Even with their services in huge demand, some smaller firms are running out of cash

By Jon Marcus

Not all ed tech providers had the capital to do what BrainPOP did, however. About two-thirds of those that responded to the Productive survey said they had only six months of runway left, meaning the amount of time before they exhaust their operating cash.

“This moment feels a little like earlier recessions in other industries, which is to say there’s often a shakeout,” said Michael Horn, co-founder and distinguished fellow at the Clayton Christensen Institute for Disruptive Innovation, a nonprofit think tank, and co-author of “Blended: Using Disruptive Innovation to Improve Schools.”

“Those companies that have market share will say [to customers], ‘Okay we gave you your six-month discount, time to pay up,’ ” Horn said. “Those that have been undercapitalized will have to make some really tough choices, even as they’ve never been busier.”