How to Generate Revenue for EdTech Startups?

Generate Revenue for EdTech Startups

The pandemic has hit the world so hard that every industry has seen major impacts in its processes. The education industry has also not been spared from adapting to changes and transforming its functionalities. It has also witnessed a drastic difference in terms of how it used to function before the COVID-19 era and now.

Many educational organizations and institutions have come up with various EdTech solutions to secure their positions and secure their market share in the education industry. Although, many of the published write-ups you have read might have said that, EdTech Solutions is nothing new. That’s what they would want you to believe in! But, to clear the fog – “EdTech is referred to as the ecosystem where technology is utilized to assist the delivery of education services.”

The primary goal of education is to feed the empty mind with some piece of information, known as knowledge. Since time immemorial, technology and innovation have always been the front face of the education industry. This is how EdTech startups were born. Therefore, it has become important that education technology solutions provide meaningful educational services.

An EdTech company strives to deliver quality education to improve existing knowledge delivery mechanisms. Therefore, EdTech startups are emerging because of their inherent nature.

The modern education technology industry has been a rapidly growing market in recent years. Due to the COVID-19 pandemic alone, the market was flourished by 25%. As per a report by Statista, by 2022, the worldwide eLearning market is expected to stand at 243 billion U.S. dollars with a 5.08 percent CAGR.

Furthermore, the total invested amount in EdTech solutions is predicted to double from $152 billion in 2018 to $342 billion in 2025. This figure shows that EdTech company will bring a plethora of opportunities worth investing time and effort into.

Global Education Technology Expenditure Growth

A report by Tomorrow.org shows that 72% of schools already use cloud collaboration platforms for their education systems, nearly 60% provide their students with mobile devices for studies, and almost 50% provide online education.

So, now can you see the window of opportunity for EdTech solutions? It’s an area where one missed opportunity could cost you zillions. So, if you are a startup company, full of EdTech ideas, that’s really great, but there has to be a systematic way to approach it. If you are searching for a custom application development company, they must first classify their EdTech business models.

As an EdTech company, you will find many business models, but choosing the right will lead you to the path of success.

Before proceeding further, the investors or entrepreneurs must have answers to the following questions:

1. Does the education app development company have an experienced and talented team of developers who can help you develop AI, ML, or robotics-integrated applications?

2. Are the education app developers capable of integrating conversational AI and AR/VR technologies into the app?

3. And last, has the eLearning app development company created an educational app or offered EdTech solutions before?

The bitter truth is that online ideas or opportunities look great on paper but turn out to be a nightmare when you actually get into the execution mode. So, in this article, we are going to discuss some factors to consider, points to look after, features, and more.

Firstly, let’s understand what EdTech is?

What’s EdTech?

EdTech’s main purpose is to develop software solutions that make education more accessible and streamline the learning process.

EdTech solutions providers focus on offering technology-driven solutions with a futuristic approach and immersive learning experience. By 2021, the education industry will emerge with various educational tools such as extended reality and the Internet of Things (IoT).

Key Points to Consider Before Offering EdTech Solutions

In fact, developing an educational application or software is not an easy task to do. There is no substantial approach for defining your EdTech platform architecture. Hence, it’s essential to consider some points before experimenting with any EdTech solutions in 2021.

Not Affordable for Every Institution

With the increasing demand for EdTech solutions, it’s a highly competitive market for EdTech businesses. Hence, it’s important for you to bring many advantages to the table in the education industry. The soul of the EdTech solution is high-quality educational content, but how that content is delivered – is what makes it worthwhile to invest in.

Let’s consider an example here – your EdTech solutions streamline the process to educational institutions. In that case, your solutions should fulfill all the requirements and needs of an institution so that they aren’t lured to invest in other technology solutions.

In a nutshell, your EdTech solutions should prove to be a value for the institution’s investment.

Priority Towards Data Security

As per the GDPR guidelines, it’s essential to protect the user’s data for every tech company. Therefore, in the EdTech sector, the concern of data security has become even more severe with technology implementation. Hence, EdTech companies must hold tight security for their users to provide EdTech solutions.

Not Easily Adaptable

As we know, young minds are very adaptive to embrace the change, innovations, and technologies that they may encounter. Therefore, the user experience will never be an issue for students. At the same time, the educators or teachers may face many difficulties in adapting to changes. Most of them prefer traditional methods like blackboards, textbooks, and pen and paper over the latest ones. And this could be a major task as an EdTech provider to innovate solutions that deliver a user-friendly experience for educators.

Technology is Considered a Taboo in Classrooms

Traditional education methods often don’t encourage the use of electronic devices in the classroom because electronic gadgets can be misused by students in various ways.

