A six-step guide to launching a successful EdTech startup.
Education is no longer just about textbooks and chalkboards. And, rest assured, it’s not limited to students. With EdTech—technology that makes education more engaging—the education landscape is changing, and so is the demand. In 2020, the global education technology market was valued at US$89.49 billion. From 2021 to 2028, it is expected to grow at a compound annual growth rate (CAGR) of nearly 20%.
Not just schools but also companies are investing huge sums into EdTech. In 2019, PwC invested US$3 billion in employee education. In the same year, Amazon announced that it would invest US$1.2 billion in upskilling training programs for their employees. Clearly, the demand for education puts the spotlight on the need for good quality EdTech companies. Here’s how your startup can become one:
Step 1: Know the market and discover your niche
There are over 30 EdTech unicorns in the world today, with a collective valuation of nearly US$100 billion. Clearly, the competition is tough. That’s why it’s necessary to know the market—understand what is already present and what your audience needs. Additionally, identify your niche. Will you provide educational services for kids, graduates or employees? Will you ask individual teachers to upload classes or collaborate with universities? Note your responses and proceed accordingly.
Step 2: Make sure your EdTech product or service is relevant
If your product or service is not solving a problem, it is bound to fail. For instance, EdTech Tutorspree—a company that offers web-based tuition services—failed because its service demanded that the tutor and student meet up in person. That was not always practical. Another EdTech startup Schoolgennie failed after it spent huge sums of money and time to create a product which, turns out, their target audience was not interested in. So, when deciding on a product or service, do thorough market research to ensure it is relevant.
Step 3: Pick your business model
For an EdTech startup, there are various business models to choose from. You can opt for a subscription-based model wherein you offer resources based on a monthly or annual subscription, like SkillShare. There’s also the freemium model wherein you offer some basic services for free and advanced services at a cost. You can also give free trials or opt for an ad-based revenue model, like YouTube.
Step 4: Build a well-rounded team
As an EdTech startup, you can’t focus solely on the technology. To succeed, you need a team of IT professionals, developers, UI/UX designers and marketing experts. In the end, your team must elevate all aspects of your product or service. Cluttered design, poor marketing and difficult-to-navigate websites can instantly put users off. A well-rounded team ensures your EdTech offering is engaging, easy-to-use and future-proof.
Step 5: Raise the money!
Every startup needs money. As an EdTech startup, you can bootstrap your business (use your personal resources to fund your business) or seek funding from investors. For the latter, make sure to develop a proof of concept (a prototype) that reflects the viability of your business idea.
According to HolonIQ, Global EdTech Venture Capital increased from US$8.2 billion in 2018 to US$16.1 billion in 2020. That’s almost double the amount! Clearly, investors are eager to invest in EdTech companies. So, make sure yours is worthy of raking in the moolah.
Step 6: Collect feedback from users
So you’ve launched your EdTech startup and are doing well. The work doesn’t stop there. Since the EdTech field is constantly evolving, you must keep collecting feedback from users. It will help keep your product or service up-to-date and desirable.
Starting an EdTech company is no mean feat. However, with the right business strategies and marketing plans, your startup can take advantage of the increasing demand for quality education.
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