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Top 5 Challenges For Edtech Startups & Solutions To Them

What are the common edtech challenges most startups face? Figure it out and read how to overcome failure and grow the business.

  • Startups
  • EdTech
Natalie Koltunova Content Marketing Manager

The education market is investors’ delight. Despite the fact that many ed-products are entering the market, there is still a huge niche for innovative solutions and much-needed tools. This is the right time for edtech startups in the USA , educational forerunners, and forward-looking companies to take action now and to reap benefits later. Why is it so? Let’s figure it out.

The fact is that over the next 10 years the number of post-secondary graduates will increase by 350 million and the number of K12 graduates will increase by 800 million. The world population grows by 200,000 people every day. We will likely add another 1 billion people by 2030, putting enormous pressure on education to scale up effectively and sustainably. This sector will see a great demand.

education attainment

Also, it reveals lucrative opportunities for startups and innovators. The market volume is huge, and it requires special services that will facilitate education and make it easier to manage, such as internal social media networks, learning management systems, e-platforms, mobile apps, cloud solutions, content management systems, interactive apps, BPaaS and SaaS systems. 

A bit more statistics to show the real picture. In just 10 years the total investments in edtech have increased by 14 times. To be more specific: in 2010 Venture Capital edtech Investments were $500 million, while in 2019 these numbers skyrocketed to $ 7 billion. More interestingly, the first half of 2020 was heavily influenced by the pandemic, which resulted in an increase of about $4.5 billion.

Educational ideas are gaining wide popularity and the best edtech startups get significant investments. Here you can read about the 13 most promising edtech startups.

global education expenditure

However, to grow a successful edtech startup, it is vital to understand clearly what difficulties you can face. Let’s figure out what challenges of educational technology will await you.

What are the common edtech challenges most startups face?

Change resistance 

Education is the most ancient sphere which stood still for a long time. On the one hand, this sphere is avid for innovation and upgrade and strives to make the learning process comfortable for both teachers and students. On the other, there is resistance from administration and teachers. Many schools and universities are suspicious of technology. 

Solution 

To become successful in offering edtech solutions, it is necessary to know the industry from A to Z and understand what the specifics are. To convey the importance of tech introduction to hesitant decision-makers, education technology startups should be aware of all the pain points of the industry – teachers, non-teaching staff, students, ed-partners. The main objective of education startups in the USA should be the demonstration of the true value of the service or product: what issues it will solve, what support will be provided, how it will increase the cost-effectiveness and cut expenses, what prospects it will offer, how it will influence teaching and learning flow.

Change is always tough, but the pioneers will benefit from it more than others.

Data Collection and Security

User privacy is a hot topic, especially during the pandemic outbreak. Many universities and schools are concerned that the implementation of edtech startup solutions to the educational processes may cause data loss and become a serious issue — the data could be sold, used for advertisement distribution, or for tracking users.

State of edtech Privacy Report, Common Sense Media reported – “Legislative initiatives such as the European-based General Data Protection Regulation (GDPR) and the corresponding California Consumer Privacy Act (CCPA) created a new narrative that highlighted the privacy shortcomings of big tech and social media companies, which led consumers to look more closely at the privacy practices of the products they use. These factors prompted vendors to update their policies at an unprecedented rate. Over half of the 100 most popular applications in 2018 had to be completely reevaluated due to these changes.”

Since 2018, a lot of work has been done and the medium scores have been improved. On the diagram below, you can see that the average scores for data sharing, data rights, parental consent, data collection, data security, and school purposes have improved.

average scores

Solution

Educational Institutions and organizations are worried about the introduction of new tech features and integrations and afraid that they will not be able to control it. Therefore, the key to solving this issue is awareness.

A responsible startup and company should educate clients and explain the reasons why the tech solution is safe — what measures were taken to prevent data loss and improve privacy transparency. Thus, educational organizations will understand that using your product or service is not only beneficial but also safe.

Analytics and AI

Effective business solutions should include the understanding of what results and measurable benefits the solution will bring to the customer. In this regard, a hot-potato question arises about analytics, how exactly the benefits will be assessed, and what metrics will be taken into consideration. 

