Classroom to Cloud: K-12 PLG Moment

In part 1, we delved into the pressing challenges of the teaching profession and the vast opportunity for innovation, especially in the age of artificial intelligence.

However, the path to monetisation and impact in K-12 may remain unclear for most.

The primary reason for this is the distinction between the buyer and the end user in the K-12 landscape. Often, the buyer for the solutions (parents, schools, districts) is not the end user (children, students, teachers). Meaning incumbent models have traditionally had to navigate extended sales cycles, sometimes spanning years, while often selling multiple times.

Consider Larry Berger’s depiction of Wireless Generation’s sales journey into schools and districts:

Our sales process often involves winning the support of state policy people who oversee the relevant funding streams, academic consultants who advise the districts, key school board members, the district curriculum leadership, the special education department, the office of research and assessment, the chief information officer, the director of IT, the principals, the reading coaches in the individual schools, the district lawyers (we store personally identifiable student data) — and then finding the person in procurement who can figure out how the district will pay for it all.

Such a complex process underscores the challenge startups face in this sector, especially when speed to market is crucial for their success.

So, what alternative do K-12 entrepreneurs have?

Product-Led Growth (PLG)

Coined by Blake Bartlett, PLG is where a product itself acts as the primary driver of activation, retention, and expansion.

“When the friction is removed, and time to value decreased, a company gets closer to true marketing nirvana — using your product as your primary marketing asset.”
— Blake Bartlett, Partner at Openview Partners

Since then, PLG has become one of the biggest trends in software, proliferating across industries. Some of the most valuable companies like Atlassian, Dropbox, and Zoom used PLG to achieve hyper-growth and top decile capital efficiency.

But why is it so effective?

A golden rule in sales is the faster you make someone go “aha”, the better.

A well-executed PLG strategy does this by inverting the traditional enterprise sales cycle to shift the customer’s “aha” moment from the end of the sales cycle to the very beginning.

By doing so, a company is able to avoid spending significant activation energy needed to get approval or “greenlighting” to launch a pilot test of the product. Another way to think of PLG is that it enables your product to be deployed as a “permissionless pilot” to the end user, still within the environment of an organisation.

This helps companies break free from a catch-22 situation found in enterprise sales where customers rarely experience the “aha” moment until they see the product function within their own environment.

Given this transformative approach, we believe that every sector influenced by software will eventually arrive at its PLG moment.

For K-12 Edtech, that moment is now here!

K-12 Edtech’s PLG Moment

Across the K-12 sector, several companies in the last decade have rapidly risen to serve tens of thousands of schools and millions of students, with some even engaging millions of teachers in just a few short years.

Newsela, ClassDojo, Nearpod, Pear Deck, Prodigy are examples of such companies.

Digging deeper, these pioneers succeeded in the same way Slack, Mailchimp, and Auth0 did in consumerising the enterprise. This meant replacing the traditional top-down sales approach in K-12 with a consumer-friendly, product-forward approach. By building products that end users themselves can activate, use, and get instant value at no cost (B2C), companies were then able to leverage these same user’s goodwill and advocacy to engage with school and district buyers (B2B).

More importantly, their success disproves the axiom that K-12 Edtech companies are forever destined for long, expensive top-down go-to-market motions.

To hammer home this point, 45% of today’s top 20 applications used in schools are PLG companies.

Why Build For Teachers?

If your core value proposition addresses teachers, you should first focus directly on building for teachers. Even if schools and districts are the ultimate payers of your solution.

Here’s why.

Tighter feedback loops equal faster iteration cycles. The most critical area for startup founders to get right at the start is finding product-market fit (PMF). If failing is a necessary evil, intentionally creating faster feedback loops between your product and teachers is critical to establishing PMF quickly, even with the required pivots to get there.

“Launch, learn from users, iterate — that matters a lot to achieve the business impact.”
— Kate Syuma, Head of Growth Design at Miro

At the end of the day, if your product doesn’t accurately solve the problems teachers face, it’s unlikely to succeed.

A shorter sales cycle and faster velocity to market equals less risk. As a startup selling to schools or districts, the required activation energy will be at its greatest. You’re expected to educate the market, prove efficacy, and build trust. With limited capital and resources, committing to school or district sales is a high-stakes game that has resulted in far more losses than wins.

