Are Education Startups The New Dot Com?


The amount of education startups is now increasing at an exponential rate. At the same time, the amount of venture funding for education businesses is at an all-time high. In some ways, the rise of education startups resembles the dot-com boom of the late 1990s, however, the successive crash of the dot-com craze may not be inevitable for the EdCo boom.

Even though many investors and VC firms are lining up with wallets in hand, there are a substantial number who have real-world experience in the education biz. By putting skin in the game, they are offering business acumen and support services that fledgling enterprises need in order to stay afloat and succeed.

The Education Investor

Namit Bhatia is an education investor in Atlanta. He is a Georgia Institute of Technology grad with further degrees from Georgia State University. Bhatia started in the technology field as an analyst, but had the entrepreneurial bug and lead a succession of successful technology startups before entering EdTech in 2011.

In addition to creating web and app based engagement platforms for many of the world’s education associations and school districts through Crescerance, his MAD Learn program is helping schools around the world to teach children application development. Bhatia is also an active investor in EdTech. He looks for key indicators when he invests, but says he invests in people, not companies.

“The first thing I ask is what is their vision for the company,” said Bhatia. “How will it help learners? What will their role be in the coming education landscape? Then I look at the passion of the individual. Why are they doing this? What lead them to make this decision? Next, I look at the team they have assembled. Does everyone share in their vision? If everything adds up on the personal side, we do a market analysis including the competitive landscape and what it will take to bring it to market.  If the need is there, and they have a good grasp on the future of education, we can generally figure out the rest. Education is a very long-term business.

The buying cycle is extremely long, and you need to know the intricacies of the education buyer. Sometimes it takes five years just to gain traction. Return on investment can take even longer. The founder having sufficient grit and resilience to live and continue to learn through this period of limited success is what makes or breaks education technology companies. Sniffing out this grit in the founder through his or her passion is a paramount investment criteria all EdTech investors look for.”

From Startup To Success

Michael Toth is the founder and CEO of Learning Sciences International, iObservation, and the Learning Sciences Marzano Center for Teacher and Leader Evaluation. Learning Sciences International is one of the most influential publishers in the education space.

In addition, they work with school districts to create a culture of rigorous instruction focused on successful classroom learning, affirmed through human-centered research, metrics, and programs that revitalize classroom instruction and student learning. Toth is successful by anyone’s standards, but began as an Ed startup. He remembers the early days, and what he was thinking when he decided to launch his company.

“I was a grant director around research and development of technologies to enhance professional development and to transfer learning and practice,” Toth said.

“The university started a small business incubator encouraging faculty to start a business and we spun out a small group of our R and D team. We had a few contracts to help us do that and we were well positioned, the Pennsylvania Department of Education had a need for an online platform to deliver professional development for teacher certification to meet a new requirement. So we got our start as the statewide provider for that system using our core competencies of technology and professional development.”

You have to have a core competency and there has to be a market need. Identifying a market need is the hardest thing for an entrepreneur. You may have a great idea, but you need to get to know the education space, talking with educators, and attempting to figure out what their struggle is. Then you can bring your skill set to come up with a solution, and to gauge whether other people will want that solution.

K-12 public education is highly regulated, so it doesn’t function under normal market conditions. You need to understand the regulatory space; there’s a high threshold of domain knowledge to break into it. But it’s a place where you can really do good work. Any entrepreneur coming into this space must have a passion for helping kids. If you have only a passion for revenue, it probably won’t play out very well.

The situation at the university was changing. We were kind of working for ourselves anyway, but it was a lot more risk to be on the private sector side. We were very mission-oriented. I’m not sure there is a bigger gamble than launching a startup. But there is a point when you just have to do it. You’ll work harder than you ever thought possible. It is consuming. But you have to align what you are passionate about with your core competency, and find a solution for a market need. If you can make that alignment between passion, competency, and solutions, the time is right any time.”