I worked in two education-centric startups. I know there are many issues worth solving for students, teachers, and school management. I have seen many startups doing great things in the education domain.
The education industry is more than USD 30 billion in India alone, but most of the times startup founders got this wrong. Don’t get fooled by these numbers. The education industry is very wide, and valuations seem swelling when we look at total education expenses of the Indian population. We, the founders, should only focus on valuations of niche in which our product is going to make money. Let’s take a deeper look what lies under the hidden layers of the education industry.
There are six types of education institutes.
This category was almost non-existent even a few years back. In the last 10 to 15 years the number of working mothers has increased in many folds thus the demand for the schools, taking care of early education has also increased. There was a rapid growth in the sector of early education.
I see these schools as crèche with a better business model. No wonder, big companies grabbed the opportunity and successfully built public companies like T.I.M.E Kids, EuroKids, and KidZee.
What do they sell?
The dream of homelike care at school along with basic education which is needed to get admission in top ranked branded schools.
This category of schools was ever present but never been that hot space as it is now. Schools are getting smarter with technology, infrastructure, curriculum and extra activities.
Parents are becoming more concerned about their children and demanding more attention from schools. Schools are cashing out this opportunity by increasing fees and providing all the facilities expected by the parents.
What do they sell?
A dream of a smart student with IQ of Einstein + Sports spirit of Tendulkar + Musical talent of A.R Rehman.
It is our favorite tuition market. In early times, tuitions were for the weak students who could not keep pace with the speed of teaching in school.. Parents started sending their kids to tutors so that they can learn at their own individual speed.
Teachers started exploiting this opportunity of making extra bucks. School teachers joined the race of becoming the part-time tutor. Then they started favoring students in the school who were taking tuition from them. Soon, parents observed that the tuition going students were scoring more marks. Of course teachers were preparing their tuition students for the questions which they were going to set in the school. Illegal, but under the carpet and no one could ever rectify this corruption.
“Ganda hai par Dhanda hai yeh” – today supplementary education is a big business.
What do they sell?
Extra Marks!! That is it.
Parents want more for their children. They want their children to excel in every possible field, so they send their children to dance, music, painting and other classes.
What do they sell?
A dream of becoming a multitalented student.
Competitive exam preparation
This segment of education was not popular before the trend of studying engineering burst in India. After the success of IIT-JEE preparation classes, teachers get the attention of all possible competitive exams.
Now people brand their coaching institute as “IIT coaching from the IITians.”
What do they sell?
Dream of getting into IIT/AIIMs (or similar branded institutes)
Colleges and universities are the upper segments of the education system. Businessmen exploited this segment in the name of popular brands.
Promise you won’t laugh at – “Think beyond IIMs……”, a ponytail hatching his golden eggs.
Today, higher education market in India is dominated by builders and landlords. The major investment is land and infrastructure, the rest of the things are almost free in comparison to infra cost.
What do they sell?
The sweet dream of a job.
What people are solving?
If you analyze education industry carefully, then you will observe a lot of problems. Parents are genuinely concerned about the future of their children so they are willing to spend as much money as they can. On the flip side, education providers are now businessmen who want to increase their profitability every year, they care about making more money.
In between the startups who are solving problems like
- Platform to connect teachers & students
- LinkedIn type of platform for teachers
- Content sharing platform
- Discussion portals exclusively for teachers or students
- Content curating & aggregation
- Zomato like portal for searching schools or pre-schools
- Game based learning
- E-commerce for school accessories
- Communication channels between schools and parents
- ERP, CRM for simplifying internal admin processes of schools
What needs more attention from startups?
You, as a startup founder has to look deeper into root issues. Do not consider education domain as a cash-cow. It may be true for school owner but definitely not for you. Tell me the name of 10 education startups who made hefty amount in past 10 years? Not much, but schools, coaching institutes & colleges are making loads of money every year.
You might be solving a valid issue but don’t just touch that issue on the surface level. Some of my suggestion for you to research further are
What student wants?
Think as if you are student, what you will need? Don’t think yourself as a revolutionist who define what student should have. Students will reject your product if you are not solving his pain.
Students are fed up with supplement education. If you are passionate about supplement education, then look for a niche. For example, if you want to make science learning product then find 100-200 students who are extremely interested in your product. Keep iterating till you find your product to be-market fit.
Go into product depth then expand in width (market growth).
There are three segments within students
- Rockets – High-speed individuals fueled by ‘self motivation’ proponent. These are students who are hungry for knowledge. You do not have to teach them; they will figure out their own ways to excel in their favorite subject. Unfortunately percentage is very low for this segment. How many rockets have you seen in your class?
