In spring 2021, Amir Nathoo was at the helm of one of the most talked-about startups in the massive and fragmented educational technology (EdTech) industry. Just six years earlier, Nathoo and his partners had founded Outschool—a marketplace for live online classes for children taught via videoconference software. From the start, Outschool experienced robust growth. But as the COVID-19 pandemic shut down schools all over the world, demand for Outschool—like that of many EdTech platforms—exploded. In 2019, Outschool sold $7 million in classes, a respectable figure that represented strong growth. The business offered 8,000 courses to 30,000 students. By 2021, Outschool’s numbers had ballooned to $130 million in annual revenue, 100,000 course offerings, and 900,000 registered students. Outschool also turned a profit for the first time. What’s more, Outschool had become a truly global operation with students in 174 countries. As Nathoo reflected on his young company’s exponential growth, he also thought about its strong financial foundation—$230 million in venture funding and a valuation of $3 billion.

Markets can be segmented along several dimensions. How did the founders of Outschool segment the market?