Business Plan for EdTech Product
In recent years, the field of eLearning has become increasingly a viable alternative to traditional means of education. Moreover, eLearning solutions are increasingly being used as a method to expand the traditional learning process. When building a business plan for an EdTech product, it is important to understand the market, the various agents and how to penetrate them.
The global COVID-19 pandemic has significantly increased the demand for eLearning solutions and caused 1.38 Billion students to switch to online learning. However, even before the pandemic, global investment in the field had already reached $18.66 Billion in 2019.
Problem Description:
If there is a part of the business plan that is more important than the product description, it is the definition of the problem we are aiming to solve. If you are able to convince the investor that your solution provides a remedy to the major problem in the market, you are halfway there in terms of raising an investment.
If the field of distanced learning is conducted in a certain way today without your solution, what is the problem you are trying to solve? What is the damage currently being caused by educators not using your solution? For example, a product that aims to improve communication between teachers, students and their parents, should improve student performance. On the other hand, a marketplace like Udemy helps to make online video courses accessible for students and commercializes the courses on the other hand for teachers.
The Market:
The global eLearning market in 2019 amounted to approximately $200 Billion. The market is expected to eventually reach $375 Billion, at an annual growth of 8%. However, that’s not what investors are necessarily looking to see in your business plan. It is clear to everyone that the EdTech market is a big market, and it does not matter so much to investors whether it stands at $200 Billion or $300 Billion. This figure can be noted at the beginning of the market research part of the business plan, but not beyond it. It is important to note the relevant segment in the EdTech market that you are entering. Some sample segments are:
Game-Based Learning Platforms:
This is a relevant field for teachers, students and businesses alike that deal with interactive and interesting educational methods. A gamification-based model is an especially popular tool for young children even though the market itself is divided into two main sectors: platforms for K-12 games and higher education games for universities, graduate institutions and the like. The game-based learning platform market is set to grow exponentially, at a rate of 10%.
Learning Management Systems Market:
Except for the general eLearning market, educators, schools, and in some cases businesses, enlist the assistance of learning management systems. In terms of education system, these systems are ideal for delivering courses, classroom management and addressing the personal needs of the student. The market value for learning systems management stands at $97.2 Billion, with an annual growth of 19.6%.
Marketplace platforms like Udemy, globally or Gool, in Israel:
These platforms connect content providers—online courses (on-demand/live) to students and users. Online learning platforms that operate as a market differ in many aspects such as audience, course formats, pricing, reward models, promotions and more. If you are developing a market platform for online courses, the part of differentiation and competitive advantage in the business program will be a critical part as this segment is among the oldest and most saturated in the EdTech market. Some of the prominent players in the marketplace segment are:
Of course, there are other areas and niches in the EdTech market, and you should know how to associate your product with the relevant field. In the business plan, you can specify most of the main segments and focus on the segment relevant to your product.
The Product – How you Solve the Problem:
Once the problem has been defined, you need to explain how you would solve it. Conceptually describe the way you will solve the problem and then go into detail. Once the reader has a clear understanding about how to solve the problem; the benefits to the education systems or product users should be emphasized. A good business plan should present the solution as an innovative concept and not as a collection of features or technical characteristics.
Marketing Plan:
In the business plan, it is important to explain who the target audience of the product is, who we are addressing and how we will address it. An investor who invests money in a startup will want to understand how their money will be invested in acquiring customers efficiently and quickly via a detailed go-to-market plan. The investor will want to see in the business plan increases in customer purchases; and if you do not yet have historical data, then estimates would also work well.
Financial:
A financial model comes in the form of a separate Excel file from the business plan whose summary appears in the Word file itself. The model should answer the following questions:
How much money do we need and what will we achieve with it? What milestones will be completed under the current budget? What is the company’s cash flow forecast for the next three/four years? It is necessary to prepare a detailed Excel that presents the company’s future expenses and incomes and the assumptions underlying them.
How Targo can Help:
Our team has experience in the field of EdTech that has accumulated over 8 years. With a collaborative work process, we can maximize the changes of raising investment and realize the business potential of your startup. We base the process of building the business plan on an orderly methodology that has been successfully implemented in many projects. Through it, we analyze the market and the business environment in a way that allows the entrepreneur to make decisions based on the information collected. Based on this information, and in full cooperation with the developer, we build a business plan for immediate implementation according to defined milestones and goals.
