Education Market in India is having worth of $100 Billion as of now with 1.4 million schools with over 227 million students and more than 36,000 higher education institutes and expected to grow at 15% year on year basis. In this high potential market of education sector, transition is happening. Brick and mortar class rooms are getting transformed into online classes. That heavy bag which you used to carry daily to your school has now become outdated and altogether a new mode of carrying books and notebooks has evolved, courtesy – tablets and mobile.

Rising education market of India and lack of infrastructure has ensured that these digital classrooms will surely go a long way. EdTech is the third industry – after Ecommerce and healthcare- which is gaining traction in terms of investment. Toppr, PagalGuy are some of the known names of education startups.

So if you are planning to start an education startup, here is the generic analysis of the same, what factors needs to be taken care while moving forwards in education startup.

Education Startups – Models

[A] Directory Portals – Directory portals of education provide the information related to any of the verticals of education system. E.g. – portal for recommending the best study books related to the particular subjects, portal for providing the information of all the colleges, portal for providing the information of entrance exams – important dates, application procedure, exam pattern, cutoff trends etc.

[B] One Way Communication Portal – Education portals that one step ahead of directory portals can be categorized as one way communication portal where direct interaction of human is only at user end. E.g.– portal for test practice, result analysis and rank comparison, portal for discussion, portal for video lectures and study material etc. UEducation, launched in 2015, which provides courseware sourced from industry and academicians is one such portal. Toppr, which was launched in 2013, is one such portal which assists students for JEE & Board preparations.

[C] Two Way Communication Portal – Education portals that include direct human interaction at both of the ends can be categorized as two way communication portal. E.g.– portal for online coaching, portal for online consultation and guidelines, portal for conducting classes etc. Vedantu, which was launched in 2011, is one such portal.

Education Startups Generic Analysis

Education startups require a lot of ground work before execution. Here is FS Analysis on first cut planning of education startups –

Assumptions for Case Study – For the entire analysis of education startups first cut planning, let’s assume that we are planning to start a portal of online tuition for High School Students and the basic model is as follow –

  • Free Study Material – to attract the students
  • Batch Study Program – small fees for money constraint students
  • Individual Study Program – high fees for specific requirements

FS Labs Education Startups Generic Analysis

[A] Selection of Education Startup Model – Acceptable, Sustainable and Scalable

The very first requirement of education startup is selection of model that you want to implement. As mentioned above, any of the three models, directory portal, one and two way communication portal could be implemented as individual or as combination.

If the model is already decided major focus should be on analyzing the feasibility of that model (that starts from point B). If the model is not decided, following parameters should be considers for selection-

  • Feasibility Analysis – Check for the feasibility of idea in terms of execution.
  • Market Acceptance Analysis – Check if the targeted market base would accept your idea.
  • Sustainability Analysis – Check if the idea is sustainable in long run.
  • Scalability Analysis – Check if the idea could be scaled up into other verticals or it would get limited after certain expansion or time span.

Case Study–For our case study of a portal of online tuition for High School Students, following are the initial selection analysis –

  • Idea is feasible in terms of creating the portal, getting the required tutors etc.
  • Idea is acceptable by targeted students as it would be time and cost optimum solution.
  • Idea is sustainable in terms of continuous demand and revenue generation.
  • Idea is scalable to other classes as well.

[B] Market Analysis – Market Size Estimation and Competition Analysis

The next requirement of education startup is to estimate the size of market that you are planning to capture and the market competition that you are going to face against your concept.

For the market analysis following points should be measured –

  • Problem Facing Market Volume – Check for the total volume for your concept
  • Targeted Market Volume – Check for the potential market
  • Direct Competitors – Check for the Strengths and Weaknesses of direct competitors
  • Indirect Competitors – Check for the players that would stop you once your concept start growing
  • Infiltration Rate – Estimate the rate at which your concept would capture the market

Case Study – For our case study, following is the market analysis –

  • Concept of online tuition is beneficial for all the population of High School Students
  • Targeted market volume of our concept is all the population of High School Students having resources and access for online coaching
  • Direct competitors are the players working in same domain
  • Indirect competitors are the players that have sufficient resources to enter into the market
  • Growth rate or market infiltration rate can be estimated by the combination of marketing strategies, portal features etc.

