Digitizing Daycare: How the Learning Care Group has used technology to get ahead
In this post, we look at how the Learning Care Group has created value for itself and parents through the use of education documentation applications.
Introduction
Of the 20.4 million US children under the age of 5, approximately 24% (4.8 million) were in organized daycare facilities as of 2011.[1] Web-based applications are helping daycare centers enhance connectedness with parents who do not get to see their children during the workday. Additionally, these applications help daycare centers reduce the time spent creating daily child-level progress reports.
The US daycare industry is estimated to be roughly $33B, but is highly fragmented.[2] The private, for-profit Learning Care Group (LCG) has grabbed a decent market share with annual revenues estimated at $700M.[3] Across its 900+ facilities operated under a family of brands (Tutor Time, Montessori Unlimited, plus others) LCG is experimenting with multiple education documentation applications.[4],[5] Within this post we examine the value these applications generate for both parents and LCG. Additionally, we will look at the operational adjustments LCG needs to make to incorporate these applications.
Parents’ Perspective
Education documentation applications provide platforms for daily child-specific updates to parents across several categories of information such as mood, activities, eating, naps, potty training, attendance, and requests for additional supplies (such as diapers). Additionally, the ability to provide pictures is usually a feature of these applications. Also, some of these applications allow parents to engage with teachers. At Tutor Time centers, LCG has implemented the PreciouStatus app. Below are some examples of information updates for my nephew from the PreciouStatus iPhone app showing bathroom updates, food consumption, nap duration, and a quote from him:
The value generated for parents from PreciouStatus (and similar applications such as LifeCubby and Montessori Compass) is heightened connectedness with their child and increased satisfaction with parent-teacher communications.[6],[7] The picture updates tend to be a favorite feature, at least for the Montessori Compass. [8] Parents can use the information from these applications to engage with their children about their day and learn about their child’s sleep and eating habits. Also, the applications are free for parents.
LCG Perspective
Business Model
There is a case to be made that LCG has differentiated itself from other daycares along the lines of parent engagement. While comprehensive, unbiased data to prove this is scant, there is anecdotal evidence to support this claim. For instance, 3 out of 15 (20%) of the positive reviews for the Wichita, KS Tutor Time cite the PreciouStatus app as a feature they enjoy about the facility.[9] Additionally, the Tutor Time website specifically markets its use of mobile apps as a way for parents to keep connected with their children.[10] However, large competitors such as Bright Horizons are keeping pace with LCG, releasing a proprietary mobile application with similar functionality to PreciouStatus in August 2015 to replace paper based reports.[11]
Operating Model
Assuming that parents require a daily update about their child, education documentation applications can replace paper reports or face-to-face interactions. Implementation requires an investment in technology, likely a tablet such as an iPad and training of staff in how to use the application. However, the time savings for a center already producing paper reports can be high, with 20X savings versus creating the same content by hand.[12] Additionally, in some instances parents have been sufficiently engaged by the applications that they do not feel the need for in-person parent-teacher conferences, providing further time savings to school staff.[13]
The costs LCG must pay to implement these applications are small and likely beneficial overall when considering the time savings generated. Pricing per student per month is between $1 and $2 for a medium sized class (>=12 students) on Montessori Compass and LifeCubby.[14],[15] If we distributed the cost of an iPad across a medium sized class, assuming a 3-year useful life, it would amount to ~70 cents per student per month ($300 ÷ 36 months ÷ 12 students). [16] In total, the costs for implementation are a few dollars per student per month, which is very small compared to the cost of tuition (which exceeds $1,000 per month in Massachusetts for example[17]). This appears to be a case where applications have created value for both the customer and firm by providing a platform for information exchange.
What’s next?
A likely next step for LCG is to implement more holistic education documentation that incorporates tools for teachers such as lesson planning. Montessori Compass already offers some of this functionality and LifeCubby recently released a software integration application geared towards reporting lesson plans and academic growth.[18] Looking ahead even further, LCG will need to think big to stay differentiated. For instance, can the data generated from education documentation be used to identify developmental disabilities earlier than traditional observations? Are there other ways to leverage the trove of data begin generated by these applications to improve academic outcomes for children?
