Humana millionaire and vulture capitalist, David Jones, Jr. wants you to believe that he is really concerned about Louisville’s failing schools. He blah blah blahs about his education concerns and deep thoughts on his blog at davidjonesjcps.com. He has big plans to fix JCPS because that’s the kind of thing a rich guy with two degrees from Yale can do. He can make things happen. He likes to throw around words like “financial transparency,” “inflection point,” and “critical strategic drivers” because public schools are really no different from big business. Well, that’s what rich people want you to think. Especially rich people who like to make money from big businesses and public schools.
Mr. Jones can’t stop talking about innovations and the similarities between education and healthcare in the aptly titled blog post “Innovating to Improve Education and Healthcare.” He says big data will solve a lot of problems and make things more efficient for education and healthcare. He also implores you to look at UPS’s technology and GPS and delivering cardboard boxes. If technology improved the bottom line for UPS, it can improve public education. Big data will help us identify very specific ways to help children, we just need the right technology to get us there. Maybe he’s right. After all, forcibly bused children are a lot like cardboard boxes, especially in Louisville, where both get driven all over the county and dumped far from where they started their journey.
Here’s Mr. Jones writing about technology and kids with smartyphones and how the combination of the two practically made his heart skip a beat:
I’ve also seen demonstrations of high school teachers leading classes of smartphone-wielding students through lessons with constant, personalized feedback on who gets it and who doesn’t, sending out to Khan Academy and other web sites for catch-up. All this makes my heart beat faster in excitement.
QUESTION: Is he excited about technology in our schools or is he excited about selling technology products to schools?
ANSWER: See below.
About one year before Jones ran for the local school board, his vulture firm invested over $5 million in an education technology product for children called HealthTeacher. That product became a part of Jefferson County Public Schools’ curriculum a few weeks before Mr. Jones was elected to the Jefferson County Board of Education.
Since Mr. Jones wants more technology in our public schools and seems to be getting his way, let’s look at how his company, Chrysalis Ventures, is making this happen.
First, an interesting quote from a recent story in the New York Times:
Companies often must navigate local school districts with limited budgets and slow procurement processes. To bypass the bureaucracy, many start-ups are marketing free learning apps and websites directly to teachers in the hopes that their schools might eventually buy enhanced services. – “Silicon Valley Turns Its Eye to Education,” New York Times, January 11, 2015
And here you go…
June 28, 2011: David Jones, Jr.’s vulture capital company invests in health education technology called HealthTeacher.
HealthTeacher received a total of $5.9 million in funding from vulture capital. Chrysalis invested $5.27 million or 89% of the total investment while SSM Partner invested the balance.
More info from TechCrunch:
HealthTeacher hustles hospitals and school-district executives.
HealthTeacher is based in Nashville – the Silicon Valley of Healthcare which means it isn’t really Silicon Valley – and gets plenty of ink in Venture Nashville Connections. Here’s a 2011 story that connects the dots between David Jones, Jr., Humana, Chrysalis Ventures, HealthTeacher, school districts and a children’s hospital.
HealthTeacher continues to support classroom education, but has for several years seen hospitals as key allies, along with broad community collaboratives. HealthTeacher’s alliance with Orlando Regional Medical Center’s Arnold Palmer Hospital for Children is evidence of the company’s efforts. The partners recently held their first Upstream conference for C-level hospital and school-district executives, and others. (Chrysalis Founder and Chairman David Jones Jr. is a former chairman of the board of healthcare provider Humana, also based in Louisville.) – “HealthTeacher reaches venture’s ‘inflection point’; backer Chrysalis joins SSM as Petra exits”, Venture Nashville Connections, June 28, 2011
Hospitals pay for HealthTeacher. HealthTeacher ends up in the public school curriculum. That’s called synergy, co-branding and probably a lot of other things that benefit people and businesses – but children, not so much. You know what I call it? I call it one of the stupidest things ever because recess, playing in your backyard, going to the park, and kicking a ball are free. Ten minutes of calisthenics in the morning – toe touches, jumping jacks and exercises recently publicized in USA Today’s Back to Basic Exercise: Push-ups, squats hot again – are free, free, free. But free isn’t good for vultures. Vultures want money and lots of it. Hospitals, especially children’s hospitals, are direct pipelines to piles of cash and plenty of feel-good publicity. A partnership with a hospital makes your product seem like healthy stuff while the schools provide plenty of eyeballs for your product and apps you want to sell.
