The 5 main challenges facing ed-tech startups, no, make that 7…

I love “list” articles. So easy to skim. This one – by Zach Cutler for Entrepreneur.com – is no exception, and has the added virtue of raising some interesting points, in an excellent format. The list in question is of challenges facing edtech (education + technology) startups… with possible solutions. I’ve seen so many articles about obstacles and barriers, but very few propose solutions. It makes me think that Zach is possibly an entrepreneur at heart.

The article is short on words and somewhat simple, but that’s actually ideal for this type of article and its intention: to make the obstacles easy to understand, and to get people thinking about ways around them. And to hopefully encourage entrepreneurs to really think about the risks in their business model.

by Jason Ortego for Unsplash

by Jason Ortego for Unsplash

In summary, the five obstacles mentioned, and their solutions, are:

1) The edtech industry has exploded.

Solution: since there’s so much competition, come up with something innovative.

Comment: Yes! I recently took a MOOC called “Powerful Tools for Teaching and Learning” from the University of Houston which looked at different categories of education technology and the problems they can solve. Very interesting. My main takeaway was that the range of tools is overwhelming, and it’s a full-time job just keeping up. The range of choice is actually a barrier in itself, because we are reluctant to invest a significant amount of time in learning how to use a new platform or tool, if we are not sure that it will survive in this over-crowded space. So we focus our efforts on the leaders, which makes it even harder for innovative upstarts to gain market share.

2) Funding for edtech startups is not extraordinarly high.

Solution: Focus on cash flow from the very beginning. Don’t depend on big-ticket external financing.

Comment: This jibes nicely with my conviction that the VC sector is losing its focus and scrambling for unicorns, rather than trying to really change the way education (or any other sector) works. There are exceptions, of course (I love the idea of the NewSchools Venture Fund – a not-for-profit investor in education technology companies). And the VC firms are businesses with a right/obligation to make profits. But Silicon Valley used to stand for revolutionary change and new ways of looking at society and motivation. As I said, there are exceptions, and maybe my hindsight is rose-tinted. But so much talk of exits and bubbles is turning the excitement of possibility into uninteresting hype. Sorry, getting slightly off track here. My point is that there are startups that should be run as research projects (with profit not being the main objective), and there are startups that should be run as businesses, focussed on cash flow rather than number of users. Most edtech startups fall into the latter category.

3) The education industry is slow to move.

Solution: Convince with data.

Comment: The proposed solution is simple and brilliant, and not hard to do these days with so much quantification. But I don’t think that it’s enough to get schools to change policies or procedures, precisely because the education industry is slow to move. Its pace is frustrating. But since we’re experimenting with our kids’ futures here, maybe it’s a good thing that it’s slow. We’ve seen so many cases of schools adopting technologies without understanding them, or without having taken the time to figure out integration. Here, take an iPad. Sure, let’s invest in an interactive whiteboard. Maybe schools should wait and see, and think deep thoughts about incorporation and new perspectives.

Alright, I don’t believe that, either. I think that it’s better to try technologies out, even if we’re not sure what the uses can be. That way we contribute to their development. We can come up with other uses, we can provide early feedback, we can become part of the process. And, we can teach the younger generation to participate in innovation by trying things out, by taking reasonable risks, and by not always waiting to be told what to do.

That would be the ideal, but unfortunately I doubt it’s going to happen any time soon, because the education industry is slow to move. But we can start pushing, with data. Data is not enough, though, we also need to convince with idealistic moonshot arguments.

4) Most schools don’t have excess money in their budgets.

Solution: Come up with innovative monetization plans.

Comment: This is why the SAAS model in edtech is what will most likely work. SAAS models (“Software as a Service”) depend on recurring revenue. You don’t buy the software, you rent it. It remains cloud-based, which frees up server space and makes it accessible from anywhere. Updates and fixes are no hassle, they’re done directly on the site. And generally, it’s scalable. You start off with a simple plan, and as your needs grow and you add on capacity and/or additional services, your expenditure increases accordingly. From the start-up’s point of view, a recurring revenue business model is more predictable, more stable, and on the whole much more attractive than a sales-based option. Customer criticism is a good thing, as it helps to refine the product, and the whole network benefits. Your clients judge you on the service.