User love equals a greater likelihood of WOM virality. Teachers who become power users are likely to spread the word. Whether it be in water cooler chats in staff rooms, social media, or communities like PioNears, Kami Heros, r/Teachers (one of the largest and most active communities on Reddit!), etc.

Teachers also love sharing data and content with each other which presents opportunities for you to develop viral loops in your product.

TL; DR. Building for teachers first enables you to be more capital efficient when finding PMF, establishes the “aha” moment upfront, reinforces teachers' habits around your product’s core value, and drives long-term sustainable acquisition, retention, and monetisation (B2C & B2B).

Now, let’s look at ClassDojo as a case study to bring this all to life.

Case Study: ClassDojo

Founded in 2011 by Sam Chaudhary and Liam Don, ClassDojo's mission is to help communities of teachers, parents, and students work together to transform education from the ground up, in every classroom in the world.

ClassDojo's core product serves as a communication tool for overseeing classroom activities, facilitating regular and positive exchanges between teachers, parents, and students. This involves showcasing classroom events and the skills students are developing, through images, videos, and messages.

“Our view from the start was actually that the idea of districts isn’t the customer of education, [that’s] kind of backwards…it’s like Airbnb saying we’re going to transform travel by selling to hotels.”
- Sam Chaudhary, Co-Founder & CEO at ClassDojo

From the very beginning, ClassDojo took the approach of speaking with teachers to understand what they needed most. That ground-up approach helped them develop a product for teachers to build supportive classroom communities with their students and parents. And for years, it was teachers that were using the platform individually, to create their own classroom communities.

However their success would remain hidden to outsiders for a large part of their journey. For the first 8 years as an startup, the company had zero revenue, no paid users, and a humble team of 55 people. But beyond its financials was a product that was spreading organically, engaged with and loved by over 10 million users.

Unlocking teacher love would ultimately see ClassDojo spread quickly from one classroom to every classroom within schools. Within the first week of launching its school leaders program (2016), 5% of principals in the US had signed up for its waitlist to seek ways to go beyond individual classroom communities, to create a whole school community. The result of this was the launch of its schoolwide features that drove even greater and stickier adoption.

Staying true to its original focus of serving the consumers (students, parents, and teachers), ClassDojo would launch its first subscription service in 2019, Beyond School. Built on the pain point of teachers wishing they had more time to teach and parents wishing to know what they could work on with their children, the service would drive ClassDojo to profitability within 4 months of launching.

Today, ClassDojo is ubiquitous in K-12 education, serving over 50 million users across 180 countries. Their latest funding was announced in 2021 when it raised US$125 million Series D led by Tencent which valued the company at US$1.25 billion.

Conclusion

“Selling” to teachers does not mean to act as the primary source of monetisation but as the framework to promote teacher adoption. And the matter of fact is that the B2C2B model is becoming inevitable in K-12 and presents the path of least resistance to disrupting incumbent solutions and a system traditionally adverse to digitisation.

Of course, there are exceptions to implementing as not all applications can be sold directly to teachers. And there is no magical GTM channel for startups when releasing a new product to market - all permutations of GTM carry their own risk-reward profiles.

But with the recent proliferation of devices in schools (and in teachers’ and students’ pockets), my goal is to highlight an alternate approach that is more possible than ever for K-12 entrepreneurs.

To completely unpack a pragmatic playbook to execute PLG would require multiple articles. Fortunately, many others have covered this topic in-depth. I’ve shared links to some of my favourite resources below.

Lastly, I remain extremely appreciative of the work our teachers do and believe that so much more can be done by my work at Aura Ventures, along with our industry, to help. If you are running a PLG company in K-12, I’d love to hear about any lessons learned that you would like to share!

Additional Readings:

• https://openviewpartners.com/blog/product-led-growth-strategy
• https://grahamforman.medium.com/next-generation-go-to-market-gtm-has-arrived-for-k12-b2b-eba979867523
• https://www.reachcapital.com/2019/10/11/designing-with-educators-at-the-center/
• https://grahamforman.medium.com/key-product-led-growth-plg-measures-and-benchmarks-for-k12-b2b-edtech-companies-7082ffe6c358
• https://www.blackbird.vc/blog/finding-gtm-plg-series-1
• https://medium.com/reach-capital/lessons-from-nearpod-35cf240896ae

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