Listening To Educational Entrepreneurs

The pandemic and its aftermath has created more fertile ground for educational entrepreneurship than perhaps any other sequence of events in my lifetime. Millions of parents across the country became frustrated and disillusioned with their child’s school and started to look for something better. Entrepreneurs rose, and continue to rise, to the challenge, creating new schools and learning environments, new educational tools, and improving the pipeline of teaching talent into education.

To better understand the water in which educational entrepreneurs are swimming, I surveyed nearly 60 of them, asking a battery of questions about their backgrounds, their goals, their successes, and their challenges. What I learned was fascinating.

First off, the sample itself. The survey had an admittedly small sample size even after casting a wide net for potential respondents (entrepreneurs are busy people!). That said, those who did respond were overwhelmingly women (76% of respondents), and had lower income, on average, than most statistics on entrepreneurs would predict. They also tended to be experienced educators, with 81% of respondents reporting that they had at least 10 years of teaching experience. I would never claim that this is a representative sample of entrepreneurs in general or educational entrepreneurs in particular, but it does offer an interesting look at a population of entrepreneurs that many organizations have been trying to create more of in recent years. Understanding their needs and challenges could be very helpful in fostering more entrepreneurs from these historically underrepresented demographic groups.

Second, educational entrepreneurs find funding in surprising ways. Sourcing adequate funding was the number one hurdle that entrepreneurs identified. When asked where they found funding for their ventures, the number one response was “personal funds.” “Private tuition” in second place made sense, as many of these ventures are schools or innovative learning environments. But I did not expect to find “friends and families” in the third most popular position. But there it was.

When broken down by the income of the entrepreneurs, even more interesting results emerged. While 69% of lower-income entrepreneurs said that they had received funds from friends and families, only 35% of middle-income entrepreneurs said so, and only 18% of high-income entrepreneurs did. Only 18% of high-income entrepreneurs received philanthropic support while 62% of low-income entrepreneurs did. Only 9% of high-income entrepreneurs received funding from accelerators, while 54% of low-income entrepreneurs did. Higher income entrepreneurs were much more likely to obtain funding from corporate partnerships and sponsorships and bank or business loans.

Third, for all of the talk about creating more hospitable environments for entrepreneurship and thinking about favorable regulatory regimes, most of the entrepreneurs I surveyed chose where they worked for deeply practical reasons and were generally not bothered by existing regulations. When asked why they operate where they do, the number one answer by far was, “it is where members of our team live.” Seventy-five percent of survey respondents selected that. In a distant second was “our target consumers live there,” and only in third place, at 14% of respondents, did we see “favorable regulatory environment.”

Now, the story is a bit more complicated. Those who identified regulation as a challenge (which around a quarter of respondents did) indicated that it was a big issue. In fact, 40% of those who identified regulations as a challenge said it was “extremely influential” in determining their venture’s success, and 27% said that it was “very influential.”

It is possible that the survey simply captured different types of ventures or ventures at different points in their lifecycle. Perhaps some new ventures, like those starting a small school or an enrichment program for a small number of students, don’t really encounter onerous regulations all that much, but those that are looking to open new centers, grow, scale, or cross state lines start to. Once they do, regulation becomes a big deal.

And, it is always important to note when conducting a survey of this kind who wasn’t a part of it. I was not able to capture those who wanted to be educational entrepreneurs but had to stop because of the barriers they face. The survey doesn’t capture those who are thinking about it now but are not able to justify the cost/benefit analysis because of the obstacles that they need to overcome. The entrepreneurs who responded to the survey provided more than enough guidance to those who are looking to promote entrepreneurship, but their thoughts should be seen as the start of a conversation, not the end of it.

Access to capital, help navigating regulations, and support for educators who want to become businesspeople is a short but simple summary of what entrepreneurs say that they need. If we want to see more educational entrepreneurs, we need to figure out how to support them with information, resources, and training so they can thrive in an evolving K-12 education ecosystem.