The rapid growth of AI products isn't due to a sudden market desire for AI technology itself. Rather, AI enables superior solutions for long-standing customer problems that were previously addressed with inadequate options. The demand existed long before the AI-powered supply arrived to meet it.

A Chinese government policy banning after-school human tutors, intended to reduce academic pressure, had an unintended consequence: it created a market vacuum filled by AI tutors. This regulatory action unintentionally accelerated a large-scale societal experiment in AI-driven education, far outpacing adoption in the West.

Unlike for-profit colleges reliant on risky Title IV federal funding, Stride contracts directly with public school districts. Its state-level funding for K-12 education eliminates the student loan fraud incentives and "stroke of the pen" federal regulatory risks that doomed many post-secondary for-profit schools.

Despite the rapid shift to a decentralized, market-based education system, Florida lacks basic accountability measures. The state has no subject requirements for homeschoolers, and while students take standardized tests, the results are not published. This means policymakers and parents have no reliable data to determine if this experimental approach is helping or harming children's education.

School districts are reluctant to switch virtual school providers like Stride due to the massive disruption it causes. The operational complexity of managing curriculum, IT infrastructure, and thousands of teachers creates significant inertia, making contracts sticky even if a competitor offers a slightly lower price.

Entrepreneurs often see the kids' market as less crowded and thus easier to enter. The reality is the opposite: it's less crowded because it's significantly more complex, with far more laws and regulations (like COPPA) that founders must navigate successfully to survive.

Pre-COVID, a major hurdle for virtual elementary school was the need for parental supervision. The widespread adoption of remote work has created a new segment of parents who are home and able to act as "learning coaches," making virtual school a viable option for their younger children for the first time.

While practical reasons like rural access exist, a primary driver for parents enrolling children in Stride's virtual schools is to escape negative social environments like bullying. This creates a highly motivated, non-discretionary customer base that views the service as a necessity for their child's well-being.

Fueled by an $8,000 per-child voucher, Florida's homeschooling trend is not about kitchen-table learning. Parents act as 'general contractors,' curating education by choosing from a diverse ecosystem of micro-schools, co-ops, and even a la carte classes from public schools. This creates a highly fragmented and customized educational experience.