“Education is a HUGE Market” — Don't fall for this trap
If you look at Edtech/Education startups as an investor or an entrepreneur you surely would have heard these phrases: The education market is huge, there are over 300M (or some huge number) of students who are out there, customers on an average spend billions currently etc.
While all the above statements most probably are factually true but therein lies a fundamental trap which every Edupreneur must avoid. Which is to get swayed by the idea that their target segment in education is very vast hence they should not worry about the market or understanding who their true customer is.
On the contrary in my observation and experience in education all successful companies have been able to segment their TG very clearly, they have been able to cut and dissect through the vast market and have executed successfully by concentrating their product and efforts on the very small target group and then growing on/diversifying from there.
The above approach holds true for any startup but is especially important to keep in mind for an Edtech startup because it is very easy for an Edupreneur to get carried away by the sheer size of customer base in education and because of this end up making bad decisions on optimizing product, positioning, pricing and marketing efforts.
A typical story goes like this: A young Edtech startup comes out with a revolutionary product which supplements say a Maths/Science for a student in a school. They pilot it with great results and the founders are hyper-bullish now on the product. They pitch their startup to potential investors claiming the market to be huge and project their plan to reach out to schools and give it to each and every school in the country. They estimate some 1.5M schools and put some equally big millions of students/teachers as their customer base.
And then the problem starts and reality sets in. Not all schools have the budgets to afford, geographical differences arise (north India schools behave differently than south India), not all boards/curriculums align, even inside a same board different schools have different structures, not all grades have equal tangibility towards the solution and hence demand is not uniform across grades etc.
All the above constraints/issues are genuine and are bound to occur. Although the above is a case of B2B but a similar story also plays out in b2c or any domain in education business. The solution lies in recognizing this early, account for it and optimizing all your efforts. Imagine the kind of energy which is lost in creating a generic product, positioning/branding it, creating content and then realizing that more than half of the market is not the market at all.
All great education businesses have been able to successfully navigate themselves through this trap, they all were very successful in recognizing their true customers/target base and then went on and created the best product, content, positioning/branding and pricing for the same. Once the brand is set and business is rolling then diversification can always be done. In fact the beauty of education is that even after you cut and slice the market to a very specific target base still the number would be large and worth going after.
In all early stage businesses it is important, as they say, to “Know your Customer” — this applies more so for education segment because here it’s very easy to assume that every student is your customer.