The Education Sector in India continues to attract entrepreneurs, attracted by the huge opportunity and market size of this sector, and the relentless shift from public to private education. The potential opportunity of providing Educational Solutions is huge, with reports placing the total sector size at around 1.5 million schools, with over 25% of them being private schools. Add to that the dramatic shift in enrollments away from public schools to private schools (Private schools now secure 40% of enrollments), and the private school sector itself offers a rapidly growing segment.
What is unique about this sector? At first glance, this K-12 School (a term used Kindergarten through XII grade) sector does appear very attractive. However, the street to success is littered with several failed start-ups. We would recommend that Edu-preneurs understand the sector really well before defining product strategy and their Go To Market model.
Lengthy Sales cycles – The Schools Sector is highly fragmented. There has been no consolidation in the sector, and this is also unlikely in the near future, due to regulations that make it difficult for corporates to enter and for existing leaders to access large sums of capital. As a result, winning market share is a slow process that requires the addition of customers school-by-school and city-by-city.
You should expect and plan for lengthy sales cycles and relatively higher sales costs. An additional complexity is that there are numerous decision makers, and it is difficult to sometimes identify the correct decision maker. As an example, many schools are governed by trusts comprising of numerous members, who are difficult to access. Some schools require that new educational products be also approved by the PTA committee, presenting an additional hurdle and delay in the sales cycle.