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In our latest EdTech Mentor Interview, we had the pleasure of speaking with Tiago Mateus, a seasoned EdTech go-to-market expert with over 20 years of experience. Tiago shares his journey from co-founding a startup to leading significant roles in the EdTech industry. He provides valuable insights into the unique aspects of the EdTech sector, the significance of go-to-market strategies, and the future trends that could shape the industry. Join us as Tiago delves into the challenges and opportunities within EdTech and offers strategic advice for startups looking to thrive in this dynamic field. Read on for an in-depth conversation with Tiago Mateus.
I'm Portuguese-American. I grew up in a family that's very passionate and serious about both education and the arts. I completed the International Baccalaureate, studied at the Wharton School, and attended INSEAD. My parents worked for the World Bank and the IMF, and I ended up living in five countries and speaking four languages. Thank you, mommy and daddy. Now I live in West London with my wife, two lovely kids, and a cat. My favorite hobbies are running, spending time with friends and family, and doing a lot of art.
In terms of my career, I have over 20 years of experience working for organizations of all sizes. For example, I co-founded my own venture, worked for a scale-up, and also worked for a global enterprise. In the first few years of my career, I worked in banking and a few SaaS startups. I ran my own venture called Sooqini, a task marketplace. Thereafter, I joined the wonderful world of EdTech and assumed several commercial leadership roles.
I first dipped my toes into our industry through my first startup, Sooqini, where we connected university students in an on-demand marketplace and they tutored each other, made money, and helped each other survive through university. It was very exciting. I even appeared on TV and spoke about our multiplying impact on education and employment in the UK.
I also worked for a company you might know well, Blackboard (now Anthology). During my time there, I worked on some exciting partnerships and helped shape the go-to-market unit for Blackboard's International division. I was CEO of Immerse Education, where we enjoyed explosive growth and expanded our residential offerings into many different markets. Lastly, I was Chief Revenue Officer of a great company called ODILO. During my tenure, we transformed the company into a true blue ocean, creating our own category of unlimited learning ecosystems. We scaled from very little to 100 million users across many countries. Today, ODILO is on its path to unicorn status. I met a lot of great people and learned a lot during my journey at ODILO, which still remains a big part of me today.
One thing that has come to my realization about the industry is that it’s one of the very few that’s truly purposeful, dynamic, and constantly innovating and evolving. Depending on your perspective, it is always refreshing. At the end of the day, it’s important for everyone. At the highest level, having a good, quality education is, in my opinion, the bedrock of all success.
From my perspective, a go-to-market strategy encompasses the different activities and strategies that are customer-facing and impact all elements of the customer journey, from acquisition to activation to renewal and expansion. It touches on various elements of the institution that are customer-facing, like sales, marketing, and client success.
Growth essentially means generating revenues at ideally a faster rate than the past, and ideally, outpacing the rate of the industry.
You recently published the first go-to-market report for the EdTech industry, where you shared some interesting insights on how organizations in our sector can thrive in 2024 and beyond. Can you tell us about the companies included in the report and provide a summary of what we can find?
I really enjoyed putting it together, and it’s available on The EdTech Growth Newsletter. To be clear, these top 250 EdTechs were shortlisted by Time magazine and Statista, following their proprietary framework that covered industry expertise, growth trajectory, and the value of their IP. They also considered the financial and potential impact on the community.
The report highlights some characteristics of these categorical leaders. First, those on the list have excellent product-market fit and tend to serve vast markets such as Brazil, China, or the US. Second, they solve critical challenges, such as improving literacy, STEM education, or developing digital skills. Third, the CEOs running these companies are truly visionary and hire great teams, leading to resilience and rapid growth even in tough markets. Lastly, some companies dominate specific niches with large addressable markets, like test preparation in Brazil or education for music.
To be fair to the report and all the participants, there are so many great companies, and there's growth everywhere, whether it's K-12, higher education, adult learning, B2B, or has a direct to consumer operating model.
