“Web 2.0″ is now a hokey buzz word, but at one time represented a comprehensive approach to making web applications. This philosophy stressed simple designs, elegant interfaces, open data exchange, and, more intrinsically, fast and focused products. Small teams of talented engineers staked out their claim to a particular niche and, needing not much more than rent money, built something workable in a matter of weeks or months. In stark contrast to the mad dash for venture capital during the dot-com bubble, companies started showing off their boot-strapping scars instead of their treasuries.

This modus operandi, I think, has served the web community well. Large investment isn’t prerequisite to starting an Internet venture – meaning that competitive advantage is often only a function of talent and ability to adapt. Of course, when a handful of students working from a dorm room can (and do) disrupt established players, the speed of innovation can be dizzying.  In addition, instead of having software monoliths that attempt to provide a comprehensive online platform that addresses all my needs (the old AOL and Yahoo), I can now use many different services – each one extremely good at what it does, be it financial management, providing news that I like, or helping Lingt develop technology.

Web innovation in the education market will do well to adopt the same intensely-focused-rapid-innovation mantra. Luckily, there’s plenty of evidence suggesting that it has already begun to do so. BetterLesson.org, another Boston-based education venture, is tackling collaborative curriculum development with an attractive and very intuitive web interface. Quizlet, started by a current MIT freshman, aims to make online flashcards extremely easy. There are numerous young ventures focusing only on facilitating private tutoring with webcams. All of these companies are small, smart, and extremely focused on providing excellent solutions to very specific problems. We live and work this way ourselves: we realize that foreign language education is a multi-faceted and complex process, but decided to take one component of that process that we thought the most important – learning to speak the language – and built an application that we think improves upon that greatly. Certainly, there are other important parts of learning a language (like memorizing vocabulary, for example), but instead of trying to conjure a generalized solution, it’s better to build iteratively, making sure each piece is really solving one problem before trying to carry them all.

My hope is that this way of thinking will inspire new educational ventures to emerge with highly tailored and highly effective web applications that ultimately give teachers and schools more affordable and higher quality options in enhancing their classrooms with technology.

A few readers have confronted me on one of the blog’s themes recently. “The education market isn’t devoid of investors and money,” they remark. “Fortunes have been made in the education space. Look at test prep and private tutoring.”

They’re right. Plenty of companies have done very well selling services that will raise your SAT score by 300 points – or your money back. Connecting students with private tutors has also proved a lucrative enterprise, so much so that many web companies have emerged in recent years to lay a stake in the new digital version of this market by facilitating webcam exchanges.

But we’re not interested in these models for the same reason they’ve been successful in the past: they cater to only the wealthiest sliver of students in the world. Don’t get me wrong – we want the wealthiest private schools and students using Lingt. . . right along with every public and disadvantaged classroom that wants to use technology to improve the quality of education.

So when we write about the education market, we are using shorthand for a subset: schools. Charter, public, private, immersion, urban, overseas – we want to benefit as many students as possible, not just the ones who have the luxury of a wealthy background. It’s this challenge that scares investors and entrepreneurs from engaging schools. The bureaucracy and slow purchase cycles associated with selling to schools are intimidating, for sure, but the rewards to our education system that will come if more young ventures feel comfortable working for and with schools are too great to ignore.

Often when I’m describing Lingt to someone outside of the education or startup community, I receive a revealing reaction:

“So what does your company do, exactly?”

“We make foreign language learning software?”

“Oh, so you’re like Rosetta Stone?”

“Not really. We build online technology for classrooms – our core users are teachers.”

“Ahhhh. . . <pause>. . . so you’re like a nonprofit?”

I’m not vexed by the question at all – I just find the pervasive correlation of education products with charity to be an unfortunate one. People are reminded of volunteer programs and company-sponsored science fairs when they think education, not a competitive market on the bleeding edge of innovation. The thought of suite-and-tie corporations plotting how to make money off one of our society’s most cherished institutions is unsavory, for sure. But, that education is so noble and vital is, in fact, more reason to value a market that is driven by the same thing that has led to rapid innovations in other markets: money. Now, if you feel like our education blog has been dirtied after reading that word, let me wash it off for you:

First, and most obvious, the promise of real capital gain attracts top talent to the field. There’s a reason why so many MIT students go in wanting to build reactors or robots and come out working for Goldman Sachs. How the education market could become more saturated with financial promise is another discussion, but once it gets there, expect the pace of innovation in the field to multiply many times over.

Second, and especially in this economy, profit is associated with greed and pretentious bonuses. But any good company will make sure profits are effectively feeding future growth that will benefit the customer. I say this from a startup founder’s point-of-view; my mouth waters at the pace and scope with which we could build cool new technology if we had money in the bank.

Third, any successful company should give back to the community that has allowed them to succeed. While charity should not drive their business models, it should be an eventual component to existence in the education space. More money circulating means more money not just donated back to education pursuits, but put to work for social benefit by the same creative and talented minds that were able to grow a successful company. Lingt study-abroad scholarships, anyone?

Finally, the desire to make money in a particular market has an ironic effect: it tends to drive down prices. This is economics 101: competition driven by the promise of capital gain will lower the end price for schools. And in a twisted way, here is the charity of education capitalism: driving down costs so a school district’s dollar can go further in providing for students and teachers. And a tight school budget needs to go as far as possible.