Marketplace Models Hit Education: 5 Lessons from #OnDemandEDU
From Uber to TaskRabbit, on-demand labor marketplace start-ups have taken off in recent years, and education is proving no exception. Edtech-specific applications of the “sharing economy” were the focus of an “Education On-Demand” panel last Thursday at 1871, a tech incubator and coworking space in downtown Chicago. Organized by Educelerate, Inc. (a not-for-profit, grassroots network of education innovation-oriented meetups of 3,000 members in Chicago, Twin Cities, Colorado and LA), and sponsored by Pearson, the panel brought together four cofounders and one head of product, all working in edtech startups that have adopted the marketplace model.
The panel included representatives from WyzAnt (marketplace for tutors and the oldest of the featured startups) as well as upstarts like Admissionado (marketplace for admissions consultants), Mntors.com (marketplace for career and college mentors), The Graide Network (marketplace for K-12 grading support) and Adjunct Professor Link or “APL” (self-evident). With such a breadth of experience, panelists nonetheless found a lot to agree on, including five key takeaways below.
The Marketplace Advantage
It’s no surprise that the panelists all agreed that on-demand labor scales well. However, many have found that the marketplace model also means better economics and service. Peter Le, founder of Mntors.com, noted his motivation in building a marketplace model for its ability to cut out a lot of margin to lower the cost of educational services to end users.
But it’s more than cost, said Admissionado COO Lauren Herskovic. The company has a service advantage in that its model attracts enthusiastic experts: individuals with full-time jobs who want to help students out of passion. And the marketplace model uniquely allows them to spread out demand more smoothly and across more consultants during peak college application season. Likewise, Liz Nell, co-founder and chief revenue officer of The Graide Network, noted that its TAs aren’t just “hired hands.” They’re developing educators eager to get some hands-on experience.
Don’t Call Us Uber
As director of product at WyzAnt, Erika Warren was quick to qualify what marketplace really means for education startups like hers. “We’re not the Uber of tutoring,” she said. “We have to challenge the assumption that marketplace automatically means the commoditization of a product.” In fact, she added, WyZant creates flexibility and options for its users, turning the traditional education model on its head. With the ability to choose the tutor that’s right for her particular needs, the student is in control.
In addition to bad Uber associations, APL Founder and CEO Kathleen Gibson noted her company must deal with the fact that “adjunct” itself has become a pejorative term. She argued that this is a trusted model going back to guilds and the origins of universities, which uniquely affords cutting-edge talent to fill faculty skills shortages.
Growing Supply to Attract Demand
When launching a two-sided marketplace, one key challenge is that in order to attract service providers, you need to prove there’s demand—but you can’t create much demand without service providers. Gibson referred to loopholes around this chicken-or-the-egg conundrum as “faking the chicken.” After building out its supply of adjuncts, APL now avoids selling this labor pool to higher-ed administrators or HR departments, but instead directly to the academic wings of its university clients. Similarly, Nell’s team at The Graide Network has found greatest success with grassroots outreach to educators versus going through administrators. “When we’ve gone directly to teachers, they seem to get it,” she said. “But when the message is being delivered by a principal, it comes across as just more work being handed on down.”
The “Happy Mom” and Other Viral Marketing Strategies
In a discussion of the best growth-hacking tactics, all panelists emphasized the importance of word of mouth. Herskovic dubbed this “the happy mom” effect. “Moms trust moms and dads trust dads,” she said, adding that her team conducts exit interviews with all parents and creates video testimonials that get posted online. Mntors.com’s Le may have had the most clever tactic: His team creates free career advice webinars that attendees must share on social in order to attend.
Quality Control in a Higher-Stakes Game
When the service you’re selling is education, quality control is paramount. As Herskovic noted, education involves far higher stakes than delivering hot dogs. Early on at Admissionado, she was cc’ed on every single email so she could simply watch. Today, the company rigorously screens its advisors and partners them with other advisors to create a system of checks and balances.
Likewise, all 80,000 WyZant tutors have been manually vetted by a team member, not leaving such an important piece of their value chain to automation. These measures are fairly expensive, but all panelists felt they were well worth the cost.
