business models in education
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BUSINESS MODELS IN EDUCATION
BROUGHT TO YOU BY:
AGENDA ● Welcome & Introductions ● Overview of Ed Tech Market in Asia ● Intro to the Business Model Canvas ● The Challenges of Traditional Education ● The Challenges of Online Education ● Business Model Case Studies ● Q&A
● Managing Director, Fresco Capital
● Invest in early stage startups in US and Asia
● Early employee at General Assembly
● Established General Assembly in Asia
● Previously Goldman Sachs
Allison @allison_baum
INTRODUCTIONS
● 10 edtech investments
● Seed stage to Series A
● US & Asia
● Review 2-3 companies per day
● 100: 1 No/Yes Ratio
INTRODUCTIONS
OBJECTIVES
● Understand the landscape for education start ups in the US and Asia
● Use Business Model Canvas to describe traditional education business model
● Examine strengths and weaknesses of new business models in education
ED TECH IS ON THE RISE
0
500
1,000
1,500
2,000
2,500
2010 2011 2012 2013 2014
Mill
ions
Private Investment in Learning Technology Companies (US$ Millions)
WHY ASIA? MARKET SIZE.
US$59.90bn: Size of global ed tech market by 201816
600 million: K-12 students in Asia
5 years: Time until Asia is the largest regional market 16
300 million: People learning English in China
195 million: College graduates in China by 2020
40% income spent on education
WHY ASIA? CAPITAL. • US$554.4mn total invested in 2014 • 24% total edtech investment in China (vs. 10%
the year before)
WHY ASIA? EXITS. +200% in 2014 (mostly M&A)
BUSINESS MODEL CANVAS
DISCLAIMER
There’s No Substitute for a Great Product
THE “TRADITIONAL” UNIVERSITY
TRADITIONAL CASE STUDY:
Job Preparation
Life Experience
Alumni Network
Access to Experts
Advisory
Test Prep
Campus Recruiting
Students
Alumni
Researchers
Parents
Tuition Research Real Estate Faculty
Product Development
Research
Education
Land
Talent High Schools
Testing Providers
Government
Endowment
Alumni
Research
Investment
Corporations
TRADITIONAL CASE STUDY:
CHALLENGES IN TRADITIONAL EDUCATION High fixed costs
Inefficient infrastructure
Limited access
Differentiated learning styles
Content development / relevance
THE ADVANTAGES OF TECHNOLOGY
Increased access
Increased efficiency
Very low cost
Personalized content
Adaptive delivery
Measurable outcomes
THE UNIVERSITY OF THE FUTURE?
CHALLENGES IN TECH: ENGAGEMENT
CHALLENGES IN TECH: $$$
Sustainability
New business models
Monetizing content
Scaling quickly
Long-term returns
A “NON-TRADITIONAL” UNIVERSITY
CASE STUDY:
BUSINESS MODELS IN ED TECH B2B: Selling to businesses or government
B2C: Direct to consumer
B2C2B: Freemium
B2B2C: Resellers or Channel Partners
All of the above J
B2B: SELLING TO INSTITUTIONS
The Good: ● Large market size ● Large contract sizes ● Long term
commitments ● Sticky customers
The Bad: ● Long, difficult sales
cycle ● Users vs. customers ● Procurement
process ● Customized needs
B2B: CASE STUDY
B2C: DIRECT TO CONSUMER
The Good ● No bureaucracy ● Easier sale ● User and customer
needs aligned
The Bad ● Smaller overall
market size ● Lower price point =
more customers ● Retention ● Marketing Funnel
B2C: CASE STUDY
B2C2B: FREEMIUM
Free $ $$
Teachers, Students
Department, School
Institution, District
B2C2B: FREEMIUM
The Good: ● Less Bureaucracy ● Users become
advocates ● Flexibility ● Demonstrate
Traction
The Bad: ● Balance between
free & premium ● Can free users be
converted? ● Time spent on non-
paying customers
B2C2B: CASE STUDY
B2C2B: CASE STUDY
B2B2C: RESELLERS
The Good: ● Increased reach ● Large contract sizes ● Upfront payments ● Leverage existing
relationships ● Bypass bureaucracy
The Bad: ● Revenue share ● Lower margins ● Limited feedback
mechanisms ● No control over
customer relationships / support
CASE STUDY
CASE STUDY
CASE STUDY
ADDITIONAL RESOURCES
More info available: ● Business Models ● Reference Companies ● Canvas bit.ly/edbusinessmodels
Friday May 15 - Sunday, May 17
Follow LearnLab on WeChat: “ghkj2015”
KEEP IN TOUCH!
www.frescocapital.com www.getting-started.co @allison_baum
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