Slight disagreement on the quality/cost problem. The big challenge isn't having a market. One of the reasons there is so much competition is that people will look at the leading players and think, "if they can sell that for $500 then I can make a lot of money with a better and cheaper product." This encourages a flood of really low quality education products that saturate the market and create a barrier to entry for new startups.
The thing most founders don't realize is that most of the revenues from high-priced products are used to fund advertising and customer acquisition strategies, so competing on price is very difficult because - ironically - it hurts your ability to scale in the short-term. This makes bootstrapping tough because if you charge the prices necessary to get users you have to compete at the same level of quality as the established players, while if you charge less you will have trouble getting users. Meanwhile, the extreme competition makes SEO near impossible (our organic search figures are dismal - our growth is ALL word of mouth).
This is why there is so much snakeoil in the industry: distribution trumps quality. The companies that survive tend to be the ones that take a shotgun approach to maximizing visibility rather than actually focusing on how to provide a better education. I personally believe focusing on quality at low cost IS a winning approach because once you achieve dominance you undermine the pay-to-advertise business model, but you have to figure out how to cover your costs and grow into that position organically. And this is simply not possible for startups that have expense structures that require them to get funding.
I've been told by public listed companies not to enter our market because they were going to own it in X years by giving away both the cow and the milk. I've seen competitor after competitor flame out because they thought getting users would be easy, produced crap and discovered that no-one came. But if you can produce something that people use and care enough about to help spread word, you can do it.
Slight disagreement on the quality/cost problem. The big challenge isn't having a market. One of the reasons there is so much competition is that people will look at the leading players and think, "if they can sell that for $500 then I can make a lot of money with a better and cheaper product." This encourages a flood of really low quality education products that saturate the market and create a barrier to entry for new startups.
The thing most founders don't realize is that most of the revenues from high-priced products are used to fund advertising and customer acquisition strategies, so competing on price is very difficult because - ironically - it hurts your ability to scale in the short-term. This makes bootstrapping tough because if you charge the prices necessary to get users you have to compete at the same level of quality as the established players, while if you charge less you will have trouble getting users. Meanwhile, the extreme competition makes SEO near impossible (our organic search figures are dismal - our growth is ALL word of mouth).
This is why there is so much snakeoil in the industry: distribution trumps quality. The companies that survive tend to be the ones that take a shotgun approach to maximizing visibility rather than actually focusing on how to provide a better education. I personally believe focusing on quality at low cost IS a winning approach because once you achieve dominance you undermine the pay-to-advertise business model, but you have to figure out how to cover your costs and grow into that position organically. And this is simply not possible for startups that have expense structures that require them to get funding.
I've been told by public listed companies not to enter our market because they were going to own it in X years by giving away both the cow and the milk. I've seen competitor after competitor flame out because they thought getting users would be easy, produced crap and discovered that no-one came. But if you can produce something that people use and care enough about to help spread word, you can do it.