Therefore, this type of education can cause the future of students and become an issue for educators who won’t be able to justify their skills and knowledge. Furthermore, it is a precarious pattern that can have disastrous consequences in general. All information found online will be completely valid and reliable in the eyes of the students as a whole.

Now, it’s time to consider the following models for EdTech startups which help you generate ROI.

Develop a customized EdTech application that drives ROI?

Revenue Models

The revenue model is the right choice to know the complexity of the startups. It gives you a clear picture of choosing the right revenue source for your business. However, it’s essential to know what value to offer and who pays the value.

But before getting into the next process, you, as an EdTech Software Development Company, should understand the education sector, users’ needs and expectations, and the competitive market. Well, this will not only help you in providing excellent services or products, but it will also provide you with insight into the desires of educators and students.

This will ensure that your product does not become obsolete as the education market has a plethora of options and complexities. So, if you have a game-changing idea but don’t know how to monetize it, keep your eyes open for the revenue models used by various EdTech startups.

Freemium or Free Trial

Freemium Model for EdTech Company

The freemium or free trial model is the first choice of every EdTech company. If you are wondering what has made it a favorite of every company, it has a ‘free’ in it.

This freemium model allows users to use products or services for free, with an option to upgrade to a paid version for extra features and functionalities.

Well, it has two different ways to work on it: feature limitations (freemium) or a limited time period (free trial). So, now you must be wondering if this model will work for your EdTech solutions. Right? But unfortunately, no customer will get into buying a membership or upgrading the services. Thus, EdTech companies find no profit in the end.

However, this model will help you gain a lot of attention and traction in a few months and make your product available straight to your end-user.

There is a principal-agent problem in education, which means that your users aren’t your customers or buyers.

However, students and educators might be interested in the products or services you offer but might not be able to convince the higher authorities to upgrade or purchase them. Some businesses have devised an ingenious technique for training teachers on potential financing sources and how to frame the offering to the authorities.

Top-Down

Top-Down Model for EdTech Company

The top-down or institutional model is a more traditional method of selling to schools through district leaders. Here, the target market volume is determined based on the projected penetration rate. Moreover, first, the market size is estimated.

Once the desired market volume becomes zero, a strategy for achieving the potential revenue is devised. This works by a district making a single purchase for all of the schools under its control. The top-down paradigm has the advantage of allowing districts to sign huge contracts.

The drawback is that these contracts consume a lot of time to sign up and are heavily contested by competing vendors. In terms of agreement and customer service, districts keep high expectations from EdTech companies.

Bottom-Up

Bottom-Up for EdTech Company

The feasible market volume is determined in this model, and the total revenue is determined once the predicted growth is estimated.

Consumers can be approached by EdTech companies through schools that are convinced to utilize a product or service for free. Then, if the families want to keep using it at home, they might be charged for it. In this case, schools generate leads for consumer adoption.

While establishing your brand in the market, you may end up losing a plethora of money on attracting and acquiring customers. However, financial failure is certain if this invested amount is not balanced with the revenue you generate.

This model is quite suitable for a ‘product loop’ between education institutes and home. The educators will encourage students to utilize the product in the classroom and subsequently recommend it to parents. This is a win-win situation because schools are all for free and high-quality products, which increases user adoption and encourages parents to listen to their children’s teachers.

The disadvantage is that it is a potentially inequitable strategy, as every student’s financial background could vary.

Sponsored model is a unique and unconventional model in which neither the school nor the parents pay for the services or products. Instead, a company sponsors the product and pays for product placement. This is usually called a corporate social responsibility (CSR) project.

The benefit is that when you offer a great product to schools for free, utilization will be relatively high, which is all that matters to the sponsor. The sponsors have the opportunity to build brand awareness and goodwill for their company.

Steps to Create a Successful MVP

When you plan to offer EdTech solutions, it’s advisable to develop an MVP. It’s a software development approach for agile methodologies.

Create a Successful MVP

Identify the Target Audience

Some EdTech solutions focus on students, while others cater to educators or teachers. So, before you plan to develop, you should know to whom you are developing for – the students or teachers. And once you know the target audience, you can start incorporating the features, elements, and functionalities based on that.

Understand Their Requirements

Even if you’ve spent years as a student in the classroom, you’re unlikely to fully know what most teachers and students require. As a result, conducting research for your EdTech product is an unavoidable step in the development process. You can either hire dedicated tech research and analyst team or do your own study by asking your target clients about their existing concerns and troubles with traditional educational systems. You must also build client personas to understand the UAT (User Acceptance Testing).

Develop an MVP

The easiest approach to test your app idea is to create an MVP. However, you won’t truly understand how fantastic your concept is until it is available in the market. In a nutshell, an MVP is an application that solves all the problems you are trying to solve.

