Episode #14: Our Children Can't Read

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  Speaker 1:
  In a world captivated by criticism, it’s easy to overlook the groundbreaking technologies shaping our future. Let’s shine a light on innovators who are propelling us forward. As the most active venture capital firm in the US, we have an exceptional view of tech’s real-world impact. Join us as we explore, celebrate, and contribute to the stories of those creating tomorrow. Welcome to the Tech Optimist.

  As a reminder, the Tech Optimist podcast is for informational purposes only. It’s not personalized advice, and it’s not an offer to buy or sell securities. For additional important details, please see the text description accompanying this episode.

  Hello there. Welcome back to episode 14 of the Tech Optimist. We have a super cool conversation today lined up for you between Mike and Andrea. They talk about how to gamify reading. Yep, you heard me right—how to gamify reading. Andrea has a company called Rally Reader, which in essence helps kids practice their reading. They work with publishers to bring authors and exciting books to younger generations through their platform to make the process even better and more fun for parents and kids alike.

  They also use tools like AI and machine learning to build data maps for each child using their product to track and accelerate progress, which is super awesome. I think this technology and this way of teaching reading is going to be really insightful for the education sector and schools around the country.

  Mike and Andrea have a really fun, really cool demo planned for you in this conversation as Andrea takes us through Rally Reader. So enjoy their conversation.

  Mike:
  Okay, so welcome to this segment of the Tech Optimist podcast. I’m really pleased to be speaking with one of our portfolio company CEOs, Andrea Reisman Johnson, and her company Rally Reader. So Andrea, nice to meet you.

  Andrea:
  Nice to meet you too. Thanks for having me.

  Mike:
  Where does this find you today?

  Andrea:
  Today I am in Colorado where even in late May, it was still snowing this morning.

  Mike:
  Really?

  Andrea:
  Yes.

  Mike:
  Yes. I love Colorado. Heading there soon. Talk to us about Rally Reader. What do you guys do? What problem are you trying to solve?

  Andrea:
  Yeah, so we are a literacy solution for kids and for K–12 students. The problem we’re addressing is that across the US, two-thirds of kids cannot read at grade level, including 80% of kids from underserved communities. Third grade is the critical test point—that’s the change between learning to read and reading to learn. If you don’t make that leap, everything else becomes way more difficult. So we are a literacy solution.

  Mike:
  Yeah, it’s one of those things where there’s such a critical point there, there’s a window. And catching up if you miss that window is possible, but really, really hard. So tools that can help that are very valuable and a big opportunity. Where is the company in its journey? This is a pretty early-stage company, I think, right?

  Andrea:
  Yes, we are early stage. This is a seed round that we just are closing, so thank you for participating. A few big pieces are done: the core platform is built, the distribution deals with all the seven largest publishers in the world are done. We are in market, both in homes and in schools. And we just secured a pretty exciting partnership with Apple. So we are early, but there are some big pieces that we’re excited about.

  Mike:
  How about your background? I mean, how did you find yourself here? What led you to this position today?

  Andrea:
  So I’m Canadian, which people always hear in my accent. When you get to the “out” or “about” or whatever it is, I’m Canadian and proud to be Canadian. I’m also a dual citizen and live in the US much of the time.

  I have a background in app development. I’ve built and scaled consumer-facing applications before. The last one was a cloud-based solution for photos and videos where we aggregated, de-duplicated, laid things out chronologically, did deep dives on facial recognition, had a privacy wall, all the good stuff. We were lucky to have great investors and competing acquisition offers. That business was sold to Shutterfly and now supports about 10 billion photos.

  We can talk about that another time, but I’ve done consumer-facing applications before. The question is always: who is the customer and how are you making their life better?

  The second piece of background is my family operates most of the bookstores across Canada. My mom is the founder and CEO, and my grandma was also an entrepreneur. She’s passed now, but it’s kind of nice to have that legacy. Through that, I have a lot of exposure to the book industry and unusually strong connections in publishing that I otherwise wouldn’t have had.

  And then on a personal front, I have three kids, and my youngest is super dyslexic and really struggled with reading. The irony was not lost on me—that I come from a family that operates almost 200 bookstores, and I would have had a kid who was functionally illiterate were it not for enormous intervention from teachers and significant parental participation at home.

