EdTech Startup — Where to Begin

Starting a company is a bold move. Yet, it is challenging to rely on a massive degree of planning and patience. Starting an EdTech startup is an even bolder move. For EdTech companies, numerous obstacles are awaiting.

Why? Simply because the industry is highly competitive, 90 percent of startups fail. Naturally, you might wonder what is so unusual about the EdTech industry that makes it so impenetrable. 

What is EdTech? Simply put, EdTech is the industry dedicated to the integration of innovative IT technologies and solutions onto the educational framework. It is all about making teaching and studying more effective and personalized. 

Why is the industry so competitive? The evidence put forward by Yahoo Finance illustrates the size of the global EdTech market, valued at $84.61 billion in 2021. The prospects anticipate its growth to $241.58 billion by 2026. It means that the market will triple in four years, and guess what, everyone wants to have a piece of that pie.

What can you do to enter the EdTech Market? EdTech companies need to consider several paramount factors to get into the EdTech business. The first one correlates to motivating you to start an EdTech company. The second factor is knowing the touchpoints you need to address to penetrate the market. The third factor is understanding how to fund your new endeavor. 

Luckily, our team of experts is here to make your life easier. We don’t want your company to be among the 90 percent who fail. So, we’ve gathered all the required information to explicitly illustrate how you can get into the EdTech business and what particular touchpoints you must focus upon. 

Why Start an EdTech Startup?

Before choosing a path, you need to know the reasons standing behind your choice. Even though it sounds like some kind of proverb, it is true. Engaging in such a complicated endeavor as an EdTech startup should be rooted in a desire deeper than a mere following of EdTech trends. To help you crystalize the reasons for starting an EdTech company, we offer several key insights to start with.

It Is What Young Generations Need and Ask For

When hearing “EdTech,” what is the first thing that comes to mind? Definitely, the term itself suggests the link to Education. EdTech is not only about making profits. It is also about making education better per se.

One of the key advantages of EdTech correlates to the desire to democratize education. Looking into retrospect, for centuries, education has been a major privilege. Even nowadays, groups of people do not have proper access to education despite being members of the civilized world. 

Keeping that in mind, going into EdTech is about making education more accessible. The integration of modern technologies equalizes the playing ground. It allows marginalized groups to get access to a better life through education. 

Sounds good? It really is. 

EdTech is what young generations strive for and will benefit from. By creating EdTech software, you can create a brighter future for learners, fight discrimination, and make social contributions. 

Investors Love It

One of the key starting points for any startup is creating products or providing services attractive to investors. The more investments you attract, the greater scalability you can achieve. 

The current trends clearly illustrate investors looking at the EdTech industry with a hungry gaze. Yet, there is a dark side to the increasing number of investors. The more the number of investments grows, the greater the chance investors will be picky about deals. At this point, while investors funnel more funds into the EdTech industry, they also start looking at new startups with scrutiny.

If you do not believe in words, look at the numbers. The prominent agency HolonIQ demonstrates the Global EdTech investment rate increased from $8.2 billion in 2018 to $16.1 billion in 2020. It means that the investment rate will increase by 100 percent within two years. 

What is more, there is a rising investment trend toward EdTech industries of the developing world. Remember the social responsibility factor? It means that helping to expand the EdTech industry is a direct way toward making education accessible all over the globe. 

The Market is Not Saturated Yet

Suppose you are old enough to remember the 2000s. In that case, you will get a solid grasp of what it means for a particular market not to be saturated enough. Similarly, as the 2000s were famous for integrating computer technologies and Microsoft products, the current age is aligned with the massive development of the education industry.

The COVID-19 pandemic has shown that the EdTech market can adapt really fast. In a matter of months, millions of learners and educators switched to online spaces, which avoided the collapse of educational systems worldwide. 

The future of education is bright. With the rise of the industry, it is expected to reach a staggering $8 trillion. It is a massive market with over 21,000 new educational companies emerging in two years. 

What is more appealing is that current generations pursue the philosophy of lifelong learning. It shows the existence of a broad target audience for the EdTech industry. The number of consumers is growing and is expected to boom shortly. It is prime time to become one of the EdTech startups that recognized the opportunity and seized it. 

