Child care is broken. Silicon Valley thinks it can fix that, too

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The US child care system is a hot mess. Parents don’t have federally-protected time off to bond with their children, despite hoards of research showing how relationships formed in the earliest years of life shape babies’ brains—laying the foundations for children’s future emotional, educational and physical well-being.

When parents go back to work, often sooner than they’d like, their child care options are limited. Meanwhile, early childhood teachers and day care workers are woefully underpaid, yet it’s all increasingly unaffordable.

Enter the entrepreneurs.

Wonderschool, a platform that helps licensed educators and caretakers launch in-home preschools or day cares, just raised $20 million in financing, led by venture capitalist firm Andreessen Horowitz. (Wonderschool has raised $24 million in total.) TechCrunch says the company aspires to be the Airbnb of day care: It lets professional caregivers and teachers set up shop at home, while Wonderschool handles the administration and logistics.

In this way, Wonderschool offers to bridge the gap for early-childhood educators who want to start their own business, but may not know how. The platform can help users get the necessary credentials, launch a website, pick a type of preschool program—from Montessori to Reggio Emilia or Waldorf—and manage enrollment. In exchange, Wonderschool takes a 10% cut of tuition.

But Wonderschool, along with other initiatives reimagining at-home child care, aren’t just meant to benefit teachers and care providers. Our current child-care system was built for the industrial age, according to Joe Waters, founder of Capita, an innovation lab for early childhood. Large child-care centers may make sense if parents work on a typical 9-5, inflexible schedule, with a drop-off period in the morning and a pickup at night. But parenting has changed, along with how and where we work. Parents’ hours are all over the place, and many are looking to maximize their time with kids however they can.

“We are interested in the future of caregiving in light of the future of work,” says Waters. “How does child care need to adapt as the workforce and workplace change?”

Filling the early childhood gap

“There’s a huge lack of high-quality early childhood education options to parents in major cities and all throughout the US,” Chris Bennett, co-founder and CEO of Wonderschool, tells Quartz. The two main reasons, he says, come down to real estate and business savvy. Starting a business in a commercial space is prohibitively expensive for most people, and most early-childhood educators are focused on kids and teaching, not raising startup capital to retrofit a commercial space for licensed child care use. Wonderschool cuts out the barrier of pricey real estate by letting teachers and caregivers set up at home, and manages the logistics via its software.

The company’s hope is that by saving on real estate, early childhood centers will be able pay more their staffers more, while parents can pay less. Indeed, Wonderschool claims staffers at its centers are reportedly earning an average salary of $78,000, versus $28,000 as the national average, according to US News & World Report. That’s not a typo: a recent University of California, Berkeley report, citing numbers from the Bureau of Labor Statistics, estimates the average preschool worker earns $13.94 an hour.

The picture of child care in America is complicated, as Corinne Purtill and Dan Kopf have pointed out for Quartz at Work. According to the US Census 2013 report “Who’s Minding the Kids?” weekly child-care costs for a family with an employed mother rose by about 70% from 1985 to 2011, the last year in which the census collected child care cost data. During that time, wages remained relatively stagnant.

Costs are increasing for everyone, but have really skyrocketed for the rich—who continue to increase their investments in their children’s education in an effort to boost their children’s chance in life. Also, as Purtill and Kopf explain, regulations have made it harder to offer at-home care, and the creation of government programs offering nearly free child care to the poorest households has decreased the supply of potential labor.

Meanwhile, US policy has not kept pace with the science of early childhood development. The first few years of a child’s life are critical. And yet, as more parents work, there is little infrastructure to offer what science says children need: an intimate environment that nurtures children, is playful, and, as the children get older, is appropriately stimulating. The only policy response to fill the gap is pre-kindergarten. But many say that pre-k starts way too late—we’ve already missed the period in a child’s life that matters most.

Bennett says Wonderschool’s goal is for every child have access to high-quality early childhood education. For now, however, the platform has set its sights on cities where parents will pay: it currently helps run 140 schools in San Francisco, Los Angeles, and more recently, New York City. The organization could not provide the number of children being cared for at its schools, but said the average size was six kids, meaning the total is probably less than 1,000. In 2016, nearly 70,000 kids were enrolled in pre-k in New York City.

