Want to Make a Difference in Education? Ask these 7 Questions of your Edtech Startup
For founders of Edtech startups, the attraction is often two-fold — a chance to make a difference in a domain that is a universal necessity and also the possibility of building a successful business.
My guess is that for many first-time Edtech founders, the overriding reason is the desire to do something meaningful and to make a difference.
What often gets overlooked is a reasonable assessment to validate chances of success in an industry that’s not hot for investors and is often a red ocean in terms of competition.
Here are the questions I would ask, before going in all the way —
How big is the problem you’re solving?
This is really the first step. Edtech is an industry ripe for disruption and there are plenty of problems that need solving. The challenge is to find one that is big enough to solve in terms of importance for the customer, market opportunity and impact.
For e.g. ClassDojo correctly identified that Classroom Management was one of the biggest challenges teachers faced and succeeded by designing a solution to tackle this big enough problem. They did really well in terms of getting to product-market fit and a certain degree of virality among the teacher community.
How do you plan to monetize?
Many Edtech startups look to build adoption and user base first and then figure out how to monetize. While some, backed by VC funders have had some success with this model, eventually they too struggle with how to monetize. Edmodo is a classic example with 60M+ user base but it has struggled in recent years to come up with a sustainable monetization strategy. Thinking through the monetization model right from the start and validating it through early customer and market analysis is critical.
How well thought out is your go-to-market plan?
One of the major disruptions in the Edtech space over the last 5–7 years has been a bottoms-up product adoption model — from teachers to school districts.
While this is smart, there are fundamental differences between marketing spend and strategies if you’re targeting teachers OR parents (B2C) versus if you’re targeting school districts(B2B).
B2C marketing — especially to teachers requires a serious investment in social media, a sustained presence in online forums and many innovative branding efforts such as professional development sessions, teacher giveaways etc.
Essentially you are competing for teacher’s eyeballs in an online world saturated with teacher created products like those on TPT, publisher created materials, products pushed down to teachers from the schools as well as various platforms.
There will be a significant marketing cost to get teachers(consumers) to even be aware of your product leave alone adoption unless you become viral and spread through word of mouth — which tends to be rare.
B2B (targeting school districts) marketing is more direct and predictable but has its own challenges and competition.
Whether you target parents, teachers or schools directly, they each have different costs and factors influencing success and you want to factor those in when creating your go-to-market strategy.
How long can you sustain?
One of the investors I met recently revealed the one thing she’d seen in common with Edtech companies who had succeeded, was that they sustained through a long period in time before they made it. If you’re looking for a quick success in Edtech it’s probably not going to happen. Edtech can be a long haul. On the flip side, if you keep hanging-on to your startup, without any tangible progress to justify it, that’s also a recipe for disaster.
Having well defined and time-bound metrics to aim for such as user base, adoption, revenue etc. can help you assess progress of your Edtech startup periodically and decide how long to keep on it or pull the plug and move on.
What makes you unique?
In Edtech, it’s important to understand who you are competing against. If you’re working on an idea that has little or no competition, it’s important to find out why. Is because no-one thought of it, couldn’t execute on it or maybe the problem was not big enough to solve?
Similarly, if you’re in a heavily competitive space like for e.g. Math curriculum products with 160+ companies targeting that space, its important to look at the factors various companies compete on — such as price, target market, research efficacy etc.
I’ve spoken to educators who have literally tried out 40+ educational apps in a single year. That’s a lot by any standards and is indicative of how crowded this space is.
Ideally, you want your solution to be such that when you pitch the idea, the first question someone asks is not “How are you different than XYZ?”
Who do you know?
It matters who you know.
There is a reason why so many external drivers like government grants and incubators/accelerators exist to help Edtech companies succeed. Its because its recognized as a tough space and its difficult to do it on your own. I’ve seen many successful Edtech startups hit the following marks on their success journey in no particular order —
- Key influencer/big names on team or advisory board
- Incubator/accelerator acceptance
- Angel or VC funding or government grants
Often one leads to the other. For e.g. if you have angel funding or a government grant, you’re more likely to get into certain incubators/accelerators which opens the door to getting key influencers on your advisory board and subsequently faster access to the school market.
To get to any of these, often you need to know someone, somewhere just to get that initial kick-start. If you’re not plugged into the Edtech network yourself, explore having someone on your team or advisory board who is.
Do you have an exit strategy?
In a very competitive market, it often reaches a tipping point, where bigger companies will make strategic acquisitions. Edtech is such a space. In 2015, there were 415 acquisitions worth $18 Billion.
Thinking through a possible exit or acquisition from the start can set your business in order and help you also be better positioned for a buy-out. I spoke with the founder of a company acquired recently. She wished for many things she had done differently from the start to be better positioned for the exit. Thinking through your exit strategy from the start, will help you make smarter decisions down the road.
Most people get into Edtech startups with the right intention — to make a difference, and it would be exciting to see more successes coming out of this space.