Lifelong Education is a Thing Now

In the previous segment, we’ve scratched the surface of the lifelong education concept. Here, it is crucial to give it a deeper look. The evidence shows that, at the moment, 72 percent of American schools utilize cloud technologies. In comparison, 48 percent of academic institutions offer learners online courses. 

Integration of technologies opens broad horizons for educators and learners. It democratizes education while making it more accessible. Besides, it creates platforms allowing everyone to become a learner despite age, social status, and demography. 

Lifelong learning is also a thing for top companies. Giants like Deloitte and Wal-Mart urge their employees to grow personally and professionally. The businesses use eLearning tools, an integral part of the EdTech industry, to grant workers better opportunities for climbing the professional ladder faster. 

Lifelong learning is a jewel for EdTech. The beauty is that two phenomena coexist. The greater development experienced by EdTech, the more lifelong learners there are. The more there will be lifelong learners, the bigger incentives for EdTech. You can enter this sustainable circle and get the best of it. 

High Demand and Rising Popularity 

High demand is the engine of any given industry. There is a growing body of evidence suggesting booming academic and non-academic demand. To illustrate: the K-12 educational sector alone is expected to grow up to 25 percent by 2026. 

What does growth entail?

Several key factors are coming to mind:

1. Schools understand the importance of adopting remote learning tools. It cuts spending and makes the institution more accessible to the global pool of learners. 
2. There is a growing number of smart devices and tech-savvy people who can get the most of them. Academic institutions need to meet the demand of such individuals and merely be with them on the same page.
3. The integration of modern technologies into education creates a greater involvement of parents in the process. It means that educational technologies offer more opportunities for learning in a family setting. 
4. The growing Internet coverage and faster bandwidth allow learners and educators to access more sophisticated technologies, relying on innovative hardware and software. 

The demand in the EdTech industry is expected to rise. It means that entering the industry grants access to a massive pool of consumers.

What EdTech Brings to People?

Let’s get this show on the road. Most EdTech companies work for the sake of two key shareholders — students and educators. 

For students, EdTech creates a range of new opportunities:

• Improved collaboration through mobile devices, cloud-based tools, and online platforms. Tons of apps and instruments bring learners together and help them collaborate when facing complex academic challenges.
• EdTech software provides continuous access to learning regardless of geographic or cultural boundaries. The EdTech technologies and the Internet of Things create digital environments that learners can access from their homes.
• Get this: EdTech is turning the traditional vision of classrooms and education upside down. The conventional model focused on students interacting with a teacher in a physical classroom and doing their homework at home. With EdTech software, learners can receive their education at home while following a comfortable pace.
• EdTech is all into personalized educational experiences. With the technology, students receive personalized learning plans and strategies best applicable to particular individual needs. With EdTech tools, one can track and evaluate academic progress with a few clicks.

For educators, EdTech software provides even greater opportunities: 

• Do you think grading presents a significant concern to educators? If you think yes, you are entirely correct. EdTech software can bring educators an effective relief — automated grading. There are available artificial intelligence tools that make grading flexible, elaborate, and accurate. It grants teachers more time to devise personalized approaches toward students while automating mundane tasks like grading.
• What about multitasking? It is no secret that educators often experience burnout because they need to handle many tasks simultaneously. EdTech software provides well-designed classroom management tools, the ones people can easily employ even without prior technical and technological expertise.
• Care about the environment? Moving toward sustainability is vital for many reasons. EdTech software creates the foundation for paperless classrooms. Picture that: educators and administrators do not need to print budgets, use the copy machine, or waste paper taking notes. EdTech companies can propagate a greener approach toward education.

You should understand that these elements are only a few to mention. Without a doubt, many more shareholders can benefit from EdTech software. With the growing development of EdTech, one can expect people to find many new ways of employing the technology. 

Where to Begin? Steps of Launching an EdTech Startup

Now, you know the reasons to start an EdTech startup. The next important step is to know the touchpoints to consider. A startup launch should be focused on several key aspects. Following such a path boosts your chances of success. 

