The Edge: Think ACT Is Just a College-Admissions Test? Think Again

[The Edge] Hi. I'm Goldie Blumenstyk, a senior writer at The Chronicle of Higher Education, covering innovation in and around academe. Here's what I'm thinking about this week: If you think "college-admissions test" when you hear ACT, think again. Fewer students took ACT's college-admissions test in 2018 than in the previous year. That's the kind of news that you'd expect would be troubling to the organization's chief executive. But to hear Marten Roorda tell it, it hardly fazed him. After my conversation with him last week, I believe him. The reason: The college-admissions test that defined ACT for 60 years is becoming a smaller and smaller piece of its overall mission. Over the past few years, ACT has been quietly converting itself from a testing company into a multidimensional educational enterprise. Having put tens of millions of dollars into several major acquisitions and investments, the nonprofit is now increasingly selling products and services to colleges for their enrollment-management operations, their developmental-education programming, and even their classroom analytics systems. It's also beefing up its offerings of tests and tools for the growing workplace-readiness market. "My biggest competitor isn't the College Board any more," Roorda told me, dismissing the organization that sponsors the rival SAT. If anything, he says, he's now more concerned about the moves being made by big publishers and newer adaptive-learning companies like Knewton. Roorda took over the helm of ACT late in 2015. The organization, he says, is now in year three or four of a six-year transformation. I've been watching ACT's moves for more than a year now. My interest was first piqued in mid-2017 with its [$10.5-million commitment to New Markets Venture Partners,]( which invests in education companies. It was an unusually direct move into the venture-capital world. Its early 2018 [investment of $7.5 million in Smart Sparrow,]( an ed-tech company [we've spotlighted before,]( signaled a surprising shift toward classroom technology. And its [purchase this summer of NRCCUA]( — the enrollment-services company that owns Eduventures, a higher-ed research organization and consultancy — suggested to me that the organization was serious about diversifying itself. ACT has made several acquisitions and partnerships in the K-to-12 arena as well. Why the shift? Roorda, who spent decades working in publishing and testing businesses before joining ACT, says it was a matter of need — and opportunity. "It's just not enough to say, Well, you're a 33 or a 26," he says. (Roorda declined to provide specifics, but he allowed that the ACT test, which has a top score of 36, once accounted for two-thirds of the organization's revenue. Now, he says, revenue from the test "is becoming a minority.") He wants ACT to be a player in what comes next for college students — and what comes before they get to college or after they've headed off to work. And he believes that ACT's capabilities in data, measurement, and analytics, whether homegrown or newly acquired, can make the organization a major figure in various stages of the student life cycle. If that sounds familiar, it should. Lots of companies are looking to own the market in that way. Not too many actually do. 'We don't serve our mission being a bank.' Still, ACT has been making moves that seem logical. Under Roorda, it has established an internal R&D organization of learning-science experts, called [ACT Next]( to explore and develop products based on data and analytics. Its decision to invest with New Markets reflects Roorda's assessment that the organization's own corporate-development team was too small to effectively scour the market for good investment deals. And its announcement just last week of its [further expansion into the workplace market]( — an arena I've been researching as I prepare to produce a report for The Chronicle related to the "skills gap" — seems well timed to take advantage of the explosion of interest in tests and tools to better match people with employers. The goal is to create a "continuum" of products and services. "The data," Roorda told me, "is the thing that is the common denominator for all that." Increasingly, that includes data from ACT assessments of students' social and emotional states, as well as their academic acumen. ACT says its acquisitions and investments each fit under one or more broad categories: K-to-12, learning, work force, and postsecondary. But I'm still having a hard time seeing the synergy. In the meantime, I'm still curious about how much ACT will ultimately spend carrying out this shift in direction. The organization hasn't disclosed dollar figures for a lot of its deals, and Roorda was discreet. One thing he did say: He's willing to deploy the organization's assets to fuel the transformation. As he put it, "We don't serve our mission being a bank." According to its latest publicly available tax filings, for the year ending August 31, 2016, ACT held net assets of $443 million. Meanwhile the Educational Testing Service, the organization that develops the SAT, has also been diversifying itself; it even made at least one move into the ed-tech world, providing [financial support to a start-up incubator called LearnLaunch Accelerator](. Roorda isn't a showy guy. ACT's transformation has been similarly no-drama, although a year ago it eliminated about 100 positions as part of an "organizational realignment." I asked Roorda if he was trying to keep a little below the radar. He acknowledged that's been a bit of a factor for two reasons. One was practical. Even with its resources, ACT is entering an ed-tech sector flooded with capital — from traditional venture-capital firms, from foundations like Gates and Lumina, and from flush student-loan-guarantee agencies like Strada Education Network and ECMC. "All the capital is going to a limited number of companies," Roorda noted. That can drive up prices. The other reason is reputational. "When you rebrand yourself a learning company, you have to be a learning company," he said. "We're not there yet completely." Happy 15th birthday, Facebook. On Monday, the internet reminded us that this was the 15th anniversary of the creation of Facebook. I don't have the time (or the stomach) to look back on all the ways Mark Zuckerberg's Harvard dorm-room creation has changed society, politics, civil discourse, and our entire sense of privacy. (And yes, even so, I still typically check my feed once a day.) But if you're curious about its impact on higher education, I can assure you that our archive holds more than 3,000 articles mentioning it. And just as I remembered, that archive begins with a delightful feature, written by our then-reporter Brock Read (now one of our assistant managing editors), describing the fledgling service, [at the time still called "Thefacebook,"]( as it had begun its expansion to 32 campuses. Enjoy the read, and a little time-travel back to innocence. Our fifth annual Shark Tank: Edu Edition at SXSW EDU seeks contestants. We're still accepting applicants to be contestants in our Shark Tank on Wednesday, March 6, 12:30 to 1:30 p.m., in Austin, Tex. You can read more about it (and another session on the skills gap that I'll be moderating) [here](. Do you — or someone you know — have a new company, a new organization, or even just a good idea to improve higher education? Please send a short description of your idea to [chronicleevents@chronicle.com.](mailto:chronicleevents@chronicle.com) Got a tip you'd like to share or a question you'd like me to answer? Let me know at [goldie@chronicle.com.](mailto:goldie@chronicle.com) If you have been forwarded this newsletter and would like to see past editions, or sign up to receive your own copy, you can do so[here.]( Subscribe Today Get the insight you need. [Purchase a subscription]( to The Chronicle for unlimited access to breaking news, expert analysis, tools, and practical advice. Goldie’s Weekly Picks [Can Data Make You a Better Teacher?]( By Beth McMurtrie Colleges are trying new ways to help faculty members use research and analytics to shape what they do in the classroom. 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