  So it was our personal experience, combined with my background in app development, and my exposure to the book industry, that all came together to motivate this.

  Mike:
  I mean, we talk a lot internally about product-market fit, and something that’s very important for us as investors is founder-market fit. One of the things our team was so excited about in supporting your seed round is we felt a really strong founder-market fit here.

  Mike:
  So tell me, I mean, the obvious question I think in everybody’s mind is we get the need, we get the scale of the need, but we’re also in a very interesting time now with AI and kind of oh shit demos that we’re seeing every three months. How are you thinking about this with all these investments in AI being a tailwind and not just you’re going to get caught under the elephant’s foot and get crushed by somebody? How are you managing and thinking about that?

  Andrea:
  So I’ll just back up a drop to give a little bit of framework if that’s okay. All of us, regardless of our background, learn how to read in the same way. There are four key steps: Can you hear the sound? Can you match it to what it looks like? Can you sound out a word? And then, how many words can you read per minute and understand? Fluency is really, can you read the way you speak? We all have those four steps.

  In schools now—and there’s a reasonable amount of controversy in the schools with the reading wars and a bunch of big podcasts on the topic—there are different approaches to how to read. But regardless of how you learn, you have to practice. We are that practice piece.

  There are products in the market… It’s a bit like piano lessons: a kid can be lucky to get great piano lessons, and that’s awesome. But if they don’t practice—

  Mike:
  Right.

  Andrea:
  Yeah, I mean, I don’t play piano. I was lucky to get lessons. I don’t play. Guilty. But for fluency, it’s really about practice, just like with piano, but even more so for reading because the more you read, the more you encounter new vocabulary, build background knowledge, and develop other skills.

  There are products out there that have been on the market for a while—not necessarily AI-driven—that use constructed content designed to get kids reading for fluency. Because it’s constructed, there’s no royalty fee to an author, so it’s cheaper. But they’re boring. It’s like C-SPAN. It’s not bad quality; it’s just dull.

  Mike:
  Boring.

  Andrea:
  And that’s the problem—it’s boring. If you want to engage a kid, you have to give them content they’re excited about. We have full catalog partnerships that include backlist titles, which are older, and frontlist titles—published today and available today—from all the big publishers. We’ve got the good stuff, the books kids actually get excited about. Wild Robot is going to be a big movie this summer, for example.

  So part of our strategy is providing real, engaging content. Publishers only want to work with partners they trust.

  And then, where machine learning and AI really shine for us is behind the scenes. We build a full word graph—a data map—for each kid. We track all the words in English: which ones they’ve encountered, how many times they’ve read them correctly or incorrectly, and which words they haven’t seen yet. That allows us to understand not just track progress but accelerate it, helping us find and fill holes in their reading foundation—similar to how we’ve traditionally approached finding and filling gaps in math. Does that make sense?

  Mike:
  Absolutely.

  Andrea:
  So for us, the content is a huge hook. Publishers only want to work with trusted partners, and our real opportunity is accelerating reading skills.

  Mike:
  Now we have a big network of other entrepreneurs, tens of thousands of investors and community members. A lot of them really like to support entrepreneurs and startups. How could they help you? What’s your ask?

  Andrea:
  First of all, if you like to support entrepreneurs, that’s awesome—thank you. Two things: One, if you are interested in literacy for any reason, please let me know. Two, if you are connected to schools where you think this could be beneficial, please let me know.

  We’re actively working with private schools, public schools, schools focused on kids with learning differences, and districts where many students come from non-English-speaking homes. We cover the full spectrum. So if you’re connected to a school and think this sounds interesting, we’d love to talk to you.

  Mike:
  How about a little demo? Can you give us… This is a podcast, but we also put this on YouTube. So yeah, why don’t you give us a little taste of the experience.

  Andrea:
  Okay, sure. Give me one second. It’s pretty cool. I have to say, Apple has an education division that reviews all the apps in the App Store—however many zillions there are—and picks one or two for each major category. There are two for math. We are one of two for reading. They help with the sales cycle, taking us into schools. When we do demos with them, this is how they like to do it.

  So part of what people see in Rally is a huge selection of books—popular books, all kinds of books. There’s a great search function. And in the downloaded books for this account, the magic is: first, 50,000 books at your fingertips—no shelf space required.

