The Case for a 'Direct-to-Consumer' Approach in Edtech

Movers and Shakers

The Case for a 'Direct-to-Consumer' Approach in Edtech

May 4, 2014

When it comes to business models in edtech, the direct-to-consumer (B2C) and selling-to-districts (B2B) approaches are sometimes portrayed as diametric opposites.

But Jennifer Carolan, Managing Director at NewSchools Seed Fund, disagrees. “There is a critical role for both models…even within the same company,” she writes in the NewSchools blog.

Districts and the upper echelons in school administration will continue to purchase tools that help them make data-driven decisions. At the same time, technology and social media has changed distribution and adoption models in a way that empowers end users (teachers and students) to choose and evaluate what is best for them.

“The simplicity of the direct-to-consumer model has the best shot at enabling a product meritocracy built on teacher adoption instead of a contest waged by sales forces and entrenched relationships,” Carolan argues.

But it remains unclear whether marketing directly to those who use--but can’t pay--is good for business. Investors are undeterred, however; startups like ClassDojo and Remind101 have raised millions of dollars with millions of users--but no revenue.

Venture capital is not a substitute for revenue, and even the most mission-driven startup must find a way to survive. Carolan says “there are some very early signs to be optimistic about with subscription models (NearPod), marketplaces (TeachersPayTeachers) and freemium (Wikispaces, Quizlet).”

“If a direct-to-consumer approach can yield better products for our educators then we are willing to try--after all, one thing Silicon Valley investors have never been short on is optimism,” she opines.

True, Silicon Valley has never been short on taking risks. Whether they’re short on patience when it comes to seeing returns on their investments, however, may be a different matter.

Disclosure: NewSchools Venture Fund is an investor in EdSurge


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