Instructure’s Age of Adolescence: A Conversation With CEO Dan Goldsmith

Jul 10, 2019

When Instructure was a fledgling at the turn of this decade, it proudly branded itself as a rebel with a cause—to become the anti-Blackboard by building a better learning management system.

Now, as a publicly traded company with more than 1,200 employees, things are different. It flagship product, Canvas, has overtaken Blackboard in the North American higher education market, and is gaining adoption in K-12 as well. The startup that once wanted a revolution is now very much the institution in the LMS world.

The new reality is not lost on Dan Goldsmith, who assumed the CEO role on the first day of 2019. For him, one of the central challenges is: How does an established empire continue to innovate?

Goldsmith had never worked in the education industry before. But across a career that spans stints at Accenture, IBM and Veeva Systems, a pharma-tech startup that went public during his time there, he says he’s developed “pattern recognition” about the “pitfalls and opportunities” that can topple large technology companies.

Maintaining a company’s culture, he says, is key to staying innovative and responsive to its customers, and “not forgetting the fundamentals that got us to where we are,” Goldsmith says.

On that front, he has large shoes to fill. Compared to Josh Coates, Instructure’s co-founder and former CEO, whose colorful, contrarian streak helped define the company culture, Goldsmith comes off much more even-keeled. (It has been a while since the company has posted zany dance and music videos or invited “sexy sax man” to company events.)

“There’s a quirkiness and fun element that reflects very well the education audience that we’re serving, and that’s a key part of our culture,” says Goldsmith. “I view myself as more of a steward of the culture, or an editor if you will, and not necessarily its author.”

Earlier this week, we sat down with Goldsmith in Long Beach, California, at InstructureCon, the company’s annual user conference, to learn more about what lays ahead for the company as it enters, in his words, the “adolescent phase.”

EdSurge: Canvas used to pride itself on being the “anti-Blackboard.” Now it is one of the most popular learning management systems across the U.S. How do you avoid falling into the trap of being complacent?

Goldsmith: We have to remind ourselves to be humble, and not become an arrogant company. It’s also understanding that our identity needs to continue to evolve. We can’t be the “not Blackboard” company. That’s not sustainable at all, and that doesn’t help us fulfill our mission to help people grow from the first day of school to the last day of work. Although that anti-Blackboard mentality early on galvanized our purpose, we’ve moved much beyond that.

Another thing for organizations at this stage is to resist the temptation to look out their windshield. If we’re just looking at our competitors, we will not be an inventive company. So our ability to take risks and partner with our customers is the best way to keep our edge. We’ll add more developers to Canvas than we ever have in the history of the company. It’s incumbent upon us as an organization to continue to innovate and challenge things—just like we did in the beginning, challenging the status quo of what an LMS looked like at the time.

How big is the company now?

We’re over 1,200. A little less than half the company is focused on R&D, which is a pretty high percentage for a technology company like ours.

If you look at other industries, you will see technology companies that gain popularity, become a market incumbent, and then start to lose market share. One of the reasons why they lose momentum is because they stop innovating and start curbing spending and investment, and they start looking sideways at competitors instead of focusing on their own path to innovation.

Let’s unpack this company motto: “From the first day of school to the last day of work.” How early are we talking about?

We have schools all the way down to preschool that are using Canvas.

There are preschoolers on Canvas?

Yes. We really do extend all the way down to preschool. There’s work that we need to do in creating an ideal experience for someone throughout their educational journey, no matter where they are in that.

The diversity of the student population has extended well beyond the traditional educational phases of people’s lives. We also have a number of retirement homes that are using our learning and engagement solutions. So we really do cover the full gamut of things.

The company started in the higher ed space. But what’s your take on the market receptiveness to learning management systems in the K-12 space?

There’s a different dynamic with K-12. Some K-12 schools decide free is good enough, and look at solutions like Google Classroom as a first step toward digitizing the classroom.

What we found is that there is usually a 12- to 18-month cycle after which schools realize that free is not good enough. The solutions don’t necessarily support everything they need to teach. It’s actually costing more time, effort and energy. More and more schools are recognizing the need for the infrastructure and scaffolding that an LMS solution provides.

How is the corporate learning market, which your Bridge product targets, faring?

Bridge is still in the relatively early stage of things. We're very happy with the growth and the adoption of Bridge.

