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In this article

7 Challenges for Ed-Tech Companies

SNATIKA
Published in : Education and Training . 11 Min Read . 1 year ago

Introduction

Ed-Tech, or Education Technology, has been making headlines in recent years. Though the concept of online learning and learning with technology has been here for a while, it was only during the pandemic that it surpassed all previous barriers and became mainstream. During that time, it was the internet and technology that held the hands of educational institutions and walked throughout the crisis. A renewed interest in technology-aided education has thus become foundational in making it a globally lucrative business mode. As a result, many entrepreneurs and startup owners have jumped into the industry. They brought with them their expertise, skills, and solutions, as well as corporate funding. There are over 9985 edtech start-ups in India only( TracXN). In America, the number is over 9,575 and in Europe, 2484. Even with such massive numbers, several problems are still haunting the industry, and these must be addressed before the industry can move into its next stage in the lives of the global population.

Before we continue, if you are a senior professional, SNATIKA offers prestigious UK Masters degree programs through our online platform. If you need a Masters to grab your next promotion, SNATIKA is the right platform for you. You can earn a UK Masters and a UK PG Diploma within 9-12 months! Check us out to learn more about our benefits.

Challenges for Ed-Tech companies

1. Disconnection between the user and the educators.

This has always been the major challenge in the Ed-Tech revolution. Online learning is one of the most beneficial revolutions that has ever happened to humanity. However, disconnection is the biggest challenge that is still haunting the users of this technology. Traditional classroom learning, on the other hand, gives learners the ability to interact with their educators and fellow learners in real-time. However, online learning has the restriction that it cannot allow you to be physically present in the classroom. This strips the learners of physical warmth and friendship that are typical of a physical classroom.

A myriad of technological solutions, ranging from live classes on Zoom to Google Meet, were tried and tested during the pandemic era. However, due to the ever-increasing presence of social media, instant messaging, and news websites in our lives, the average attention span has decreased from 12 seconds in 2000 to 8 seconds in 2013( Biotechnology Information). The disruptions in focus caused by social media are always a major problem to overcome. More than that, the absence of physical connection and the lack of opportunity in making friendships in the real world make online learning less desirable for younger generations.

2. Different mindsets between teachers and Ed-Tech owners

Ed-Tech companies are a product of the fast-paced digital world that is globally connected. This makes it a highly lucrative platform for business owners, entrepreneurs, and investors. A majority of Ed-Tech companies are focusing more on profits rather than on spreading knowledge. Though there are individual professionals that truly want to eradicate ignorance and increase opportunities, on the whole, an Ed-Tech company is mostly profit-oriented. The business owner needs profits if he wants to satisfy the investors. Hence, their idea of the company growth will be solely based on numbers and their increases thereof.

Teachers and educators, on the other hand, teach everything slowly. They truly want to inspire their learners to be able to learn. This makes them a little unadaptable to the corporate mind. They use learner performance to weigh their work.

This gap can lead to frustration between educators and business owners. While educators are wary of constantly changing systems, plans, or products, business owners are wary of slow results or smaller numbers.

The solution is to make each other's roles and responsibilities as clear as possible. Without respectable communication, trust dies and frustration arises, which will lead to bitterness. So the solution would be to listen to the teachers first. Instead of following every new feature implemented in other companies, listening to the educator may be more beneficial. As educators know the industry inside out, and especially the target market that is the learners, they can give business owners better advice. This will not only benefit the company owners but also the staff and their target market and investors as well.

3. Low usage and retention

Several Ed-Tech companies like Udemy, Coursera, SkillShare, Byju's, and Udacity are dependent on recurring payments from learners for their profit. While companies spend money on acquisition, a large part of the acquisition cost is converted into profit only if the customer is retained or continues to use the platform for a long time. As many companies focus only on the acquisition and not much on retention, this can pose a major challenge down the line. Solely relying on new customers is never a good idea for any business. Converting customers into consumers is what decides the fate of your business.

Customer churn is a serious threat to businesses that rely on recurring revenue. Profitwell estimates that increasing acquisitions by 1% can increase revenue by 3%. While doing so, a 1% increase in retention will boost your bottom line by almost 7% (Price Intelligently). Upsales and follow-up deals are still necessary for traditional business models. The lack of usage damages consumer confidence in Ed-Tech products and presents a challenge you must meet to create a long-lasting company.

The solution to this, then, is to improve customer engagement and increase post-sale service memories. A happy customer will always return to the company whenever the need arises.

So make customer experience improvement your priority goal. Make sure that your solution is simple, effective, easy, and of high quality. This can make a world of difference in your customer satisfaction. Corporate giants like Starbucks have always been using this formula in their highly personalised coffee cups. IT giants like Meta and Google are not far behind with their AI recommendation systems that personalise your feed. Indeed, recommendation software is the thing of the future, which you should keep your eyes on. Even if you cannot implement an expensive system, try personalisation in other ways, such as one-to-one training, personal emails, and the like.

Thirdly, never forget gamification. Gamification has become the essence of any Ed-Tech company. Duolingo and Byjus have implemented the system on their platforms with great success. Gamification and social validation like leaderboards can boost a competitive spirit and make customer engagement better than regular lessons.