An added bonus of the model, Bennett says, is the community the educators form online, and even in person.  ”Running one of these programs can be really lonely,” he said. Teachers can share resources, ideas, and even sometimes meet up in a local playground is they are close enough. An added bonus for investors is that it is agnostic about what kind of education centers offer: “Every parent has a different idea of what they want for their child,” says Bennett. “To be prescriptive limits the ability of us to provide our mission.” (That said, the company has hired a curriculum expert to help design options for the dashboard).

The risk, of course, is quality control: Wonderschool sets teachers up, but isn’t on-site to oversee the operation. But unlike, say, ride-sharing, child care is a highly regulated area. On top of local, state, and federal regulations, Bennett says that Wonderschool has its own “quality and safety promise.” Programs must publish a “rhythm of the day,” or schedule, and have outdoor time. Parents offer feedback through the platform so Wonderschool sees issues when they crop up, and teachers are assigned mentors to help them navigate tricky issues like crazy parents or how to retain staff. So far, no teacher or school has been kicked out, Bennett says.

Wonderschool think it can also buck a broader child care trend: currently, center-based care is on the rise. But that is likely a reflection of families flocking to and staying in cities, where the economics of center-based care work. For parents seeking a smaller, more intimate setting, as well as those in rural areas or embedded in the gig economy, a preschool set up at home could be an appealing option.

The future of child care design 

Having in-home child care requires having a home that is suitable for child care. To that end, Capita’s Joe Waters is working on entrepreneurial solutions.

Last year, Capita teamed up with Auburn University’s School of Architecture in Alabama to design a new kind of housing product—a house that is affordable, efficient, durable, and specifically designed to meet the needs of in-home child care providers in rural America.

Auburn’s architecture school  has been tackling affordable housing issues in impoverished western Alabama since 1993, when it founded the Rural Studio with undergraduate students and faculty to bring good design to some of its most impoverished communities. In 2005, Rural Studio challenged students to design and build a house for $20,000 (the average cost of a mortgage in the community), which became the 20K Initiative. It has since built more than 200 low-cost projects by embedding students in Newbern, Alabama, to live and work with residents to build homes.

Waters says there are more than 1 million home child-care providers in the US, about half of which are on the books. “Let’s dignify their work with good design,” he says, by creating houses that allow providers to elevate the quality of the care. The right house, he believes, could transform the perception of at-home care from a side gig to a valued profession.

Waters knows about Wonderschool. In fact, he could see some of the houses, when they’re built, being put to use by Wonderschool users. In other words, Waters could provide the hardware, and Wonderschool, the software.

What’s next?

Solving affordable child care is only one piece of the much-larger issue of how we can support families before the kids get to school around age four of five. It’s clearly a major concern: a survey of 1,858 men and women between 20 to 45 years old, conducted by Morning Consult for The New York Times survey, showed that a quarter of respondents who either had children or planned to have kids expected to have smaller families than they’d like. The number-one reason: “child care is too expensive.”

Waters is tackling that problem, too. With KnowledgeWorks, Capita will publish in 2019 a Forecast for the Futures of Young Children to explore how child care might change to adapt to the gig economy, as well as questions like how climate change, gender identity, race and equity, as well as technological advancements may affect the needs of families and children. As Waters points out in a post on Medium, “early childhood ‘policy’ is too frequently defined as a set of programs (pre-K, home visiting, child care, etc.) operating in silos rather than as a coordinated public policy approach connecting singular programs together.” If we want more affordable child care for everyone, he says, we need to think bigger.

That’s not problem for Wonderschool’s Bennett. Like all good Silicon Valley startup founders, he’s already thinking about how to scale up, and says he is is in conversations with local, state and federal officials about how he might bring at-home care funding to the masses. Meanwhile, a lot of cash-strapped, overextended parents are awaiting a solution that can deliver.