Why Is It Hard For EdTech Startups To Sell To Schools?

There’s a lot that technology and innovation can do to disrupt and improve the education system in India, and indeed, in other parts of the world. Quite a few startups in the education sector have developed innovative products and solutions that can make a huge, positive impact.

Yet, most struggle to get traction. And it is not because the schools and universities do not need that innovation, or that they do not have the ability to pay for solutions and products that can make a difference.

So, what makes it so difficult to sell to schools and universities? Lets explore…

Difficult to Reach

The management team across schools is usually inundated with companies trying to sell them their solutions. Since they can’t possibly consider every proposal for a meeting, they end up filtering out the ones they deem fit for a meeting.

So, if the startups don’t get that first chance to have a face-to-face meeting, they are already out of the race and end up losing one prospect. Hence, reaching someone in the school to talk about your solution is in itself no less than a challenge.

As a result, the sales person’s actual capacity to reach someone relevant, who has the decision-making authority, is significantly lower than what can be planned on an excel sheet.

Hence, for startups to be successful, it is extremely important to get a few initial customers signed up, demonstrate evidence that the solutions add value, and then explore different ways in which they can reach decision makers…

Technophobia and Resistance to Change

Teachers and school staff are usually comfortable following traditional working and teaching methods. Like with everyone else, teachers too are skeptical of change since they feel uncertain about being able to adapt to the change and keep up with it.

Most teachers and staff are not ‘technology natives’. Schools and universities are traditionally speaking, not tech-driven organizations, and hence it is hard for them to make that shift.

It is, therefore, very important that the solution is user-friendly.

A fine balance has to be achieved between the functionality and simplicity to ensure that the actual users are not intimidated with the thought of using it.

Moreover, when technology is involved, people tend to perceive it as a threat to their own jobs and the degree of resistance only increases. Hence, how to manage stakeholder interests is an art that entrepreneurs need to learn quickly.

Multiple Stakeholders

A school has multiple stakeholders such as admin staff, Principal, teachers, other staff, management etc; and of course, parents and students. So when you go to them with your value proposition, there is a strong likelihood that the intended users, those evaluating it, those recommending it and the approvers are all different people.

For instance, for a school ERP system, the Admin or Finance team may evaluate the product, while the principal may further review it and negotiate a proposal, and if he/she is satisfied, will they recommend it to the owner/chairman/trustees to make the purchase decision. In case of certain solutions, schools may pass on the cost to parents, and hence, may want to run it past the parents to see their willingness to pay for it.

So, the person or people you meet may not actually have the authority to take a decision regarding the purchase of your product or service.

Startups selling to schools should make an honest attempt to understand the dynamics of selling to schools, and map the stakeholder that they need to convince, to ensure that their solutions are adopted by that school.

Crowded Market

The education sector in India is currently pegged at a whopping $100Bn, of which school education contributes a significant 38.1%. Given the apparent size of the market, there are numerous startups jostling for space in the segment and offering a multitude of solutions that address different pain-points for schools.

However, though the startups are clear about the ‘differentiation’ they offer, schools are no longer impressed with the differentiators alone. School managements review solutions holistically, including the ability of the team to service their account well. Schools need a comprehensive solution. Not just a great product. Most startups do not recognize this critical difference.

Lack of Validation

All startups face a peculiar problem in their early stages. While customers want validation from other users, (particularly, if the investment in terms of money or time involved is substantial). Startups are unable to substantiate their claims since they may have no other clients.

Without enough evidence about the credibility of the solution on offer, schools are reluctant to spend money or time on it. Moreover, they want a validation not only on the actual product, but also the after sales support in order to justify the huge spend and gauge the long-term value of what you are offering.

Propensity to Spend Money is Low

Unless the startups have an exceptionally strong value proposition and a comprehensive solution, and are prepared to leverage on volumes (rather than keeping high margins), getting schools to sign on the dotted line and close the deal is not easy, considering their propensity to spend is relatively low.

So then, how can startups get a head start?

• Test your product first to get validation – The key is to focus only on a few schools in the first phase and test your product there, so you have enough evidence that the value you promised to them is being delivered. Think of scaling up only when you are fully confident of your product.
• Look for partners who already have relationships with schools – Consider looking for partners who already have a relationship with schools in order to reach the influencer. (For instance, a competitive exam preparation platform can use a school ERP Services Company to reach schools where the ERP is being used).
• Create pull – Sending regular updates over an email about your products to the schools to keep them engaged, as well as creating relevant digital content in the form of blogs, articles, PRs etc. on relevant forums, will give your better visibility in the market and help in building your brand.

Once you have established your brand in the market, clients, i.e., schools are also more open to meeting you because of the brand recall and the associated credibility. For instance, you could share a case study on how after implementing your product, parent involvement improved or the student’s grades improved in a particular school. You could also share the testimonials of the key stakeholders to validate the product.

Conclusion

It is important to focus not just on the sales, but on all the aspects that can help you build a lasting relationship with the schools. The schools should not perceive you as someone who is there to provide a solution, not just to sell a product. They need to see you as someone who will work alongside them to ensure that the rollout is a success, and thereafter, whenever they need any assistance.

The implementation process, therefore, should be very smooth and seamless and the after sales support should be equally strong in order to ensure that you are not just able to find clients for your products or services on offer, but also retain them.

Educomp and Applyifi.com recently launched the EdTech Funding Forum to identify, assist and enable high-potential startups in the education sector.