Market Research and Choosing a Niche

The foundational phase of any startup strategy is conducting market research and choosing your niche. What does it mean? In short, first, you focus on exploring your solution statement and defining the specific issue your product or service intends to solve. Such a solution statement is something to use when defining the niche. 

Going further, you need to take on the role of an investigator. Whether you have a team of market researchers or intend to do it on your own, you need to get as many insights into the market as possible before plunging into the unknown. 

There are specific approaches to market research:

• The central purpose of the research. Prioritize particular elements you seek.
• Get a broad perspective on the market through industry outlooks.
• Focus on target customers and determine the population you will appeal to.
• Do not forget about the competition. Understand who stands against you and what such companies offer. 
• Gather as much data as possible. It can be later used to synthesize important insights. 
• Translate theoretical findings into practical implications. 

Market research gives you a perspective of what to expect. Determining the niche shows what you will propose and your ace in the sleeve. 

Creating a Strategy and Stating a Unique Market Proposition

After investigating the market inside out, it is time to focus on creating a strategy distinguishing your company from competitors. Keep in mind that customers seek solutions and not features in the educational field. 

It doesn't matter how sophisticated your product is. It can have a myriad of “beneficial” features. If it does not offer solutions to clients’ issues, your product will soon become an unsuccessful element to learn from. 

To illustrate — imagine there is a particular issue plaguing the educational field. For instance, educators use outdated methods to teach learners, which results in low student engagement. If it is a big enough issue, you can provide the software to increase student engagement. It can be an online platform with embedded tools of visual rhetoric, anything that makes a boring textual presentation more appealing. 

The next crucial part of the strategy is defining a unique value proposition (UVP). In simple terms, it is a message that urges consumers to purchase your product or service. Any given startup marketing strategy relies on effective UVP.

Developing the UVP is about three key aspects: 

1. Consider the value your product/service delivers. 
2. Determine the intended audience. 
3. Show what makes your company and product differentiation. 

The simple recipe for a good UVP is to focus on what your target audience considers important. Usually, it is about factors like pricing, performance, design, support, and integrations. Knowing that grants an 80 percent rate of success for your product. 

Start Simple with an MVP

Looking at the paragraph’s heading, you should have a logical question — what is MVP? In short, MVP is defined as a Minimum Viable Product. What does it mean? MVP is the prototype of the product you make to test the waters. You produce a single product to witness how potential consumers react to it. It shows whether you have chance to penetrate the market. 

Starting simple and creating an MVP of your product is the reliable and less stressful way of launching a startup and reaching a top performance. Imagine. It’s your first time in the scope of the EdTech industry. You have an idea and investment to engage in a full-blown production. Yet, the most reasonable approach is to offer clients the first version of your product to let them test it. Later, you gather the feedback and correct all the mistakes and errors to make the final version of the product impeccable. 

Remember, do not go straight into the battle. Consider taking small steps and having an MVP that does not cost a lot and offers space for improvement. Getting into the EdTech industry is not a spring but rather a marathon. 

Choose a Strong Development Partner

As a startup owner, it is important to have an in-depth understanding of the industry you work in. As you might have noticed, the educational industry is massive. There is a myriad of domains, realms, and segments. Simply, you cannot be the one who understands them all. 

What should you do to stay competitive? You need to choose a strong development partner. For instance, imagine your startup producing a language-learning app. While you might be a tech-savvy and business-savvy person, you might not be a language expert. To become successful, you need to find someone, a development partner with proven expertise and knowledge in the selected segment of the industry. 

Having a strong development partner on your side grants a rapid development process, minimization of risk, and boost in quality. Besides, suppose the development partner you cooperate with is a prominent one. In that case, they can vouch for your product, which is a massive marketing benefit. 

When looking for a strong development partner, consider the following experts:

• Project manager
• Product manager
• Business analyst
• Software developers
• UI/UX designers
• Quality Assurance Testers

A strong development partner should have such experts to ensure high-quality services. If you think you can succeed in an unknown industry without a development partner, you better think twice. 

