How to Start a Your EdTech Business in 2023! Get Started A Must-Read Guide!

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4. RESEARCH THE NICHE IN EDTECH BUSINESS

4.1 Choosing the right Niche in the EdTech Business?

EdTech business have grown rapidly in recent years in India. The first EdTech movers have definitely reaped the dividends by creating monopolistic markets, bigger brand value and huge market share, but as newer EdTech company have moved in, the EdTech business has become super competitive and challenging.  New EdTech start-ups looking to create space for themselves in this tightly knitted market will find it extremely difficult to survive when pitched against established big businesses with more ammunitions in their dump.

Does choosing a Niche segment within the EdTech industry is good way for a new EdTech company to enter the market and deflect competitions from established players. One can focus on unserved needs of the market or certain area or segment of the market where the bigger and established EdTech business have little or no interest.

Some of the good niche business ideas for new EdTech business would be

• Coding and programming languages for web technologies like HTML, JAVA, PHYTON, JQUERY, MYSQL.
• Training for Competitive exams for foreign universities GMAT, GRE, IELTS, TOEFL, SAT.
• Training for Competitive exams for Indian universities JEE, NEET, CAT, UPSC, GATE, CSE
• Advanced foreign language training programmes like SPANISH, FRENCH, ITALIAN, MANDARIN, GERMAN.
• Microsoft certification in MS Office, Advanced Excel, Azure developer, Microsoft 365 certification etc.
• Google certifications in data Analytics, Project management, IT automation, UX design etc
• Employees training in programmes in Sales, Advertising, Digital Marketing, Personality Development etc
• Other programmes like Art, Music, Design, Graphics, Finance, Share Market, Health, Wealth etc

New EdTech business can choose from one or many of the above listed ideas in niche category to focus on. New business can choose a niche where they feel that have a distinct advantage over existing competitions in terms of technology, pricing, scale or knowledge.

Competing in EdTech space would require new startup business to be more innovative and create newer exclusive ideas for creating engaging content for their customers. The heart of every EdTech business lies in its ability to deliver timely, accurate and relevant content to its audience in a way that it provides maximum value and minimum fuss to its user and creates memorable customer experience.

Next, we take closer look to understand the technologies that help run the EdTech business smoothly and efficiently.

5. CHOOSING THE RIGHT BUSINESS MODEL

4.2 Choosing the right EdTech business model for your EdTech company?

Having a good EdTech product is solving only a part of the problem. The success of an EdTech Business equally depends on choosing the right type of business model for your EdTech company. As an EdTech company it is important for you to understand the financial structure of education sector and test your product with different models to see which revenue models best suits your business.

Here are some popular pricing models in use by some of the top EdTech businesses.

1.Freemium model

In this model an EdTech platform offers free services to its users and build a strong relationship with its user base to encourage them to buy paid services in future. The strategy used by EdTech business here is to offer Fundamental and intermediate courses free of cost to its users while the advanced courses are behind paywall and available on purchase to the user.

2.Subscription-based model

Subscription Models is the fastest growing business model in the Edtech industry. Much like Netflix which charges their customers on monthly or yearly basis to access their content.  Edtech business have also devised similar strategies by offering a subscription model to their users in return of unlimited access to all of their courses and content on their platforms.

3.Traditional model

This is very simple business model in which a user purchases a particular course from basic to advance on an EdTech platform. Most new EdTech start ups like this business model for its simplicity and ease of implementations. Traditional model works best for short term courses like culinary courses, fashion designing, Web designing etc.,

Next, we look in to how we can fund our EdTech business through various modes of financing.

6. FUNDING YOUR EDTECH COMPANY

6.1 How to Fund your EdTech Company?

In all certainty Starting an EdTech business is quite an expensive business to build and incredibly competitive to operate the funds required for simply building a suitable Tech platform for your EdTech business can be nerve wrecking for most tech entrepreneurs.

Seeking funds from investors is a difficult task in itself and requires an entrepreneur to have an in-depth product knowledge as well as market knowledge before pitching to the investors.  As an entrepreneur you should be prepared to answer difficult questions posed by investors with great deal of passions and courage.

An Edtech business may need a large capital investment in initial phase along with founders own capital here some of the ways to fund your edtech startup

a. Self- funding

b. Financial Institutions

While self-funding options could be limited for initial investments in your EdTech company. You could look at financial institution for more help like Commercial Banks, Investment Banks, Mortgage Firms, Lending Institutions etc for taking a short term or a long term business loans to suffice your initial funding requirements for starting your EdTech business.

c. Crowd Funding    

You can showcase your business ideas as a project on crowdfunding platforms and raise funding from group of small investors, individuals or anyone having interest in your business idea. An EdTech company may greatly benefit from crowdfunding method for raising capital as educational start-ups are in hot demand lately and many people are willing to invest in early stage EdTech startups this may help your business raise millions of dollars in funding especially if your idea is appealing to the investors.

