Can He Tear Up That $400 Textbook?
WHY YOU SHOULD CARE
Because in 2018, college students are still buying pricey, 5-pound textbooks riddled with typos.
By James Watkins
It was an inauspicious start for a company promising to pull the college classroom into the 21st century. Top Hat CEO Mike Silagadze had made 60 unsuccessful pitches to potential investors — Waterloo, Ontario, in the late 2000s, was living up to its nonexistent reputation for startup infrastructure. “We had to raise money from literally anybody who would talk to us,” he recalls. Then, driving from one pitch in Toronto en route to another, Silagadze changed lanes without looking, got T-boned by a truck and destroyed one of the few assets to his name — a 2005 Mazda 3. An impound lot and a taxi ride later, he somehow reached the second pitch unscathed and only 15 minutes late. Even more miraculous? This investor bit.
It’s no surprise that Silagadze, 34, and his co-founder, Mohsen Shahini, struggled initially. The two robotics nerds were trying to break into educational technology, a field in which they had no experience and one notorious for attracting wannabe change-makers with dreams that seem impossible, unprofitable or both. Not to mention their proposal to digitize the classroom was as abstract as every disruption cliché: “Uber didn’t exist yet, so we called it the iTunes for education,” says Silagadze.
For Silagadze, there is no reason why textbooks should cost students a semester’s worth of earnings — or why they need to be physical tomes that take years to update.
Eight years later, however, by adding new features and through sheer doggedness, the company actually resembles the initial dream: The Top Hat technology platform now supports in-class interactivity, lecture slides, homework, online test-taking and a content marketplace of digital teaching materials. It’s the latter feature that could set Top Hat apart in the crowded ed-tech space: “Everyone’s doing classroom response systems,” says Fiona Hollands, professor of education at Columbia University’s Teachers College, “but not everybody’s providing a platform for [professors’] self-publishing” of textbooks.
For Silagadze, there is no reason why textbooks should cost students a semester’s worth of earnings — or why they need to be physical tomes that take years to update. Content on the Top Hat platform is interactive, multimedia and, best of all, instantly customizable by individual professors. In for the same treatment as the books themselves are the textbook publishers, about whom Silagadze doesn’t mince words: These publishers, “apart from just being evil overall, take 95 percent of the revenue” he says (representatives of McGraw-Hill and Pearson, two giants in textbook publishing, declined to comment). On the Top Hat platform, where all content is less than $90 and over 90 percent of it is free, the authors are getting a slice of a much smaller pie — but they’re also entitled to 45 percent of any revenue.
Critics argue that without enough incentive for educators to create these online textbooks, the marketplace won’t get off the ground, but Silagadze cites the numbers: Top Hat tech is being used by at least one faculty member in “pretty much every large university in North America”; 2.8 million students use the platform (admittedly, most have embraced simpler products like an in-class voting app); their content marketplace already boasts 20,000 items, including more than 100 textbooks; and about 8 percent of professors using the system are writing textbooks of their own. Numbers like these have excited investors: After a 2017 fundraising round, Top Hat has raised a total of $50 million, according to Crunchbase. “Early on in the life of the company, we didn’t think the product had a network effect,” says Albert Wenger, a partner at VC firm Union Square Ventures, which led Top Hat’s Series C round. Silagadze approached the firm two times before it was finally convinced to invest, based on the promise of the content marketplace, says Wenger, who sits on Top Hat’s board of directors.
Indeed, Wenger praises Silgadze’s persistence, a trait honed throughout a remarkable life story. Born in Siberia in the then-USSR, he suffered allergies so severe that his parents were told he was at death’s door when he was just 1 year old. The family fled the remote Arctic Circle for Ukraine — in time to be caught up in the Chernobyl nuclear disaster. Their next stop was Israel, where Silagadze remembers being bullied by Arabs for being Jewish and by Jews for being Russian. Add to that the Gulf War and the Palestinian intifada, and it’s plain why the family searched for “somewhere slightly more politically stable” — and settled in Canada. Silagadze shares his literal war stories with a happy-go-lucky smile, then quickly moves on to the good stuff: volunteering in high school in a physics lab that would go on to win a Nobel Prize, and spending hundreds of undergraduate hours tinkering with robots.
Of course, grit can’t guarantee success — nor can you throw technology at educational problems and wait for learning to improve. In fact, some shifts away from physical textbooks toward digital ones have harmed students, cautions Barry Fishman, professor of learning technologies at the University of Michigan’s School of Education, partly because it can be confusing to use vastly different interfaces from different tech platforms in different classes. Silagadze insists this scenario applies only to publishers’ meager attempts at digitization involving uploading PDFs of entire textbooks for essentially the same high price as the original hardbacks. He then points to company data showing high student satisfaction, sustained attendance and decreased failure rates after professors implement Top Hat.
So, what’s Silagadze’s ultimate dream? “To fully displace the textbook publishers” once and for all. Defenders of Silgadze’s nemeses would say there’s value in the “signaling mechanism” old-school publishers have to lend authority to a particular professor’s textbook, says Hollands. And crowdsourced content has its limitations (edits to Top Hat’s material is controlled by “subject matter experts,” says Silagadze, Wikipedia be damned). But where some see established authority, others see opportunity: With the five leading textbook publishers holding 80 percent market share, Wenger argues, “that’s a market that’s ripe for disruption.”