Understanding the Education Customer

VCs and entrepreneurs tend to be well educated.†Well educated people think about education as an investment.†You put as many of your resources in to an investment as you can. It may take 20 years to pay off, but if the return-on-investment is high (which it is for education) then you invest. This group of people ó if youíre reading this, you fall into this group ó generally understand that education is an investment, and as a result are price insensitive and will optimize for quality (a higher return on investment).†For this group of people, quality is the primary driver of a purchasing decision, not cost.

The average, middle class person thinks about education as an expenditure, not an investment.†Itís something they have to do because itís mandated†and the lack of the highest quality education hasnít negatively impacted their lives in a meaningful way. Step back for a second before you judge. Imagine itís 2005, and you live in a small town in the middle of Ohio (where I grew up) and you donít get a college degree. If you get a factory job and make $25k/year and your wife gets a factory job and makes $25k/year, youíre making $50k/year. But houses only cost $90,000 and food is affordable and you can get a loan for a car for $300/month. So youíre not doing terribly and the default state for your children is the same life. You can afford a house, food, have a car, and have weekends off.

So, what has the lack of an education done to the typical Americanís life? Itís removed job security, screwed your retirement, and maybe set you up to go bankrupt if you get sick.†There are no immediate consequences, there are no immediate consequences for your children, but there is an immediate cost. So the average person thinks of education as an expenditure.†If you get sick when youíre 70, youíre screwed. Or if you donít save in your 401k, you may have to work till youíre dead. Or maybe your children wonít be as competitive in a global workforce 30 years. Donít believe me? Only 15% of kids taking the SAT pay for an out of school test prep course like Kaplan. Over 50% of Americans donít have beyond a high school degree.

This fundamental investment vs. expenditure mindset changes everything.†You think of education as fundamentally a quality problem. The average person thinks of education as fundamentally a cost problem.

Notes:

Folksonomies: education technology software solutions it start ups

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/education/high school (0.354362)

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Middle class (0.610561): dbpedia_resource

 Why Education Startups Do Not Succeed
Electronic/World Wide Web>Blog:  Garg, Avichal (OCTOBER 7, 2011), Why Education Startups Do Not Succeed, Retrieved on 2017-11-16
  • Source Material [avichal.com]
  • Folksonomies: education technology solutions it start ups