d. Angel Investors

If your EdTech company is in advanced stages of startup you could seek funds from private investors or angel investors as well in return for certain percentage of equity in your business. EdTech business which operates in a niche market segment with positive balance sheet are most likely to get funded from angel investors. Angel investors usually invest from a few thousand dollars to a million dollars depending on the valuation of your EdTech company.

e. Venture Capitalist

Once your EdTech business is launched with good a product and has a decent run in the market for few years with a positive cash flow statement and fewer liabilities you can approach Venture Capitalist companies (VC’s) for seeking really large investment like a few million dollars or even more for rapidly expanding your business. VCs are large corporate houses and generally provide all kind of assistance like financial support, tech support, business support etc. SV Angel, Sequoia Capital, Accel are some of the top Global VC’s which fund business worldwide in Series of funding cycles.

7. TESTING YOUR EDTECH PRODUCT

7.1 How to test your EdTech company product before launching?

Testing is a critical phase for any product before it commercial launch. The idea behind rigorous testing of a new product before or after the launch is to get vital feedbacks directly from the users about their experience with the product. Testing could be both internal and external to iron out any last moment issues with the final product.

As an Edtech company it is highly advisable to not rush through your product launch before testing your products on all available parameters both internally and externally to identify if there are any issues with the product and resolve it timely. A smooth product experience for users is very important in a highly competitive space like Edtech.

Here are few strategies to test your EdTech product before launch.

• Run a pilot project and give free access to teachers and students to let them use the product for certain duration. Interview both the students and teachers to find out if they faced any difficulties while using the product. Ask for their suggestions and advices regarding improvements in any features, design, accuracy and usability of the product.
• Publish a demonstration video or a guide showcasing the teachers and students on how to use the product. This would help the users to test the product much better by using all its available features.
• Trail run a test program with different schools, institutions to check how the product fairs among students of different age groups, different curriculum and different teaching methods. Analyse the test results to see how the products could be improved further to run seamlessly across demographic.
• Conduct a short market survey among the users by posing them with few important questions regarding products performance, usability, accuracy and users experience to continuously analyse the products performance over time.
• Use social media platforms to test your products among peoples of different interest and demographics to see how well do they connect with your product and what are their opinion and reviews regarding your EdTech product in comparison to other similar product in the market.

Remember that no matter how good your Edtech product is there will always be room for improvements. Be sure to test your product constantly and enhance the users experience based on the feedbacks you receive from your customers.

8. LEGALLY INCORPORATE YOUR EDTECH BUSINESS

8.1 How to legally incorporate your EdTech business in India?

Legally incorporating your EdTech business is an essential element of doing business legally in India. A company registration certificate is an important document to be produced when opening bank accounts, registering for taxation and seeking loans and grants from government and financial institution.

A legally incorporated company builds trust and confidence among investors and customers. It will also protect its founders from unlimited liability, provides perpetual succession, helps in raising equity capital for business and host of other benefits. It is advisable to hire a CA or Registration Agency to seamlessly complete the registration process.

There are various options to register your Edtech business as a legal entity in India. However, depending on your business model one can choose the right legal structure for your business.

1. Sole proprietorship
2. One-person company
3. Partnership company
4. Limited liability Partnership company (LLP)
5. Private limited company

Private limited company or an LLP company are the most preferred options for your EdTech Business model. Most investors prefer to invest in companies which are registered as a limited liability company as the liability of the shareholders of the business is limited. In the case of insolvency of the business, the personal assets of the shareholders are not at risk.

9. MARKETING YOUR EDTECH COMPANY

9.1 How to market and your Edtech Business?

Lately, the level of competition in EdTech Business sector has become very intense and that is mainly due to the number of really good EdTech companies that has arrived in the market. Most of the big players in the EdTech industry have been marketing their businesses pretty aggressively and burning cash in marketing and advertising as they are heavily funded from investors.

It is important that your EdTech business plan has a good marketing plan which covers all your bases and help you give a head start in your business. Since, you may not be able to go all out in marketing your business due to budget constraints it is hence important that you stick to Niche marketing strategies like Digital marketing and leveraging social media for running focused marketing campaign.

You can use some of the below marketing strategies to market your business in order to encourage your target customer base to use your product and services.

Marketing is a very subjective question and depends a lot on your intent of promoting your business. As a business owner you may be limited in your marketing budgets. So, it’s important to underline your strengths and draw a marketing plan which can effectively highlight your strengths by utilising all the mediums of promotion within your prescribed budgets.

CONCLUSION

EdTech is the future of education system and now is your time to start. With the societies now realising the power of AI based learning the hesitation for using EdTech products is now slowly diminishing and the people are getting more used too in dealing with these new methods of learning.

EdTech entrepreneurs who can innovate and create new educational products and niches are surely to succeed even in the toughest of times ahead. So get your backs moving and start an Edtech company now!

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