Key Factors to Consider Before Starting an EdTech Startup
The COVID-19 outbreak has resulted in the rise of online learning and increased demand for innovative education technology solutions. If you have been thinking about launching a startup in this field, now is the perfect moment for bringing your ideas to life.
Well, starting a startup is a risky task. But if you conduct an in-depth market analysis and build a killer business strategy, nothing will hold you back from success.
Today we will talk about the key factors you need to consider in the first place. Let’s get started!
The unmet customer need
What all successful edtech startups have in common? They spotted unmet needs and created new technologies to solve those needs.
And what about failed startups? What did they do wrong? They tried to design a solution for a problem that barely exists. They skipped the market analysis – they didn’t identify the unmet customer need – and that was the key reason for their failure.
What about your startup idea? What concrete need are you going to satisfy? The unmet need gives you opportunities for new value creation. If you haven’t identified the need yet, you should do it as soon as possible.
Next, you should define who will use your edtech product, when, and how. You should research your target audience and find answers to the following questions:
Who is your ideal user: college student, pre-schooler, teacher, professor, academic writer, language learner, researcher, etc.?
Who will pay for the use of your product: educational institutions, parents of the students, students, etc.?
Where does your target audience come from?
What languages does your target audience speak?
What income level does your target audience has?
Once you find answers to these questions, you will get an idea of how your product should look like, what features it should have, and what pricing strategy you should choose.
No matter how innovative your startup idea is, you will compete with other businesses in one way or another. Before you launch your startup, you should identify all companies that operate in your niche and analyze their strategies.
You should define what marketing tactics they apply, how they position their products, and what pricing strategies they use. Also, you should analyze the advantages and disadvantages of their edtech solutions.
Let’s say you want to create a metasearch engine for flashcard and essay database. You should visit this page and check how similar flashcard databases work. You need to learn more about your competitors to find a way to make your startup stand out from the pack.
The next thing you should consider is market size. Even if you define the unmet customer need and design an outstanding solution, it will not guarantee you success. If the market size is too small, you will not be able to make your project profitable.
Imagine you want to create a platform for learning the Dumi language, one of the rarest and least spoken languages in the world. Obviously, you have no competition in this niche. But here is the problem. There are just a few people in the world who want to learn this language. It means that the market size is tiny. No matter how good your product will be, it will not bring you money.
Many edtech startups fail because they run out of money before their projects start bringing them a profit. You don’t want your startup to fail, do you?
Before you start working on your project, you should estimate all associated costs. You should calculate how much money you will spend on equipment, salaries, marketing materials, office space, inventory, and other things before reaching the break-even point.
Well, it’s a challenging task to make accurate cost estimates, but you should do your best. You should sum up all the expenses and multiply the total sum by 1.2 – you need to have extra money, “an emergency fund,” to cover unexpected costs and keep your project afloat. '
The success of your startup depends on the qualification of your team. Therefore, you need to ensure that all your team players have the necessary skills and talents.
Preferably, you should invite an educator or someone with vast experience in the education industry to your team. This person will guide developers and help them design the product that will perfectly fit the market. Also, you should decide whether your team will work from the office or remotely.
Even though you haven’t designed your product yet, you should already have ideas on how you will promote it. You should decide whether you will rely on email marketing, social media, influencer marketing, or other marketing instruments. A well-designed marketing strategy will help you create buzz around your startup and get clients fast.
Also, you should outline your pricing strategy. Depending on your product’s specification, you can choose a subscription-based, “freemium,” tiered, or volume pricing model. Besides, you can offer your product to students for free and gain profit from ads or affiliate links.
Many startups underprice their products. They wrongly believe that if they set a higher price, they will scare away prospective users. But the truth is that if you offer a unique outstanding education technology, educators and students will agree to pay any price to use it.
Once you research your target audience, analyze competition, calculate the total costs, and estimate the expected revenue, you need to consolidate all your findings and ideas in one solid document. You need to write a business plan that you will further use to make the right critical decisions and prove the viability of your business to investors.
There are many business plan templates out there – if you have never written business plans before, feel free to use them. Or, find expert business plan writers who will help you to create a flawless document.
If you consider these nine key factors, you will face no difficulties in launching your startup. You will profit from your innovative education technology and make a difference in the world.
Don’t waste a second, and start working on your startup idea today. Make the first step today and get closer to your big goal.