(By Syed Sadaf Sultan and Ee Phoa Hui)
Many say that EdTech is the Fintech of the future. The $5 trillion global education market has been influenced by a recent wave of education technology startups, offering new and innovative solutions from Massive Open Online Courses (MOOC) to Content Marketplaces. There is a burgeoning belief that technology will play a pivotal role in solving some of the most critical problems in education and investors are expected to support this conviction with whopping $252 billion in investments in the industry by 2020. [1]
As far as the EdTech value chain is concerned, many contend that the entire value chain is ripe for disruption, from K-12 to tertiary and adult education. However, when most think about education technology, they only consider the likes of Coursera, that is, Massive Open Online Courses, where one can take free courses online and listen to hours of lecture videos. However, the EdTech space is much more than that. To understand the entire landscape of EdTech, we need to segment the industry by the relevant stakeholders that it affects the most, namely students, teachers, and administrators.
Students: There are five key areas that are focused on the student. There are aggregators and vertical search platforms such as Coursera and Udemy that help learners discover accredited and non-accredited programs or content. Then, we have the actual content providers who can run the gamut from universities to individuals who are generating content across language learning, recreational interests, or 21st-century skills. Another fast growing segment has to do with student comprehension, as known as the online tutoring industry, where students can get 1-on-1 live tutoring from skilled educators. [2]
Teachers: 30 million teachers worldwide are utilizing EdTech products and services generally across three key areas. First, teachers are using solutions for classroom management, leveraging technologies that aid in student analytics/reporting to facilitate in-class administration. Second, teachers are using solutions such as Canvas to source and create teaching materials. Finally, a number of solutions are geared towards teaching the teacher and developing their pedagogical capabilities, such as Atomic Learning or Teachable. [2]
Administrators: Administrators are using EdTech solutions in their back office for functions such as staffing and teacher assessment, student and learning management systems. For their front office, EdTech is supporting functions encompassing credentialing, online distribution, and enrollment. [2]
However, the EdTech space is also garnering a lot of criticism for being highly saturated, limited in impact, and for not having clearly defined business models. On the former point, as an example, consider the hundreds of startups that already exist in just math-focused products. Similarly, many startups are trying to compete in tiny niches and the recent uptick in EdTech accelerators are simply adding fuel to this fire. Now from a financial standpoint, the EdTech industry is also littered with a litany of failed startups, or even unicorns who at a mature stage have yet to materialize a clearly defined revenue model. [3] All of these factors have generated significant cause for concern and the urgent need to rethink EdTech. For the industry to scale sustainably and achieve its fullest impact, the following factors must be considered:
- Need for consolidation and refocus: Clearly, with so many startups doing so many of the same things, there is an urgent need for consolidation in the market. This would organically happen as some of the incumbent players will separate from the pack and start to gain a solid foothold in the market. For the new and upcoming players, it would bode well to focus on a narrow set of problems that no one is addressing. In particular, startups should aim to solve inefficiencies in the hyper-complex education system and develop unique value propositions around very specific pain points. [4]
- Stop over-engineering solutions: Often, amazing EdTech solutions never gets adopted as they are trying to solve problems that don’t exist yet or won’t exist until many more years of innovation has transpired. One particular example can be attributed to companies that believe that their software will usher in a whole new educational model and truly disrupt or “eat” conventional education. Many in the industry believe that such thinking is purely delusional, and that technology can at best complement educators, not entirely replace them. Also considering an emerging market context, where pervasive challenges in the classroom can often be very basic, over-engineered Silicon Valley solutions with data analytics and VR technology is the last thing that is needed. [5] EdTech should aspire to be iterative, not radical, in achieving incremental improvements in the classroom that address the lowest-hanging fruits that technology only can effectively address in a given context or culture.
- Engineers should stop trying to be teachers: Many EdTech companies are started by founders with backgrounds in technology without a prior understanding of pedagogy and education theory. To really create effective solutions, entrepreneurs need to understand the magic that happens in the classroom, and without this insight, they will not be able to create solutions that students and teachers engage with. Many startups have tried to gain this view by bringing teachers on board. In that vein, if EdTech startups started to think of themselves as learning companies rather than pure-play tech companies, we might one day have solutions that well and truly move the needle.
References:
[1] https://techcrunch.com/2016/08/13/edtech-is-the-next-fintech/
[2] https://prezi.com/xguky7u7aur6/ed-tech-market-map/
[3] https://www.inc.com/chirag-kulkarni/why-edtech-is-flunking-out.html
[4] https://www.edsurge.com/news/2014-09-11-software-will-not-eat-education
[5] http://www.educelerate.com/2016/03/do-emerging-markets-want-their-education-disrupted/
Education is certainly a space that can benefit tremendously from technological innovation. I agree that unfortunately, the Edtech space is highly fragmented. However, what can be done to consolidate the industry? There are not very many large incumbents can that “eat up” all of the smaller players. In my mind, you would almost need on of the large tech giants (like Google for instance) to play that role in the industry. Furthermore, what would be the primary goal of consolidation? Is it to be able to provide and better and cheaper offering for consumers? Or is it to be able to join several ideas into one platform?
Many industries suffer from over-engineering and not paying enough attention to customer needs and simplicity in order to gain buy in. It would help for players in the industry to take a step back and reevalute: What are the issues? How can we solve them in the most simple way?
I disagree that engineers should not be teachers, while that is certainly not their primary role, in order to inspire new children to be interested in engineering it is helpful to understand why adult engineers took that path to begin with. There are certain insights that can be drawn from using engineers as teachers such as understanding why people enter and exit the technology fields.
I am extremely interested in how education will transform for future generations so naturally, I clicked your blog post. Because many of the other posts are regarding more cutting edge technology, it made me curious how that can have implications on edtech. I can see the benefits of cloud technology applied to edtech but how would blockchain and IoT be applied in this space?
I really like your last point about more talent in education to be involved in this evolution of edtech. I believe the biggest limitation of edtech is the lack of the intangible benefits of traditional teaching such as the level of engagement, which seems to have a huge impact on the success of the student.
I love the article. For our marketing class, I also tried to put together a business plan for a company that could address some of the challenges above. It’s incredibly difficult to do, and honestly, I was unable to find a revenue model that made it sustainable, yet still accessible to even the bottom levels of the pyramid.
I think that the concept of the engineers not being teachers is an interesting perspective. There is definitely a role for entrepreneurs to better understand the theory of education, and conversely, there is a great opportunity for academia to learn from the entrepreneurs. The best methodology for learning is still being developed.
Another problem that those EdTech companies have is business model. It’s true that it’s a large industry but money mainly goes to traditional education or education directly related to degrees such as English courses.
Well aggregated limitations. Would also love to see some more consolidation and solutions that enable global scaling and setting new international standards. How would a world look like where even in a small village in an emerging economy school kids can have access to high quality English classes and then go ahead and can get something like an internationally acknowledged certificate (e.g., TOEFL certification etc.) so that poverty is no limit to education any more.
I am wondering if the problems of the sector described here apply to the various types of EdTech providers. When hearing the word EdTech, I often think about companies that are relevant and interesting for me personally, like Coursera, edX, Kaplan, and the like.
However, I believe the even bigger potential to change the world could be with companies that target education to people that did not have any access to proper education in the first place. Scaling such companies is much more difficult, as language barriers will play a much bigger role, and access to the internet and required devices might be more of an issue. However, if launched successfully, potentially with the help of a large NGO or impact investor, the disruption could be much stronger.