March 4, 2022

B2B Growth for EdTech Startups with Ben Kornell

How founders can create a profitable B2B sales model

Middle school teacher turned EdTech Consultant, Ben Kornell talked us through his journey building AltSchool, which was recently acquired by Higher Ground Education. He draws from his experience teaching and in the healthcare industry to break-down exactly how founders can create a profitable B2B sales model.

Ben spoke about the mismatch between intention and outcome when it comes to learners achieving their true potential - this is what successful EdTech focuses on. A good product is just the first step towards bridging this gap, because scaling innovation takes both adaptive and technical change.


So what strategies support adaptive growth?

Know that customers come from both the total addressable market and the total addressable users within the market. AltSchool went from 300K to a million users within three weeks of the pandemic and most of this growth came from customers who were underutilizing the tool.

It's all about Customer Acquisition Cost (CAC) and Lifetime Value (LTV).

Sustainable, long-term growth comes by either increasing LTV or by lowering CAC - ideally both. Some strategies to do this include generating a service based model where customers pay a premium to learn how to unlock value from the tool, guaranteeing better product implementation in the long run. Another strategy Ben mentioned was using customer testimonials and word of mouth to market the product once there is a little bit of traction.

No one washes a rental car so let users own it!

When there is no sense of ownership, people are less likely to engage with the product, so adding an element of customization is very helpful. When targeting educators, try creating only 80 percent of the curriculum and let teachers build the rest in their own way. If students are the main audience then adding avatars or peer-to-peer interactions can be game changers.

Short term business thinking is kills EdTech 

Quality and scale are related. So if you scale up too quickly without a solid product or service then customer retention rates will be low. This is far from ideal since the key to EdTech is high LTV as CAC often ends up becoming a big overhead. Fundraise for the long-game and pace yourself as you grow.


What are some business models that work?

Subscription is not always the best idea

Sometimes all access subscription can devalue the product in the customer's eyes. For example with teacherspayteachers they work on a unit by unit model which is more expensive to the user but helps them be more intentional with their purchases. 

Considering a hybrid model is recommended

Such as looking at a membership subscription which leads to discount on purchase units (such as UberOne). Another good example is prodigygame which is  free to learn but there are premium access features for further gamification.

How do I drive B2B sales?

Aspirin vs. vitamins

Different users have different pain points - a good sales pitch is the result of mapping these out for the various user types you are targeting. With B2B sales, the threshold is for buyers to be satisfied and that's what needs to be focused on in contrast to a B2C model where the threshold is for users to have their minds blown.

Founders need to close early deals themselves 

The first few deals are about building trust in your company and finding those “champion customers” who can lead to further growth through good recommendations. A sales team can come in later, once you have stacked together enough small wins to move ahead from.

Be less apologetic about charging

Know the worth the product is bringing to the customer and the cost is directly correlated to the value generated. Try focusing your pitch around that and create ways to help the user find funds from within their budget.


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