4. Marketing confusion

In certain cases, marketing can be a challenge for Ed-Tech companies. For example, if your company's target users are kids, you cannot rely on your buyer persona, aka the kids. Even though the end user is a kid, it is their parents or teacher that make the final decision and have the final say. This can be problematic because you must keep this in mind to attract both the parent and the child to succeed in your business. In these cases, a dual marketing campaign model needs to be implemented, which increases the marketing cost. Even if you do the marketing, there is no guarantee that your end user will be satisfied with the product. It gets hard to get feedback and understand some of the underlying problems.

In these cases, having a direct relationship with your customer can help. Follow the mindset of the paying customer in your marketing campaigns. If the CEO of a company has the final say in buying your Ed-Tech software, follow their buyer persona in your marketing instead of the end users who are the employees. If the principal has the authority, then follow their lead instead of the students'. This can bring you profits if the authoritative figure is well versed in the needs of the customer.

Related Blog - How EdTech is changing the world


5. High competition

Ever since the pandemic, there has been an uproar in the startup world that is following the Ed-Tech industry. There are now thousands of Ed-Tech startups across the world. In such fierce competition, only the most relevant, highly innovative, and easy-to-implement solutions can stand apart from the crowd. Moreover, your costs must also be competitive, with which your acquisition and retention rates suffer.

In this scenario, only a narrowed-down market can help you survive. Jumping into the general or saturated categories can only increase the odds of failing against established companies in the category. Your value must be unrivalled or unchallenged in your niche. Only these can ensure your business's survival. Focus on your unique value proposition and come up with ideas through a brainstorming session with your educators, investors, and target audience. Doing thorough market research can be the ideal solution for a possible goal.

6. Shifting mindsets

Laptops and tablets are often the cause of distraction for students. Due to the unhealthy use of social media, the attention spans of the human race are reaching historical lows ( My Tutor). This is a concerning factor for Ed-Tech manufacturers. As technology is increasingly viewed as a productivity and attention killer, it is becoming even more difficult for companies to sell it to prospective adults. The digital detoxification challenge on social media also is a reason behind this mindset (Life Hack). Many educators have prohibited technological devices from their classrooms because they feel it would be a distraction, which is often true. Selling your Ed-Tech products to such a market can be a hard thing to do because you must first educate the market about the benefits of the product.

Thankfully, the pandemic has made it much easier, and globalisation and digitalisation have also eased educators' concerns about the benefits of Ed-Tech devices. You can use case studies, measurable results, and genuine research. Feedback from other educators is often more influential in changing mindsets than a research paper from an unknown university. However, you can easily do a combination of these aspects and see the results.


7. Investor problems

Investments in Ed-Tech have considerably increased since the pandemic. For example, in 2021, Indian Ed-Tech start-ups raised $4.7 billion only behind the e-commerce and fintech industries ( Business Standard). The lure of quick money has been driving hordes of investors to try their hand in the Ed-Tech industry. However, the Ed-Tech industry is slower to gain momentum than other industries. Quick money can be a reality in the Ed-Tech space in very rare cases. Just an advertisement can get you hundreds of thousands of sign-ups within a few days. However, there is no guarantee that all those that have signed up will continue to use your service. Not everyone is a serious learner. Most individuals do not even make it past a week in their education. Just like new year's resolutions, signups can be tempting to be viewed as a real success story. As discussed earlier, retention rates are the final decision makers in this matter. This can be a problem for investors, as they might be wondering how to make quick profits. While they see quick progress in other industries, this could result in personal clashes or withdrawal on the part of investors. Unrealistic expectations will only backfire for both parties involved.

Avoiding investors must be a priority for startups. With that, cutting extra costs, marketing, efforts, or additional inputs can make your business sustainable. If you don't have a budget, try to innovate. With the number of technological breakthroughs available, you may be able to find a solution to your problem more quickly. Create a sustainable business model by communicating with your staff, i.e., educators, and target audience. Learners should not always be dependent on giving off freebies for their learning. This can be negative for your business but brings about a social change in expectations as well. This can be bad for business and the economy of the country as well. Giving off freebies can also place the burden of the cost on your shoulders and make your business strategy stand on shaky ground.

Related Blog - Commercialisation of Education vs State-Controlled Education


Conclusion

The Ed-Tech industry is the industry of the future. The industry will survive, no matter the setbacks. The nature of the world of education is set to undergo a digital transformation soon. The pandemic has only shown us the potential of Ed-Tech. Many companies are making the space even more user-friendly. However, even with all the potential, the industry is also facing several challenges. Addressing these challenges is the duty of every Ed-Tech professional and owner. To make this industry a globally viable business model and to make it a tool to educate every individual who can't access traditional education is a dream into which everyone must put their efforts.

As an Ed-Tech owner, you will experience slow growth, which might result in bitterness from investors. You will face challenges in marketing, monetization, acquisition, retention, and changing customer mindsets. In all this, choosing a low-competitive niche with little investor funding can help you. Keeping your team from doing more than necessary is a key to success. Rather than following trends, listen to educators and your target audience. This will ensure that you engage with your learners and keep your staff satisfied with their work. This can work in your favour over time.

Finally, if you are a senior professional who needs a Masters degree to further your career, visit SNATIKA right now!

Related Blog - What does a Masters in Education Management and Leadership Program Teach You?


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