29 Apr How is Silicon Valley Subsidizing or Solving Childcare?

One might think Silicon Valley has it all figured out by now. After all, it’s home to many innovative companies, but it’s still not clear about how it can make large companies subsidize childcare, or how it can work things out using the startup mindset.

A recent Qz.com report points to how “the US childcare system is a hot mess.” Rising childcare costs reportedly put a financial squeeze on families with more than 60 percent across all income brackets saying it was difficult to find high-quality childcare in the US.

There may be hope yet, as a new platform called Wonderschool, which aspires to be the Airbnb of day care, aims to help licensed educators and caretakers launch in-home preschools or day cares.

The startup lets professional caregivers and teachers set up shop at home, while Wonderschool handles the administration and logistics. It reportedly raised a total of $24 million in financing, led by venture capitalist firm Andreessen Horowitz.

Now the challenge is how to convince early-childhood educators if they will want to start their own business by helping users get the necessary credentials, launch a website, pick a type of preschool program and manage enrollment. In exchange, Wonderschool takes a 10 percent cut of tuition.

Qz’s report raises the issue of how parenting has changed, along with how and where people work. “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 it’s no longer the case.

Wonderschool aims to cut out the barrier of pricey real estate by letting teachers and caregivers set up at home, and manages the logistics via its software application. It may take awhile before large companies pick up on this, so startups like Wonderschool may be on to something here. Wonderschool’s business model may hold the key to “subsidizing” childcare costs.

Wonderschool’s goal is for every child have access to high-quality early childhood education. The platform has set its sights on cities where parents will pay: it currently helps run 140 schools in San Francisco, Los Angeles, and recently, New York City.

Solving affordable child care is only one piece of the much-larger issue of how to support families before the kids get to school around age four of five. 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.”

Cuckooz Nest found 65 percent of parents would return from maternity or paternity leave sooner if they could access more flexible childcare arrangements. Flexibility was the second largest obstacle at 28 percent, with just 15 percent stating separation from their child as the hardest barrier when returning to work.

The survey suggests a gap between working parents’ career aspirations and opportunity for legislative and corporate frameworks to more closely align with their ambitions.

How much will it take to support mothers and fathers returning from parental leave and to consider the changes they can make to do this.

As quoted by Relocate Magazine, Charlie Rosier, co-founder of Cuckooz Nest: “Childcare has always been a hot topic and while parents want to secure the best option possible for their child, the lack of flexibility and the high cost of doing so can often mean this just isn’t the case.

UK-based research findings can only hope government can provide more tax relief on childcare costs as an impetus to encourage more parents to return to work and sooner. Now if this can only be applied in the US as well.

A high proportion (85 percent) of those surveyed believe large companies have a key role to play in supporting parents’ careers. About 46 percent of working adults view childcare costs as the main obstacle when going back to work given the cost of childcare in relation to their salary.

Global mobility managers may want to explore this issue.