How To Monetise Your EdTech Business

Entrepreneurs enter education not for the gold at the end of the rainbow, but to instigate change. However, as Tom Hooper of Third Space Learning said last night; if you are solving the right problem, there is money to be made. Now, lets get down to brass tacks…

Charles Wiles, founder of Zzish, and Emerge Venture Partner, organised and compared the evening. His insights were as interesting as the other entrepreneurs on stage, as he embarks on his own mission to grow and monetise an edtech business.

Firstly he introduced, Ben Whately who waxed lyrical on leveraging the scalable nature of tech. Ben is the COO of memrise, a free platform that uses images and science to make learning fun. Most users (of which there are 3 million) use it to learn a language, but you can use it to increase your memory of just about anything.

Ben argues that edtech must find a way to bring that information to life, as a good teacher does. He advocates a freemium model in which you build a product that people will really enjoy using, for free, then upsell features around the edge of the core product.

Ben was liberal with his examples; memrise have experimented with a number of different freemium models. One that seems is to be working is to sell insights about individuals’ specific learning patterns and the words they find most difficult. A small percentage of users pay for these services, but a small percentage of 3m (and growing) is still a fair whack.

An experiment that did not pan out so well was a strategy found in many mobile games, where users play for a certain period of time for free, after which they are asked to pay, or wait some time before they can re-access the content. For motivated self learners, this strategy is irksome.

Crucially memrise were able to convince investors that the product and user base came first, monetisation second. DuoLingo a rival language learning app with 10 million users has also been free since its inception in 2011. Last year they revealed that they will be attempting a different route to monetisation, through credentialing: the DuoLingo Test Center is currently free but it won’t be for long. Once the DuoLingo Test is accepted at schools and employers, the company plans to charge $20 to take it. They aim to disrupt TOEFL, the current standard for English teaching as a second language certification.

Nicola, co founder of DoodleMaths, stepped up next. Doodle Maths is an adaptable maths app for primary school children. They are also part of the current Emerge cohort. They have over 3000 downloads a week, and are consistently highly ranked in the app store. Nicola was helpfully candid about what has and has not worked for Doodle Maths in their 18 month journey. Doodle Maths is free to download, but once an assessment has been taken full access to the 9 years of content costs £8.99. They too will be experimenting with various freemium and subscription models going forward, but up to this point they have learnt the following:

Encouraging App Downloads:

Have a robust SEO strategy — figure out your keywords. The app name is important. They included the word primary in the title of their app after they realised this is what potential users were searching. A full, clear and engaging app description is essential. Reviews and ratings; this will also feed into your SEO strategy. Make full use of the 5 screenshots apple give you to display your app. An icon is very important, as it is the first impression people get of your product. Play with offers: price discounts, time limited. They work. Tweet the offers to favourable app reviewers, these are your biggest evangelists and are likely to spread the word. Cross platform — you can only grow so much if you don’t have both android and iOS.

To encourage conversions to the paid product:

Have a quality product. Don’t stop iterating. Concentrate on the funnel. If 80% of users are leaving before purchase then focus here before looking to attract more users into the funnel. Experiment with freemium — where is the sweet spot for in app purchases?

When selling to schools:

Use apple credibility when talking to schools “achieved #7 in education category” Be lean: Doodle Maths does not have a large sales team. They phone and email schools, get them to try for free and provide an online demo. This is working for them, and it is a scalable sales strategy.

Tom Hooper, founder of Third Space Learning followed Nicola. His takeaway point was to solve a real problem with a great solution, and charge for it. You hear this a lot, but it was refreshing to have such a clear example.

Third Space Learning connect teachers from around the globe to children that need 121 teaching. They have 2 training centres full of teachers dedicated entirely to Third Space Learning. Teachers book hours, select children that would benefit most and choose maths topics for the online teacher to work with the child on.

Children from low income background are twice as likely to fail academically. There are 1,700 primary schools in England, and in nearly all of them there is a Head Teacher scared about numeracy levels of their school, because it is their neck is on the line. That there, is a pain point.

Third Space Learning knew their product worked. In their pilot study, it increased 2–3 sub levels in one term. The question was, how to get it into schools. They tried free trials, but the teachers would rarely turn up to the online lessons. They tried then 6 week trials and a money back guarantee; only if all the online lessons were used. Better, but not great.

Eventually Tom decided to forget the free trials. He knew how acutely the teachers felt the problem, and he knew he had a solution. He honed his messaging, targeted the desire all head teachers have to improve numeracy, spelled out exactly where TSLs value lay, and embarked on a email marketing campaign: a full 14 week program, paid for upfront. Using this method Third Space Learning went from 4 schools to 75 schools in 6 months.

The last nugget from Tom was to know where your budget is coming from. Many people liken Third Space Learning to a tutoring agency. However, their budget is not coming from the parents’ pocket. It is instead to be found in the £5.5bn spent on teaching assistants in English schools. The pupil premium is of course another area of funding that Third Space Learning targets as they fight to narrow the attainment gap.

An eclectic hour with 3 wildly monetisation strategies. Of course there is no one size fits all, but hopefully a handful of these insights will go a little way into helping an edtech startup out there grow, and in their own way, upgrade education.

Originally published at emerge.education.