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A lot of education startups, including ones USV has invested in, offer their products for free. (eg Codecademy, Edmodo, Duolingo. But see also Coursera, Lore). It seems as though the revenue model for these startups — for the time being at least — is just to raise venture capital. What role do investors play in steering these companies towards business models and financial growth? What are these conversations like and how do you balance “mission” and “money”?
Also, when it comes to a lot of free products in the consumer market, such as Gmail, Facebook, and Twitter, the business model revolves around advertising and selling user data. What do you see as the present/future market for selling users’ learning data?
@audreywatters “It seems as though the revenue model for these startups — for the time being at least — is just to raise venture capital.” = sharp observation.
One of the biggest issues I’ve run into as an #edtech founder is around the bias institutional investors have against products that target districts first. It seems like VCs would rather back a company with a freemium product and 5,000 teachers in disparate schools as opposed to a company with a product that’s won a district with 40,000 students, two nationally recognized educational organizations and only needs to quote a price and cash the check to have revenue. How should founders communicate the value of having a product that is capable of winning at the district level and how should we speak to why it is essential to our strategy without turning off institutional investors?
Julian Miller, Ontract
To what extent does a wish to have a social impact play a role in investing in educational startups?
What are the key talents you’re looking for in the founding team of an ed-tech startup?
How many ed-tect startups have you invested in, and who are they?
What do you think are the most viable business models for web/mobile ed startups?
What new/emerging business models do you see in ed startups or that can be applied to ed startups?