If you build it, will it work? And how will you measure it? These are vital questions for edtech innovators as they build companies, secure funding, and scale their impact. In a crowded market with fierce competition for scarce dollars, smart entrepreneurs embrace research to inspire, refine and scale their businesses.
After the pandemic, the edtech market exploded with new products and services, and investment flowed freely. But investors pulled out almost as suddenly as they emerged. Promises that your company will transform literacy, mathematics, social-emotional learning, or professional development are no longer enough to secure funding. The concept needs to be supported by credible empirical evidence that follows a trajectory from research to practice.
It's been a wild ride. When schools closed in spring 2020, More than one billion students worldwide moved to online instruction in less than a month.. Educators struggled to meet the needs of students without adequate technological tools, training, and infrastructure, and educational technology innovators capitalized, introducing much-needed solutions.
Amid rising demand, bullish investors poured money into the sector and edtech-vc-funding-totals-10-6b-down-from-20-8b-in-2021″ target=”_blank” rel=”noopener nofollow”>edtech equity financing increased 297 percent, from $7 billion in 2019 to $20.8 billion in 2021..
New billion-dollar unicorns have emerged, with 38 edtech companies collectively valued at $89 billion as of March 2023, including companies that have become household names in education, such as Newsela and Quizlet.
What happened next is a warning. In a saturated market full of unproven solutions, investment in educational technology rose and fell. Global edtech funding plummeted 49 percent between 2021 and 2022, falling to $10.6 billion. And it seems that a hard landing awaits us in 2023, with edtech-in-10-charts” target=”_blank” rel=”noopener nofollow”>Annual funding is expected to close at pre-pandemic levels of $3.5 billion..
Now, the industry is restarting. Today's investors and buyers demand more information, data, customer discovery and product testing to commit financing. Companies that follow this path will be better positioned to secure financing and build sustainable businesses.
Research and evaluation are essential to discover consequences and achieve change. These steps can serve as a roadmap.
Step 1: Root your work in research
Before you start marking a whiteboard, click pause. As you conceptualize your business, look for research that substantiates your concept. Explore qualitative and quantitative data about your target audience and their urgent needs.
Consider these four questions to inform your value proposition and business model:
- What is the fundamental research supporting your idea?
- What research underpins your product or service?
- Who are the experts who can add context or insights?
- What did these researchers learn from their studies and what do they recommend?
This framework builds a case that supports, or possibly refutes, your concept. That analysis informs your product's features and customers and establishes a solid framework for its development.
Additionally, the researchers you consult can act as initial advisors, providing valuable insights and potentially studying the impact of your product when the time is right. Those early connections can save you valuable time and resources as you design and even co-create your solution with customers.
Step 2: Support unmet needs and address identified pain points
Your startup should be more than an exciting idea. To attract the funding sought, edtech startups would need to solve an existing problem. If you've done research to support your concepts, you should point out possible use cases. What “pain” are you addressing within school ecosystems? What value are you adding with the solution you are providing? How do you distinguish between buyers of your product, such as leaders or district directors, and end users, such as students or instructors? From there, innovators can refine and validate their concepts.
For example, not all educational solutions fit existing needs. A small suburban school district in New Jersey is very different from a sizable county-based system in Florida. A small rural community college will not have the exact needs of a large urban university. Young readers may need very different literacy support than high school students whose native language is not English. It's critical to understand and communicate whether your solution is niche or offers broad applications.
And remember, most K-12 school districts and higher education systems publish their strategic plans. Do your homework to align your solution with your strategic objective. Be creative in identifying unmet needs. Determine how you differentiate yourself from competitors who may be doing something similar.
Step 3: Seek Guidance, Mentoring, and Feedback
It's time to nurture your developing business, and startups in any industry benefit from experienced, in-depth support. Experienced investors, entrepreneurship educators, and established innovators in their field can be guides. Catalyst @ Penn GSE supports entrepreneurs with resources, mentorship and community, including support through our free virtual accelerator, Catapult.
Lean on your advisors for critical insights about the market, team, potential customers, partners and competitors, and employees. Be prepared for probing conversations and be open to adapting or pivoting based on user feedback and testing.
Your end users are also a critical sounding board. Consult educators, students, and administrators about their needs and challenges, and give them a preview of your model.
Educators need an early understanding of the effectiveness of the learning tools their schools and districts acquire. In a recent survey, only tech.aspx” target=”_blank” rel=”noopener nofollow”>about a quarter of teachers and principals They say they have information about the effectiveness of their digital learning tools. Developers should consult key user groups to ensure they have opportunities to receive authentic feedback, which opens opportunities for product adaptations and even changes.
Step 4: Demonstrate effectiveness and determine scalability
It's never too early to plant the seeds for future success, including how to expand your customer base and modify your product.
Unicorns like Newsela and Quizlet learned to scale by ensuring their solutions were engaging, pedagogically aligned, and easy to adopt.
As it grows and scales, research remains its north star. Gather quantitative and qualitative information from early adopters and subject matter experts as you test and implement solutions. Your findings may lead you to reorient your plans or open new paths.
Gathering early and ongoing feedback from users is essential to informing these strategic decisions, and proper measurement helps build a more sustainable and successful business.
Conclusion: Research leads to impact and sound practices
By basing their work on fundamental research, innovators start from a position of strength. This creates a foundation for designing through customer discovery, co-creation with users and buyers, and driving toward evidence of effectiveness. When curious investors look for evidence, innovators who follow a path from research to practice will have the logic, knowledge and support necessary to secure critical financing and build a successful company that generates the impact they seek.