HealthTeacher was so motivated to generate cash flow that they crafted a white paper to help non-profit hospitals with the updated IRS Form 990. Who doesn’t love free tax advice? In addition to tax-related advice, the five-page white paper delivers compelling statements like this one:
“One area in need of increasing support is school-based health education, which is under-funded and in danger of disappearing.”
Oh, please. There’s plenty of MONEY for health education, there just isn’t enough TIME during the school day. These poor kids barely have enough time to go to the bathroom. They get about 15-20 minutes to eat lunch or less time if their teacher can’t get her class to the cafeteria at the designated lunch time. Schools have plenty of money and if you don’t believe me, let me remind you that JCPS has a budget of more than $1.3 billion.
Vultures, rejoice. The pitch worked.
Here in Louisville The Children’s Hospital Foundation, which is the philanthropic arm of Kosair Hospital, provided the funding to get HealthTeacher in Louisville’s public schools. Kentucky is one of the poorest states in America, you know. I sure do hope Kosair isn’t denying financial assistance for very sick Kentucky babies and children while propping up an investment of one of the richest men in Kentucky.
Let’s take a look…
Children’s Hospital Foundation’s 2012 tax return has some interesting information. CHF spent so much on fundraisers in 2012 that they ended up in the hole. They made $767,912 but spent $792,879:
They sure do blow a bundle on fundraisers and executive compensation. Good thing their tax return included this reassuring line: “The Foundation continues to expand partnerships within the community and enhance the hospital’s ability to serve all children regardless of their families’ ability to pay.” Sounds good to me. Just take care of those kids.
According to CHF’s tax return, they treat over 156,000 children a year which works out to about 427 a day or 17-18 an hour – and these numbers are important:
Kosair will stop at nothing to collect donations. They’re using kitties in CartWheels magazine which is their glossy, quarterly fundraising magazine. Here’s a kitty in the Spring 2014 issue.
These people really have no shame.
Enough about Kosair. Let’s take a quick look at the finances of another children’s hospital charity. Or maybe we should just refer to them as cash machines.
Miami Children’s Hospital is the non-profit that brought HealthTeacher to The School District of Palm Beach, the 11th largest school district in the nation. Like Children’s Hospital Foundation, Miami’s Children’s Hospital spends big on fundraisers:
Miami Children’s Foundation finished up the year in the red:
Miami Children’s Hospital Research Institute, another non-profit tied to the Miami Children’s Hospital, had a policy of spend, spend, spend, too. This is from 2012:
So, there you go. Sick and poor children are being used to solicit government grants and donations for healthcare. For education. For health education. For health education technology. For HealthTeacher, Chrysalis and JCPS school board member David Jones, Jr.
Let’s move on and discuss the actual product, HealthTeacher. Maybe it’s really amazing and worth every penny. Maybe it’s so incredible that the product will justify these cash-burning non-profits blowing money on apps and games.
Here’s what happened just a few months before Chrysalis invested in HT:
June 2011: HealthTeacher hires John Herbold, senior product manager from Apple. I’ll bet he’s amazing!
This was posted June 18, 2011 on The Huffington Post by Amy Lee, “Apple Loses Product Manager to HealthTeacher.” I circled and underlined some important words for you.
Mr. Herbold’s MobileMe had three babies named iCloud, PhotoStream and Find My iPhone: Naughty babies! Naughty!
One of MobileMe’s features was Find My iPhone, now a part of iOS, which helps you “see the device’s approximate location on a map (along with a circle showing the radius of inaccuracy), display a message and/or play a sound on the device (even if it is set to silent), change the password on the device, and remotely erase its contents.”
