EdTech Startups: Survival of the fittest
India has become the third largest startup ecosystem and since 2012, the country has churned over 200 new ed-tech startups every year. Many of those harboring the big idea which can revolutionize the space.
With more than 1.5 million schools boarding over 260 million students, 751 universities and 35,539 colleges; we have earned a vital spot in the global education industry. So, when the EdTech revolution hit the Indian sub-continent less than a decade ago, many startups surfaced showcasing tremendous potential to change the way students could learn and grow.EdTech Startups: Survival of the fittest @Bizztor_IN Click To Tweet
According to a joint report released by Google and KPMG, online education market is set to grow to USD 1.96 Billion and around 9.6 million users by 2021 from USD 247 Million and around 1.6 million users in 2016. This means there is opportunity to grow for existing players and new entrants.
Unfortunately, EdTech startups with millions of funding have struggled to secure their base, let alone grow. Till date, many of these startups have died a premature death within 18-24 months of being into operation. Although each startup has a different reason for its closure, certain glaring similarities cannot be overlooked.
Let us try to analyze what may have possibly gone wrong in EdTech startups focused on K12 institutional space.
Inability to raise serious money
Many EdTech startups have changed the pivot after a year or two of operations to survive. Interestingly barring a few notable EdTech startups, majority of the EdTech startups face an issue of moving past raising seed money.
Many EdTech startups have faltered in the fund raise process – lack of scalability, chasing the wrong customer set, lack of clear differentiators, etc. have created an issue in raising fresh round of funding.
Too many offerings / players reaching the decision maker
The number of successful education startups in India can be counted on fingers. With so many startups becoming defunct within months of starting out, people need a reliable standard that validates their claims. They are becoming extremely cautious and picky while choosing the right platform.
Also, many a times decision-making and reputation baggage is also a limitation. A renowned school is not always upbeat about taking a digital solution from a new EdTech company. They either need a validation from other users or need enough visibility to be sure of who they are dealing with.
The Right Mix (Online to Offline System)
Many startups leveraged the proliferation of internet as a pivotal focus of providing online solutions to complex problems. However, what they may have failed to realize is that a completely tech-based solution would probably not work in the institutional space.
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Online content/solutions always need to be supplemented with offline solutions for an EdTech startup to work in India, majorly because the required ecosystem of High Speed Connectivity, Devices and Tech Savvy Teachers is still not present apart barring International schools and few top schools in the country. For most of the schools, learning is still traditional and old school.
Lack of Digital Champions at School
Another issue with only EdTech startups stem from the fact that key drivers of digital learning in this space are teachers. They are undoubtedly the cornerstone of improving learning outcomes.
But, having been in the humdrum of traditional classroom teaching for a majority of their teaching life, they are not seemingly approachable as a tech-savvy target audience. So, reaching them and asking to adopt a new tech product is met with much resistance.
Patience is a virtue (inadvertently missing)
India has a highly competitive education space; therefore, every EdTech solution essentially has to go through a one-year long validation cycle to prove itself. A significant amount of time is needed essentially to create a successful EdTech product.
Therefore, unlike e-commerce or other hyper local business, there is no hyper growth in this sector. Sadly enough, this becomes a problem for startups as parents and teachers do not want to engage in an association where the results can only be seen after a year.
Even investors lose patience and interest in this space if they don’t see instant results. Players have to find a way to grow and make money.
In the End
EdTech companies need to realize that no matter how unique the product, it is important to analyze the ecosystem and go ahead with their idea only if it practically solves a problem in a creative and unique way.
By applying innovative marketing strategies that resonate well with users and differentiating their product competitively, the upward trajectory of EdTech startups is sure to revive itself within the country in no time.