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[1] Laughlin, L. “Who’s minding the kids? Child care arrangements: Spring 2011 (Current Population Reports, pp. 70–135). Washington, DC: US Census Bureau.” (2013).
[2] Daycare Business Overview & Trends, 2014 http://www.sbdcnet.org/small-business-research-reports/daycare-business-2014, accessed Nov. 18, 2016.
[3] Roumeliotis, G. and Kim, S., “Morgan Stanley near deal to sell Learning Care”, Apr. 11, 2014, http://www.reuters.com/article/us-learningcare-sale-idUSBREA3A1U220140411, accessed Nov. 18, 2016.
[4] Learning Care Group “about us” webpage, https://www.learningcaregroup.com/about-us/, accessed Nov. 18, 2016.
[5] Alexander, S. (2014, Feb 15). PreciouStatus wants to become the informative app for day-care parents. McClatchy – Tribune Business News Retrieved from http://search.proquest.com.ezp-prod1.hul.harvard.edu/docview/1498254141?accountid=11311, accessed Nov. 18, 2016.
[6] Ellis, Michelle L., “The Efficacy of Classroom Management Software on Parent-Teacher Communication” (2015). Masters of Arts in Education Action Research Papers. Paper 110.
[7] Seril, Lindsey A., “Communicating Effectively with Parents in the Montessori Environment” (2015). Masters of Arts in Education Action Research Papers. Paper 116.
[8] Ellis, Michelle L., “The Efficacy of Classroom Management Software on Parent-Teacher Communication” (2015). Masters of Arts in Education Action Research Papers. Paper 110.
[9] Reseller Ratings, Tutor Time – 7026 West 21st Street, http://www.resellerratings.com/store/TT_Wichita_Ks_6367, accessed Nov. 18, 2016.
[10] Tutor Time “technology” webpage, https://www.tutortime.com/parent-resource-center/technology/, accessed Nov. 18, 2016.
[11] iTunes App Store, “My Bright Day”, https://itunes.apple.com/us/app/my-bright-day/id1025221590?mt=8, accessed Nov. 18, 2016.
[12] Ghose, C., “LifeCubby lets parents watch child care centers from iPad”, Jan 25, 2013, http://www.bizjournals.com/columbus/print-edition/2013/01/25/lifecubby-lets-parents-watch-child.html, accessed Nov. 18, 2016.
[13] Ellis, Michelle L., “The Efficacy of Classroom Management Software on Parent-Teacher Communication” (2015). Masters of Arts in Education Action Research Papers. Paper 110.
[14] Montessori Compass “pricing” webpage, http://montessoricompass.com/pricing, accessed Nov. 18, 2016.
[15] LifeCubby homepage, https://www.lifecubby.me/index.php, accessed Nov. 18, 2016.
[16] Amazon.com iPad deals, https://www.amazon.com/Apple-MC769LL-Tablet-Black-Generation/dp/B0013FRNKG, accessed Nov. 18, 2016.
[17] Economic Policy Institute, “The Cost of Childcare in Massachusetts”, http://www.epi.org/child-care-costs-in-the-united-states/#/MA, accessed Nov. 18, 2016.
[18] LifeCubby and FunShine announce the integration of their software platforms. (2016, Nov 03). ICT Monitor Worldwide Retrieved from http://search.proquest.com.ezp-prod1.hul.harvard.edu/docview/1835372443?accountid=11311, accessed Nov. 18, 2016.
Jon – Thank you for this fascinating post! I think this is a great example of “doing well by doing good;” i.e., building a business model that’s aligned with more a more efficient allocation of educational resources and ultimately, better outcomes for children.
I covered a software company at work which (while mostly health care related) had a large and growing higher educational arm. The business sold software tools to colleges and universities that track academic and behavioral factors (mostly related to grades and advisor visits, but potentially could also track things like library and gym visits) and use predictive analytics to identify “high risk” students (i.e., those in danger of failing or dropping out). The school can then intervene to help the student succeed—for example, with more high-touch advising or a course-of-study change—by allocating resources to that high-risk student that it can’t afford to give everyone. I always thought it was a really interesting model and a great thing for society—we forget this at Harvard, but across the country, only about 55% of college freshmen end up graduating within five years.
