EDTECH STARTUPS: Myriad Lessons Learned After the Fall

It has been a fruitful year for edtech startups; the education atmospherics in India and around the globe have produced a good harvest. There have been recent moves by private companies as well as the Indian government in this space. At the announcement of the Union Budget 2018-19, Finance Minister Arun Jaitley had said, “The government is set to increase digital intensity in education. Technology will be the biggest driver in improving quality of education.”

However, the journey of edtech to becoming the next big revolution in education wasn’t a cakewalk. Despite the prediction of India becoming the world’s largest tertiary-age population by the year 2020, we have always been skeptical about introducing edtech in classrooms. As a result, an enormous number of potential edtech startups have failed and
KNO was a software company, founded in 2009, that offered interactive e-textbooks and other educational material in collaboration with publishers. Its products were designed for three categories of audiences namely Kno for College that offered higher education e-textbooks, Kno for School that covered K-12 learning material, and Kno for Publishers that provided publishers with tools to add textbooks and interactive content to Kno.

Each e-textbook came with interactive features including videos, 3D models and simulations, a personal journal, social sharing features, flashcards, Kno Me – a tool to track student progress, and other effective learning aids.

Kno received funding from Andreessen Horowitz, Intel Capital, Goldman Sachs, FLOODGATE and GSV Capital, and was based in Santa Clara, California.

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However, the firm was acquired by Intel for $15 million with some retention bonuses for its employees and intellectual property. A startup that raised $73.4 million in venture capital and debt fell down.

Thereafter, Kno began its journey as Kakai Inc. It lasted for four years while its tablet flopped and its shift in focus to an app-based textbook platform failed to attract customers.

ALLEYOOP began with the sole aim to prepare students for college. The Pearson-backed startup was known as the “Zynga for learning.” A college readiness network, with up to 100,000 users, it combined customised guidance-educational content with game dynamics. Students could sign up using Facebook and search for homework help. “After three years of design, development, and beta testing it shut shop on — we’ll be closing Alleyoop on March 31, 2013. The Alleyoop team will work to facilitate a smooth transition for the online community of users and business partners as we wind down the site,” an Alleyoop spokesperson had said. Little is known about the reason for its shutdown; however, a statement from the startup said, "Innovation is a process of trial and error driven by rapid iteration and risk taking. Over the past few years, we've tried some new things and learned a lot…"

KNACK For Teacher started as a simple tool for teachers. The user could make graphs, organise notes and prove their effectiveness with the efficient tools. The makers of the app understood that teachers are short on time and support. Ironically, Knack for Teachers fell short on time and support as well, closing in 2011. According to a blog post shared on Knack’s Twitter account, the app shut down because it "had very low number of users for a very long time." Jarrod Drysdale, Knack’s head, wrote that he learned important things about teachers and education along with the bitter truth that “Knack’s not a solution people want."

TUTORSPREE, an online platform offered web-based tuition services to students on various subjects such as math, social studies, language, science, programming, and  English. The New York based startup solved the discovery, matching, scheduling, and payment inefficiencies of the 7 billion-dollar domestic market by combining its growing community of over 5000 active tutors with technology that created ideal union between student-tutor. Started in 2010, the platform gained respectable venture capital funding. However, several reasons led to the company’s shutdown; firstly, after the tutor and student union took place, they cut Tutorspree out of the transaction and deprived the company of the fifty percent cut it deserved. Secondly, they faced difficulty in raising a second round of funding. Finally, Aaron Harris, co-founder, Tutorspree had said, “For our team, I know that we reached a point where we felt growth was not where we wanted it to be.”

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COLLLABO, a teacher lesson plan and collaboration site failed because of being treated like a side project. Its founders complained of never getting the attention or traction the company needed to succeed. AJ Juliani, co-founder, Colllabo, wrote in a blog piece, "Three months after shutting down …two other companies received multi-million dollar rounds with painstakingly similar ideas. What was worse is how much better they were at executing and shipping than our team was." He is now founder and editor at educationismylife.com.

YOGOME led the way in education by providing children of ages 4-10 across the globe with the necessary tools for success. The Mexico-based edtech startup developed educational tablets as well as mobile games. Yogome created a digital subscription service for its educational apps including 2,000 activities in the form of games, videos and digital books. The multi-lingual games were developed by pedagogical experts. Nine subjects were taught by engaging Yogotar characters to make learning fun. However, 2018 was a year of downfall for the company; the company board came across evidence of mismanagement of funds and financial misconduct by Manolo Diaz, co-founder. The company had claimed to have over six million active customers from over fifty countries; however, after the uncovering of the fraud, it’s expected that these numbers were false and inflated. Further, it has led to investors taking this case as a warning; Yogome was able to raise millions of dollars based on false metrics.

SHARPSCHOLAR was found to ideate better ways to connect students and teachers for a more interactive and effective teaching experience. SharpScholar was a pre-class and in-class assessment tool that aided the teacher to identify why and what students were able to learn and miss with real-time learner analytics. It also guided students with quality material helping them prepare for their classes. At their peak, they were able to reach 5,000 students while being adopted by five top universities in Canada, and had 12 professors onboard. However, unlike other startups, founders of SharpScholar were able to accept and learn from their mistakes.

Jawwad Siddiqui, co-founder & CEO, elaborated on his experience and gave away four essential learnings from his mistakes on his blog; “Firstly, have a direct relationship with your “Customer” i.e. minimise or eliminate layers of approval and interdependence of your product. Teachers prefer not to use tools that require different layers of approval from others. Secondly, don’t confuse your customers, consumers, and capacity to pay i.e. beware of the complications of scaling a business model that relies on different buyers with different capacity to pay. The third lesson, beware of the empathy gap between teachers and entrepreneurs i.e. 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. Finally, we are influenced to be free consumers i.e. 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.”

While looking at the data of startup shutdowns, an interesting fact was unveiled. More than fifty percent of the founders, post-shutdown, have joined another company where they work in leading positions. However, only a small chunk are able to come back as founder.

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Amid the innumerable struggles that the edtech industry goes through, there is a common struggle; it takes a long and tiring period of six to eight months to convert free users to paid ones. Often, these startups lose interest, creativity and funds due to inactive consumers and audience leading to their shutdown or failure. Is it time for the Indian education system to inculcate edtech as part of a holistic learning experience? Considering the obvious advantages, it is something for educators and policy makers to think about.