7 Factors An Edtech Business Fails {+How To Avoid Them}
Nitesh Jain
Oct 5, 2023
Venture capitalists are becoming more interested in education tech startups, and more and more people are using apps for school. This has made entrepreneurs excited to start their businesses. They are now more optimistic about starting the next BYJU, Duolingo, or Udemy and getting a bigger share of the global education technology market.
But they’re missing something important.
You can use KNO, SharpScholar, Knack for Teachers, and Tutorspree. This year, a lot of new education businesses joined the list of businesses that failed. As a result, many of these companies try to get into the market and be among the top edtech companies but fail. Others never even try to get into the market for several reasons.
If you are an entrepreneur who has been thinking about getting into the edtech business but is now somewhat confused, read on. We will talk about the reasons why edtech startups fail. In addition, we will share the best of what we know and have done to help you avoid failing as an edtech company.
First, let’s talk about the main reasons why edtech companies fail.
7 Mistakes that education startups Often make
There are many reasons why edtech startups fail, but we will only talk about the seven main ones here. Let’s look at each one separately.
1. Bad study into the market
There is no doubt that the education industry has a lot of new and interesting opportunities. On the other hand, not all of them “must be required.” Some of those ideas are too complicated to use right now.
If companies jump into the education industry without doing their homework, like market research and a study of the competition, they might not be able to tell the difference between “must-have” and “fancy” app ideas, and they might end up choosing the latter. One big reason why startups don’t even get off the ground is this.
2. Not being able to wait
The edtech field is growing much more slowly than other business areas. Most businesses don’t see major growth until 5–10 years after they start up, which is not very inspiring.
Entrepreneurs and investors who want to get a bigger piece of the learning app creation market at a very fast rate find this frustrating. Even worse, investors and venture capitalists are known for not being able to wait, so they often give up on their chosen business before the e-learning startups show any growth.
3. It’s not clear what the difference is between buyers and customers
There are a lot of people who download apps just to try out the features and see if they work (thanks to the teams that promote mobile apps for this). A very small number of these “trial” users buy or sign up for the services that the app offers, though.
This means that fast-growing e-learning companies can’t make enough money, even when they have 10,000 or more users. This isn’t possible in the fast-paced edtech market.
4. Adding tools that aren’t needed
Many businesses have added AI, AR, IoT, ML, Blockchain, and other technologies to their education apps after seeing how they have changed the EdTech industry.
That being said, a lot of them don’t look at the rewards or pain points they solve for the customer. That is, how they can get the target audience’s attention, boost sales, or add to the app’s main idea.
This has made app creation more expensive and made it harder for people to use. In the end, it’s one of the many reasons why startups fail.
With the help of a Nova case study, let’s get a better idea of this point. It is a blockchain-based digital learning system that is changing the way education is done in a good way.
Appic Softwares made it so that it is simple and easy to use, so both students and teachers can find it easy to learn. It also fixes a specific problem that LMS providers have, which is fake course certification.
From this, we can say that Nova uses technology in the right way to solve problems and make sure that it is easy for people to use.
5. A lack of openness and teacher cooperation
Lack of openness and collaboration with teachers is another reason why a lot of education startups fail in the market.
The goal of these companies is to replace teachers and other parts of the current school system. Their work is secret, so they can’t talk about it or get feedback from teachers or other people. Because of this, schools and teachers aren’t interested in accepting and using these educational apps (or software), which means they fail in the end.
6. The app has too many features
A lot of times, educational business leaders add so many features to their plans for making educational software that the final product is very hard to understand. This usually take
s attention away from the main goal of the app, makes the user experience worse, and ultimately lowers the chances of success.
7. Not enough teaching for users
The edtech business is getting more and more competitive as time goes on because mobile apps are the future of education. Because of this, some business owners are in such a hurry to put money into making educational software and releasing new goods (or features) that they don’t even think about whether or not users will find them useful.
They aren’t proactive about adding user guides or other training materials that could help people learn how to use the mobile app. They lose the market because they can’t keep their target group.
You now know the reasons why new ideas don’t always work out, which means that your edtech company won’t make it to the top companies. We are sure that your ideas for education startups are being rethought right now.
If you want your edtech business to have a different past, you should learn how to avoid these kinds of failures instead of giving up on education startup ideas.
Okay, let’s do this.
