4 Reasons Why Edtech Startups Fail

Education technology businesses are being started at a staggering rate. Each promises to resolve an issue and change the face of education. Although these traits may be commendable, there is no doubt that education technology businesses are struggling in a market over-saturated with products and ideas. There are many reasons why education technology businesses fail. Looking at several of these, we can understand why education technology is a competitive market and why many well-intentioned businesses fail. 

Misreading the EducationSsector

The education sector is a complex marketplace. Every school district has varied needs, but education technology products appeal to parents, learners, administrators, and school boards. Most education technology businesses do not understand who they need buy-in from and cannot find a way into the classroom. Another problem is that education technology creators often do not understand the actual needs of educators and learners. They make products that are solving already solved problems or are trying to reinvent the wheel.

Education technology creators should not be designing products for their personal reasons. They should actively figure out what the problems of the contemporary classroom are and will be. Failure to do this ends in the creation of useless products.

Copycat Products

With a marketplace full of  “innovative” products, the death of most education technology businesses stems from their app not being unique enough to compete. This suggests that entrepreneurs are not forward-thinking and that their products are too similar to products that are succeeding or already have a robust user base. Investors will not invest in products that do not stand apart from their competitors, and administrators will not be interested in buying products they already own.

New education technology businesses need to do their homework and ensure that their products do not mimic other products and offer something new. This is an important factor if their products are to be a success.

Their Business Model is Wrong

Most education technology products have embraced the freemium pricing model as the norm. This is attractive to new consumers but can be detrimental to education technology businesses if those same consumers do not purchase the upgrades and bring money into the company. New education technology businesses need to understand how to sell their product and build investor trust. Not all products will benefit from a freemium model, and creators need to understand what options are available on the market. Without understanding pricing and the different education technology business models, new businesses will never see a cent of profit.

 No Patience

The growth of fledgling businesses is slow, and there is very little hypergrowth for education technology businesses. Many businesses will only see growth after 5 to 10 years of operation. This can be morale-crushing for new businesses that have followed the freemium model and may not receive any profit for a long time. Showing patience and providing investors with data and user numbers is important in building long-term trust and a solid relationship. Education technology entrepreneurs often do not see the yield of their product, so they lose hope, and the product dies.


So, although education technology businesses have the traditional problems that come with start-ups, very specific areas lead to failure. Education technology businesses need to meet a real educational need, be unique, and understand what business model is best for their growing company. It is also very important that education technology entrepreneurs understand that growth will be small at first, which shouldn’t dissuade entrepreneurs from working hard. Education technology is the future of education, and we need more exciting products that will change the way we learn.

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