10 Startup Lessons From Kaplan's EdTech Accelerator Demo Day
For many students, this week was the start of a new school year. For the 10 startups in the TechStars-backed Kaplan EdTech Accelerator, it was graduation.
The inaugural class of startups -- carefully selected in June from more than 350 applicants and ranging from gamified textbooks to college preparation for veterans -- graduated on Tuesday at New York City's IAC Building and held Demo Day presentations for angel and venture investors and education industry influencers.
After garnering feedback from more than 80 Kaplan executives and technology experts, and tinkering with their revenue models, design plans and presentation speeches for three months at Kaplan's New York City offices, the teams behind these disruptive education technology companies have learned their fair share of business lessons.
Here are their top tips for startups:
Opt for college students. If you're looking for a suitable audience to prove your startup concept, go no further than your nearest university campus. "There's a stigma out there that college students just don't have the skills or experience, and you just shouldn't deal with them, but that's not the case!" says Victor Young, CEO of Flinja, a platform that connects college students with prescreened companies who need projects completed, turning students into "freelance ninjas" with the work experience necessary for postgraduate employment. "They are eager to test out your product. They really want to be part of startups -- come in early, help you build it, help you prove the concept and grow with you."
Entertain multiple revenue options. Creating a product that solves a problem is one thing, and figuring out how to make money is another -- but don't abandon a great idea just because your revenue streams aren't clear yet. "Our goal coming into this program was to figure out our business model, and through the mentors, we got three very different approaches and recommendations," says David Blake, CEO of Degreed, a place to visually track academic, professional and lifelong learning accomplishments. The team aims to attract enterprises, which can then see an overview of their employees' abilities. "We ran a lot of different tests, from putting up a splash page to see what people were willing to pay for different feature sets. Get out of the building, go talk to customers, formulate your hypotheses, and go test them. Get as much data as you can."
Design for native advertisers. The decision to monetize an online product through native advertising requires a loyal community of users, and they will continue to spearhead your service if it's designed well. "It's a long-term type of marketing, not like cost-per-click or anything like that. It's all about how they feel about the brands, connected to actual utility and the things that you're building," says Kris Chinosorn, CEO of MentorMob, a skill and knowledge platform that maps definitive step-by-step learning paths from current Internet how-to content, and touts partnerships with the likes of Virgin Mobile and Microsoft Bizspark. What's the best way to keep users engaged? "One thing I always look at when I'm trying to build products is that people just like to use beautiful things, so keep it as dead simple as possible and easy to understand."
Don't shy away from simultaneous business models. If potential clients are asking for one-off transactions, provide that option as a start, but also try to foster a relationship model to secure business in the future, says Tim Dutta, CEO and co-founder of Verificient Technologies. The proctorless option for universities and learning organizations verifies students' online test-taking identity using facial pattern recognition, and does so per online test as well as per learning institution. "Our mentor Jay Schwartz pushed us, saying, you have to do it now. Don't wait and just start with a transactional model; do both at the same time. Go ahead and test the hypotheses in the marketplace."
Hire and pitch selectively. So much of a startup's success is dependent on the people behind it, from all angles. "We didn't just want to hire people that had a certain skillset, we also wanted people that were really on fire about this problem," says Dave Cass, CEO of Uvize, an online mentorship network and preparation destination for military veterans entering college. And giving every pitch your best effort doesn't necessarily mean pitching at every effort. "Investors are part of that too -- they have to care deeply about the problem as well."
Be prepared to pitch in unexpected places. Though startups should still screen investors to find the right fit, you never know when a casual conversation is going to evolve into an ideal opportunity. Cecilia Retelle and Kim Taylor -- co-founders of Ranku, a discovery engine for online degrees from traditional education institutions -- secured Mark Cuban after informally pitching him at a bar in New York City. "Be prepared -- it was a Saturday afternoon and unplanned!" admits Retelle. "You can't plan for the unexpected, you just always have to be ready to go."
Soak up as much as you can from other entrepreneurs. For some startups, the EdTech accelerator didn't just help startups develop their work, but also their work styles. "When you actually surround yourself with an environment of entrepreneurship and with high-intensity people, it's pretty amazing," says Erin Jaeger, community director of Modern Guild, an online career mentoring platform that teaches skills like personal branding and elevator pitching to high school and college students. "That's something I wasn't a believer in before we started, but now it's just a must have."
Stay true to your mission. Accelerator or otherwise, be sure to hold on tightly to your original inspiration. "If all the signs are pointing a major pivot, then do so, but stay true to yourself," says Matthew Gross, CEO and founder of Newsela, a news-gathering platform that delivers articles at multiple levels to help students of all ages become advanced readers. He sought to create Newsela to improve the reading comprehension of his own son, as well as that of elementary school students throughout America. "You're gonna get a lot of advice from a lot of people, but try to look at the underlying reasons behind their advice, other than the advice itself. And then process that information carefully. Separate out signal from noise and remember why you got into this in the first place."
Be open to vehicle adjustments. "We really struggled with what the product would look like -- we were initially putting it together as a supplemental product that we sell to schools, but then it became clear that it made more sense for us to partner directly with publishers to take advantage of their existing sales and distribution networks and help them transform their existing products into the next generation products that people would be expecting on iPads," says Derek Lomas, CEO of Mathify, a company that partners with textbook publishers to create interactive learning material. Because the new method of delivery still stayed true to the original mission, Lomas said that he was "stoked" about the change. "We had already developed so much product, so it was really about, what's the best way of making this product make sense in the market as it exists today?"
Never stop learning. With startup practices constantly evolving, even seasoned, serial entrepreneurs can benefit from other experts' perspectives. "Once in the program, I realized how much I could get out of it, just from learning about how a really well-run organization like TechStars and Kaplan think about building businesses -- I have one experience, one data point; they have so many," says Brian Jacobs, CEO of panOpen, a platform for colleges and universities to compile open source course materials to students at a lower cost than traditional textbooks. Though he had already founded the successful virtual bookstore startup Akademos, what did he learn about entrepreneurship altogether? "I think the emphasis on lean startup as a methodology is fantastic. To some extent, I applied some of that in my early days as an entrepreneur, but I wasn't systematic. What this experience has taught me is that you have to be systematic in applying lean startup."