Pay Attention to Marketing

More and more companies understand the mere truth — you cannot underestimate the importance of marketing. While marketing is a smooth ride for enterprises, there is another question — how much should a startup spend on marketing? Unfortunately, there is no one-fits-all solution.

You should spend enough on marketing to ensure your consumers hear your UVP. You should also spend enough to ensure your consumers access your MVP. Engaging in cost-effective marketing depends on a proper marketing plan. It requires looking at the market and adapting to its shifts.

Having a dedicated marketing plan directly depends on your budget and the team you can afford. Creating a perfect product or service is not enough. What makes your product stand out is a diversified marketing plan. 

Fortunately, both paid and unpaid instruments are for developing your marketing approach. Consider the following tools:

• Being proactive on social networking sites
• Writing an appealing blog
• Having an email marketing strategy
• Creating landing pages 
• Using paid advertising if necessary

These are only a few tools accessible to anyone. They do not require a massive budget. Yet, they grant massive marketing benefits. 

Listen to the Users and Gather the Feedback

Listen to your guts. Listen to your experts. Yet, most of all, listen to your clients. The secret of success in EdTech relies on getting feedback from consumers. Collaborate with your target audience. Understand what is wrong with your product. If you think your MVP will be error-free, you are wrong.

Be humble. The more you revise your product, the greater the chances of long-term success. How can it be achieved? First and foremost, have good customer support service. Second, integrate some UX features making it easy for clients to leave their feedback. Third, focus on both strengths and weaknesses, and do not be a victim to confirmation bias. 

Feedback is an extremely potent tool for development. However, after piling up all the feedback, you and your team need to analyze it. Based on the findings, you need to implement solutions. 

The best way of gaining client reputation is to show you consider their feedback and integrate real changes to become better. 

How to Fund an EdTech Startup?

We do not live in a perfect world where everything is possible, and money is not an issue. In reality, in many cases, dealing with a company in the EdTech industry often depends on your ability to attract investment and properly diversify a budget. 

How to get funding for your startup? How does startup funding work? What are the types of startup funding? These are the questions we provide answers to. 

Crowdfunding

There are so many startup funding sources that an uninitiated person can easily find oneself lost in them. The rule of thumb dictates — you need to choose the funding sources based on the appetite of your company and its strategic objectives. 

Crowdfunding proved itself a popular and effective method for attracting funds. The model is based on the simple premise — a large number of people make small contributions in exchange for some bonus you will provide as soon as the product is launched. At this point, you should have a general idea of how the approach works.

You make a pitch and ask for small contributions. In return, you offer some tangible rewards for the contributions. The beauty of the system is that you do not need to give back anything if your product fails. Some might say that crowdfunding is an error-proofed approach. Yet, you need to understand that crowdfunding does not offer enough incentives if you aim high with your product.

Grants

Grants are especially popular in the educational sector. There are many governmental and non-governmental organizations willing to fund projects and products aiming at improving the educational system. The best thing about grants — you don’t need to give back anything. 

The key issue with grants is to follow specific requirements. There are thousands of other startups seeking grants along with you. That is why your pitch or message should stand out. It means that applying for a grant requires working with someone familiar with the process. Besides, you need a person who will create a perfect design for the project to impress the people responsible for providing grants. 

Bootstrapping

Suppose you are lucky enough to have some investment or budget of your own. In that case, bootstrapping can be a solution for the startup’s financial needs. When using the method, you pay to start the company. The best part about the approach is that you have total control of the business and the total share. It means if your company succeeds, your profits will grow as well. 

In turn, funding the company with your own money can be risky. If the startup fails, you lose the money. What does it give us? Essentially, to engage in bootstrapping, you need to invest personal funds and be ready to make some major decisions. If you consider the method, you need to have a strong marketing plan and know what you are doing.

Investors

Previously, we’ve shown the rising number of investors moving into the EdTech business. It means that external investments are one of the funding sources to consider. 

If you plan to work with investors, get ready to offer them a share in your company. The biggest challenge is to work out an agreement beneficial for every party involved. Consider that there are several types of investors. 

• Angel Investors offer their funds, which entails greater control they will ask for in your business.
• Venture Capitalists are investors offering funds on behalf of other people. 

