Benoit Wirz, investment partner at Brighteye Ventures shares his top advice to help tech entrepreneurs get their EdTech startup off the ground.
Education technology (EdTech) has seen a boom in the last five years, as schools bring devices and broadband into classrooms and investment increases. The EdTech sector is one of the fastest growing in the UK, expected to reach £2.4bn by 2021, and in 2017 the UK ranked number one in EdTech venture capital in Europe. It’s no surprise, then, that this is a sector that provides an enormous opportunity for aspiring entrepreneurs.
But where should those on the cusp of starting their own EdTech company start, and how can they make sure they succeed in the face of increasingly fierce competition?
Think through the key questions
I see fundraising in EdTech as a question and answer process. Investors and entrepreneurs quiz each other until we’re satisfied that our visions align. As a consequence, there are a few key questions that every entrepreneur, EdTech or no, should anticipate before they start thinking about looking for funding.
First, ask yourself: what problem are you solving? On a macro level, what part of the $6 trillion education market are you targeting, and how fast is your segment growing? On a micro level, what qualitative and quantitative data can you use to estimate the value of solving the problem?
Second, how is your product, or your approach, different? EdTech startups can differentiate themselves in a number of ways: via technology, distribution model, pedagogical impact, customer segmentation, design, business model, user experience. As a general rule, the greater the differentiation, and the harder it is to imitate, the better. This is often called a ‘competitive moat’.
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Finally, how good is your team? Beyond general competence and background, we look for founders with an ability to learn, execute, persist, and recruit talented personnel.
Make sure it works
Like healthcare, educational outcomes have a meaningful impact on people’s lives. But unlike healthcare, educational products can often achieve commercial success without having to be verified by a third party, like the NHS, for example. Educational outcomes also don’t manifest themselves immediately, and as a consequence can be more expensive and difficult to track in the long term. At scale, however, evidence-based solutions tend to win out. We look for solutions with a real ability to move the needle when it comes to learning.
My advice here is to define measurable learning goals from the outset. Set up evaluations to assess outcomes alongside key partners such as Educate, based at University College London, which brings together EdTech entrepreneurs with academics and researchers.
What’s more, you need to think not just about how you will deliver to users, but how third parties will ascertain that value. How can you make sure that what users learn using your apprenticeship product, for example, will be recognised by the employers they are trying to reach?
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Prove you can motivate
University drop-out rates in the UK went up this year for the third time in a row to 6.4%. And online courses see much higher rates of attrition: between 75% and 95% of students who started a MOOC don’t finish. Educational outcomes take a long time to realise, but most people find it hard to make progress towards long-term goals without short-term validation and rewards. This means that motivating your users can’t be an afterthought, but has to be integrated into the product itself.
How can you solve the question of motivation? There are, thankfully, a number of strategies to choose from. You can provide shorter educational experiences, such as bootcamps offered by the likes of IronHack and LambdaSchool, and microcredentials such as BloomBoard and Degreed. You can also learn a few lessons from consumer internet, gaming and neuropsychology to enhance motivation and provide short term payoffs on the way to longer term outcomes (Epic!, Aula). Alternatively, make the student a guarantee, such as employment upon completion (OpenClassrooms, Depauw University) or a high mark at the end of the programme (Tassomai).
Aspiring EdTech founders need to be asking themselves a lot of the same questions that a founder in any other sector should be. However, education holds a special position in that it has a significant, often life-changing, impact, and this requires a certain amount of dedication from its users. Bearing all this in mind, go forth and enter the rewarding world of EdTech.