  Kids can read silently, like on a Kindle, or read out loud, and we catch a meaningful percentage of errors, providing real-time help so they’re not just skipping hard words or reading them incorrectly without knowing.

  Here’s how it works: If I make mistakes, it stops and gives me a chance to try again because we want to encourage persistence. If I get it right, great. If not, I can press play to hear the word read aloud, then read it back. I can also tap on any word to get a definition at the same grade level as the book.

  And what really excites kids is the dashboard. They want streaks, just like in any other app—they can [inaudible 00:13:31]…

  Mike:
  Gamify it, right? Yeah.

  Andrea:
  100%. 100%. So what kids tell us is that they want streaks, and if they don’t have access on the weekend, they want some way to freeze their streak or restore their streak. This is what they care about. And from our standpoint, so many other things in their lives have been gamified. Whatever tricks and tools we can use to get them to read more, thumbs up.

  Mike:
  For sure. I mean, we’ve gamified investing through Robinhood, so we know it works, period. Right?

  Andrea:
  Exactly. And as one example, one of the things that I hear all the time, especially in fourth or fifth grade focus groups, is something like, “Okay, if I do my 15 minutes of reading today, but you still want me to finish the chapter, what do I get?” Which might sound direct, but for anyone who’s spent time with a fourth or fifth grader, it will also not be surprising.

  Mike:
  Yeah, transactional. Yeah.

  Andrea:
  You got it. Exactly. And so basically what they got was a word counter. The same way we as adults know that walking is good for us, but seeing steps counted is exciting. They see that kind of stuff.

  The data—I was talking about sort of a data map behind the scenes—most adults or parents have heard of sight words or high-frequency words. In the academic world, they’re sometimes called Dolch words or Fry words. But we’ve scanned 50,000 books and pulled the thousand words that are the highest frequency. They make up three-quarters—75%—of the words in all the books. And we just gamify them: read them out loud correctly in any order, and the first three times they sparkle off the page and then they’re yours. You can see on the dashboard which ones you’ve won.

  We also do very customized, specific error tracking for each kid. Just like if somebody gave you a math test and circled a problem and said, “Try this again,” we help them build the broad foundation and then help them practice their specific errors.

  Mike:
  So the sight words—just again so I understand as a layman—if kids really have internalized that subset of words, the fluency of reading is just greatly accelerated. Is that roughly right?

  Andrea:
  It’s exactly right. The English teachers talk about it as automaticity—you have to be automatic with those words. It’s the same reason we memorize multiplication tables in math: because at some point you get to an equation, and if you’re puzzling out seven times eight instead of automatically having 56, you lose the thread.

  Mike:
  Right, right. No, that’s great. I mean, it’s great. Now, how about parents who say, “My school hasn’t adopted this, but I am an involved parent and really want a tool like this for my child”?

  Andrea:
  We do a consumer offering where right now it’s iOS only—so iPhone and iPad. Personally, I prefer the iPad just because it’s a bigger screen, but it’s your choice. The app right now in the App Store is free, and you pay for books. The offer right now for parents is: pay the same price for books and have your kid get that real-time support and data so that you’re not the one pestering—you’re the cheerleader who says, “Good job.”

  Mike:
  Yeah, that’s fantastic. Hey, really interesting story. Again, I strongly encourage our listeners and audience: if this resonates with you and you want to be supportive, reach out to Andrea. I’m sure she’d love to connect with you.

  And yeah, keep up the good work. Again, nothing inconsistent with doing well and doing good at the same time. I just think this is an example of that. So congratulations on your progress to date, congratulations on your seed round, and just continue to kick ass out there.

  Andrea:
  Thank you for having me.

  Mike:
  All right, have a good night. Take care.

  Andrea:
  You too. Take care. Bye-bye.

  Mike:
  Bye.

  Speaker 1:
  Thanks again for tuning into the Tech Optimist. If you enjoyed this episode, we’d really appreciate it if you’d give us a rating on whichever podcast app you’re using, and remember to subscribe to keep up with each episode. The Tech Optimist welcomes any questions, comments, or segment suggestions. Please email us at [email protected] with any of those, and be sure to visit our website at av.vc. As always, keep building.