Raising investments directly depends on your ability to sell the product, even if there is no MVP at the moment. You need to sell an idea and show why investors need to invest. Focus on real evidence and avoid vague statements. Be specific and sure in your words. Investors look for profitable endeavors, and if you can deliver, they will not omit your company. 

Loans

Perhaps, the easiest way to get funding is to ask for a bank loan. However, it is not necessarily the best approach if something appears easy. Remember, if you get along to start an EdTech company, you need to return the loan with an interest rate. The biggest concern - you need to return the money regardless of your company’s success or failure.

What is the biggest takeaway from loans? You receive the money, and the bank grants you total freedom of action in dealing with business. If investors often ask for a degree of control over your business, banks do not care. As soon as you return the loan with the interest rate, they will be happy. 

Five Successful EdTech Startups

How can people teach? The first thing that comes to mind is a classroom full of students whose gaze is directed toward an educator leading the teaching process. Yet, the introduction of digital technologies and the COVID-19 pandemic have integrated irreversible changes. Teaching is a process not bounded by physical, geographical, and cultural boundaries.

Does learning stop when you leave school? Is there academic life beyond the classroom? EdTech startups show that lifelong learning is the new normal. People need to adapt to the constantly changing job market. EdTech companies help clients resolve this by introducing EdTech software, the one integrated through online platforms and mobile applications.

These are the key areas in which selected EdTech startups managed to succeed.

ABA English and Teaching Through Video

The ABA English is the EdTech company that managed to find a way to commercialize live learning through video. The startup launch was presented with the platform offering clients an immersive experience of learning English. Each client is assigned with an educator, who guides the personalized learning process and answers every given question.

Does the company know what it is doing? The ABA English combines unique video-based technology and certified teachers. The used method proved to be incredibly effective. 

Does it get any better? Yes. The company offers a free 30-day trial. During that period, a customer can pass a free level test, choose a particular learning method, and receive management and evaluation reports illustrating their progress.

Students and teachers can access the EdTech software through designated Web Campus and Mobile applications. 

What about the reasons for the company’s success? The critical factor promoting the success of the ABA English stems from the proper connection of technologies with certified professionals. Besides, the platform works for its clients and provides personalized approaches. The company managed to occupy its niche and establish a solid reputation.

The ABA English is the case of a successful EdTech company that understands the value of personalized care and proper integration of technologies and human capital. 

Looking for Online Tutoring — Choose Preply

Preply is one of the leading startups in the online tutoring marketplace. As you noticed, 2020 was the year when almost every business tried or entered the digital realm. It is merely the reaction to the pandemic and the desire to offer clients safe means of product and service delivery. 

The key startup strategy revolves around adaptation to changing trends within the EdTech market, thus meeting the demand for online learning. The evidence from the World Economic Forum shows that the demand skyrocketed as thousands of educational institutions closed their doors to students.

Recently, Preply has raised more than $10 million to move its platform toward North America, thus scaling its original position in Europe. 

How startup funding works at this point? Imagine — you are a wealthy investor looking for new opportunities to make your capital work and not stagnate. Perhaps, you have a financial advisor or a person responsible for looking for prospective startups you can invest in. 

What are the factors that you or your financial advisor will consider? The facts are simple. Reputation and ability to meet the existing demand are the factors to determine the viability of the prospective company. 

Preply managed to establish a good reputation, predominantly because of high-quality services and a proper startup marketing strategy.

What do you receive when working with Preply? When using the platform, you get an opportunity to choose a tutor while employing a range of filters. The software will mitigate the communication between a learner and an educator with the match insight. Besides, the platform helps process the payment and includes the particular payment package for any given client. 

As a result of using the service, a client leaves a review about the tutor and the platform. It is a hybrid mouth-to-ear approach that helps establish the accurate and transparent reputation of Preply. 

Preply is the EdTech startup you must not avoid looking for an online tutoring platform. 

LearnLife and What Lies Beyond School

Is there life on Mars? Perhaps. Is there life when you graduate from school? Definitely.