Interesting topic. Kudos to the author for finding a subject often overlooked when discussing technological advances.
As a parent, I welcome anything that offers more visibility into child care services. The app discussed will not only offer a more efficient way to interact with providers, but also a way for parents to connect more often with their children. A concern is that the parents may feel less of a pull to spend actual time with their child if they can do so electronically and spend more time at work, exercising etc. [1] Let’s hope this great technological advancement does not become perverse.
[1] https://www.fatherhood.gov/dadtalk-blog/spending-time-your-child
Jon, thanks for introducing me this amazing service. I had no idea these types of services even existed, and now I imagine how much value it can bring to low-income level daycare services, especially in emerging countries in which you have absolutely no visibility of what´s going on. In Brazilian public daycare facilities, for instance, there are not even reports of what your child has done during the day. I´ve just done a quick research to check whether similar services were available in Rio and São Paulo and apparently there´s nothing – that´s a huge opportunity!
Moving forward, a couple of potential opportunities to grow LCG have come to my mind.
(1) Leverage on Social Media to advertise their products. Parents usually post/share several different stories about their children on the internet, and this can be a big opportunity to advertise the daycare facility and bring more consumers.
(2) Earn public press media by sharing how safer and happier parents are. Parents now know better how to continue activities with their children when they get home feel more part of the school activities too.[i] By sharing these stories, LCG is likely to earn “free” media and reach a broader audience.
[i] http://www.precioustatus.com/education-childcare-testimonials/
This is a very interesting application of digital technology. Thanks for this post, Jon!
Although not a parent (yet), I can imagine that I would be very excited to use the PreciouStatus service. The ability to know my kid’s activities is very important, as I would be able to ascertain if my child had sufficient nap, or is making friends at daycare, or is eating well. And there is very little friction for adoption from a parent’s perspective.
My concern would be whether teachers could provide real-time updates effectively. Considering that they have to monitor several children at the same time, they may not be able to enter the appropriate data in a timely manner. Also, real time updates would encourage parents to communicate more with teachers via the app, especially if something is not normal, such as a shorter nap than usual. Whilst communication between parents and teachers is generally good, too much could be distracting for the teachers.
As I read the article I had the same concern as Milkman: while parents would love the idea of having frequent and regular updates on their child, how willing are daycare teachers to put in the extra effort to pull out a digital device and “push” an update to a parent?
While not completely analogous, if we look at the fact that most Twitter users never post (and only read)[1] my takeaway is that it is easier to be a consumer than a content generator. Given that (1) PreciouStatus two-sided platform like Twitter and (2) one side of the market appears to derive more value from the platform than the other, how can the PreciouStatus ensure that daycare teachers find the experience as valuable and enjoyable as parents? Or will teachers use the platform infrequently, seeing it as a chore or extra work that they do not have time for?
[1] http://www.cbsnews.com/news/many-twitter-users-dont-tweet-finds-report/
GNG and Milkman – I agree that complacency by teachers in using the platform is definitely a risk, if LCG doesn’t increase the hours of labor / teacher or the total number of teachers in the classroom. Writing 5-6 updates / day for every child likely means spending at least 10 minutes / child / day on updates. With at least 12 students in a class, that easily adds up to 2 2 hours / day or 400+ hours / year on monitor updates. The additional labor hours required to implement this across facilities seems to far outweigh the revenue earned for the service provided. As such, I’d hope that LCG would increase their tuition fees, inclusive of the service, or increase the monthly price for paying parents.
I had a similar concern with the effort required by the teachers. Mainly, who is watching the 12 kids that the teacher is responsible for as they are looking down at their phone/tablet to send the latest lunch/potty update. It also seems like they are relying on the time to be quite close to real time as the parents are using the app to track sleep patterns.
Going forward it might be beneficial for them to invest in technology that can send auto-updates. I also might be afraid about the privacy of the children’s data. What if the distracted teacher sends a picture of my kid, etc. to another parent?