With a sales-based model, customer criticism is a nightmare. Replacing, refunding and accepting returns drains resources. Updates and fixes are a hassle to administer, for company and clients alike. And your clients judge you on the product, which is more difficult to control, and which can be a business killer.

The “free to users” model which gets income through partnerships that the article suggests is dicey. Income through partnerships sounds like advertising, or targeted access for marketing purposes for other businesses. And with schools, especially if we’re talking about underage kids, that could lead to a host of what-have-you-done-with-my-data problems. Also, we are becoming more familiar with the notion that there is no such thing as a free lunch. With free services, you are paying with your data. And with education and kids, we just don’t want to go there. I wrote a while ago about how an edtech platform that would have generated significant efficiencies for teachers and school administrators didn’t work out because of data concerns. If the schools aren’t overly sensitive with their data, the parents sure are. And when it comes to schools, it’s often the parents that collectively block or slow adoption.

5) Academia is more about theory and less about action.

Solution: Work on the communication above all, and create mixed teams.

Comment: Academics and entrepreneurs rarely speak the same language. And they tend to have different attitudes to life. Entrepreneurs tackle problems with a solutions. Academics write papers. (I know, I’m generalizing, and there are notable exceptions, of course.) Because of these differences, they both have so much that they can learn from each other, which is why they can make a great team. Depth on the one hand, brevity on the other. Complexity on the one hand, clarity on the other. Details on the one hand, synthesis on the other. Landscape on the one hand, strategy on the other. Facts on the one hand, solutions on the other. I could go on, but I’ll do you a favour and stop.

Understanding the academics’ point of view is fundamental in selling software or efficiency tools. Not being able to speak their language is most likely a deal-breaker. But, not all edtech clients are academics. School administrators, for instance, are often businesspeople first. However, they then have to convince academics, teachers and parents. So, bottom line, edtech entrepreneurs need to understand that not everyone sees things in the same problem/solution light as they do.

I would add:

6) Teachers are busy

…and don’t generally have the time to follow mandates from on high, generally from people who don’t understand how busy they are. Nor, often, do they have the inclination, unless they are convinced that this solution will either save them time. If it can produce better results, so much the better. Most teachers, I am convinced, really want the kids to advance and to learn. That’s why they became teachers. But with budget cuts and increased public scrutiny, they are under more pressure than ever to comply/perform/report. So, get them involved, in all senses of the word, and you have a huge advocacy base.

7) Not all kids have the same resources

If a kid is taught how to use an iPad in class, but has no technology at home, he or she will be at an educational disadvantage compared to peers who do have a home environment supportive of innovation and investment. Those of us who grew up in that environment often don’t realise the privilege that we had. Technology in the classroom isn’t worth much if there’s no access to technology at home. It’s better than no access at all, but there needs to be an effort to get parents involved and “on board”.

Obstacles in education technology adoption and implementation, as in life, are plenty. And I’m not saying that that’s a bad thing. Education is so important, it has such an impact on the mentality of our future creatives, workers and innovators, that it’s not something that we should trifle with frivolously. Edtech initiatives need to go through a rigorous testing process, in the lab and in the field, pushing against barriers both expected and unexpected. And as General Douglas MacArthur allegedly said, “No battle plan survives contact with reality.” Agility, willingness to pivot and a conviction that the learners are what matters, are what will distinguish the winners from those that were a good idea but couldn’t quite make it.

We need to incorporate technology in our education, as in our life. But technology is no more than a tool, a medium through which we can reach wider audiences, faster, and in a more entertaining way. The edtech successes of the future will need to win over a wide range of interested parties, from investors to school boards to teachers to parents to the kids themselves. And that is a very difficult task. Will the end result be worth it? Making learning more efficient and fun, making teachers lives easier and more productive, saving money for school boards, and earning a good economic return for investors… And in the process, re-kindling interest in forgotten subjects, inspiring goals in directionless interest, cultivating curiosity and the desire to solve problems? Yes, I’d say it’s worth it.

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