Many students face various challenges when leaving a typical classroom and campus. Luckily, EdTech companies work to ease the weight put on learners’ shoulders in post-academic life. LearnLife is one such EdTech startup.

Founded in 2017, the company is bound to innovate the traditional education system and shed some light on what people can do to engage in lifelong learning and improve their professional and personal skills beyond the classroom setting. 

The company’s key focus lies in developing innovative learning elements, technologies, and spaces. These are called to redefine the learning experience and help learners meet academic and professional life challenges.

LearnLife cooperates with multiple stakeholders to be the beacon of positive change in education. The startup captured the attention and the market with its bold move and collaboration. They presented a new learning paradigm, and the one digressed into respective elements revolving around three core principles - preparing, implementing, and sustaining. 

Along with digital presence, LearnLife occupied a physical niche as well. What does it mean? The startup attracted enough investment to open the first learning hub in Barcelona. It is a significant move allowing LearnLife to make itself visible on the market and illustrate how corporate social responsibility can be transformed into real, tangible changes. 

What is LearnLife’s recipe for success? It is simple. Think big, take action, and put a massive emphasis on responsibility. While there are various startup funding sources, you are more likely to attract investors when your product or service makes a real change. 

Helping learners succeed beyond school is something that LearnLife can be proud of. 

Learning from the Best with MasterClass

Want to cook like Gordon Ramsey? Does not have the writing skills of Stephen King? Dream of learning from the best world-renowned musicians? Do not worry; with MasterClass, you receive access to the top knowledge and expertise offered by celebrity writers, musicians, and artists.

The EdTech company has become a loud voice within the scope of the educational industry. With its unique concept, the firm managed to bring world-renowned celebrities and top experts closer to people. 

The masterClass is an online learning platform. For a subscription fee, you get both education and entertainment. The celebrity-taught classes cover a broad range of topics and offer competition certificates. 

There are different types of startup funding. MasterClass managed to find the one bringing it about $2.5 billion, as estimated by TechCrunch. The system used by the firm proved to be highly beneficial. Many EdTech startups try to replicate it.

However, not all copycats can achieve the degree of success acquired by MasterClass. Why is that? The simple truth shows that the EdTech company managed to find a sweet spot between personal and professional skills. 

While companies are offering professional boosts, MasterClass made the process entertaining. It shows that in the EdTech business, the application of proper marketing strategy presents an utmost advantage. 

Want to be closer to your role models and learn new skills? Having a subscription to MasterClass offers you such an opportunity. 

Being Mobile with Brainly

Most EdTech startups have online learning platforms ready to meet the demands of their users. However, not all companies have mobile applications that simplify the provisioning process. Brainly is the EdTech firm that managed to build a robust online platform and mobile app. 

With its app and platform, the company unites learners, parents, and educators worldwide. How does it manage to do so? The company integrated a robust and sophisticated Q&A platform within its mobile application. When using the platform, both students and parents can be connected to educational experts who suggest an expert opinion on boosting academic expertise. 

One of the critical aspects of Brainly’s success is linked to its core values translated through the firm’s platform. The company has a motto, “Always wonder. Always explore.” While it may sound a bit cheesy, Brainly managed to translate its values into action. 

At this point, there are about 55 million unique app users globally. It means that Brainly’s approach works to unify different people across geographic and cultural boundaries. 

Another prominent key feature of Brainly’s app. is about sharing and review. The platform has an integration option that helps users share lessons and learn in groups. While it promotes diversity and collaboration, the platform also has a robust system of reviews. 

Did something go wrong during the lesson? You have easy access to the support department, and you can be sure that your request or complaint is processed in a matter of hours and not days. When there are millions of users, being that efficient is extremely valuable. 

What have we learned about Brainly? Being a successful EdTech startup is about having both an online platform and an app, bringing different users together, and having instruments to hear and understand their needs. 

Five Failed EdTech Startups

Thinkers and successful people often suggest that the path toward prosperity lies through the ability to overcome failures. However, wouldn't it be better to know how to avoid failures first? Right? It seems that learning from the mistakes of others is a tweak in the system.