A few thoughts on some of the issues raised here:
Milkman and TCG on “real-time challenges”: you are right that keeping up with real-time updates would be challenging for a provider. My understanding is that updates tend to be batched during nap times and other downtimes — real-time updating is rarely achieved.
Gng and Ryan on if teachers are willing to put in the extra effort and what it will cost: my understanding is that daily updates are fairly standard in the industry, if not digitally then in paper form, so transitioning from paper to digital does not add extra burden as long as the application is easy to use. However, if a center is not providing daily updates jumping straight to digital might create additional costs as you suggest.
TCG on who is watching the kids: daycare centers must abide by minimum staff-to-child ratios as mandated by the state. For instance, in NY, a class of 12 1.5-3 yr olds would need to be supervised by 3 staff[1]. While I am not sure if this completely eliminates the risk of a staff member improperly supervising children, it certainly sounds better than a 12 on 1 scenario!
http://ocfs.ny.gov/main/childcare/policy/97-10%20%20supervision%20issues%20as%20they%20relate%20to%20day%20care%20center%20programs.pdf
This is a really interesting topic. Although I like what the company is doing, it feels a little ‘gimmicky’. My biggest concerns about putting my child in daycare is not whether I can get an update on their nap time and what they’ve eaten, but how much its going to cost me, and what quality of care my child is going to get. As you say above, childcare is incredibly expensive – over $1000 a month. I feel like firms should be focussing more on using digital technology to make its more affordable or higher quality.
For example, could you apply an ‘uber-pool’ model to childcare, where families ‘pool’ children with a nanny to make it more affordable? Or use a rating service (like Angie’s list or Openable) to rate childcare facilities or nannies?
I know there are a few start-ups looking at this (like the Harvard-based company CozyKin)…I wonder if LCG can leverage their size to focus on some of these areas as well.
Hi Jon, great article.
It was both fascinating and somewhat funny to me that parents are able to see exactly when their children fell asleep, or went to the potty. This takes the term “helicopter parenting” to a whole new level in my opinion. Having said that, I think that the correct application of this technology in day-cares or kinder-gardens could be extremely useful if it was devoted more exclusively to the developmental side of things.
I recently learned about a Mexican startup called “Advenio” that identified a serious gap in Mexico’s child-care space. As more women are brought into the workforce in Mexico, the need for this kind of service has skyrocketed. What I found interesting is that from the get-go, Advenio implemented a technology-centric approach which allows parents to look at cameras in their children’s day-care centers, send messages to care-takers, and recieve updates on developmental progress. I just thought it was very interesting that these kinds of innovative approaches to child-care are sprouting all over the world, in countries at different stages of economic development.
http://www.advenio.mx
Very interesting and relevant post, Jon! We had an early education and day care business in our portfolio and we looked at some similar digital applications. To Javier’s point above, it seems like the trend is to move from providing regular updates to parents to offering camera surveillance. While I see many benefits to both approaches, I do think it is important to consider what are some of the considerations associated with these technology offerings.
One of my main concerns is distracting teachers and reducing the time they spent with children because of time-consuming updates to parents. While providing updates to parents can be important, ultimately what parents want to high-quality, attentive care to their children. So to avoid forcing teachers to spend a lot of time on providing these updates, a lot of daycare facilities now offer camera surveillance (if they can get a license for it), which I believe adds a lot of tension between parents and teachers. For instance, teachers constantly feel scrutinized and watched and often have to answer to numerous questions from parents who have observed them feed or handle their child a certain way, which leads to nitpicking and compromising trust between the two parties. Sometimes that can even lead to parents switching their child to a different childcare facility. Additionally, as mentioned above, there are a lot of privacy and legal concerns and it often ends up being more challenging for daycare centers with cameras to recruit teachers, because teachers don’t want to be exposed to “nitpicking”.
We ended up deciding not to implement cameras at the company we owned but it is certainly an interesting issue and it is definitely a growing trend in the industry. The question is – where is the limit and which applications add value to parents/teachers and which ones create unnecessary friction in the process?