A FEW years ago a group of American educators got together to talk about a common problem. School systems were being swamped by data—like every other sector of the economy. And like other industries, they had no idea how to respond. But unlike businesses, most schools aren’t competitors. So they looked at how they could team up to solve their problems.

They created a computer system to store data in a secure, common format that gave the schools complete control over what data they collected, how it was used and with whom that data was shared. In a nod to transparency and civic responsibility, the software was open source. A non-profit organisation was formed to run it, backed with $100m from the Gates and Carnegie foundations. A blue-ribbon board of directors was formed, mainly educators but also Bob Wise, a former governor from West Virginia.

And so inBloom was born. But on April 21st, less than two years later, the group announced it is shutting down.

Why the flame out? After being warmly embraced by school districts in America, inBloom saw them pull out after parents and privacy advocates heard about the plans and feared for student privacy.

InBloom is one of the first major big-data casualties—a victim of exaggerated fears and a misunderstanding about the technology. Rather than a diabolical plot to sell student data to the highest bidder (as it was often mischaracterised by critics and in the press), inBloom was meant to be a solution to the problem of data in education. And it was also a clever way to enable the use of data to improve learning and teaching.
It is worth bearing in mind that schools have been keeping electronic records for decades. In the 1983 film “War Games,” Matthew Broderick plays a fun-loving geek who, to impress a girl, changes her biology grade from an F to an A after breaking into the school’s computer system (watch film clip here).

But managing the technology is a struggle for schools: how to store, process and provide access to the data—not just student grades, but things like attendance, disciplinary actions, sports activities, medical records and so on. The data are often in different databases, incompatible formats and require different passwords. As a result, the data are not used effectively. For example, by aggregating them one might find that a certain teacher is particularly good with certain students (say, shy boys or rowdy girls) and organise schedules so that they teach those pupils. And the data are difficult to access (by a parent, for instance) or share (if a student transfers schools).

InBloom solved these woes, by providing a service for schools to store and set controls for their data—in the same way a computer operating system lets users store their content and chose their software to access those files.

Yet inBloom was grossly unprepared for the backlash against its technology. Instead of fighting critics directly, they left it to their customers—the school districts—to educate parents and make the case. This was a miscalculation, since it was easier for those facing the criticisms to retreat rather than walk further out on a limb.

This is a pity. It will put a brake on attempts to use big data to improve education (which The Economist has discussed here and here and here and here). Worse, inBloom’s collapse will probably cast a chill over other promising entrepreneurs and tech-philanthropists who want to solve similar problems in other industries. For example, shouldn’t we have an inBloom for health care, so patient records can be easily accessed by qualified caregivers? The best way to lower the costs and improve the quality of medical service is by the effective use of data. But after inBloom’s beating, who would take the risk? (Indeed, the British government recently delayed plans for an inBloom-like health-care data platform after a public outcry.)
Among the lessons inBloom’s leadership take from the experience is the need to better communicate the benefits of using data. “We thought they were clear and obvious,” says Iwan Streichenberger, inBloom’s chief executive (pictured above with Bill Gates). Moreover, society’s approach to privacy needs to change. Just as society made progress on the environment when the thinking shifted from the “negative” to the “positive”—from imposing fines to promoting a company’s green credentials—so too must we shift our thinking about privacy.

Despite inBloom’s closure, the system may survive. It is an open-source project and several school systems still use it. So there’s a glimmer of hope that it can quietly continue to evolve. InBloom hit the wall not because it had the wrong idea, but one that was ahead of its time. It failed to overcome privacy fears that, although not groundless, were exaggerated and fixable. Whenever a timid ignorance obstructs progress, the loss is all of ours.