Find My iPhone was in the news few months ago. Remember? Jennifer Lawrence. Kirsten Dunst. Nudie pics.
Herbold had severed ties with Apple three years before this story blew up but hmmmm. If Apple engineers had worked on and likely improved the product for the three years between Herbold’s departure and the 2014 hack, what were MobileMe and its babies iCloud and Find My iPhone like to begin with? They must have sucked, that’s what.
Herbold was a senior product manager for MobileMe when Apple launched it in July 2008, which Fortune Magazine called “Apple’s worst product launch in the ten years since Jobs’ exile” in a story called “Who is to blame for MobileMe?“:
In May 2011, Fortune magazine reported that during the summer of 2008, after MobileMe had launched to mostly negative reviews, Apple’s CEO Steve Jobs summoned the MobileMe team to a meeting in the Town Hall auditorium at 4 Infinite Loop. After asking them “what MobileMe is supposed to do”, when someone answered, Jobs reportedly shot back, “So why the fuck doesn’t it do that?”
Jobs’s biography (pg. 531) picks up on MobileMe’s suckitude where Fortune magazine left off:
Over the next half hour, he continued to berate them. “You’ve tarnished Apple’s reputation,” he said. “You should hate each other for having let each other down. Mossberg, our friend, is no longer writing good things about us.” In front of the whole audience, he got rid of the leader of the MobileMe team and replaced him with Eddy Cue, who oversaw all Internet content at Apple.
Where is Eddy Cue today? He’s still at Apple. He’s just the senior VP of Internet Software and Services and he was involved in setting up the Apple online store, iTunes music store, and the App Store. In other words: SUPERSTAR.
Here’s a popular pic of Eddy Cue that people like to post on the internet:
I’m not the only one saying MobileMe sucked; Jobs said MobileMe sucked. It’s right there in his biography.
There was, however, a big problem: The service, to use Jobs’ terminology, sucked. It was complex, devices didn’t sync well, and email and other data got lost randomly in the ether. “Apple’s MobileMe is Far Too Flawed to Be Reliable” was the headline on Walter Mossberg’s headline in the Wall Street Journal.
Despite Herbold’s ties to the MobileMe turdfest, maybe he could bring some of Apple’s magical marketing pixie dust with him to HealthTeacher. Right? When a company hires a product manager from Apple, it wants to develop and sell stuff. That should pretty much sum up the entire objective.
Asked whether hiring Herbold signals broader change for 12-year-old HealthTeacher, [HealthTeacher CEO, Scott] McQuigg said, “We wouldn’t be making a hire like this is we didn’t have significant plans to evolve our offerings.” He stressed that HealthTeacher is not “abandoning” its classroom focus, but aims aggressively to foster “digital engagement” among teachers, parents, students and others, wherever they are.
McQuigg said Herbold “is in the early stages of putting together his product strategy plans [and] I envision him building a team — both staff and external resources — to develop apps, social media, games, dynamic content, etc., to enhance our current health education offerings to schools and to directly engage youth and their families.”
HealthTeacher offers curricular content, testing and related services, made available via the Web to parents, educators and others. The company’s business relies on subscription income and “funding from local hospitals to support health education in schools in their communities,” McQuigg said this morning. – excerpt from “Apple Inc.’s Herbold Joins HealthTeacher drive to make U.S. youth health ‘cool and aspirational”, Venture Nashville Connections, venturenashville.com
Cool and aspirational shit comes to JCPS in October 2012:
So what does HealthTeacher’s “digital engagement” look like?
One app is called Awesome Upstander which my kids have quickly renamed, Awful Upstander. In this game you protect a friend from a bully while stomping on bananas, collecting over-sized rolls of toilet paper and kicking a toilet while avoiding a geyser of peewater because you just broke the damn thing. Truly awful. Two thumbs down. The game was developed by Touch Tilt, which, my youngest knowingly informed me, “used to make really good games, but not anymore.” My middle kid walked away after watching ten seconds of the demo. My oldest kid sniffed, “The developers for that app aren’t really gamers.”
