EdTech advice

4 Common Mistakes Made by EdTech Founders (And How to Avoid Them)

Every Founder makes mistakes along their journey. But with EdTech, those mistakes might look a little different than what your typical SaaS company might encounter. 

Even if you feel confident that you’ve accounted for everything in your control, it’s important to remember that EdTech is a very unique market with considerations you might not find in other industries. 

For example, the deferred revenue model created by academic budget cycles forces Founders to confront lumpy or inconsistent cashflow head on.  

But that’s just one of the many challenges EdTech Founders face while trying to scale their businesses.

Here are a few tips from seasoned EdTech pros on what to watch out for: 

1. Creating Products that Fail to Become a Line-Item for Districts

“Remember, somebody has to pay for your product.

Sometimes, [as Founders] we see problems that can be solved, but they’re not necessarily truly a product. It’s a small idea – a piece of something.

School districts might be interested [in those small ideas] when they have a short-term cash flow influx, but eventually that goes away. And if your solution isn’t a line-item in their budget, it’s hard for it to have longevity.

I would encourage Founders to really think about: What are the funding streams for districts? How do they actually pay for things? Where is the money consistently?”

Shanti Elangovan, CEO & Founder, inquirED 

Shanti’s advice highlights an important aspect for success in EdTech. You have to create a product that is so critical to educational success, it becomes a mandatory line item in the district’s budget.

2. Not Understanding Your Customers’ Needs

“The biggest mistake for me was not understanding what teachers and students needed.

I thought I had developed a product that teachers would really like but did not consider many other factors.

The best way to avoid this is to put together a focus group. Ask teachers, students, and parents about their challenges and needs, get feedback from them as you develop your product, and have them use and test it before you launch.”

Mosongo Osong, CEO & Founder, CatholicBrain

As a Founder, you may have a brilliant idea. But that vision doesn’t always jive with the reality of how a product is used and consumed.

That’s why you have to integrate customer feedback, not just from the buyers, but also from end users and those who make critical decisions for them (e.g. parents). This ensures your product will have practical application and increased adoption. 

3. Treating EdTech Like Any Other Business

“Don’t take solutions from other industries and assume they will work in education. With EdTech’s multitude of stakeholders and users (students and faculty/staff), there are nuances that will impact your go-to-market strategy. 

A comprehensive competitive analysis is essential to identify your niche and core competencies. We often observe VC-backed EdTech firms entering the market and quickly discovering the competitive landscape without a true value proposition for students or faculty members on campus.

One way to avoid this scenario is to research for your ideal customer profile and establish relationships with leaders in those markets. Identify the challenges they face and demonstrate how your solution can address immediate and long-term issues. You might even change your ideal customer profile after this analysis.”

Aaron Elliott, Director of Operations, MyMajors

EdTech is similar to tech, but there are some key differences, too. Aaron’s advice highlights the importance of defining your ICP. This is something we’ve talked about previously in the context of accelerating growth for EdTech GTM motions. 

4. Scaling Before Product-Market Fit

“One of the most common mistakes I see new EdTech Founders make is trying to scale before they have product-market fit.

It’s so important that you focus on making early customers delighted with the product before investing in marketing and sales. Scaling before finding product-market fit is achieved risks creating a revolving door, with customers churning out at alarming rates.

I’d much rather know a Founder has a small cohort of a half a dozen delighted customers than dozens of lukewarm customers. When you reach the point that your early customers would be disappointed or very disappointed to no longer be able to use your product, then you have an opportunity to invest in sales and marketing to expand within those customer segments.”

Graham Forman, Managing Director & Founder, Edovate Capital

And Graham should know, he’s funded exited startups like Netchemia (sold to PowerSchool) and Pear Deck (acquired by GoGuardian). That elusive but critical PMF is the only way to truly scale what you’re doing. Iterate until you find customers who couldn’t live without your product.

Now that you know some of the common pitfalls EdTech Founders face, it’s time to re-visit your own plans and make sure you’ve covered all your bases. 

If you play your cards right and follow these tips, who knows? Maybe one day you’ll be dishing out lessons learned to the next generation of EdTech Founders. 

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