What’s connecting the dots between the education and corporate sides is actually the market itself. Educational institutions are recognizing that the largest growing population is the professional worker, and there’s a lot of opportunity for online programs. When institutions are extending those programs to build corporate relationships, it’s very common they use Canvas to do that. Then Bridge comes in to provide the employee development piece.

You’ve acquired Practice, Portfolium and MasteryConnect. What informs your acquisition strategy?

First and foremost, it should have a “one plus one equals three” effect for our customers. The combination of Canvas and MasteryConnect, for example, should create a better experience and impact for our customers.

The other two things are culture and values. That sounds really soft and squishy, but what I have found throughout my career is that if you don’t have those alignment between the companies, then partnerships or acquisitions usually don’t work out very well. In the case of Portfolium and MasteryConnect, we had the benefit of knowing them as they were in our partner network.

Are there other acquisition targets on the horizon?

We don’t have specific hard targets. We’ll continuously look at things. The partner program we have provides a really great environment for us to identify acquisition opportunities without the traditional type of risk you would have starting from a cold relationship.

On the company’s previous earnings calls, you’ve teased at a new product in development, DIG. What can you share about that effort?

We have lots of data around the usage of Canvas that can help inform decisions that teachers and students are making, and we can utilize our insights to create and fine-tune algorithms.

One example with DIG is around student success and student risk. We can predict, to a pretty high accuracy, what a likely outcome for a student in a course is, even before they set foot in the classroom. Throughout that class, or even at the beginning, we can make recommendations to the teacher or student on things they can do to increase their chances of success.

That’s just one example of what we can do. There’s a big opportunity, just like there is with many other industries, to utilize data to understand trends to help drive student success.

And this is data that’s collected historically from past users?

Think of it more as data that informs the algorithm. How do you tune an algorithm that can then actively look for trends in the signs and behaviors of an individual student in class, or an instructor at an institution? Based on that algorithm, it will make recommendations.

Not all students and educators are on board with having their data used to inform algorithms. Have you heard such concerns so far?

This is not unique to education. We see this all the time out in the world, so we’re very careful in how we can find benefits and give back to the industry, in terms of using data. One of our first and primary tenets is that the student, the individual and the institution own the data—that’s their asset. We’re not looking to sell data assets.

We need to use data responsibly, and there should always be a clear benefit and intent. But some of the things we’re doing are not necessarily new. In fact, most of the higher ed institutions we talked to are already applying AI and machine learning on the student data that they have.

The other important thing that helps keep us on the right path is working with institutions, and not sort of doing it in some lab off to the side. As we started talking about DIG, we were already working with 40 different higher ed institutions on these concepts.

There will always be people who have questions around the appropriate use of data. That’s a healthy thing, but we also think there’s a big opportunity to evolve and move education along and provide better insights to teaching and learning as well.

Will there be an option to opt out of having one’s data used to inform the algorithms?

It doesn’t necessarily work that way, per se. We haven’t had that request, honestly. With the 40 institutions we’ve had conversations with, I’ve never had one ask for that.

I think there’s always some skepticism. What we see sometimes from instructors and teachers is a concern that “Hey, is someone going to be looking over my shoulder? Am I going to be evaluated based upon data? Is this somehow going to result in some performance measurement of how I’m doing as a teacher?” That’s not the intent of what we’re doing.

The example I gave around predicting students who are at risk ... We’re being very careful how we do something like that. We would never want to dis-intermediate the relationship between the student and the teacher. The model that we have prototyped is one where we deliver insights to the teacher, who then decides how to use and disseminate them to the student.

Is there a timeline for when DIG will be publicly available?

No, and it gets back to the questions you’re asking. We don’t want to force ourselves to a timeline. We want to be really careful in how we introduce things, and do it in an appropriate way that takes whatever time it takes.

That being said, with some of the at-risk student predictors I mentioned earlier, we’ve been prototyping that for a while, and we expect to be in beta with some of those things at the end of this year or beginning of next year. But in terms of commercializing and bringing out more products based upon DIG, we have no timeline we’re holding ourselves to.

I asked [Instructure’s co-founder and former CEO] Josh Coates this five years ago, and now I’ll ask you. What three words would you use to describe Instructure today?

Mission-minded. Curious. Optimistic.

(Coates’ answers: Impactful. Open. Innovative.)


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