[C] Getting the Required Resources – Database / Manpower

Next constraint of education startups is ensuring the availability of required resources. E.g.– a strong database is required for directory portals, tutors with attracting teaching style for two way communication portal.

Following are the resources required to execute the education startups –

  • Database – For directory portals, a large database is required
  • Manpower –To execute the startup, technical, managerial, teaching staff etc are required
  • Technical Support –Resources to conduct the online execution etc.

Case Study –For our case study of online portal, following resources are required –

  • Tutors – to execute the online tuition classes
  • Technical Staff – to develop the website/app and other technical support
  • Managerial Staff – to manage the activities
  • Marketing Staff – to get the business expended

[D] Website / App Development – Attractive, User Friendly

Website or App is the interface between backend team and front end user. So the User Interface must be attractive and user friendly to make visitors able to convert into users.

E.g.- education directory portals of available tutors in the city could be made attractive by listing them on map so that students are able to easily track them. Directory portal of college information could be made attractive by categorizing the colleges as per all the possible combinations, like – placement records, college ranking, fee structure etc.

Case Study – For our case study of online tuition portal, following could be the center point of attraction-

  • Easy integration of camera along with video quality adjustment
  • Archives of pervious lectures
  • Key points report at the end of every lecture
  • File uploading facility for queries etc.

[E] Revenue Model – Profit Generation

Basic aim of any of the business model is to generate profit margins that are sufficient enough to run the operations smoothly. The potential revenue models for directory portals could be registration charges etc. For one or two way communication portals the revenue model could be the program fees, registration fees etc.

Case Study – For or case study, the model is a combination of free and paid services –

  • Free Study Material – to attract the students
  • Batch Study Program – small fees for money constraint students
  • Individual Study Program – high fees for specific requirements

[F] Marketing Strategies – To Capture the Maximum Market Volume

Before and during the actual execution of startup proper marketing strategies are required to capture the market. Since the targeted market for education startups is limited to those people that are interested in your services. So targeted marketing is required for education startups.

Case Study – For our example, following could be the marketing strategies –

  • Conducting seminars in schools
  • Targeted Marketing at Coaching Centers
  • Referral Program – Free Test Series or Discount etc.
  • Social Media Marketing
  • Targeted Marketing to convince the parents.

[G] Long Term Vision – To Get Acquired or To Become Leader

Startups have two major objectives in long run, either to become leader of the specific business vertical or to get acquired by big player. Having clarity on your long term vision at the starting point itself helps in moving in the right direction.

Education startup of directory portal could be targeted to get acquired by some big player of two way communication portal or to become leader by introducing all the verticals etc.

Case Study – For our online portal, target could be to sell it to some big player who is working in same domain.

[H] Scalability Model – Future Growth

For future growth of any of the business model, it must be scalable in long run. The scalability could be defined in terms of enhanced market presence, enhance reach or introduction of other verticals as well. Education startups have a huge scope of scalability. Any of the business models, as explained in starting, could be extended by incorporation of other verticals.

A directory portal could easily be extended to one way communication portal by introducing the related study material, test series, pervious year question papers etc. Similarly, one way communication portal could be extended to two way communication portal by getting tutors on board and technical developments.

To have scalability model helps in deciding the right direction and time span to transform or encompass the business model.

Case Study – For our case study, the model could be extended in following manner –

  • Enhanced geographical presence
  • Introduction of tuitions for other classes as well
  • Online test series etc
  • Exams information, college information etc.

Wish you luck for your startup. Stay tuned with FS to know more.