5 Tips to Create a Successful Growing EdTech Startup
EdTech is sometimes called the second fintech, implying rapid growth and the investment appeal of the niche. Nevertheless, this does not mean the market welcomes new players with open arms. EdTech startups are subject to general risks, and as you know, most innovative companies stop working after failing to gain a foothold in the market. How do you reduce the likelihood of your EdTech startup failure? Here are 5 tips for creating a successful growing EdTech startup.
Understand what user problem the product solves
The first stage is to find the product market fit: understand what problems your product solves, form a concept, and test it as quickly as possible. Getting quick feedback from the market without significant investments is crucial because startups often do not have much money.
Suppose we are talking about EdTech projects in the field of VR technology and metaverse learning. In that case, the product market fit determines the market’s need for learning with immersive technologies.
One successful example of an EdTech-product that successfully meets the demands of users in its niche is the Netherlands startup Studocu. The EdTech platform was founded in 2013 to exchange study documents with each other. Since then, millions of study documents have been shared by students. They want to learn using the best knowledge sources, and this startup fulfills their desire. Currently, almost 50 million students from 2,600 universities across 60 countries are using Studocu to access high-quality knowledge sources.
Find like-minded people for your team
An effective team, geared up for the result, is a no less critical condition for the success of an EdTech project. It is crucial to focus on competencies and invite robust IT specialists, analysts, and product managers to the project. At the same time, given the specifics of the industry, the team needs excellent teachers and methodologists who know their subject and learning standards and have extensive practical experience.
You should understand that a strong team is the key to success. You should gladly accept graduates of leading technical universities. In such a way, you will create the best team that will become the basis for creating high-quality educational content and the product.
Count unit economics
For any startup that wants to generate revenue rather than losses, it’s essential to understand the unit economics of the product. You should understand how much one customer costs, how much they bring in once per purchase, and how much throughout their lifecycle.
It is essential to have a well-developed financial model that is flexible if necessary. For example, when pricing a product, you must remember that the audience may be unwilling to pay the assigned price. The model should allow for adjustments.
In addition, it is important to know market data and learn from competitors’ experiences. Figures based on the real market picture will be easier to justify to investors.
Find the right sales channels for your product
It is crucial to understand who will buy your product and decide on the tactics and sales channels.
At the start, it can take time to understand which sales channel will be the most effective. The choice depends on both the business model and the market in which the company operates. Therefore, different sales channels can be effective for different products.
For example, digital advertising suits educational products for the broadcast audience. There are vast tools here – from traditional PPC to integrations with bloggers.
There are also other sales models, such as freemium. Here some of the functionality is offered free of charge, and advanced options are provided for an additional fee.
But if this is a product with a high price and aimed at corporations, don’t expect traditional B2C marketing to work well. You need a sales team that promotes the product on its own, for example, through a combination of tools from B2B email marketing to affiliate and referral networks.
Learn market experience
The digital education industry is relatively young but has already accumulated enough experience in winning strategies and actions that have led to failures.
Many innovative companies practice brainstorming dedicated to parsing their failures and analyzing other startups’ failures. This is an excellent place to start when developing a strategy for bringing an EdTech product to market.
For example, the startup Kno was one of the first developers of touchscreen tablets for the education industry. But it could not withstand stiff competition from other manufacturers, especially when similar products from Apple hit the market.
So the question needs to be answered when launching your startup: how can an innovation protect itself from being copied by strong competitors? Perhaps you should not introduce the product to the market but immediately propose the idea to the IT giants.
Here it is also appropriate to say that any product should be tested by collecting user feedback. At the same time, it is essential to avoid overdoing your EdTech product with improvements. You cannot put the perfect product on the market at once.
Both hackathons and accelerators can be good support for a SaaS startup development process. Within accelerators, the project is audited, weaknesses are identified, and mentor support is received. The most famous accelerators are 500 Startups, Techstars and Y Combinator. The latter has produced such world-renowned companies as Airbnb, Dropbox, and Reddit.
Conclusion
To sum up:
- The starting point in choosing a niche is the audience’s needs. It is better to learn niche in the test mode because it is much cheaper. Technology provides excellent opportunities for A/B testing in developing an educational product.
- The team is the key to success. Working in EdTech requires knowledge of the structure of the educational field, standards, and methodological foundations.
- Unit economics is your trusted tool, a constant assistant in budget control and business health assessment. Refer to it when making decisions.
- You need to clearly understand which sales channels work best on a particular project, so you can strengthen them and not waste your budget.
- Analyzing market experiences and getting feedback from users should become a regular practice.
Failure and risk should not discourage because they are part and parcel of being an innovative business. Failure is also a valuable experience for any funder, and the chances of success in launching the next startup will be higher than for newcomers.
