Three things every education entrepreneur should know

As an experienced startup operator and investor in education, I speak with hundreds of education entrepreneurs a year and often get asked advice about building a successful startup. There’s a tremendous amount of good content out there about how to build a startup and I suggest entrepreneurs check out some of the amazing resources that are available. They include resources from leading accelerators including Techstars and Y Combinator and books like The Lean Startup by Eric Ries. These are excellent guides to building different kinds of startups.

As good as these resources are, I think there are some specific things about building an education startup that should be highlighted. These education context-specific lessons come from my experience operating in three startups and investing in about 15 to date. So, here’s a short list of things that every education entrepreneur should know.

1. If you’re looking to create a company to grow and flip quickly, you’re probably in the wrong market.
   
   Schools and districts are well known for moving slowly when it comes to change. Systems and processes in education are in large part compliance driven and compliance is dictated by policy, which tends to move slowly. That being said, education buyers can and will move relatively quickly when you offer a painkilling solution to a high-priority problem they’re working to solve. Once you establish a partnership and make your education buyers successful with your product or service, you can expect loyal long-term customers who will be helpful in referring you to other education customers. You can build a great business, but expect it to take 7–10 years of hard work to get there.
2. The amount of venture capital you raise doesn’t define you.
   
   Raising venture capital is hard in any market, but I think it’s especially difficult in education where sales cycles are long, budgets are tight, and the incentives to buy for public schools (which are non-profits) are not as clear as for-profit buyers. Venture capital can help accelerate a successful business, but money doesn’t replace the entrepreneurial effort needed to identify a worthy problem to solve and to develop an effective solution that buyers will pay for. You don’t need venture capital to start a company in education if you can solve a real problem and charge customers for it. In fact, many successful education businesses have been bootstrapped.
   
   For example, Lynda Weinman started as a teacher in need of tools to instruct web designers in the late 1990s. The offerings at bookstores were not compelling, so she began producing training films that better educated her students. Over the next two decades, she created a content library and tech assets that had enough scale to convince LinkedIn to pay $1.5 billion to acquire her company, Lynda.com. Another example is Pluralsight, which offers remote software training. The company bootstrapped for its first nine years and now offers more than 6,000 courses online. It’s a public company worth more than $4 billion.
3. Novelty is good, but don’t stray too far from familiarity.
   
   Education innovators want to innovate and they must in order to build a differentiated business. Some entrepreneurs find rapid traction with their innovations, while others struggle to get there. So, what separates startups that get rapid adoption from those that struggle? In my view, the key difference between the two paths can be found in Clayton Christensen’s “Jobs to be done” theory. In Christensen’s theory, people buy products and services to get a job done. Success comes from making the job easier or more efficient for the buyer. Innovators often stray when they offer something so novel that it creates a new job for an educator. An innovation that tackles a familiar, difficult job that educators or administrators need to do and delivers a 10x improvement over existing methods will be a huge success.

Education entrepreneurs face distinct challenges in building successful startups. If it was easy, every education entrepreneur would be knocking it out of the park. It’s challenging and rewarding to build a scaled education business that serves hundreds of thousands of educators and millions of students, and it’s a journey that you should expect to take many years.

Are there other characteristics that make the education market unique? If you have ideas, I look forward to hearing from you.