EdTech Company — From Idea to Its Implementation

The influence of innovative technology on education can’t be underestimated. So, EdTech startups are now the main tool of this transformation process. As the CEO of TeachMeCash — the company working in this industry — I’d like to share with you the secrets of opening a company on this market. Dive deeper into the details of the ‘backstage’…

Establishing an EdTech Company

  • Availability — online education is cheaper and more competitive. So, it will be easier to attract additional funding. This will allow a company to focus on filling the courses and improving the service for students rather on the material issues.
  • Differentiation — online education is as much as possible focused on every particular student and their burning educational needs. For example, there are short courses in certain specialized fields.
  • Marketing subtlety — online education can reach previously unattainable consumer groups. In the context of globalization, it is now easy to find lecturers and students in specialized fields.
  • Variety of training forms — online education allows you to experiment with forms of knowledge representation and expressions of students.

What? Where? When?

Knowing the market and having determined the product, it will be possible to establish clear short-term and long-term goals of the future company and develop a solid business model for it.

The Main Business Models of EdTech-Companies

  • Institutional — buyers are mainly institutions — educational institutions, corporations, etc.;
  • Custom — buyers are mainly users — teachers, students, parents;
  • Freemium-institutional — free for users, paid for institutions;
  • Freemium-custom — free and paid offers for individual users.

These are not ONLY available models, still, they are most popular among entrepreneurs.
As for me, I have chosen a unique business model which is described in the TeachMeCash product presentation. If you want to learn more, go to the Referral Program and Career Program section, click on the ‘Get it to e-mail button’, and receive an email with the TeachMeCash presentations including the one about our product containing our business model.

At Whose Expense?

It is possible to collect money for the project by means of crowdfunding. It is not necessary to look for one big investor to start the work faster, you can attract small one-time infusions.

However, investors usually choose the few: each year, top 10 deals are typically about half of the total annual funding. Over the past few years, there has been a tendency for about 15% of companies to attract 75% of investments. However, this is also true for other industries.

Testing, Feedback, and Advertising

  1. Testing ALWAYS makes errors visible. After that, it is worth getting started with beta, giving free access to the product to any number of real users. You will also find something worth fixing at this stage.
  2. And even after a full launch of your EdTech project, collect clear feedback. Every review, no matter if it’s positive or negative, should be appreciated. Continue encouraging users to communicate, as they are the best in promoting a new brand.
  3. Advertising of your EdTech project should make 7–8% of gross income. This is a fundamental need of every project and without it, a great product can remain unnoticed for a long time.

Who Owns the Rights?

  • Who owns the rights to created content?
  • Will the contents be protected when accessed?
  • Is there some copyright infringement?
  • Who is responsible for the reliability of the information provided?
  • What is the legal procedure for issuing a certificate or a diploma?
  • What are the guarantees for users and risks for the founders?
  • How to protect users from images and contents of unwanted nature?
  • Who will be responsible if the platform is used by criminals or terrorists?
  • How to make money in case of dissatisfaction with the quality of services? How can these funds not be returned?
  • What privacy requirements should be met?
  • What liability will the company bear if somebody’s feelings are affected?

It is also important to ensure the legal aspects of implementing the chosen monetization method. Moreover, you need to understand that education is becoming international, and almost all educational startups are focused on the global market. This adds a lot of international legal aspects to consider.

The Bottom Line

My name is Illia Danylenko, I am an entrepreneur, investor, expert in the field of EdTech, investment, and finance, the creator and CEO of TeachMeCash.