Here are some screenshots of the demo:
Look out for the bully in the black leather and Bieber haircut!
Running amok in the cafeteria and stomping on bananas will stop a bully! Collect friends like currency! And stop running on the tables, asshole.
Collect gigantic rolls of toilet paper and band-aids!
Destroy school property! Kick the shit out of the toilet and break it!
Schools pimped HealthTeacher to the kids. The kids bought the 99-cent app. And then they cranked out reviews like this one:
November 2012: Teddy Gordon to the rescue. Again.
And this from Mr. Jones:
I’m not in this for the money, and I would be stunned that anyone else running for election to the JCPS School Board is, either. I’ve watched the well-intentioned and dedicated public servants who serve on the board for many years, and it has never occurred to me that they were pouring out their time and passion for the $75 per meeting, to a maximum of $3000 per year, that the position pays.
As such, I have no reason to believe there is any conflict of interest with my candidacy under any statute.
The vultures at Chrysalis have invested over $5 million in HealthTeacher which means they will collect a substantial return on that investment if HealthTeacher generates a profit, which it appears to be doing. Vulture investments in successful start-ups generate annual management fees, collect interest in the 20-30% range (sometimes higher) and get a substantial share of profits. A modest management fee alone probably amounts to more than $100,000 a year. Chump change to a vulture, I’m sure. The interest alone will be over $1 million unless HealthTeacher received the Special Friends Interest Rate.
Jones says he isn’t on the school board for the money. Well, I’m entitled to my opinion and I think he’s a lying liar. If he really cared about our public schools, why didn’t Chrysalis donate the product to JCPS? Because these bitches are in it for the money.
Kosair may have paid for the purchase of HealthTeacher but there are additional costs associated with this product. They’re called operating costs and JCPS is picking up the tab for those. Kosair bought the razor but JCPS is paying for the razor blades.
Teachers are using this product in the classroom. Who pays for the teachers’ salaries? JCPS.
Computers are needed to use HealthTeacher. Who pays for the computers? JCPS.
Internet access is needed to access HealthTeacher. Who pays for that access? JCPS.
IT personnel are required to maintain that internet access. Who pays for that? JCPS.
Kosair did not pick up the entire cost of HealthTeacher. Kosair’s contribution is small compared to JCPS’s financial commitment to use the product in its schools. Without JCPS’s financial backing, this arrangement wouldn’t exist. HealthTeacher, Chrysalis and David Jones, Jr., all benefit from JCPS’s financial support even if none of them appear on JCPS’s vendor list.
Humana has been in a lot of trouble for breaking laws and unethical marketing practices. Maybe Mr. Jones, whose vast fortune comes from Humana and the profits that flow from improper sales practices, rejected claims and scary mailings to old people, thinks he can bring that same sneaky-snaky style to education. Somebody needs to make this stop.
Peter Thiel had this to say about education start-ups in George Packer’s National Book Award Winner The Unwinding: An Inner History of the New America:
“So, you’re saying that might be a problem just because the company has an educational slant?”[asked Andrew Hsu a nineteen-year-old, fourth-year Ph.D. candidate in neurosciences at Stanford]
“Yes,” Thiel said. “Our main bias against investing in these sorts of companies is that you end up attracting people who just don’t want to work that hard. And that, sort of, is my deep theory on why they haven’t worked.“
In care you don’t know about Peter Thiel, he invested $500,000 in Facebook and made over $1 billion. He made $55 million from his $240,000 investment in Paypal. He has opinions about pretty much everything but, there you go, that’s what one venture capitalist thinks about education technology.
Slacker magnets. Bottom feeders.
And this is how I feel about that and David Jones Jr., his company’s investment in HealthTeacher, cashing in on public schools and the weirded-out philanthropy of children’s hospitals:
Have a great weekend, friends!!