- Mercedes/Audi/BMW – High worth students who are excellent in studies but controlled by ground boundaries of the curriculum. They need directions; they need the motivation to break records, they feel valuable when people talk about them, they feel motivated when appreciated by masses. I don’t know the exact percentage, but can we assume top 10% students?
- Public Transport – These are students who are driven by public pressure. If given a chance they will not move from their station. They feel a burden in everything they are doing about studies. These are masses, you see them everywhere in metro cities, urban cities and villages. These are the students who are ignored by most of the startups.
Figure out your segment. You can not make a product to satisfy all the segments. Everyone may participate, but your focus must be on one and only one segment.
What teachers want?
Teachers in India are different from teachers in US/UK. Before building something for teachers, you must understand why a teacher choose teaching as a profession. I feel sad when I see some teachers who are teaching in colleges because they have not got a job anywhere else. Very unfortunate but true in my experience. I will love to get proved wrong at this point.
This unfortunate situation happened because of crony capitalism. Education businesses need cheap labor because they don’t want to pay packages like IT companies. They hire graduates and post graduates who are rejected by other companies. Why? Because no one look at the performance of a teacher, they look at the degrees. Teacher performance should be measured by the number of students who love to attend his/her class without attendance pressure.
I have seen some teachers who are passionate about teaching. Who could have got a better paying job but they are teaching because they love to teach. Students attend their classes, not because of fear of attendance shortage but because they enjoy learning from that teacher.
Why schools and colleges need to impose minimum attendance? Because they failed in making education an enjoyable process.
Re-evaluate what you are making for teachers. Find out a target group of teachers for your product. Start with 10-20 early adopter teachers to validate what you are making.
Figure out their difficulties. Ask them what they want. Do not ask them what other teachers want.
Chip and Dan Heath explained an experiment with human psychology in their book ‘Made to Stick.’
Let’s assume that you are trying to persuade someone to take a new job in a department that is crucial to the company’s success. Here are three possible pitches for the new job.
- Think about how much security this job provides. It’s so important that the company will always need someone doing this job.
- Think about the visibility provided by this job. Because the job is so important, a lot of people will be watching your performance
- Think about how rewarding it will be to work in such a central job. It offers a unique opportunity to learn how the company really works.
This experiment reveals the chasm between ourselves and others. Most people say no. 3- an appeal to learning would be most motivating for them. Those same people predict that others would be most motivated by No. 1 (Security) and No. 2(Esteem)
Learn the art of taking feedback. Ask them ‘what you want?’, not “what you think your colleagues will need?”.
What school/college management wants?
No Secret, they want profits. Build something that can reduce their costs or help them in making more money.
Some schools want to make money in every possible way (wrong or right) but some schools want to increase profits by taking responsible steps. Both are right in their places. Debate is not to prove someone wrong. Debate is how to add value in their life.
Some random ideas –
- Save their money on SMS by providing them WhatsApp type simple communication platform
- Save their money on paper printing by implementing e-library – easy to access, easy to search, easy to read
- Help them in getting more students (highly monetizable business)
- Give them something for which parents can pay extra – happily. Something so cool that the school can provide as optional buy for parents and 99% parents says YES.
- Reduce school’s headache from government regulations/policy updates. Send them easy to interpret and actionable notification whenever there is any relevant update from C.B.S.E, state government or central government.
- Reduce their existing manual cost by upgrading to technology. No bullshit. Be practical, your offer should be so simple that you pitch for sale, and they should get saving calculations in their mind.
After reading above points, if you get an idea that you will have all my suggestions as part of your product, I am sorry to say but 99% chances are you will fail.
Focus only on one thing at a time and do it with sheer excellence. Once it is done then think about including next best thing.
If you think I am imposing my shitty thoughts on you then take an example of WhatsApp. Until their acquisition by Facebook, they were simple text/image based communications platform. Recently they added voice and not yet a video calling. Do you think they lack in technology expertise or money or video was not something people wanted? They just focused on one thing.
Education seems lucrative space to build next big startup, it is big space but do not get fooled by big numbers and size of the market that analytic experts are telling you. Think about creating value for the stakeholders. Pick only one stakeholder at a time, filter out a niche, build something awesome that people love to talk about, iterate and iterate to make it next big thing.
Think big but act small. No one ever became successful in satisfying everyone’s needs. Build your product for one person and make him fall in love with it. He will do the rest of marketing for you.
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