In the current economic climate, many entrepreneurs are wondering how to launch a start-up. From the vast array of options available to them, they often choose an EdTech start-up. This is otherwise known as the combination of “education” and “technology” where hardware and software enhance teacher-led learning for the benefit of the students involved.
Globally, EdTech start-ups, as well as digital learning platforms and apps are becoming increasingly popular. There are interesting ideas, investors, and an audience waiting. What more do you need? There has never been a better time to develop an EdTech start-up!
Have we piqued your interest? Then keep reading! As we share with you a brief guide to launching and developing an EdTech start-up.
Why Get Started in This Industry?
According to Research and Markets, in 2019, the EdTech market in Europe generated €199,306.41($20,571.2 USD), and by 2027, it is expected to reach €595,128.30 ($61,250.6 USD). From 2020 to 2027, it is predicted to grow by 14.6% compound annual growth rate.
Best Practices for EdTech start-ups
Has a great idea already emerged in your head, but you’re not sure how to get started? Do you wonder if unless you have something new to offer, you may not get noticed due to the competition? The reality is quite the opposite. We’re still far from reaching saturation in the Edtech market, and there are plenty of opportunities to explore.
Thus, we want to share with you some recommendations on the steps Edtech start-ups need to take for the best results
Before launching your start-up, you should research the market and points like:
- The major players
- Your main competitors
- What does the market offer, and
- Products available and popular.
As of today, there are more than 30 Edtech unicorns, which are valued approximately at €97.59 billion (USD 100 billion). This is clearly a competitive market. That’s why it’s essential to understand what your target audience needs and what is already available.
Are you planning to provide educational services to employees, graduates, or kids? Do you plan to ask individual teachers to upload their classes or collaborate with universities? Take note of your concerns and move forward accordingly.
By doing this, you can determine if your product will have a potential audience. Looking at your direct and indirect competitors, you can come up with a way to stand out or improve features the audience feel are lacking. All this information from your market study helps to set up your own market strategy.
Establish Your Niche
The EdTech industry consists of many subdomains, models, and technologies. When you plan EdTech start-ups, the goal is to find a niche that is right for you and specialise in it. Don’t assume that a single company has the capability to handle everything in this field.
Providing an all-in-one solution might not be taken seriously by the public. Especially if your company is brand new, people may have a hard time trusting you. EdTech start-ups are more likely to succeed when they offer a specialised product or service with its own unique twist to it.
Your EdTech start-up must be relevant to your target market, since any product or service that does not solve a problem is doomed to fail. For example, consider Tutorspree, an EdTech start-up which offers web-based tuition services, but it failed. One of the reasons for its failure is that its service required tutors and students to meet in person.
Another similar EdTech start-up, Schoolgennie, also failed after spending a great deal of time and money to develop a product. But it turns out that their target audience wasn’t even interested in the product. So if you want to provide a product or a service, make sure you do thorough research first to ensure it is relevant.
Put Together the Right Team
To build a great EdTech start-up, you need a team of educated professionals who share the same passion for the subject. Managing as a CEO for an EdTech start-up is very different from being a professional in education. Attend schools, university meetings, and professional events to connect with educators.
Having the right team in place is essential. Who are your co-founders? What part do each of them play? As a founder, what role will you play? Having a small team means taking on a variety of roles and responsibilities. Therefore, it is important for everyone to understand what they are supposed to do and carry it out properly.
A lack of efficiency will result in delays and mistakes, which can be a disaster for your start-up. In addition, you should also determine who will develop your product – be it a dedicated software development agency or your own development team. You need to put all of this together to build a successful team.
Obtain Necessary Funding
When thinking about how to start an EdTech start-up, funding is another factor to consider. You need to raise capital to develop the project. These are five ways you can get funding for your EdTech start-up.
- Crowdfunding: Using crowdfunding, you can gain funding for your project from multiple donors who believe your idea is worthwhile. A variety of amounts are contributed and people receive intangible benefits, such as free use of the product, if the implementation is successful.
- Venture Capital: As investing in start-ups represents high returns, venture capital investors and firms are interested in growing unicorns. There is a 40% increase in European Edtech Venture Capital in 2022, standing at 1.35 billion Euros ($1.4B) compared to 0.97 billion Euros ($1.0B) in 2021.
- Partnership: You can find like-minded people who are interested in your project, or you can team up with a corporation that is interested in partnering with you. It is possible to obtain funds either way.
- Loans from Financial Institutions/Banks: Banks are usually willing to lend start-up companies the money they need. You don’t have to worry about the bank getting involved in your business, and it’s simple to pay monthly instalments. The bad news is that you have to pay the money back regardless of whether your company succeeds or fails. Thus, you have to be prepared to face the consequences in case of default.
- Government grants and funds: Many governments prioritise the development of the education sector. You might be able to get a grant for your project. It is common for several organisations to apply for a grant, so keep in mind there will be competition and a strict deadline. Moreover, your product must meet the organisation’s criteria.
For more information about raising capital for your business, check out our article.
Proof of Concept/MVP Testing
Having completed your research and assembled a team of professionals, it’s now time to validate your ideas. Business ideas are easy to pitch, theoretically. However, the product may have difficulty satisfying different demands in the real world. Proof of concept would be a good way to resolve this issue.
With a proof of concept, you could validate your idea with a minimal budget. A product’s most important or riskiest features would be included in this application. It is not necessary to impress users with fancy design here. Proof-of-concept and Minimum viable product [MVP] work in similar ways.
You can test your idea using an MVP while investing much less than you would for a full product development. You can receive valuable feedback by having real users test this product, including features, likes, and dislikes, and possible bugs.
The best way to test your product is to do multiple iterations and improvements, rather than developing a main version that nobody wants to use. Then, you can refine your final product using feedback from the MVP.
Gather Regular Feedback
Speaking of feedback, clear responses from your customers are key to success in EdTech. This will keep your product or service attractive and up-to-date. You should listen to how your work is being treated in the real world, whether by users or competitors. Both positive and negative feedback are powerful tools for development.
Make your application user-friendly by adding a feedback and suggestion section. This helps you to collect the most valuable information right from the users’ hands. Clients often come up with creative solutions to problems that the rest of the team can miss.
Analyse your feedback and implement improvements based on your findings. The more you solve the problems of users, the more likely they are to remain your customers. Users will want to use the product if they know they can get help if any problems arise.
If you want to learn more about EdTech examples, benefits, why entrepreneurs should be interested in it, and some of the most popular EdTech brands, check out our article.
EdTech start-ups are undoubtedly profitable going into 2023. Since the outbreak of the pandemic, there has been a growing interest in digitalizing the education sector. This is why EdTech start-ups have the best chance right now.
Success looks different for every business. That is why it’s always a good idea to follow best practices when designing products or services within the education sector. You have to travel a long and twisting path to success. However, by taking the right steps, you can successfully develop the next great EdTech start-up.