As a serial entrepreneur turned advocate for education, I am overwhelmed by the challenges startups in the education technology (edtech) space face on a regular basis. Growth is often perceived to be guaranteed because schools are “all over the place” and scaling is taken for granted. Success in any enterprise is hard and edtech isn’t an exception. However, determination and perseverance are critical for “great entrepreneurs always find a way.”
What is EdTech?
EdTech (a combination of “education” and “technology”) refers to hardware and software designed to enhance teacher-led learning in classrooms and improve students’ education outcomes.
EdTech is still in the early stages of its development, but it shows promise as a method of customizing a curriculum for a student’s ability level by introducing and reinforcing new content at a pace the student can handle.
Throughout the years, I’ve heard numerous reasons and explanations for why startups fail. They include the usual suspect of lack of funding, inability to pay attention to client feedback, lack of proper understanding of the market, absence of appropriate skill sets in the team, ignoring cash burn, and poor administration. While these all have their place in the records of wrecked new startups, they miss the mark regarding clarifying the other significant reasons so many edtech startups fall flat.
The following are five frequently ignored reasons for the failure of edtech startups.
Edtech founders tend to build according to their preferences. Once you have launched your platform, as basic as it may seem, you need to watch out for client feedback to improve the product. Oftentimes, the desire to get the product to a certain level without adequate input from the potential users stifles revenue and early death of the startup. I agree that creativity could redefine the edtech ecosystem, but I understand the journey would not be viable without users. At the appropriate time, infuse the unique attributes that will make your product standout.
Make the product a “must-have,” not a “pleasant to have.”
Education is an intense and competitive business. There are a ton of contending interests and financing is frequently hard to come by. Entrepreneurs regularly hear, “I like it” from potential buyers who engage the sales team for a while but don’t wind up buying. This is frequently an indication of a “pleasant to-have,” not a “must-have” item.
Remember that most school administrators just have the ability to focus on a few things at a time which must be priorities. Once a product doesn’t assist them with tending to one of those main priorities genuinely, regardless of how much the buyer might like the product, it won’t lead to a purchase. Lamentably, most schools don’t have time for extravagances that don’t address a basic need. To stay away from this, sort out some way to address a main concern for the buyer.
Differentiation is gradual, not game-changing.
As increasingly more edtech products enter the market, it’s increasingly hard to stand apart from the group. As a buyer, it’s regularly hard to track down products with clear differences when there are so many options to decide on. For example, how do you ascertain the most useful tutoring platform among so many?
Whenever lots of keen individuals pursue an opportunity, the product features look more comparative than changed. Search for underserved portions of a market to discover new and more opportunities for differentiation. As a rule, the fewer the number of business visionaries tackling an issue, the simpler it will be to make a game-changing offering.
Failure to identify and access a reliable income stream.
Building educational organizations takes time and effort, so entrepreneurs should have the option of accessing financing streams that have been trustworthy for quite a long time.
Without a dependable source, startups will battle to be a part of a school’s financial budget.
A decent, useful channel is difficult to come by.
Critical for the success and survival of every startup is to discover a decent, productive channel reachable with good unit economics. I would bet that this is one of the top reasons so many edtech startups end up in the boneyard.
At the beginning of a startup, it’s fitting to explore different avenues regarding numerous channels to decipher what works and what wouldn’t, but a fruitful channel has to be recognized before the cash runs out. In a harder fundraising environment, finding an effective channel rapidly deserves greater urgency. Remember that clients’ ability to identify and buy a good product will also depend on how the entrepreneur has made distribution possible, which is somewhat difficult.
You have a better chance of making your edtech startup successful if the above issues are addressed early enough.