Also read:- Top 5 React Education Apps in 2025
How to avoid the reasons why edtech projects fail and grow your business
If you want your edtech company to make it to the market and join the ranks of the top edtech companies, you will need to follow some of the steps below. These steps will help your edtech grow and avoid the problems that lead to failure.
How to Get Past edtech Failed
1. Study the industry and your competitors
As we’ve already talked about, a lot of education startups fail because the people in charge don’t know what the market wants or what their rivals are selling. So, the first thing you can do to lower the chance that your app will fail is to put time into the app-finding process and learn what your target users want and need.
That is, you need to know what problems your target audience is having, what edtech apps are already out there, and where they are falling short. This will help you figure out when and how you can be successful in a school or learning setting.
2. Pay attention to KPIs
As was alrea
dy said, a lot of apps win the race to get more downloads but fail to turn those downloads into users. It would not be smart to use download as the main indicator to judge the success of your e-learning app in this situation.
One should be excited about looking at different mobile app KPIs to get the most out of their app’s income and, by extension, their edtech startup’s success rate.
3. Work together with schools and teachers’ groups
Teachers and educational groups have been a part of the standard way of learning for a long time, long before you hired an education app development company and started your own business.
These people know a lot about how the market has changed since it began, including the problems and chances that led to new ideas and more.
In this case, it’s still a good idea to treat them like a friend and ask for their advice on how to make your teaching mobile app more useful, safe, and successful.
This is how you make your on-demand teacher app stand out from the others: you need to add features that no one else has.
So, get ready for it.
You can talk to the best teachers and schools to learn about teaching, how technology changes the results in the classroom, how students actually learn, and what they expect.
You can also talk to a top company that makes learning apps or an investor who has worked on different kinds of learning app projects.
4. Make the learning method better than it is now
An additional way to keep your edtech idea from failing is to see it as an extension of what’s already there, rather than something that will replace it. Make it clear.
Pay attention to the problems with the current learning management system and plan how to fix them. This will make people in the traditional ecosystem more likely to use your technological innovation answer and tell others about it. Something that will help you reach more people without having to put in a lot of work to sell it.
5. Create a cross-platform business plan
There is a slow process for making money in the elearning app development business, as was already said. So, you should choose a business plan that will help you stay ahead of the competition until your app starts making money.
Finally, there are four main ways to make money from the same thing that can help your business succeed:
There are still a lot of people who don’t understand how free apps make money, but this is the best way to do it. In this case, the mobile app can be used for free. You do have to pay some money to get a better experience and access some new tools, though.
Only Pay as You Go: This business plan lets users pay only for the time and services they use the edtech app.
Subscription: Even the best edtech startups, like Coursera, use this business model to charge customers a fee to use their products or services on a weekly, monthly, or yearly basis.
Enterprise Sales—Education startups think about enterprise sales when their products need more training, coordination, and customer service.
6. Make an MVP version to begin with
If an education app is too big and complicated, it will not only take longer to make, but it will also make it harder to get new users and keep the ones you have. With new rivals entering the market every minute, it will be hard to win over the hearts of the people who are watching.
When this happens, investing in the idea of a Minimum Viable Product (MVP) is the best way to get more benefits and lose less. That is, adding the least useful technologies and features to your edtech mobile app so that it can get to market faster, save money and time on development, test your MVP idea, and so on.
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7. Use the correct technology
It might not be a good idea to add a bunch of different technologies to your edtech app for no reason, but that doesn’t mean you shouldn’t include any cutting-edge technologies in your app plan.
If you want to use cutting-edge technologies and tools in your edtech startups, you should get in touch with the best educational app developers and ask them which technologies would work best with your project.
How can Appic Softwares help you make educational apps?
Appic Softwares has a lot of experience making educational apps that use the newest ways to learn, such as game-based learning, social learning, mixed learning, and interactive. We can also make apps that are specific to your L&D needs.
Here are some of our most well-known solutions:
- Using in different ways
- More people who get push notifications
- Higher rate of course finish
- Adaptability to the newest ways of teaching
- More participation and interest
- Better adapting to the needs of training
- Help with tools for performance analysis
- Interaction in real time
- Getting better value for money
If you want to make your edtech platform, you can hire a reputable education software company like Appic Softwares. Our professionals will help you through the whole process and make it easier for you to make an app. Talk to me!
So, What are you waiting for?
