Must Read Founder's Five June 17, 2022

Founder’s Five: Matthew Pittinsky, Parchment

Founder’s Five is a continuing series from Tyton Partners that invites education company founders to shed light on their own success and illuminate the landscape for other education entrepreneurs and investors by answering five basic questions.

Matthew Pittinsky invested in Parchment in 2011 to solve problems he first experienced as a co-founder of Blackboard. Matt saw the need for innovation in the provision and sharing of credentials as well as the need for learners to have more control over their credentials.

Matthew came to Parchment in 2011 through an investment in a predecessor company called Docufide that was founded in 2003. Today, the company celebrates as many as six co-founders of companies that have been merged with Parchment since then. Since the initial investment, Matt and his team have built Parchment into a global platform that enables credentialing organizations to issue digital credentials that provide rich data about learning outcomes and experiences in a way that provides the learner with much more agency over their credentials than the old, fragmented, paper-based approach. The platform is two-sided, providing services to the organizations that receive, verify, and evaluate credentials as well the organizations that issue them.

Parchment has helped millions of learners, over 13,000 school districts, university registrar offices, state education agencies, and other receivers (including university admissions offices, background check companies, employers, college application services, OPMs, and certification and licensing boards) to exchange more than 140 million transcripts, diplomas, certificates, comprehensive learner records (CLRs) and other credentials globally.

Parchment was acquired by Brentwood Associates in 2020 in conjunction with Parchment’s merger with competitor Credential Solutions. Matt is also the co-founder of Blackboard, the ubiquitous higher education technology company.

What is your company’s origin story?

For me, Parchment originates with my experience at Blackboard. At Blackboard we were helping schools, universities, and professional organizations bring their education online. In the process of helping to build Blackboard, two observations struck me:

First, for all the innovation that education and training providers were embracing in terms of delivery of instruction, the credential that a learner earned at the end of a degree or non-degree program was basically the same as it always was – a paper-based transcript, diploma, or certificate. Credentials are the currency by which we convert our education into opportunities such as admissions or employment, but we were leaving the credential as a low-fidelity record despite the high-fidelity systems that supported the learning process. That seemed like a critical gap. This observation returned to me when I was an assistant professor of sociology at Arizona State University. While my “meta” learning objectives were to help students write well, speak well, think analytically, and be comfortable with numbers, there was no way to represent those evergreen competencies, nor was there a way to represent a student’s proficiency in Stata, R, or survey design as an outgrowth of my courses.

Second, people would experience Blackboard in K12, again in higher education, and then again in their professional lives, but there was no “persistence layer” that they controlled and took with them. Each learning context treated the consumer as a “new account.” Learning is cumulative, and a learner’s learning record from one context can help inform access to or success with learning in the next. There should be a learner account – what we now call the Parchment Credential Profile – that an individual controls and that they can use to link to different education and training providers, but again, stays with them. 

These two ideas – credential innovation and learner credential management – ultimately brought me to Parchment.

How will the market be changed by your company’s success?

We believe that Parchment’s success brings sector-level opportunities that would not be available if a platform like Parchment never existed. For any one school or university, we add a lot of value as we help them save money by going digital, automating, streamlining, etc. We also help them generate new auxiliary revenue funds as well as provide a better student experience.

Your question is at the market-level though, which is a super interesting way to think about impact. Students progress through all sorts of pathways, from transferring between schools and school districts, participating in dual enrollment, applying to college, transferring college credits, applying to graduate school, studying abroad, accessing scholarships, applying for internships and employment, and more. We believe that the more widely Parchment’s platform is adopted and the more our network scales globally, the more efficient, convenient, secure, and effective those pathways can become. 

Additionally, moving credentials to digital and data formats opens all sorts of affordances that never existed before when it comes to representing learning in a more insightful and context-specific (employment, enrollment) way.

