Edutech in Nigeria. 2016 Year in Review — What is working and what isn’t

Hello my name is Ogunlana Olumide — one of the founders of Prepclass. Asides building awesome businesses, I strongly believe in the value of documenting our journey thus far while sharing valuable insights that would lead to a much more collaborative and mature education technology ecosystem. Indulge me for the next 5 to 10 minutes. While I try to highlight the growth/challenges edutech solutions in the market faced in 2016 while predicting what 2017 would look like.

In a series of post I would I talk about the the current solutions available in the market namely :

  1. Tutor — Learner Marketplace
  2. VAS Enabled Mobile Apps
  3. Software Applications for Schools and Universities
  4. Study Abroad Platforms
  5. Education Blogs and others

For this week I would be talking first about Tutor-Learner marketplace(in my opinion the biggest solution out of the aforementioned)

Enjoy!

Tutor-Learner MarketPlace :

These are platforms that allows learners to hire the the services of a tutor that would visit to teach at a pre-agreed rate, place and time. Prepclass is by far the biggest in this space having enjoyed the first mover advantage and generating monthly revenues in excess of 10 Million Naira monthly serving over 50,000 thousand hours of tutoring in 2016 in Lagos, Abuja and Port Harcourt.

Growth of Tutor-Learner MarketPlace in 2016

  1. K-12 had the Biggest Demand : In 2016, the biggest niche (by volume of revenue and number of requests) for tutor-learner marketplace was K-12 learners in Nursery and Primary school. Contrary to the dictates of the economy, the demand for tutors actually increased in 2016 inspite of the economic recession in Nigeria. While parents significantly reduced the consumption of luxury items and products, they were more willing to invest in the academic performance of kids leading to increase in the value of after school tuition (especially in the k-12 age range). At Prepclass alone, in 2016 we had over 1500 requests for learners valued at an average of N28,000 each at an average lifespan of 5 months per relationship, totalling N210m in 2016 alone more than 2 times the demand from 2015 where we had requests valued at N98m

2. Teachers depending on Tutor- Learner Marketplace to supplement their income: More full time teachers are now aware that they don’t have to overly rely on schools to earn for a living. In 2016, Prepclass got over 14,000 requests from teachers alone almost twice the number of requests we got in 2015 (last year we did almost zero marketing for tutors). In a survey we did with over 100 tutors who had worked with us consistently for 6 months plus, 70% of them indicated that within the period of working with us, Prepclass contributed an additional 40–60% to their monthly earnings.

Challenges of Tutor-Learner MarketPlace in 2016

  1. Post-Paid Culture of Parents & problems with Payment reconciliation: While demand increased on the parent side, Nigerians have a very strong postpaid culture especially when it comes to services. People typically don’t want to pay for a service until it has been rendered hinting at the general poor service quality in Nigeria for their lack of faith. However in many cases parents delay tutors payments(sometimes for weeks) after service has been rendered arguing that they are also owed money at work. About 35% of payments are still owed after the first week of a new month, however reconciliation success is eventually as high as 97% for most months.

2. Tutor recruitment and behavioural analysis: The tutor recruitment process is arguably one the most crucial part of the business, it simply cannot be done “online” only without first conducting hundreds of offline interviews to draw a model for what an ideal tutor should seem like and then having online tests to analyze each prospective tutors’ proximity to what an ideal tutor should be. At prepclass, we have conducted over 4,000 phone call and physical interviews on more than 2500 tutors. Without the kind of exhaustive empirical and experiential data that we have on what an ideal tutor should seem like, proceeding with only online vetting but without a clear idea of what to ask and what to expect puts learners at risk of meeting fraudulent people who may have the subject knowledge but lack the ability to actually teach

3. Training and managing expectations on both sides The tutor-learner marketplace brings the learner and tutor in very close proximity to each other, creating an environment for potential conflicts or in some cases undercutting the market place. Managing and mitigating these possibilities, constantly encouraging tutors to put in their best and training learners not to expect overnight miracles is a significant challenge that requires efficient hand holding of both client and tutor

Prediction for 2017

  1. More clones would emerge : 2017 is even going to be more interesting as more smaller clones would emerge in the market. The winner would be the solution that builds strongest community of tutor-learner and the platform that can keep the best tutors while guaranteeing them a steady stream of income

2. Teachers would seek to earn more : More teachers would deprioritize their low-paying school jobs to work with tutor-marketplaces.

3. Significant increase in learners for Skill Acquisition and Exam Certification : As the unemployment rate increases, the demand for extra skills and exam certifications would rise leading to demand for tutors/classes where such skill can be acquired

4. Use of videos via social media: Video consumption is fast increasing especially on facebook and Instagram. The use of videos to reach learners with some proprietary content would likely be on the rise.

5. Emergence of informal group tutoring: As purchasing power drops, while demand remains high because of the importance of education as the “ticket out of poverty”, learners would seek to reduce the cost of after school tuition. This would birth the emergence of group tutoring of 3–5 learner in “rent-free” locations thus decreasing individual price/session but increasing reach

6. Value Differentiation will become decidedly important as more clones emerge in the after school tuition market

7. Investment interests: The tutor marketplace /shared economy model will garner more interest as the service market place comes into its own this year. With the evolution of the nigerian ecosystem beyond content blogs, social media, ecommerce, product marketplaces and now payment (which currently has a lot of buzz). I think the time for service marketplaces is very close especially as payment problems near a definite end. With Uber leading the charge in the transport industry, hospitality in second place, we foresee edtech as a very interesting next contender.

That is it from me for this week.

Next week I would be talking about Edutech in Nigeria. 2016 Year in Review — VAS Enabled Mobile Apps. What is working and what isn’t?

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