India’s ed-tech ecosystem can reap several benefits by utilising the data opportunity to re-engineer their value proposition, strategise partnerships and re-think business models while also bridging the trust deficit they have always faced.
COVID-19 has upended businesses and disrupted the routine lives of individuals across India. Startups are scrambling to stay afloat, and have been warned by their investors to consider cutting jobs and spending. The lockdown has also forced schools, coaching, and tuition centres to shut shop — leaving students with the only option of moving towards the virtual world to continue preparation and learning. To make the most out of the situation, several ed-tech companies, including Byju’s, Toppr and Vedantu, are offering free access to their platforms, and have witnessed a massive surge in user onboarding — standing as an exception in an unsettled startup economy. While the crisis is an excellent opportunity for customer acquisition, it is a perfect time for ed-tech companies in the Kindergarten Grade 12 (K-12) segment to build evidence on the efficacy of their products. This can be done by exploiting the rich and diverse datasets generated due to user engagements, and re-engineer their business strategy to enable scale-up.
According to a recent Inc. 42 report, the ed-tech landscape in India has over 4,450 startups. It ranks third in the world, after the US and China, in terms of overall funding received, and is also home to the world’s highest valued ed-tech unicorn — Byju’s. India’s vibrant K-12 sub-sector, which primarily uses English as the medium of instruction, has the potential to offer global educational products. Scaling up at home is essential to unlock potential abroad — yet the former has not happened.
In India, state governments are the largest providers of education. However, they are plagued by several inefficiencies of large student-teacher ratios, teacher absenteeism, and lack of quality training amongst teachers. Private schools too face a problem with teacher quality. These inefficiencies combined with India’s huge education market size — where 35% of its 1.3 billion population below 15 years of age — present an immense business potential for ed-tech products to scale-up by plugging gaps. However, two factors have always prevented them from scaling up, and the current crisis presents these companies with a perfect opportunity to address these and re-think both their product and business.
The first factor and one that ed-tech founders most commonly cite, is the lack of awareness and a trust deficit in technology-based education amongst parents. Parents strongly believe that home-based remote education cannot replace the skills children build through face-to-face interactions.
Parents are slowly beginning to view ed-tech platforms as complementing their child’s learning and development — as an alternative means of education to after school one-to-one tutoring. By offering free access to their platforms during the crisis, ed-tech companies are now getting the trial and mindshare they were not able to earlier. It is an opportune moment to create awareness amongst people, and nudge behavioural change by breaking the trust deficit that always hampered customer acquisition.
The second factor, and the most important one, is the lack of evidence around the efficacy of ed-tech products — a huge factor that is to be considered for scaling up. Government buy-in and partnership with ed-tech firms is essential to scale ed-tech products. While governments, for a long time, have displayed a keen interest in using ed-tech products to fill the aforementioned systemic gaps and have adopted solutions to some extent, the lack of ‘credible’ evidence has hindered deployment of solutions at scale.
According to a 2019 report by the EdTech Lab — an initiative of the Delhi-based education policy non-profit Central Square Foundation (CSF), there exists very limited evidence on the quality and efficacy of products in the market. Until CSF’s EdTech Lab conducted Rapid Evaluation Tests (RET) for the top 12 ed-tech products in the country, only four products had been rigorously evaluated in six different interventions since 2007. The report had various findings, of which three are significant for this discussion. First, most ed-tech products in India are being judged by their features, quality of content and scale of production, and the widespread access they provide rather than focusing on learning outcomes. Funding for these products also follows similar patterns. CSF found through the RET that features that impressed most experts went unused by teachers and high production quality that seemed attractive at times had limited pedagogic value. Second, very few companies in India build personalised adaptive products (PAL) that uses tools based on technology to match instruction levels to students’ learning levels, and determine which topics students should take up — based on performance assessments. Third, none of the 12 products that underwent RET, exploited data sets effectively, in order to meaningfully track overall student learning and perform comparisons of learning levels over time.
There needs to be a more concentrated effort by ed-tech startups to gather more evidence by making product quality a function of student learning outcomes. Product type and features are not strong indicators of product quality. This is especially important in India, where learning levels are extremely skewed — where one fourth of all children in grade VIII in rural India are unable to read a grade II level text and one third are unable to solve a 3 digit by 1 digit sum according to the Annual Status of Education Report by Pratham. The natural corollary of this is for startups to ensure “right” learning by building products that customise student learning by riding what Inc 42 describes as the “third wave” of revolution in the Indian education sector and adopting artificial intelligence, machine learning, and deep tech in product design. The Indian government has also recognised the benefits of PAL, issued guidelines in 2018 to implement PAL products, and the state of Andhra Pradesh is rolling PAL products in 2,600 government schools. The 2019 Draft of New Education Policy also envisages such a strategy to improve the overall quality of education.
Data is the underlying commodity to build evidence and product quality around student learning outcomes, and to ensure that the ‘right’ learning happens. Companies need to harness vital amounts of granular data by administering periodic assessments, and tracking user behaviour and outcomes effectively in their products. The crisis, therefore, presents an unprecedented opportunity that startups must definitely seize. On-boarding of a sizeable number of users will generate enormous rich datasets that startups can exploit. Until now, most ed-tech products catered to tier 1 cities and children from the high-income segment — ignoring the majority of India’s students who come from tier 2, tier 3 cities and rural areas. With more students enrolling from tier 2 and 3 cities, the crisis presents a perfect playground for various companies to modify products, adapt and contextualise them as per the needs of different customers. Companies should therefore utilise this crisis to build the best possible evidence around learning outcomes.
Going forward, companies should collaborate with experienced civil society organisations like CSF and Pratham to further rigorously test products, and create ‘credible’ evidence that governments can rely on while adopting solutions. Most importantly, the solutions need to be contextualised for low-income segments, target various learning levels, adapted in vernacular languages by using appropriate cultural references, and sold at lower prices than current market prices. Focusing on customer and user-centric innovations as well as civil-society support, for adoption and implementation at scale, is key.
While the rest of the world is up in the throes, India’s K-12 ed-tech ecosystem can reap several benefits by utilising the data opportunity to re-engineer their value proposition, strategise partnerships and re-think business models while also bridging the trust deficit they have always faced. Startups should place focus on impact and learning outcomes, and not merely the scale of the technology adopted.
In the longer term, if such collaborations bear fruit and generate evidence on approaches and products that are effective, India should seriously consider promoting such partnerships in the developing worlds of Asia and Africa as part of its developmental assistance programmes. Indian ed-tech startups and civil society organisations can together offer global educational products, and solve developmental challenges of the global south — which face similar problems of access and quality. The COVID-19 crisis is the time for the ed-tech startup ecosystem to start re-engineering.
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Anurag Reddy was a Research Assistant working with the Centre for New Economic Diplomacy and the Technology and Media Initiative at ORF. Anurag tracks the ...
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