids weren’t impacted by Primary School’s closure, it became a PR problem. Was Primary School principally a cover for his illegal, elite private school? (A hair-splitting Zuckerberg spokesperson argued it was a “home-school pod… not a private school.”) At least Zuckerberg had the dignity to close his school rather than pivoting to software or online like his billionaire forebears.
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In the taxonomy of billionaire schools, there are three types. The tech moonshot (Thiel), the vanity school (Musk), and the cover school (Zuckerberg). The cycle begins again with the newest entrant. Although Joe Liemandt isn’t a bold-faced-name billionaire (and – related – hasn’t had a spat with Elon Musk), he is the founder of software company Trilogy and a billionaire nonetheless. In 2022, Liemandt took control of Alpha School, an Austin private school, added AI to realize the promise of personalized digital learning, and opened the school’s second campus in Brownsville, TX. Thanks to AI and Alpha School’s tech platform, Alpha School students now reportedly complete all academic work in two hours, leaving the afternoon for projects and creative interests. Alpha School has guides, not teachers. Guides monitor student progress, coach, and help out in the afternoons. However, teaching is entirely on screen. There are now 18 Alpha School campuses. At last week’s State of the Union, an Alpha School student was an invited guest of the First Lady.
But according to several muckraking articles, not everyone loves Alpha School. Wired reported that the AI pacing and performance metrics cause students undue stress and anxiety. Last month a 404 Media investigation of Alpha School uncovered AI-generated Internet-scraped curriculum that’s low-quality or flat out wrong, illogical assessments, and a hallucinating chatbot that confuses students on reading comprehension assignments. Presumably, parents paying $75K tuition at the new San Francisco campus were surprised to read this.
Although two hours of on-screen instruction is a niche market – perhaps only highly prepared and motivated students (likely higher income, consistent with the price point) – there are worthy elements of this newest K-12 disrupter, including gamification and monetary rewards. Alpha School points to learning gains that appear to dramatically outpace the norm. Regardless, Liemandt has learned from his billionaire brethren and isn’t taking any chances: he’s adding software. Alpha School is about to start licensing its “EducationOS” under the brand Timeback: “Your kid can crush academics in only 2 hours per day.”
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Billionaires start schools to prove a point about the promise of technology, to educate their own kids, to create a cover story for the school where they’re actually educating their own kids, and to impress their partner (or in Elon Musk’s case, many partners). But we’ve seen what happens when they lose interest: physical schools dissolve to digital.
Running a school isn’t like launching a product. Schools aren’t platforms, they’re communities. Communities don’t scale like code and shouldn’t be sunsetted like some half-baked product feature. No one should A/B test childhood and no one should pivot a campus to digital, not even tech billionaires.
Hyperscalers may well have a place in K-12 education, but not running schools. At less than 5% of total spend, technology has a long way to run in K-12 education. But rather than attempting to disintermediate or replace teachers, the most exciting opportunities are supplementing and reinforcing classroom learning, providing teachers with actionable data on student learning, preparing students for assessments, and achieving administrative efficiencies so the nearly 50% of spend that occurs outside the classroom – e.g., $20,000 per student per year in New York City schools – can be redirected back into teaching and learning.
I suppose we can be thankful for one thing: at least Jeff Bezos – who has run away from, in alphabetical order, Amazon Fresh, Amazon Go, Amazon Spark, Dash buttons, Fire Phone, Haven, Washington DC, the Washington Post, and his wife – hasn’t tried to start a school.