Should I Sell My Education/Edtech Company?
The global education technology market share crossed $17.7 billion in revenue in 2017 and is expected to grow to $40.9 billion by 2022, yet many edtech companies don’t make it. The trick is to sell the business before it fails. Let’s look at some signs that it might be time to sell your edtech company.
You have run out of steam
This is not an uncommon situation. Setting up a startup from scratch, steering it through funding, finding the right co-workers and fine-tuning your product or service all takes an inordinate toll on a founder’s personal resources. As Green Wedding founder Kate Harrison puts it: Which do you have more of, passion or exhaustion? In the beginning, passion carries you through the many personal sacrifices founding a startup requires, but there may come a time that you may realize that you are too exhausted for another sleepless week.
The company doesn’t need your skill set anymore
It so often happens that the person who comes up with a brilliant product idea can carry the business in the beginning through pure passion and vision. But later as the business grows, the business requires additional skills that the founder might not have or might not be interested in acquiring. For example, when the company gets to a certain size, it will require leadership in different departments or areas. Some founders can adapt to these changing conditions, others are better off finding a new idea for a new startup.
The market is changing
When you started your business, the market was ripe for a certain product, but the market trend is changing and it looks like your product or service will become inconsequential. This is an obvious point, but if you don’t keep your eyes peeled for changes in a fast-paced market, you might be caught with a company that has lost its market edge. An example is Kno, originally known as Kakai Inc. which only lasted four years. The company’s tablet flopped when Apple took over the tablet market and the company’s shift to an app-based textbook platform failed to garner interest.
Your business model is failing or not attractive
A company must have a viable business model to succeed. Simply put, this means you need to generate more income than costs. It sounds very simple, but it is not at all simple to achieve. One of the reasons the online tutoring marketplace Tutorspree failed was that once the tutor and student met up with each other, they were able to meet up and work together without the aid of Tutorspree. This meant the company lost out on its share of the fees.
On the other hand, you might come up with a viable business model, but you might not want to run your business like that. For instance, setting up a call center might boost your sales, but you might hate the idea of running a call center.
The cost of a winning team might be too high
An edtech company that depends on tech can’t compromise on quality and quality tech professionals come at a high financial cost. If you can’t afford the professional expertise you need to turn your educational technology idea into reality, you may be on a losing track. Unless you can convince top people you work for next to nothing, it might be time to sell.
Ultimately, there are many reasons for a founder to sell the company and move on. It might be a difficult decision, but it may also be the beginning of a new edtech adventure.