Class Clowns: How the Smartest Investors Lost Billions in Education

Hardcover | November 29, 2016

byJonathan A. Knee

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The past thirty years have seen dozens of otherwise successful investors try to improve education through the application of market principles. They have funneled billions of dollars into alternative schools, online education, and textbook publishing, and they have, with surprising regularity, lost their shirts.

In Class Clowns, professor and investment banker Jonathan A. Knee dissects what drives investors' efforts to improve education and why they consistently fail. Knee takes readers inside four spectacular financial failures in education: Rupert Murdoch's billion-dollar effort to reshape elementary education through technology; the unhappy investors-including hedge fund titan John Paulson-who lost billions in textbook publisher Houghton Mifflin; the abandonment of Knowledge Universe, Michael Milken's twenty-year mission to revolutionize the global education industry; and a look at Chris Whittle, founder of EdisonLearning and a pioneer of large-scale transformational educational ventures, who continues to attract investment despite decades of financial and operational disappointment.

Although deep belief in the curative powers of the market drove these initiatives, it was the investors' failure to appreciate market structure that doomed them. Knee asks: What makes a good education business? By contrasting rare successes, he finds a dozen broad lessons at the heart of these cautionary case studies. Class Clowns offers an important guide for public policy makers and guardrails for future investors, as well as an intelligent exposé for activists and teachers frustrated with the repeated underperformance of these attempts to shake up education.

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The past thirty years have seen dozens of otherwise successful investors try to improve education through the application of market principles. They have funneled billions of dollars into alternative schools, online education, and textbook publishing, and they have, with surprising regularity, lost their shirts.In Class Clowns, profes...

Jonathan A. Knee is a professor of professional practice and codirector of the media and technology program at Columbia Business School. He is the author of The Accidental Investment Banker (2006) and coauthor of The Curse of the Mogul (2009).

other books by Jonathan A. Knee

The Accidental Investment Banker: Inside The Decade That Transformed Wall Street
The Accidental Investment Banker: Inside The Decade Tha...

Paperback|Jul 31 2007

$12.94 online$23.00list price(save 43%)
see all books by Jonathan A. Knee
Format:HardcoverDimensions:288 pages, 9 × 6 × 0.98 inPublished:November 29, 2016Publisher:Columbia University PressLanguage:English

The following ISBNs are associated with this title:

ISBN - 10:0231179286

ISBN - 13:9780231179287

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Table of Contents

AcknowledgmentsIntroduction1. The Wizard of Ed2. Rupert and the Chancellor: A Tragic Love Story3. Curious George Schools: John Paulson4. Michael Milken: Master of the Knowledge Universe5. What Makes a Good Education Business?6. Lessons from Clown SchoolNotesIndex

Editorial Reviews

A valuable addition to our knowledge base regarding education markets... Class Clowns prosecutes a very sound case that investors must beware when entering the educational space.