Sharp Scholar was started by Jawwad Siddiqui and some friends. Siddiqui was a junior at his university and was dissatisfied with the varying quality of
instruction in his classes. SharpScholar was a software
platform designed to better connect students and teachers.
For teachers, it allowed them to upload content, add
interaction, engage students, collect analytics on what was
being learned and what was being missed, and improve
their teaching. For the student, the platform acted as a
coach so they could learn the material and come to class
prepared.
At its peak, SharpScholar had 5,000 students, five
top universities in Canada, and 12 professors signed
on. The service received plenty of attention. The founders
appeared on Dragons’ Den, Canada’s equivalent of
Shark Tank. They were offered a $100,000 investment for
a 15 percent stake in the company, but turned it down.
They won awards, got accepted into a prestigious incubator,
and interacted with people at the Khan Academy,
GoogleX, and other high-profile organizations. Yet, after
only two years in business, SharpScholar shut down.
What went wrong?
In a thoughtful blog post titled “We Shut Down Our
Edtech Startup. Here’s What We Learned,” Siddiqui
offered four pieces of advice for entrepreneurs based on
SharpScholar’s failure:
Have a Direct Relationship with Your “Customer”
SharpScholar struggled to identify its customer. Was it
the student, the teacher, the school administration, the
government? They were all intertwined. This meant if a
teacher liked the product he or she would have to keep
in mind the student, the budget, the school policy, and
even get approval from administration. This factor complicated
SharpScholar’s relationship with the teacher. It
also resulted in a lack of focus with respect to for whom
the firm was tailoring its product.
Lesson Learned: Teachers (and others) don’t like to
use tools that require different layers of approval from others.
Make products that do not require multiple layers of
approval to be purchased.
Don’t Confuse Your Customers, Consumers, and
Capacity to Pay
In most industries, the person who pays for a product
is the one who uses it. This is often not true in education.
The person who uses the product (teacher and/
or student) is often not the one who pays for it. Teachers
sometimes have budgets—but not always. Parent
groups and nonprofit organizations sometimes help—but
that is hit and miss. Funding from school districts for
technology products varies dramatically from district to
district.
Lesson Learned: A business model that relies on a different
person or entity to pay for a product than the one
who uses it is a challenging model.
Beware the Priority Gap between You and Your
Customer
Teachers and entrepreneurs have priorities that don’t
always align. An entrepreneur that has a technology product
to sell wants to close the sale and get the product
in the classroom. Teachers think about setup time, how
much effort it will take to learn and integrate the tool into
their lessons, what to do about kids who lack access to a
smartphone (if the tool is an app), and so forth.
Lesson Learned: Entrepreneurs want to make sales and
grow their businesses. Teachers want to take their time.
This gap can be so large it causes an edtech start-up to fail.
We’re Used to Free
The flood of free tools—from Facebook to Google to Dropbox
(basic version) to Google Docs—has primed people
to expect certain services to be free. In addition, many big
companies that make their money from consumers and
businesses offer educational versions of the product for
free or at deep discounts.
Lesson Learned: Many target customers in the education
space (and other spaces) expect products to be free.
So, when you’re thinking about launching a company
ask yourself the following questions about the industry
you are about to enter. How many layers of approval will
my product experience prior to the purchase decision
being made? Is the person who pays for my product the
one who uses it? Will the priorities of my company be so
different than the priorities of my customer that I could
fail? And finally, how accustomed are my customers to
getting products similar to mine for free?
Questions for Critical Thinking
1. What lessons does SharpScholar’s failure have for
entrepreneurs who are considering entering the EdTech
industry?
2. We studied business models in Chapter 4. Would you
classify SharpScholar’s business model as standard or
disruptive? What types of execution-related challenges
are associated with the type of business model you
believe SharpScholar sought to implement?
3. As explained in this feature, SharpScholar did not have
a precise image of who was the firm’s target customer.
Examine the “bargaining power of buyers” from the
perspective of the different customers mentioned in
the feature who may have been SharpScholar’s target
customer. Which of the potential target customers
would possess the greatest amount of buyer power
relative to SharpScholar and why?

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