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SXSWedu: 5 Considerations for Ed Tech Startups

From teachers-turned-entrepreneurs to legacy publishers, speakers at SXSWedu had plenty of advice for ed tech startups.

By Hannah Johnson

You can’t help but notice the passion at SXSWedu, a four-day education conference organized by the creators of the South by Southwest festival. Teachers and professors, school administrators and librarians, technology experts and “edu-preneurs” all gathered in Austin, Texas last week because they believe they can improve learning and education.

True to the SXSW brand of events, much of the conference focused on emerging technology, digital innovation and startups. From teachers-turned-entrepreneurs to venture capitalists, textbook publishers and officials from the Department of Education, almost all the speakers and panelists had advice to offer tech startups looking to break into the education market.

1. Beware of the Long Buying Cycle

It’s hard enough to launch a digital product and then sell it to customers, but in the education market, the year-long buying cycle makes the whole process even more challenging.

“You will be in the red for a long time,” venture capitalist Renata Streit Quintini told the audience at a panel on business models. School districts allocate months to assessing their needs, planning the budget and reviewing bids — and each district will make buying decisions at different times. In such a fragmented market, Quintini said, you’ll need a large sales team.

“You have to launch at the right time,” said Andrew D’Souza of Top Hat Monocle. Though, he added, purchases at the individual level in schools are on the rise. School district buyers are also taking notice of what products are popular with individual teachers. In higher education, sales directly to professors and students are increasingly common.

2. Remember, the Buyer is Usually Not the End User

One of the alluring aspects of the education market for startups is the chance to sell products into entire school districts (true for the USA but not the UK), rather than to one consumer at a time. For the sales team, this is great. You have to convince the school district buyer, not every teacher in the district. But this system comes with caveats.

“Part of the problem is that the people who use the tools are not the people making the purchasing decisions,” said education writer Audrey Watters, on a panel about emerging technology. “Teachers have tools foisted upon them that they didn’t choose.”

Lord Jim Knight, a former minister of education in the UK and now consultant “endorse[s] the problem that the purchaser is not the user.” Knight said that buyers might gravitate toward the latest “bright shiny thing” but that “if the bright shiny thing is not being used well, that reflects back to the purchaser and they move on to something else.”

What does this mean for startups? While you have to sell to the school district buyer, your product has to sell itself to teachers and students.

3. Be Open to Alternative Revenue Channels

That huge sale to a massive school district isn’t the only way that education technology can generate revenue. Though institutional sales are still the biggest fish in the sea, so to speak, some startups are having success selling directly to parents and students.

“Be open to all kinds of partnerships to get noticed,” said Heather Hiles, Founder and CEO of Pathbrite. Her startup offers teachers the option to build courses on the Pathbrite platform for free. Students have access to a free version, or pay $10 per academic year to access the course materials. Hiles also partnered with Pearson for distribution.

However, Quintini said that as an investor, she is leery of freemium business models in education, as well as ad-supported models and products that have to be sold to a new group of customers each year (like test preparation materials).

4. Gather Data and Feedback

“It requires a huge leap of faith from teachers and schools to use startup technology,” said Watters, which means you really have to prove that your product works.

Though many education technology companies provide extensive “professional development,” or training for teachers on how to use their products, Richard Culatta of the US Department of Education said, “professional development is a crutch for bad design.” Teachers should not have to learn to work around the quirks of their educational technology.

For digital companies, this means gathering data about the usage of your product, listening to teacher and student feedback, and improving end user satisfaction. If teachers and students are happy with your product, they’ll use it more…and you’ll have data to prove it when the buying cycle comes around again.

5. Innovate, Don’t Replicate

“What keeps me up at night,” said Culatta, is that we are creating “a complete digital replica of our current analog system.”

During a panel on the future of textbook publishers, Pearson’s K-12 Group Leader Peter Cohen said it’s wrong to assume that “digital is going to save us money.” And if it’s more expensive to use digital tools in classrooms, the question we should be asking, said Cohen, is, “what are we trying to accomplish?”

Said Hiles, “Think big. I’m disappointed when I see people building just an app that makes an inconsequential difference…revolutionize education.”

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