In 2016, Jawwad Siddique, one of the youngest Product Guru, wrote an article in EdSurge titled, “We Shut Down Our EdTech Start-up: Here’s What We’ve Learned.” In this piece, he shares his journey about his start-up, SharpScholar, and how he launched it when he was a third-year student at Queen’s. He claimed he was unhappy with the quality of teaching he received from different professors, and this disappointment led him to reflect upon strategies and solutions to fix this problem. He wanted to connect with students and teachers in an engaging learning experience.
Along with two of his friends, he sowed the seed of SharpScholar, and it became a well-known name in the EdTech industry. It was soon featured in Dragon’s Den. In short, this particular start-up was a success… or so it seemed in the initial years.
Unfortunately, in 2016 Siddique announced SharpScholar was closing their doors. His reasons weren’t uncommon for the EdTech start-up industry.
There is much to be said about education technology or EdTech, a challenging industry for entrepreneurs to disrupt, for investors to see a significant ROI, and for schools to embrace.
In 2018, U.S. education technology companies raised almost $1.45 billion. The total funding in 2018 also eclipsed the $1.2 billion raised by U.S. EdTech start-ups in 2017. This proves there has been plenty of rain in the education technology industry, where venture capitalists and private-equity investors unleashed a deluge of cash flow.
If you look at the trend, investment in EdTech has been exploding since the past decade (9 years to be exact). If we drive down the memory lane of numbers to 2011, the EdTech investment was close to $400M and now, 8 years later there has been an influx of 300%.
This investment has created brilliant innovation in the areas of adaptive learning, simulation, and immersive experiences. Unfortunately, there have been several companies driven to insolvency based on an inability to commercialize educational technologies. The educational system needs to improve with innovative technologies however, if there is no profit demarcation for enterprises, it will limit innovation and contribute to stagnation. So, what is driving companies like SharpScholar and other heavily funded EdTech to lock up after a while?
In most of the world, education still primarily follows the agrarian calendar. This means to understand how to sell to schools, you need to understand the decision-making cycle. Presenting a solution that requires an educator and/or administers consensus will need to be displayed in the fall before you propose implementation. Many educational companies have trouble sustaining revenues and minimize expenses during the long peaks and valleys. Academia is built on research and application; which translates to the decision-making process. There is rarely a time when an educational technology decision is made with haste.
One of the most difficult challenges for education innovators is how to commercialize their solutions. Ask yourself, “who is going to pay for the solution”? and “who will benefit from it?” It is very challenging for students to pay for an educational solution. Educational consumers are difficult to engage, they are elusive, and it needs a one by one strategy to gain critical mass.
3. Educator Workload
Many incredible technologies fail to scale with adoption. Many educators will not use a technology solution that increases their workload. For example, if your education technology requires educators to dedicate countless hours in implementation, it will most likely not gain wide-scale adoption or will have a limited shelf life.
4. Ancient Classroom Practices haven’t changed much
The educational system is in desperate need of modernization and scaling. Many industries are almost unrecognizable when historically compared. For example, advanced manufacturing is entirely different from its industrial age. Our great grandparents had different technology and then came the advanced automation in manufacturing to make life easier.
However, if one was to visit a lecture hall from the industrial age and one from 2020, both would mostly look alike.
5. 99 Problems, Pick 1
With so many problems, pick one. If you are going to build amazing learning experiences, stick to that. Do not try to create a platform to deliver your experiences partner with an industry leader. If you are focused on reducing attrition rates in schools, work diligently on this challenge vs attempting to solve equality issues.
Education, in itself, is not a one-size-fits-all situation. There is no doubt that many EdTech start-ups will fail. However, the ones that start with a strong business model, proof of concept, and understand how to best approach this unique ecosystem of customers can find success.