How Can An Edtech Startup Enter the K-12 Market?

The answer is the same for any other market: Find an agonizing problem that a significant number of people have, then offer a better solution than the existing alternatives.

And I would add: Identify a sustainable business model for your solution as well. It does schools no good if you build a great solution, only to make no money, run out of savings, get no funding, and close up shop. I know this from painful personal experience.

It may seem difficult to make money in the K-12 market, but there is more money than most realize. If your customer is a K-12 school district, their total IT expenditure in 2011 was $9.4B.

Also, all school districts want to know that you have a sustainable business model because they want to know that you will be around for years and years, rather than be a transient startup that could disappear at any time. This is a very important point that many aspiring edtech entrepreneurs don’t realize. Selling to schools is a B2B business model. Both businesses and schools prefer to procure products from companies that will be around – and schools even moreso, because integration can be such an intensive process.

This is in stark contrast to individual classroom teachers who don’t control a budget, however. Selling to teachers is a B2C business model where most consumers have come to expect free products.

My suggestions for an aspiring edtech startup entering the K-12 market are:

  1. Validate that your product is solving an agonizing problem.

    This problem should make your solution a “must-have” and not a “nice-to-have.” The average teacher does not have a lot of extra mindshare for new products that are only a nice-to-have. They have to need it. A lot can be written about this. If you have not done so already, go read The Lean Startup by Eric Ries, since his methodology can apply well to B2B businesses.

  2. Validate that your solution solves that problem effectively.

    Find some local teachers or students and watch them use your product. Test the outcomes using the scientific method. See if there is a demonstrable and repeatable improvement from the use of your product. Finding teachers or students willing to do this is not an easy task, but if you are truly solving an agonizing problem, it shouldn’t be that difficult. Being able to come up with quantifiable data to prove your solution will help you win more customers and provide you with a valuable case study and testimonials. These teachers or students are essentially your innovators, as detailed in Geoffrey Moore’s book Crossing the Chasm.

  3. Identify your actual buyers.

    In the K-12 space, the end-user is often not the same person as the buyer. There are many buyers in a school district. They can range from superintendents to principals to IT directors to curriculum directors to department heads. Some end-users can at least be influential in the buying process than others. If you cannot identify the buyer, your end-users may be able to help you too. Note that schools often pay with purchase orders (POs), which could take the form of a check that will arrive in months.

  4. Validate that your buyers will pay for your product.

    Concentrate on making that first sale. Your price point doesn’t matter that much in the beginning. As long as it is not absurdly low, don’t obsess over the right price. If you are lucky, you will have a buyer who is willing to work with you on a reasonable price. Look at competitive products and their pricing structures as a basis for yours. Understand the issues that the buyer cares about. Having a case study to validate your efficacy will go a long way in convincing them. Some may even require this kind of proof first.

Once you have made that first sale, listen to your end-users and buyers, then tweak your product as necessary. Meanwhile, go focus on your next 10 sales. Then your next 100. Then 1000. Going in small incremental steps will keep you realistic.

Or even better, look into different distribution and viral growth models that can accelerate your sales. The best kind of growth is the kind where your customers naturally want to tell their colleagues about you.

This is a simplified view and each step has many nuances, depending on the exact nature of your solution. Hopefully this provides enough of a starting point for any aspiring edtech entrepreneur.

This article was originally posted as an answer on Quora and modified for this blog.

Author: Mike Lee

An idealistic realist, humanistic technologist & constant student.

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