Sramana Mitra: If you try to build a business that is selling to schools, that’s an incredibly slow cycle. I have companies in our portfolio and I know a lot of educational entrepreneurs who have become frustrated trying to sell technology or content to schools. It’s a long sell cycle. The textbook vendors are quite entrenched. To some extent, these vendors that provide curriculum materials to the schools are quite entrenched. If you look at the financials of those companies, they are not attractive financials.
I guess the discussion that we’re having is actually a very good discussion for our audience because there is so much to be provided in this industry. There’s such a real problem that education is not efficient. It is not scalable. There’s such huge pockets of the human population that is not getting the benefits of the advancements that are happening and yet, it’s an industry that is struggling with the financial framework of it. You can throw lots of investments and lots of capital at an industry when that capital can provide return on investment. Without that return on investment, the industry will continue to hiccup.
Katya Andresen: I think that’s right. I think that the most challenging path to take as a startup is probably the one you described – selling into schools.
Sramana Mitra: Very hard, yes.
Katya Andresen: It’s a long sales cycle and it’s a competitive space. When I came in a year ago to strengthen our business model and grow the company, what I looked at is what problem are we solving for whom and who is willing to pay for that solution. I keep saying these simple questions but I think not enough entrepreneurs stop and ask those two questions. They’re really important.
Parents for sure have an issue where your kids are spending more and more time on devices. You want screen time to be learning and family time. We have products that make parents feel good about the screen time. That is one piece. The other piece is we have this great content and functionality. Who else needs that? People who are building products to where education is going. They need that. They need good content to put in there. They need collaborative tools to put inside their products. Those are folks that will pay, which is why we are focused on B2B as opposed to B2S (business to school).
I think it’s really important as you’re supporting all these startups. I’m glad there’s so many of them. We certainly need a lot of creativity and effort around helping kids learn. We need it all over the world. People need to ask if they have the right products and partners. Is my solution going to work by itself as a startup?
The other thing I will say is that I’m glad we do things that are free and make freely available. I think that’s important.
Sramana Mitra: We do that too in our weekly online mentoring program that is free. That is great, but things need to be sustainable.
Katya Andresen: I also believe in content marketing. If I came to one of your free webinars and if it’s really wonderful, I’m going to want to join and get more support that is paid.
Sramana Mitra: The problem is that not enough people believe that they should be paying for things. You can build a business. You cannot build a venture-scale business. As a result, the capital flowing into educational technology is going to be limited. Until we can crack the code on the fact that we can build fast-growth businesses, capital is not going to be available.
Katya Andresen: That’s my point.
Sramana Mitra: That has been an interesting conversation. Thank you very much.