It is better one time to see than a thousand times to hear. Here, we would like to present five examples of EdTech startups that did not make it into the industry and became learning material for others. 

inBloom

The story of inBloom started with significant success. The EdTech startup emerged in 2011. The prominent Bill and Melinda Gates Foundation funneled a whopping $100 million to offer inBloom a major push. However, even though the company received a significant financial boost, the startup collapsed three years later in 2014. 

InBloom should have been an open-source platform that helped educators and administrators process data effectively and improve students' learning outcomes. Sounds like a decent mission. 

The company managed to get people, resources, and clients. It put forward ambitious objectives and took upon the firm's role that would redefine the data processing methods. However, as it later turned out, having an ambitious idea is one thing, and properly implementing it is entirely another. 

What happened? InBloom failed to integrate adequate security measures to help protect its users' sensitive information. Why did inBloom fail to do so? The company was unable to comply with the new educational reform, which put a greater emphasis on data security. 

inBloom failed because it focused on the idea and did not consider crucial aspects that would have helped turn the idea into reality. 

SharpScholar

SharpScholar is another example of a failed EdTech startup. The company was founded in 2014 and managed to operate for only two years, which means the firm collapsed in 2016. After its inception, the startup experienced a major degree of success, with 5,000 students using the platform all across Canada.

SharpScholar built an effective and innovative platform that helped make the educational process more interactive. As mentioned previously, EdTech startups rely on various forms of funding. However, companies like SharpScholar often directly depend on buy-in from different stakeholders. 

What does it mean? It means that to succeed, a company needs to find enough clients for its product or service. The firm should create a bring with educators, administrators, learners, and the government. 

SharpScholar was an effective platform. Its failure came as a major shock and success to many people. When digressing the startup’s story, there are several lessons to learn. 

At first, the company had a great start and achieved resounding success. It even won several awards. Yet, having a good start does not mean that you will survive for a long time. Some say that SharpScholar’s product was way too innovative for its time. Others suggest that the firm did not find common ground with the regulators. 

Taking all the evidence together, SharpScholar failed because it could not attract enough clients. 

TutorSpree

TutorSpree was founded in 2011 and collapsed in 2013. It appears that many failed startups managed to stay afloat for about two years. One can assume that it is how long it takes to determine whether the EdTech startup will fail or succeed. 

The company had proper funding and received praise for its marketing efforts. The startup created a connection between tutors and tutees, effectively serving as a middleman. 

At first, it all went well. The company established its presence. It initiated an effective marketing strategy aimed at the $90 billion industry. Yet, it appeared that the startup had a significant, fatal flaw.

While TutorSpree served as a middleman between the shareholders, when tutors and tutees often used the firm’s services, they abandoned the platform and chose to work directly. Further investigation revealed the mere fact that the startup had a significant weakness.

Why is it important? While there are many online tutoring platforms like TutorSpree, most avoid failure. The company's primary weakness stemmed from the fee it took from tutors. TutorSpree wanted to accumulate capital fast, which motivated it to take 50% of the tutor’s fee.

It may sound financially beneficial, but in reality, many tutors do not want to give away half of their income. What does it tell us? When you want to make money, don’t be too greedy. 

KNO

KNO is, sorry, was a company that occupied a niche of mobile hardware and digital textbooks. Back in 2009, it was a booming market. At that time, users started using tablets and mobile phones daily. KNO used the opportunity to create the EdTech product. 

However, in 2013, the company’s stock was sold to Intel for pennies on the dollar, which can be considered a failure. 

In the beginning, KNO raised $73 million in capital. It had a significant cash flow, and its products seemed free of any technical flaws. However, as often happens, KNO could not find the consumer base for what it offered. 

What does it mean? KNO suffered from bad timing and the inability to anticipate the competition. The company sold its tablets with an integrated platform full of digital textbooks. Yet, the firm failed to recognize one major looming threat — the emergence of the iPad. 

When Apple released its product, the iPad became an instant success. Naturally, KNO’s tablets were pushed far down the food chain.

In KNO’s defense, even after facing a major failure, it tried to claw its way up by changing its business strategies. Nevertheless, the target market was lost, and the EdTech startup became a part of “failed EdTech startups history.” 

