Penetrating world markets: an EdTech experience
Insights about scaling an EdTech startup
Roy Zur, an extremely talented Edtech entrepreneur and an alumni of the #7 cohort of MindCET Accelerator, runs a cyber-security-education company, which tackles one of the biggest challenges in this field – the significant skill gap and talent shortage of skillful employees.
We asked Roy to share his lessons learned as founder and CEO of Cybint on how to scale globally an Edtech startup. We found his answer insightful and are happy to share it with you.
1 – Identify potential markets (or: Beware of ‘opportunities’)
With almost any EdTech business other than B2C, you need to be very careful on what markets you choose and identify the right potential market. There are lots of opportunities (these days more than ever) of expanding into new world markets, but beware of the risks. A risk to get out of focus. A risk of taking you to a long expedition of finding a product-market fit in new markets, before you even found it in your initial market or in a market that is more important.
When you identify the problem that your company is solving, it’s crucial to identify where in the world this problem exists, from a geography point of view. When you’re expanding to a new territory, you will need to refine your product-market fit – even if it is the same product, it is a different market.
But identifying the market with the most potential is not enough.
2 – Identify barriers to entry (or: Is this really the right target market for me?)
When polling a top-down analysis, you might identify China as the market with the highest potential, and you are probably right.
But it’s not the way it works.
A startup does not penetrate a new market with a top-down strategy ( if we reach 1% of the market we will have 50M$), but with a bottom-up (we’re selling for 10$, for schools with an average of 100 students, so to reach 1m$ in sales we need 1,000 schools. Now, how can we solve this problem?). With bottom up analysis we start to see all the challenges, to take into account all the barriers (language, access to infrastructure, regulation), and we get to know the total addressable market. With the right analysis, we might find out that the next potential market has less potential for our business. And that’s a significant insight.
3 – Connecting the dots
Roy and his team follow a principle to which they refer as “connecting the dots”, or in other words – anything new needs to be directly connected to something that they’re already doing. For that, you need to say NO to things. Say NO to apparent opportunities, because they are not relevant opportunities (if they are, say yes!). The wrong opportunity may be your startup “death sentence”.
Be careful of the “maybe syndrome” and the “see-mores” (the ones who want to “see more”), whether they are potential customers, organizations or investors. They stay in your funnel, and best chances they will not lead to a deal. Those leads will make you feel good – when you shouldn’t – and you will end up wasting resources that should be invested on better prospects.
4 – Market analysis (or: Boots on the ground)
You should not go to a new market, unless you know that market really well. You can’t say you plan to grow to Brazil, when you’ve actually never been there. Start with learning the territory – who are the players, what is the pricing, the demands, the needs. Interview people. On your third degree of separation in Linkedin, you may find people from the market who are willing to talk. Get their insights. Prepare a questionnaire. Pick up the phone and talk to them. For qualitative information, a conversation is much better than a survey. If you don’t have time, find interns from the relevant space. Remember that the foremost objective of this analysis is to identify design partners in that market.
5 – Start with product marketing (or: Invest in a brochure before you invest in tech development)
There’s the ‘chicken or the egg’ situation with customers. You need to know if they want the product before you build it. It’s much simpler to build a mockup, a presentation or a brochure, before you’re actually doing all the changes in your product. It sounds obvious, but too often we tend to forget it(translating the product to French, for instance). In the initial discussion with potential customers, there’s no need to waste additional money before things start to move ahead. Product marketing is much cheaper for that purpose.
6 – Find product-market fit (or: Build the right MVP)
The goal of every startup is to find product-market fit, but sometimes we believe we found it, until the moment we try to scale, and we understand we’re not there yet. Assuming you find it in your market, you will need to refine the product-market fit in almost every new market, especially in education, which is a culturally sensitive space (language, styles of learning, levels of education, etc.) The product-market fit can be achieved with the “right” MVP. If your product is a car, your MVP might be a bicycle, or a scooter, but it will not be a structure of a car. The MVP needs to do what the product will be doing.
And one last thing – don’t try to solve scale problems from day 1. Explore your new territory, find your new product-market fit, and the answers to the scaling questions will emerge from the process.
Good luck out there!