What the tension means for the institutional edtech market.
GUEST COLUMN | by Ian McCullough
There has never been a better period in human history for education. Anyone with Internet access can build knowledge and practice skills any time they like. The current state of academic institutions is a wholly different matter. Edtech companies that serve schools, colleges, and universities are now caught between future possibilities, present realities, and past promises. Moving business forward requires more than stepping on the gas and watching corporate wheels spin. It is time to reflect, map the terrain, and plan carefully.
‘Moving business forward requires more than stepping on the gas and watching corporate wheels spin. It is time to reflect, map the terrain, and plan carefully.’
In order to understand the three significant opportunities for industry growth and investment, it’s worth exploring the evolution of edtech and recent social factors impacting how educational institutions engage with and consider technology purchases.
Evolution of Edtech and Recent Factors
Modern edtech was born when passage of the Telecommunications Act of 1996 in the United States created the Schools and Libraries program of the Universal Service Fund, which is more commonly known as eRate. Although the industry began incubating in the 1960s, technology was largely limited to computer labs. Thanks to eRate, students across America gained access to the Internet and a global community of edtech developers coalesced and began building for the World Wide Web. Since then, edtech has transformed instruction and administration worldwide. From the SIS to the LMS to countless specialized applications to near-infinite content from empowered creators, EdTech is no longer a niche where a small set of revolutionaries are promoting the promise of technology.
While software drives campus operations these days, COVID-19 fomented a reckoning across the ecosystem. Institutions faced enrollment drops, spending cuts, instructor shortages, and student mental health crises. Institutions reviewed product usage and budget rationalization across all of their edtech vendors to ensure they provided value. UNESCO’s report on the role of technology in education during the pandemic, An Ed-Tech Tragedy?, revealed that institutions use thousands of tools, yet face implementation gaps. The resultant digital design divide led to underutilization and, consequently, service cancellation. Now, more technology is no longer an end unto itself.
Complicating things further for startups, investors pulled back on the flow of capital that poured into the space from 2020 to 2022. Firms not deeply familiar with education were unprepared for prolonged evaluation periods and complex procurement processes. Investors also recognized — contrary to popular belief — that the generative AI boom poses a competition problem for edtech developers. If educators could directly prompt a chatbot incorporated into a service they already use (like Google Workspace or Microsoft Teams) with satisfactory results, then why pay to license yet another tool?
Public perception of the broader technology industry is also a challenge now. A connection to Silicon Valley once offered edtech sparkle, but more and more it confers suspicion. Regulators around the world increasingly scrutinize the business activities of “Big Tech.” Rapid advancements in AI continue to spawn a host of exceedingly thorny questions, from the boundaries of academic integrity to deepfake-driven sexual harassment to intellectual property risks. The effect of social media and smartphones on youth and adolescent mental health is currently a hot topic among policymakers. Even the e-rate program that launched the industry is now in question. As schools, colleges, and universities are all either public institutions or likely receive government funding, the politics around technology has created even more friction for educational innovators.
Seeking Traction? Transformation a Must
Institution-focused edtech businesses seeking traction must transform. To that end, there remain several paths that leaders can explore.
- Workforce learning and development (L&D) is having a big moment and will be a key element of the 2025 ASU-GSV Summit. Looking upstream of adult learning to K-12, trends align. Career and Technical Education (CTE) has been a rising opportunity for quite some time and has reached the point where Gen Z is referred to as the toolbelt generation. Previously-overlooked curricular areas may be ripe for new instructional solutions.
- While the Ivy League is drawing controversy in Higher Education, community colleges are drawing students. Affordable opportunities for upskilling/reskilling, advantageous transfer policies with state university systems, and dual-enrollment programs with local high schools are offering learners a gateway to a college degree that doesn’t break the bank. Edtech vendors can leverage this trend by looking at the choices made by students deterred by the exorbitant cost of undergraduate tuition.
- COVID-19 lockdowns sparked many strong feelings. From out of that crucible, however, there were students who discovered ways to learn suiting them better. Some K-12 students and their families found online schools, microschools, and homeschooling to be a better fit for their situation. While the “enrollment cliff” is a huge challenge for campuses-based college degree programs, online programs at Western Governors University, Southern New Hampshire University, and Grand Canyon University occupy the top three spots in higher education enrollment statistics. While the pandemic is behind us, interest in distance learning is only beginning to blossom, which presents a significant opportunity for new tools and investment.
Ultimately, the most critical practice for institutional edtech businesses is long-term planning; the most critical discipline being patience. Academic institutions make decisions over the span of years. No amount of emails or cold calls is likely to prompt a purchase decision that hasn’t already been considered by multiple stakeholder committees. The marketing funnel should stretch 5-7 years out and active nurturing should be in progress 2-3 years out. The sales team needs to be right-sized to the market opportunity and sales reps require a well-defined plan of action. Scrambling drains cash. Sound strategy and steady execution are the keys to advancing edtech companies along their journeys.
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Ian McCullough is an edtech marketer with over 20 years of experience across consumer, corporate training, and institutional with companies like LeapFrog, Socratic Arts, and Pearson. At Turnitin, he built the dedicated marketing function for K-12 and led it for five years. He holds a Masters degree from Carnegie Mellon University and resides in the San Francisco Bay Area. Connect with Ian on LinkedIn
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