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If you want to sell a million dollars' worth of product, there's a quantity/quality of sale ratio. You can sell a million people something that costs a buck, or
by beat 14y ago
If you want to sell a million dollars' worth of product, there's a quantity/quality of sale ratio. You can sell a million people something that costs a buck, or a thousand people something that costs a thousand, or one person something that costs a million. Hidden inside this is a problem that affects all startups, not just education... there's no money to be made selling to poor people, because they don't have much money. Poor people aren't thousand dollar customers, generally. If you want to get rich selling to them, you need deep/broad market penetration.
So to make money on an education business, you either need very broad use (at least six figures of users), or something of very high value to those who can afford it - the thousand people for a thousand dollars model (much more than that, and you're actually selling to institutions).
When we say "startup" around here, we're specifically talking about a pretty narrow economic model... angel/venture funded software companies targeting $10M-$100M+ annual sales in less than a decade. It needs those hockey-stick graphs to justify the investment. How do you get that?
There are probably spaces that can be exploited by startups - mobile software that simplifies the lives of college students in the under-$100 range, for example. But really, I think the innovation mostly has to come as entrepreneurship within institutions.
- HarryHirsch 14y ago> I think the innovation mostly has to come as entrepreneurship within institutions. Sometimes it does. We are using LON-CAPA (http://en.wikipedia.org/wiki/LON-CAPA http://en.wikipedia.org/wiki/LON-CAPA) to administer tests to the hordes of first-year students who need to take out classes as part of theit gen.ed. requirement. You couldn't handle them with a roomful of TAs.
- mindcrime 14y agoWhen we say "startup" around here, we're specifically talking about a pretty narrow economic model... angel/venture funded software companies targeting $10M-$100M+ annual sales in less than a decade. That may be your definition, it may even be a popular definition, but it is by NO means "the" definition of "startup" here. I don't see, for example, any evidence that everyone here thinks of angel/venture funding as being a requirement to be a startup. I believe you will find any posters here to like @sgblank's definition of a startup as "a temporary organization designed to search for a repeatable and scalable business model". Anyway, if you put aside the absolute requirement for hockey-stick growth curves, you liberate yourself to pursue things in different ways, and follow a different tack. And if what TFA suggests is true, this might be a good idea for education startups. If you're counting on broad changes in thinking at the level of society-at-large, you probably don't want to be in a hurry. Being under the gun from a VC is probably counter-productive in that case.