We Shut Down Our Edtech Startup. Here’s What We Learned.
June 20, 2016
By: Jawwad Siddiqui
In 2014, during my third year of university, I was unsatisfied with the varying quality of teaching between my classes. Some professors were great but others not so much. This experience led me and my co-founders to ideate ways to better connect students and teachers for a more effective and engaging teaching experience.
Shortly afterwards, my friends and I launched SharpScholar, a pre-class and in-class assessment tool that helps the teacher identify what students are learning, missing, and why with real-time learner analytics. For students, it acts as an educational coach guiding them through the material so they come to class prepared. You can learn more here about how it works.
As the co-founder and CEO, I’ve learned a great deal by building this edtech company over the past two years. Along the way we went on Dragons’ Den (Canada’s equivalent of “Shark Tank”), interviewed at ImagineK12, got accepted into DMZ Incubator, won awards, and learned from people at Khan Academy, GoogleX and other high-profile organizations. At our peak we grew to 5,000 students, adopted by five top universities in Canada, and had 12 professors onboard.
But now, after two years of building our company, we are winding down our startup. We will continue to serve the small client base we have, but we are closing our doors. Along the journey we made significant missteps—some of which were irreversible. This post is my attempt to share the learnings from our experiences with the edtech community.
Have a Direct Relationship with Your “Customer”
The stakeholders in education—students, teachers, administration, and the government (budgets, policy, voters)—operate very interdependently. This means that if a teacher wants to use a tool or software he or she has to keep in mind the students, school policy, budget considerations, and even get approval from the administration.
Therefore, for a startup, focusing on one target customer (teacher) without getting sidetracked by another is very difficult. This direct relationship gives a singular focus to the sales team (messaging, positioning etc) and the development team (roadmap, priorities etc).
At SharpScholar we created a highly interdependent product—the usage of the product depended on approval from students and admin which effectively complicated our relationship with the teacher. This resulted in us having different messaging for students, teachers, and admin as well as lack of focus as to who we are tailoring to.
Lesson Learned: Minimize or eliminate layers of approval and interdependence of your product. Teachers prefer not to use tools that require different layers of approval from others.
Don’t Confuse Your Customers, Consumers, and Capacity to Pay
A customer is someone who pays for the product. A consumer is someone who uses it. In many industries they are the same person. This is not true in education industry where the consumers of a product (often teachers or students) are not the customers who have the capacity to pay for it.
For example, in the toy industry, companies advertise their product to the kids (consumer) on TV or the web. These kids then bug their parents (customers) who then go out and purchase these products for their kids. In this case, we have a clear customer, consumer, and a capacity to pay.
However, it is difficult for an education startup to replicate the success of the toy industry because it is not always clear who the “buyer” in the school is. Teachers sometimes have budgets—but this is often not the case. Funding from schools and districts for technology tools can vary dramatically. And selling to an educational product to parents runs the risk of exacerbating an uneven playing field, as some kids come from low-income households that may not be able to afford the tool.
Lesson Learned: Beware the complications of scaling a business model that relies on different buyers with different capacity to pay.
Beware the Empathy Gap Between Teachers and Entrepreneurs
Teachers and entrepreneurs ultimately have different priorities. While startups are trying to get teachers to adopt classroom apps, teachers think about setup time, or the students who don’t have a phone. Teachers want to take their time to learn and integrate the tool into their practice. Entrepreneurs want to close the sale as soon as possible.
At the end of the day, the teacher and the edtech company are focused on very different performance metrics for their respective jobs.
Lesson Learned: Entrepreneurs want (or have) to scale fast to meet and exceed business metrics. Whereas, teachers need to consider the bigger picture and take their time. This gap is very often too much to bear and results in start-up failure.
We are Influenced to Be Free Consumers
Would you pay for using social media tools such as Twitter, Facebook, or Snapchat? Probably not.
Unfortunately, the flood of free tools have primed people—students and teachers included—to expect certain services to be free. Furthermore, many big players (Google, GitHub, Microsoft) that make their money from non-education-specific services offer freebies or highly discounted products for the teachers, further reinforcing this mentality.
Lesson Learned: In the cash-strapped industry of education, many target users of edtech products believe that there is such a thing as free lunch in the education space.
Despite all the mistakes and lessons learned, I will continue to collect and reflect on various lessons learned in the edtech or education startup space on my blog. I appreciate discussion and viewpoints that challenge my learnings.