Finally, as I explained, we are a multi-credential platform. Historically, in the analog world, there have been different vendors for each credential each of whom specialized in one kind of record. There were organizations that issued transcripts only, diplomas only, and so forth. When credentials move into the digital world though, learners don’t want to interact with multiple platforms for multiple credentials, especially from the same institution. When a learner goes to college, they don’t want to get a digital badge from one provider, a diploma from a different provider, and a transcript from a third provider. They expect their university to have a credentialing infrastructure and expect all their official credentials will be issued through their account. And, when they go into the workforce, they can continue to get credentials into that same account.

What do you know now that you wish you had known when you began?

The most important thing I didn’t know in 2011 was how difficult it is to build a two-sided business; a two-sided network where to scale on one side (e.g., drivers) you have to scale the other side (e.g., riders). Each side has distinct needs and requirements. We have faced numerous chicken-and-egg challenges, such as the need to grow adoption of transcript receivers to grow adoption among transcript issuers. It also prompts interesting and challenging business model questions: How much do you charge the issuing side? Do you charge the receiving side if they also receive a distinct value? 

The two-sided nature of what we do also affects product decisions and adoption. For example, receivers really want to get transcripts in machine-readable data formats because that provides them a lot of efficiency and allows them to use the data for transfer and course placement. But issuers don’t necessarily care about sending data. They’re happy enough to just send pdfs, which solves their problem of getting rid of paper and postage. So, the piece that I didn’t realize when joining Parchment and building the business is just how difficult and how many riddles we must solve and will continue to need to solve when we’re building a two-sided business. 

What non-intuitive insight have you gained through this work?

I like to joke that, at Parchment, we are literally operating in the bowels of the education and training market. We are getting rid of paper credentials and making them digital for the purposes of exchange, which is sort of like plumbing in education. In EdTech, there is a bias towards the aspirational, the transformational, and the disruptive. But I don’t think that’s how change happens in education.

I wrote a piece about this and proposed the term “radical incrementalism” to describe a theory of impact for EdTech that seeks systemic innovation through incremental improvements. At Parchment, we are proudly incremental. We took one step, which was to get rid of paper transcripts, making them electronically exchangeable, making diplomas digital, and issuing digital badges as part of coursework. We think that if we take that first step, we can then take the next step, which is to start communicating competencies through more comprehensive record formats and allow more seamless credit transfer and insights for students seeking to graduate in the optimal amount of time and with the optimal amount of cost.

I have seen so many ‘change the world’-type education technology companies come and go with the complaint that the education market was too slow and didn’t get their big ideas and virtues. They blamed the market instead of appreciating that the way that you create transformative change is by picking very specific points of friction and incrementally taking the friction out, which then enables you to do more.

Matthew Pittinsky

By adding value, we earn permission to do more and more. So, the non-intuitive insight is that if we want to drive radical changes in education, we must be willing to do the hard, bottom-up incremental work, and we have to move the institutions along with us.

What other education company besides your own do you wish you had started?

I love RaiseMe. I very briefly mentored RaiseMe’s founder, Preston Silverman, and from the start I thought the idea of RaiseMe was just beautiful. The premise is to incentivize students to engage in positive college-going, college-access behaviors while in high school (or even earlier) by giving them micro scholarships. Those micro-scholarships are tied to challenges that are created by admission offices. So, an admission office might issue a science and engineering challenge. If a student completes it, they get a micro scholarship towards their tuition at that institution. RaiseMe helps create a college-going mindset among high-school students and encourages the right kind of behavior to turn mindset into reality. It allows colleges to engage with and attract students in a constructive, positive way compared to a lot of enrollment marketing that is, well, icky. I love that alignment and think it’s a beautiful business.

RaiseMe is also a two-sided business in that it has to build out relationships with counselors to attract high-school students on one side, while also building out relationships with admission offices to offer the micro scholarships on the other side. That two-sided relationship is a hard nut to crack. The moment I heard it pitched, I just thought it was awesome.