Opportunities in Indian education solutions sector
26th Jul 2015
The Education Sector in India continues to attract entrepreneurs, attracted by the huge opportunity and market size of this sector, and the relentless shift from public to private education.
The potential opportunity of providing Educational Solutions is huge, with reports placing the total sector size at around 1.5 million schools, with over 25% of them being private schools. Add to that the dramatic shift in enrollments away from public schools to private schools (Private schools now secure 40% of enrollments), and the private school sector itself offers a rapidly growing segment.
What is unique about this sector?
At first glance, this K-12 School (a term used Kindergarten through XII grade) sector does appear very attractive. However, the street to success is littered with several failed start-ups. We would recommend that edu-preneurs understand the sector really well before defining product strategy and their Go To Market model.
The sector has its own characteristics that one must consider while developing a strategy. Here are some important points to consider:
Lengthy Sales cycles – The Schools Sector is highly fragmented. There has been no consolidation in the sector, and this is also unlikely in the near future, due to regulations that make it difficult for corporates to enter and for existing leaders to access large sums of capital. As a result, winning market share is a slow process that requires addition of customers school-by-school and city-by-city. You should expect and plan for lengthy sales cycles and relatively higher sales costs. An additional complexity is that there are numerous decision makers, and it is difficult to sometimes identify the correct decision maker. As an example, many schools are governed by trusts comprising of numerous members, who are difficult to access. Some schools require that new educational products be also approved by the PTA committee, presenting an additional hurdle and delay in the sales cycle. So do ensure that you have thought through your sales costs and planned to hire the right kind of salespeople who can navigate a difficult sales environment.
Product – Market fit – I have seen several startups develop great products but fail to gain traction. I think that’s because they have not really thought about whether their target customer can understand, appreciate and assimilate the product. As an example, a very sophisticated smart class set up with networked tablet devices, a teacher console and compelling content may sound like a ‘killer product’, but are School Leaders able to appreciate the benefits of this product, and do they have trained IT professionals and tech-savvy teachers who can maintain and adopt these solutions? How will parents of that school respond to textbooks giving way to Tablets? Will the academic head of the school put her job on the line and be open to experimenting with such a dramatic transformation? Will the school owner want to make such investments?
Where do the opportunities lie?
Investors have invested in startups that hit such barriers, and are therefore wary. It would therefore be prudent to think about these issues. I will let the reader develop on their imagination and creativity to develop offerings for this segment, but to help out; here are some pain points that schools face:
Acquiring students: New schools have invested large sums of capital in acquiring land and developing infrastructure. While some generate strong customer traction, some are unable to grow their enrolments. We have observed several issues, beginning with poor branding and messaging and in some cases misdirected investments. Perhaps there are opportunities here. We have come across companies that take over school marketing, branding and communication, some that take over the entire school management, and some that focus on just boosting walk-ins. Perhaps there is a brand aggregation play that is possible.
Financial Management: Several school owners struggle with managing their finances and in accessing funds. As a result they are unable to invest in growth. We know of vendors focused on providing financial services to Schools that are generating strong growth.
Teacher Lifecycle Management: Some schools suffer in recruiting, training, retaining and motivating their pool of teachers. Parents are very sensitive to this aspect, and high teacher attrition is inevitably followed by high student attrition. Surely, there are opportunities to exploit here.
Curriculum development and Management: Numerous schools struggle in this area. They are simply unable to develop a well-rounded, forward thinking curriculum framework that underpins the academic development of its students. Teachers walk into class without lesson-plans, classes are taught without learning objectives in mind, and there is no thought given to making subjects more interesting, or assessing and supporting the non-academic development needs of students. There are several players in this sector, but the market continues to be fragmented and under-served.
Solutions around constrained infrastructure: Our approach to changing science was driven by the constraints of schools not having science labs capable of handling students of all grades. We therefore took the lab to the classroom, by developing easy to use activity kits. I am sure there are creative approaches to other infrastructure issues.
These are just a few gaps that we observe, but surely there are more opportunities to exploit.
To summarize, we think that the K-12 sector continues to be an attractive sector with strong growth potential and social importance, but it’s a sector that requires careful planning, relentless execution focus and investor-backing in order to succeed.
About the author:
Manoj Thandassery started Curiositi to change how Science is taught in schools. He and Vinod Abraham(Co-founder, Curiositi), mapped the entire K-12 Science Syllabus and have designed hundred plus one-time-use activity kits. Launched in 2014 with 24 schools, they have grown to 80+ schools across Karnataka and Maharashtra this year. The team recently launched their activity kits for consumers at www.curiositi.in.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.