Why There Has Never Been a Better Time to Be an Education Entrepreneur
Back when I taught high school, I was able to reach just 150 kids a day. But today at our education company, Learn Capital, I'm now seeing our portfolio reach 150 million viewers. That’s a million times more reach through connected technology.
Indeed, there has never been a better time to be a pioneer in education technology: In 2014 U.S. edtech venture funding was nearly $2 billion; and while some investors fear we may be entering an edtech bubble, I'm not as worried. Of course there is inherent risk when a market sees a sharp rise in investment dollars; and not everyone will make money. However, disruption in the education and learning market is in its infancy and cries out for further innovation.
Following are a few key reasons why entrepreneurs should focus their efforts on disrupting the education market and getting a piece of the proverbial $4.6 trillion pie.
1. Demand for learning is exploding.
The demand for learning is insatiable and compounding. It is commonly known that society's most educated people are also its most rigorous learners. So, it should come as no surprise that the most literate societies are the ones who learn the most. That's why tertiary education is being sought out by greater numbers here in the United States and the world's more educated nations. Advanced education has become more commonplace and affordable; and companies are offering more rigorous training to meet their needs for an innovative and technology-driven workforce.
Additionally, there is growing sophistication among parents, who in turn are positively reinforcing their children's education. This trend is fueling a life-long demand for continued education -- so much so that educational supply does not meet demand; and that gap is growing.
2. Educational demands for flexibility are not yet being met.
As the average person becomes more sophisticated in his or her educational endeavors, the demand for continued learning has outpaced supply. Until recently, when the internet really started to work its magic, those who wanted to learn had to:
1. Go to a school.
2. Go to a school near their parents' or own home.
3. Consider campus options -- especially if they had top-notch academic skills and were financially well off.
All such forms of learning involved an instructor and a library, and that was pretty much it. Today, more than ever before, learners demand more availability and lower costs.
3. Capital is readily available.
A flood of "interested" capital is now available. Our company receives several emails a week from investors seeking a first investment opportunity or a further investment into the education space. Not all companies will receive funding, of course, but there are a huge number of investors looking for new opportunities. Additionally, investable companies will see great terms and have an ever-increasing choice of investors to choose from.
4. It has never been cheaper to start a company.
In an interesting experiment, TheNextWeb asked software development firms how much it would cost to build the products currently driving billions of dollars in the education space. Surprisingly, the finding was that companies like Twitter could be built in less than a full working day, with initial costs as low as hundreds of thousands of dollars. That’s not bad considering that entrepreneurs in the ed space are receiving $10 million-plus dollar valuations in Seed and Series A rounds.
5. The processes for starting a company have become widely known.
The knowledge behind lean startups, customer development and the how-to's of raising rounds of capital has become easily accessible. There was a point in time where such knowledge was a combination of industry secrets. Now, though, the tools to start a business are a popular commodity and widely available in popular books by authors such as Eric Reis, Steve Blank and Brad Feld, as well as on various blogs and websites. In fact, entrepreneurship is now a global trend.
6. It has never been easier to reach a wide audience.
Education platforms are paving the way for companies to launch and create strong user bases quickly and affordably. For example, Edmodo has an app store that has helped launch dozens of companies and build strong user bases. Clever now allows users to integrate with school data and drive school adoption.
Standing on the shoulders of the internet and mobile technologies, today’s startups can reach anyone who's connected, with just a click. Oh, how things have changed since I stood in a classroom, teaching those high school kids. And, rest assured: As we move forward, more and more companies will show hyper-scale growth curves like those from WhatsApp, SnapChat and WeChat. You should consider joining them.