According to my research, only about 7% of Learning Management Systems (LMS) and platforms provide AI-based analytics. Advanced analytics is one of the most demanded features on the tech solutions market. Analytics and data collection should be optimized for a few personas: the student, the admin or the teacher and the heads of the organization. This will allow organizations to build competitive advantages, automate processes and select more effective training programs.

Therefore, it is important to consider the following roadblocks:

  • Limited resources for making full analytics;

  • Calculation of the net benefit for the student — how the grades, behavior, acquisition of information and memory have improved;

  • Planning and forecasting results;

  • The process of Intelligent Tutoring Assistance development to provide students with personalized tutoring approach for effective learning process

Solution

To overcome these challenges, it is necessary to:

  • Provide encrypting to minimize app vulnerability of hacker attacks

  • Provide the ability to collect data for analytics before, during, and after the implementation of the tool; 

  • Also, it is important to distribute the analytics for several users — for teachers, for students, and for the heads or administration of the organization.

With this approach, the effective tracking of the process at all stages will be available and submitted to all interested parties.

Customer-centric ecosystem

One of the hottest trends in IT business development now is building a customer-centric ecosystem. Now the “Customer — first, product — second” approach is the facilitator of good experience. Customer centricity is a buzzword now and it seems that businesses shift their operating models to better client service. If so, why are there so many disappointed and unsatisfied consumers? Up to 80% of the successful and best-rated performed companies’ claimed that their main objective is personalized customer experience based on digital and tech solutions.

What are the bumps on the road then? Here they are:

  • Speed, awareness, friendly attitude, and convenience — these roadblocks together account for more than 70% of customer satisfaction and are the main tools that enhance loyalty.  

Here is a map which shows how important experience for the customers is when they decide where to buy and what service to use.

map customer experience

Solution

It is essential to understand that a decent product and tech features are great — but the customer is king. Make the most of the tech stuff but focus on human interaction more. Moreover, this is a great time and opportunity to complete your services by taking care of your clients, teachers, and students. 

Here I present the most valuable features that need to be developed and implemented into a startup ecosystem:

importance for customer experience

Regardless of what kind of business idea you have, whether it is an AI-based Learning Management System, a SaaS solution for automation processes, or a dynamic e-library – consider all these factors. It will boost the customer-centric journey and provide your users with a great experience. This is the path to pay attention to if your business strives to increase sales and build a loyal community.

Embrace the Challenge 

There is no such questionnaire by answering which an entrepreneur will clearly see existing opportunities and asses the time as a “window of opportunity” to make a move. To understand if the market is poised to take off, the founder of a business should: firstly, find out if the country’s legislation is ready and won’t be considered as a roadblock in the future; and secondly, keep an eye on the window of opportunity.

Solution

Let's consider these two points separately:

1. Clarify legal complexities:  

  • Will your business be protected in terms of legislation?

  • Is there a legislative platform existing for your business idea?

  • What legal conditions should your business and your idea satisfy?

  • What proper licenses and legal permissions the business must have in order to operate on the targeted market?

2. Understand whether the market is poised to take off.

To increase the odds that the product will sky-rocket, entrepreneurs may do the following: 

  • Test a trial version of the product with random customers and get valuable insights. Based on their feedback, the founder is able to understand if the targeted audience and the market needs your solution. Then determine the right time to bring the solution to the market. 

  • If you are concerned that you will enter the market too early when the market is not ready yet – wait and analyze the first steps of your competitors. If you are afraid to miss your chance and enter the market too late, enter the market sharply and aggressively before your competitors consolidate their leadership positions.

Conclusion

All in all, entrepreneurship is not an exact science and there are no one-size-fits-all answers and questions. Considering the above difficulties, such as resistance to change, data privacy and security, AI-based analytics, customer-centric approach, and assessing the right timing to launch your business idea will help you to see the potential of your product on the market from different angles, broaden your mind and dig deeper.

Structure

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