Education is in the middle of a major disruption. That disruption is technology, and it includes everything from decisions about how much and what types of hardware should be placed in classrooms, to what types of software and apps to purchase for computer-assisted instruction, to online coursework for teens, college students, and adults. How all of this is going to shake out is completely up for grabs at this point.
So, when entrepreneurs think they are going to move into the EdTech industry, they need to be well aware that the industry is so fluid, it will be difficult to launch a successful startup unless they are prepared for constant change. That said, there are other reasons why EdTech startups fail. Here are 5 of them.
There is a Disconnect Between EdTech Developers and Educators
Unusual as it may sound, many EdTech companies develop curricula based upon state standards and textbooks, without input from classroom teachers in that state. And amazingly, many developers are under the mis-conception that the Common Core standards in one state are transferable to all other states. As well, local school districts may very well modify the sequence of content and skills instruction and are unable to alter that sequencing once a system is in place. These companies are making the same mistakes that textbook companies made in the past.
Texas and California have state-wide textbook adoptions, so textbook companies would fashion their texts based upon the standards in those two states. They would then attempt to sell those same texts to local school districts all over the country. This worked for a while, but ultimately failed because state standards and sequencing varied so significantly. Textbook companies then had to modify curricula, particularly in the areas of science and social studies, in order to meet the needs of a variety of states and districts and then produce several versions of a textbook. EdTech companies that are producing instructional modules for computer-assisted instruction must spend time with teachers and administrators in all states, in order to fashion systems that are a match. This is time-consuming and requires manpower that many startups just don’t have.
Lack of Understanding of the Education Market
There are at least 4 levels in the education market – state legislators, local school district administrators, teachers, and students. A 5th (parents) is often an additional level, as any instructional program that is adopted may involve parent reviewers too. More than any other industry, education vendors must spend years developing a reputation and a relationship with state departments of education (especially when there are state-wide adoptions), local school boards and administrators, and teachers. A great deal of time must be spent wooing people at all levels, especially teachers, who ultimately must implement the apps, tools, and systems.
Unfortunately, many EdTech startups are launched by individuals with business or marketing backgrounds. These individuals believe that because they were once a part of education, as students, that they have the understanding they need – nothing could be further from the truth. A prime example of this is the failed company, Knack. Here was a decent idea – a cloud-based app that would streamline the process by which teachers maintained attendance, grading, etc. and then “crunched” all of the numbers and spit out individualized reports on each student. When Knack launched, there was some competition, but this system was more sophisticated and provided more detailed information than others. What the founder failed to realize was that local districts were busily developing their own systems through their own IT staffs. Major fail. Knack folded quite quickly, because individual teachers were not going to purchase the app. Perhaps if the founder had done proper research, he might have been able to market his product to school districts rather than to individual teachers.
Too Broad a Focus
A startup in most industries is highly focused on a single product or service. Only after initial success does the company then seek investors and expand products and services. Many EdTech startups attempt to “cover the entire waterfront,” especially in regards to curriculum, and nothing is then done well. EdTech companies that do survive do so with gradual expansion, over time. They begin with targeted apps and tools, perhaps just in one curricular area, and develop those with input from real teachers, who are involved from the beginning. Being hugely successful in developing apps and tools in mathematics at the elementary level is an example of an EdTech startup that focuses on a single aspect of education. Once the products are developed, marketed and beginning to show profit, then a company should move into another curricular area.
The reputation is established and there is a client base that trusts. Unless there is a large amount of startup money, a company that attempts to do it all form the beginning is doomed. It simply cannot afford the educator expertise or essay writer expertise it needs, and nothing is done well. The EdTech startup TutorSpree is an example of starting out with goals that were too ambitious. The co-founders, first of all, came from Wall Street, not from education, and they relied on investors who were also not educators. Their vision was large, but they jumped full speed ahead into that total vision rather than growing the company gradually. It launched in 2011 and was closed by 2014.
Lack of Business Expertise
Just as many EdTech startups fail because they do not include the real stakeholders in their products, so do they fail because they are educators first and business people second. It is a worthy endeavor to want to improve education for kids. And certainly educational technology can be a huge factor in improving educational delivery to students.
Teachers and administrators are probably best suited to design digital instruction/tutoring for kids, but they are, by the very nature of their professions, not business people. Failing to secure solid business advice, and failing to “vet” those business people you bring in and to develop an appropriate business plan will lead to failure, no matter how good a product or service may be. As you consider those individuals who will provide business expertise, look long and hard at their resumes and be certain that your interview questions focus on an understanding of the longer-term nature of EdTech growth.
Lack of Patience
When EdTech startups fail within the first few years of operation, it is often due to lack of patience. EdTech is not like developing an “Angry Birds” app that is an instant success and generates profit quickly. EdTech is like a glacier. It moves very slowly. EdTech success cannot begin to be measured, really, until about 4 years into the startup. Both founders and investors need to recognize this and plan for it.
Those EdTech startups that have made it seem to have some common traits. They all have great patience, a full understanding of their market at all levels, business expertise, and a deep understanding of school systems and decision-makers. If they combine all of these traits with a great product, success is far more certain.
If you enjoyed this post, please consider a donation to our cause. Author receives 25%.