Now, you should see the value of market research. Finding money is not a problem. Being prepared for the looming market shifts is. 

Community Coders

Community Coders is the last EdTech startup on our list. It is one of the most recent cases of failed companies. The firm was founded in 2018 in Canada. Our theory is correct again two years later, and the startup closed its business operations. 

The company started as a platform for high school students who seek skills and knowledge in web development and digital marketing. 

What was unique about the startup? Its management. University students founded the company. 

While many success stories start from people who either drop out of universities or get some idea while being in them, the failure of Community Coders is linked to what university students often do not have — experience. 

The critical issue with the company stemmed from its inability to integrate good management and close deals. 

The case of Community Coders shows that you can have all the money and all the marketing instruments. However, if you do not have experience and managerial skills, your company has a major chance of failing. 

Lessons Learned: What are the Things to Consider with EdTech Startups

We’ve seen EdTech companies rising to the top and firms falling to the bottom. However, if there is nothing to learn from all the cases above, we should not continue. Luckily, there is plenty to learn.

There are two particular patterns you can get from the successes and failures. We would like to offer you a gist of both of them. 

What to Avoid

• Poor Market Research. You can have the best idea. You can be the most innovative. People might love how you perform on the market. Yet, if you don't know what to expect from competitors, nothing will save you. Market research is the cornerstone of success. Avoid poor market research at any cost. Even if you do not have sufficient funding, prioritize market research above other aspects.
• Unclarity. Many EdTech companies offer free trial services and products. People can download your application or use your platform during that period. However, it does not guarantee that users will purchase it. You need to have a direct plan for attracting investment without complete reliance on buy-ins and user revenue. Remember, a bird in the hand is worth two in the bush.
• Unnecessary Technologies. The product you offer might save the world. It can reshape society and redesign how people think. Yet, if your extremely innovative product does not have a target audience or does not have a market to be realized, the company will fail. While you might think that you follow the path of innovation, in reality, the path toward success starts from engagement with the target audience and implementing strategies that bring sales. 

What to Preserve

• Marketing over selling. You need to understand that clients want to trust you. It is especially important in the EdTech industry. For instance, if you work in foodtech, it is all about the quality of your product, and the ability to sell it. In contrast, in EdTech getting clients’ trust is paramount, and it is more important than selling. How can I get clients’ trust? Marketing is the key. In EdTech, you need to prioritize marketing over selling.
• Solution, not a feature. Your platform can have a myriad of new features and traits. However, if it does not solve clients’ issues, the platform will fail. EdTech has to be outcome-based. The simple truth is that consumers do not want to know how stuff works, they want to know how stuff can help them. How can you find solutions? You need to think like a client, and not a vendor. Get in your target audience’s head and understand their needs.
• Support and feedback. Getting feedback and looking for ways to improve your product is another major component of success. Listen to your clients and give them instruments to vocalize their concerns. It means that your products must have customer support and integrated communication tools. What are the ways for improvement? Getting feedback, reviewing your product, and understanding that there is always room for development. 

The Bottom Line

The EdTech industry is waiting for new players. The market is not saturated enough. There is plenty of demand. The investors are ready to offer you funds. 

All you need to do is clarify the reasons for starting the EdTech startup, consider major touchpoints, and find proper funding sources.  

Ready to design some innovative EdTech software? Wrap up the idea into a good UVP and build an MVP. Investigate the market and establish the key strategy. Find a responsible development partner, and listen to your clients. Many EdTech startups fail, but only a few succeed. 

Knowledge is the key. The more you understand how to begin the path, the greater your chances of success. Don’t rush. Remember, it is a marathon and not a sprint. 

Remember, there are several key insights you can learn from both successful and failed cases. Focus on marketing. Understand what the clients need — conduct market research before implementing your idea. Give clients ways to offer you feedback on the product.

Do that, and you’ll live happily ever after. Yet, the final choice is yours. You can either learn from the mistakes of your predecessors or think that your company will fit into the minuscule percentage of EdTech startups that do not obey the rules.