Boundless UnBound

Thursday Dec 19, 2013 by Dennis Keohane - Senior Writer, VentureFizz

Boundless might be THE pillar EdTech startup; not just in Boston, but anywhere. 

On Tuesday, I caught up with Boundless CEO Ariel Diaz to do a profile of the company that he created to disrupt the stale education textbook market. 

Since Diaz co-founded the company with Aaron White and Brian Balfour in 2011 to create an alternative to expensive course textbooks for college students, the company has oozed with the potential to be one of the greatest education-focused startup success stories. In many regards, it has fulfilled much of the promise of Boundless's initial conceit. However, starting in the spring of 2012, Boundless was hit with a lawsuit from three major textbook publishers (Pearson, Cengage, and MacMillan) who claimed that Boundless's textbooks copied the "distinctive selection, arrangement, and presentation" of their own textbooks, "along with other original text, imagery, and protected expression of [their] and their authors, all in violation of the Copyright Act." {Check out the full original complaint here.}

The lawsuit could have been debilitating, but in fact, the company has thrived in the face of the challenge posed by the education publishing mainstream.

During our talk the other day, when I asked about the lawsuit, Diaz surprisingly answered me quicker than I expected declaring with a hint of a chuckle, "I really can't comment on it because its in mediation, but we'll let you know as soon as anything happens."

Now, I know the reason for the slightly betraying response. Yesterday, in a blog post, Diaz revealed that the Boundless lawsuit drama is over.

As he wrote, "Looking back, it’s incredible to reflect on all we’ve accomplished in the year and a half since the lawsuit began....Since then, we have doubled the size of our amazing team, released two major student-facing products, built a brand new educator platform, grown our content sevenfold, and increased our usage and reach more than 3 million students and educators. This is not only incredibly exciting, it is also a testament to the strength of our team and vision."

Now, there seems to be no stopping the company on its path to becoming the key player at the crossroads of education and technology.

The Boundless Journey

Diaz, White, and Balfour all had prior startup experience before connecting to create Boundless. Diaz had started YouCastr, an online video platform for high schools to broadcast and sell live sports, etc. White was involved in the early days of DoInk, started "I Can't Decide" and Proxlet. Balfour was a co-founder Viximo, which was acquired by TapJoy.

White and Diaz realized they were "kindred spirits" while on a trip to Costa Rica with other "big idea" folks in 2010. Balfour came on board shortly thereafter, and the vision to improve education became the Boundless mission.

The pain point that needed fixing, they realized, was that was the textbook market full of as Diaz said, "antiquated textbooks that were incredibly expensive and that students were forced to use do to the nature of the distribution model for textbooks." That model being traditional publishers 'selling' the books to professors who would then require the students to have the books for their classes. "Because of that," Diaz explained, "you had no price sensitivity, which is what has driven the price of textbooks up over three times the rate of inflation over thirty years or more."

The initial idea of creating textbooks alternatives, in the fall of 2010, was tied to the launch of the iPad and the fact that the company found so much rich open educational content available on the internet. 

"We started creating books in three subjects with a basic reader that was in beta," Diaz said, "which was the period when we got sued."

The lawsuit from the three education publishers was filed in early 2012, around the same time that Boundless received an $8M Series A round of funding led by Venrock, and joined by previous investors, NextView Ventures, Kepha Partners, Founder Collective, and SV Angel. The company had previously raised $1.7M. 

The lawsuit didn't slow down the companies momentum, and Boundless pushed forward with its vision for improving education.

"We had to keep on focusing on what we do well," he continued, "which is build great product and innovate on behalf of students."

The Learning Curve

In the face of the adversity created by the lawsuit, Boundless did what it did best, started building a mountain of content to be used for its textbooks. They officially launched  Boundless 1.0 in the fall of 2012. This year, the company released Boundless 2.0, which Diaz called, "our best product ever, because for the first time we were able to get really high quality learning technology and algorithms that went beyond what a traditional textbook would do."

"In our development of [Boundless 2.0] we saw improvements of 10X in terms of getting people into a more active recall mode with some of the product iteration and improvement that we integrated more deeply," Diaz said. "That was pretty exciting because that made the learning and studying more effective."

Boundless also added a flashcard product and few other study improvement offerings as well. The company continues to uphold the original concept of democratizing education with its free "open" introductory textbooks in a variety of courses. Additionally, Boundless now has "premium" course-specific books that it sells for $19.99, well below the average cost for many coursebooks.

Most recently, Boundless announced it content platform for teachers, as Diaz said, "in order to serve the entire ecosystem."

"Teachers and educators can now take our content and customize it to their syllabus, assign students readings and homework, get data on an engagement level as far as what students are doing on the platform, and get materials to help their lectures in the form of editable, shareable power points and slides," he explained.

The intinial feedback on Boundless for Educators has been great. Diaz explained to me how challenging it was to implement the use of open content in education. He described how Boundless is overcoming the two major challenges of the low quality nature of the available content products available and the lack of access that students and teachers had to that content.

"[Boundless for Educators] is really the first time you have this high quality content in a really easy-to-use way that educators can just pop in, drag and drop, send out a link to their students, and start going."

Boundless is still moving forward and growing at an impressive rate. As Diaz said, "We have to keep building great things and keep innovating, but foundationally, we are at a pretty exciting time in terms of all the different things that are still accelerating in education."

The Next Phase

Before the news of the lawsuit being settled broke, Diaz commented, "The lawsuit is one thing that we have been dealing with in parallel [to growing], and it hasn't been that much of a struggle in terms of slowing us down, which is good."

That doesn't mean that growing the company has been easy. As Diaz explained, "The biggest structural challenge for education and Boundless as well, is that in the educational cycle, there are only two big windows per year to launch a product and to learn. That is a very tough cycle when you run an environment that wants to be lean and agile and responsive to customers because you have so few opportunities to do that."

"It's been a struggle from a product standpoint," he continued, "because we are trying to build a world class education product and our feedback window is pretty tight." But Boundless is trying to solve that problem with a ramped up summer testing program for its products.

But, as Diaz wrote in the announcement of the lawsuit settlement, "While it’s fun to reflect on what we’ve done, it’s even more important to look ahead to what we still have left to do to change education."

"The transition to a digital educational content foundation has been slowed by a conservative industry, a search for new business models, and a lack of great products...Thankfully, we’re finally on the verge of solving this."

Unburdened by the shackles of a lawsuit hanging over their head, the Boundless team is moving forward to be a dominant force in what Diaz called "a massive wave of innovation in education."

In a city with a growing reputation for being an EdTech hub, Boundless may be the figurehead of a growing, positive movement to make education better for everyone.

Dennis Keohane is the Senior Writer for VentureFizz. You can follow Dennis on Twitter (@DBKeohane) by clicking here.

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