MVP focuses on testing the validity of your business assumptions instead of developing an immaculate-looking app. The MVP will help you determine whether your app concept is in line with market research and client needs. When it comes to designing an MVP, there are always new things to learn. An MVP is a low-cost way to make sure you’re investing in the proper app idea.

Want to develop an EdTech application like Byju’s?

Top Features to Integrate with EdTech Application

Features to Integrate with EdTech Application

While developing education technology solutions for your customers, you must keep relevant and priority features in mind to integrate, which will help them resolve their problems and provide robust solutions. So, let’s get into the features list, which you have to consider now.

Secure Database

All the educational data (study materials, user data, tutorials, videos) should be uploaded to the database to provide seamless education services. Therefore, you should have a powerful and cutting-edge database connection. The database should always be ready to establish secure connection requests.

We would not expect that everyone will have access to a 4G or 5G internet connection. Hence, the database should not become unresponsive even at low bandwidths. As a result, students will be able to access educational content more easily.

Seamless Onboarding Process

Regardless of the software solution, onboarding the consumer into the database is always a process requiring effort and ideas. We need to have proper onboarding solutions due to regulatory requirements and customization of EdTech solutions.

The onboarding process allows users to create their profile in a few steps with various sign-up options. Also, users should be able to access their dashboard, where they can view and modify their personal information.

Intuitive User Interface

While developing EdTech solutions, your application must be user-friendly so that your users can navigate easily. One major factor that makes your application unique and help it stand out in the education industry is its user interface (UI). The more creative and unique your user interface is, the higher number of users can you attract. Therefore, create a unique UI than your competitors.

Comprehensive Content

Attracting users to your eLearning application is not easy as compared to the offline classroom educational system. It requires new ideas, customized learning options, and feedback from users to optimize education content.

The content should be:

  • Worth reading
  • Customized and created for your target audience
  • In the form of all (eBooks, tutorials, seminars, guide, whitepaper)

Embedded Videos

As an EdTech solutions provider, you have to offer tutorials or recorded videos that are coupled with separate sessions. Also, you can offer a comment section or facility where students can raise their doubts during the live video lectures.

Furthermore, your EdTech solutions can have a feedback session where students can share their opinions and feedback. And by implementing their feedback in your application, you can enhance the user experience and satisfy their requirements.

Push Notifications

Push-notification is the most important feature for self-learning applications. Whenever your learners lose their pace, your app can notify them by sending motivational messages. This will encourage them to start learning again.

Moreover, this functionality can be used to notify students of upcoming lectures or tests in school information systems.

Advanced Technologies to Integrate

In this digital world, devices are becoming more intelligent and efficient. IoT has created a lot of buzz in the software industry. The Internet of Things (IoT) is creating a complex web of interconnectivity that ensures massive data collection and helps Artificial Intelligence (AI) to find improvement methods. Therefore, the user experience will be improved, which will add a new dimension to EdTech solutions.

Moreover, the pandemic has forced the industry to adopt Blockchain technology. As a result, it provides secure and decentralized data management.

Virtual Reality

VR and AR have established a bridge between real-time study and experience something. In short, immersive learning enables the learning experience process with AI.

  • You can pay a visit to the park for an experimental demonstration without leaving your school premises. You just have to put on a VR headset, and you can virtually travel to the park.
  • Interplay Learning is one type of online training platform. This allows professionals to enhance their proficiency and skills. It combines VR and 3D simulations to train the talent.

Gamification

In recent times, every educational institution has widely adopted EdTech solutions. Therefore, gamification has also become an essential part of EdTech apps to attract the students’ attention for a better learning experience.

Students get more proactive and competitive when they experience challenges while playing educational games. As a result, their productivity and interest have been shown to increase when using gamified visuals, earning points, and team collaboration.

Advanced Technologies to Integrate

Blockchain

The decentralized underpinnings of blockchain could be transformative in terms of modernizing outdated educational infrastructure. Simultaneously, it can encourage students to work hard and be rewarded for achieving a significant degree in a discipline. It can archive student records by managing data and safeguarding it in immutable ways.

Get a free consultation for your EdTech product

Wrapping Up

So, if you are an entrepreneur, have an EdTech idea, and looking to offer EdTech solutions with the help of technology, now is the time to invest in developing eLearning applications.

However, it’s not easy to develop an EdTech solution. But as we mentioned, there are some factors we have to consider before getting into education technology solutions. The tools, features, and MVP roadmap we have discussed in this article will surely help you plan better for your next eLearning applications or EdTech solution apps.

By choosing the right Educational Software Development Company or EdTech company, you will get the suitable EdTech web and mobile apps that are excelling in the market.

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Pratik Mistry is a rare mix of technologist and vice president of sales at Radixweb. His passion lies is in helping companies to grow revenues by delivering top notch software development services and build value-based partnerships. When not driving high-impact go to market strategies, Pratik loves to try new cuisines and going to the movies.