I no longer keep count of the investors who told us we would never make money in EdTech. From our shy begins where all we had was a twitter account to the online learning platform used across the world, we have always walked on this fine line between intelligence and stupidity, arrogance and humility, stubbornness and flexibility. There is no bitterness of course towards the investors that turn us down – it’s up to us to convince them – but at the back of our minds, although we are now making money from the platform, we still strive to somehow prove them wrong.
Still, those investors have/had a point: making money in education is tough. Here are some reasons why.
Lack of Money Allocated to Education Software
People who say there is no money in education are wrong. There is actually plenty of it which is allocated to a variety of things from teacher salaries to school meals, from the pen and paper students use to the administration that runs the school. Where does an EdTech product fit? Money is poured into technology but less into the tools that bring the best out of technology. Shiny iPads decorate classes, but what about the apps? A lot of this can be due to the novelty of EdTech apps; everyone can see the benefits – and limits – of a textbook, but what about a new app?
Administrators have no qualms about spending vasts amounts of money on expensive textbooks that no longer reflect modern teaching, but until there is more budget allocated to software, it’ll continue to be a struggle.
School Budget Cycle
Whether you are selling to the richest school in the country or a deprived one, the cycle of a school budget means educators will often have to allocate money to spend on your product or service… the following year only. Selling to a school or specific department is in any case a slow process – as many people need to be convinced and give their stamp of approval – but the nature of the yearly budget slows it down even more.
If selling to investors is tough, convincing a teacher to pay for your service or product is even tougher. Casting aside the value of your product, many teachers are not willing to pay for something they have a regular use for in their classroom. In a day and age where many services are free – think Google – it is no longer the norm for users to pay; it has even somehow become the exception. To these teachers,we can easily respond.
First of all, it’s important for them to realise that the “free” proposed by Google and the like is not entirely free as your personal data is used and sold to advertisers. Secondly, teachers must acknowledge that running the service they are using actually costs money. We are a small passionate (and frugal) team and, like everyone, we have bills to pay, including rising technical costs tied to everything running smoothly on the platform. Edsurge wrote an excellent piece on the cost of free in EdTech.
Some EdTech products have had millions of dollars invested in them and have the luxury of – temporarily – making everything free to everyone. What matters for us is to be sustainable sooner rather than later.
“Why don’t you hire a salesperson?”
Yes selling to schools and convincing educators and administrators is a long, arduous process, but on the other hand, we have a very different approach to sales, a bottom-up and loose one. We seek to make teachers test and try out the tool first before they can then see the value of upgrading to Premium.
The belief on what we have built is so strong that we have no salespeople in our team. Undoubtedly, hiring an experienced salesperson would bring about more revenue, more institutional and department sales while bringing us closer to sustainability. On the other hand, that would not necessarily imply the tool is used which remains fundamental to us.
The bold path we have chosen is not the easiest, but then again nobody said it was going to be easy. We are lucky to have investors who believe in what we do while growth, retention and sales are on the rise. We are also lucky to have educators who see the value of our product. Both them and the investors are an invaluable help on the obstacle-ridden road to sustainability.
If you have any questions or comments, please email Jonathan directrl at [email protected].