Making impact core to education companies’ business strategy

In previous blog posts, I’ve repeated the challenge that perplexes India’s education sector: even after expenditures totalling more than USD $100 billion in the state and private sectors, student learning outcomes fail to improve. Furthermore, the business of K-12 education—and the products and services that can improve it—don’t see significant growth rates.

There are numerous reasons why companies struggle to establish themselves in a market with such enormous demand and private players find it cumbersome to venture into the field: the regulatory challenges of operating schools, the restrictions placed on entities that open schools (non-profits only are allowed), and the 2009 RTE Act infrastructure requirements.

If we look past the business of K-12, other challenges to bring new products and services to market surface:

  1. Several mediums, languages and cultural contexts exist are coupled with an absence of clear academic standards for grade-appropriate learning.
  2. The large private schools and government schools marketplace, it is difficult to access, and the private schools market is fragmented and often plagued by unclear decision-making.
  3. Private companies looking to enter the market are hindered by the lengthy procurement process and delayed payment cycles in the India government education system.

The rare, private enterprise given the opportunity to sell its products or services is also faced with perhaps the most daunting feat of all: proving economic and social value.  With so many hurdles to cross, education companies must still make quantifying their impact—and communicating those findings to the masses—a priority.

With so many hurdles to cross, education companies must still make quantifying their impact—and communicating those findings to the masses—a priority.

Measurable impact

Test prep companies such as Byju’s, Mahesh Tutorial, Embibe, Toppr and Avanti, are attracting capital as fast as they are scaling their operations to support demand. These companies that promise to help students qualify for college entrance exams can measure and communicate direct impact on student performance.

The play school segment, which lacks regulatory hurdles yet appeals to paying parents, continues to grow.  The impact of companies such as Tree house, Bachpan and Klay is easily demonstrated to parents by the number of children able to make it to ‘big’ school.

Unfortunately, it isn’t feasible to measure the efficacy of K-12 products and services at this point. Of the many evaluations of learning outcomes, most do not apply rigorous standards nor use replicable tools. The data collected yields analysis that are not actionable or objective. The insights to help teachers improve classroom practices are still missing.

We submit that evolving a set of common benchmarks is a positive first step toward creating systems that accurately measure the value of K-12 products and services . To measure the impact of the foundation’s investees, we have been collaborating with several agencies to develop an assessment framework guided by the following principles:

  1. Provide absolute levels of age and grade-appropriate competencies as compared to the National Curriculum Framework and measure relative improvements in student learning levels to understand investee impact
  2. Use common assessments which can be used across different mediums and geographies
  3. Articulate results in a simple and understandable fashion

The methodology has allowed us to report standardised results, regardless of the nature and geographical location of the investee.

The framework is proving to be a useful tool for companies, as well.  Recently, an investee won a 1,000-school contract with the government of Karnataka by demonstrating improved academic outcomes during a two-year pilot, all the while, implementing rigorous measurements.

In education, measuring impact is a prerequisite for all scalable education ventures —and it makes sense.  Education companies seeking a stake in the K-12 market can increase their offerings’ impact by first defining and understanding grade competencies, then evolving products or services to better achieve their desired effect.

Read other blogs in this series:

Exceptional education partners have made significant progress in India

Could parents be the key to revitalizing the education sector?

Invigorating education with informed, early-stage investing