To pinpoint a few specific segments, I think accreditation of online courses, both for lifelong and formal learning, is a hot area. Verticalized platform partners consolidating different capabilities and focusing on solving specific pain points in a specific market are also attractive. For example, a company that has an LMS, SIS, and good reporting capabilities that supports the academic cycle of primary and secondary school students. Language learning is another segment with significant potential, especially those with a proven pedagogical framework.
Good question. The report shows that one in five companies today explicitly promote their AI capabilities as part of their core value proposition. Many more are also likely still integrating these capabilities into their tech stacks. Some companies with mature products are adding AI-powered features, while others are embracing AI holistically from the start.
Areas with significant impact from AI include content creation, where AI drastically increases the speed and quality of creating content and courses, making them more digestible, aligned with pedagogical frameworks, and interactive. Knowledge management is another area where AI unifies and queries organizational knowledge to aid decision-making. Adaptive and personalized learning is also notable, especially when specialized in specific content areas or age groups, such as middle to high school math or TOEFL preparation.
On the negative side, data security is a concern due to the ease with which AI can be accessed, leading to potential breaches. Interconnectivity and interoperability issues with AI products also pose challenges. However, this has catapulted the rise of cybersecurity and centralized platform players focused on education, and many tend to be performing quite well.
I've been in on-demand and marketplace-type businesses and believe you get the highest impact with fantastic tutors or mentors supporting learners. You can't replace that completely, but you can improve the knowledge acquisition process over time. Some language learning companies may be more threatened than others, especially those that are not tech-enabled and have a higher price point without a clear pedagogical benefit. Nevertheless, the industry is here to stay, and AI could reinforce core propositions, and make companies even more profitable.
First of all, why do we need this overhaul or deep look at GTM? The EdTech and the general SaaS industry over recent years have experienced a material decline in growth rates and profitability. Outbound is harder than ever, leading to higher customer acquisition costs, sales cycles are longer, and win rates are lower.
The industry has also become more competitive, and the cost of talent and investment in go-to-market motions have gone up. Discounting is more prevalent, and AI is changing the game.
All of this has impacted baseline profitability, calling for a reset and holistic improvement in the go-to-market funnel, customer journey, lifetime value, customer acquisition costs, and net revenue retention.
Of course. We have to think of basics, like the average ticket size and the cost of acquiring and maintaining that account. In one model, you might have fast, low-ticket, low-touch sales, while in another, high-touch, high-complexity sales. Skills need to be aligned accordingly, whether it's handling a discovery call or focusing on specific marketing areas like brand or content. Changing the team mix to support the right go-to-market motion is crucial.
While I don't have access to their numbers, I've seen companies like Nearpod and Thinkific adopting both product-led growth and product-led sales growth to support its enterprise models. Both operate in different segments: K12 and corporate.
Partnerships are crucial for growth in many sectors, but in EdTech in particular. So what are those types of partnerships that are most beneficial for startups? How can they effectively leverage these relationships for growth and to scale their operations?
We have seen that in the SaaS industry, not just in EdTech, partnerships have proven to be increasingly efficient. In fact, over the past two years, partnerships have become one of the most effective channels for both acquiring customers and speeding up sales cycles, positively impacting profitability and win rates. Partnerships are converting better at scale than other classic motions, like outbound or even some inbound strategies.
Now, in terms of how partnerships can impact businesses, I would divide it into two different areas. One is the channel model, where you work with another organization that may resell and even white label your proposition. These models help companies enter new segments or markets. You need to ensure that these organizations are strategically aligned with your business, acquire the right type of customers (i.e. ICP), have adequate skill sets and adopt the same business models as in your core market.
But that's not all. For the channel to work, you need to invest in the process. You need a dedicated partnership person to support the channel, either internally or, if you’re not ready, externally with a fractional hire. This means building the right operating framework with the partner, the right incentives, and the right support model to yield results over time. Partnerships are more of an investment with a like-minded organization to close business and grow together, rather than just referrals.
The biggest costs are your time and investment in that partner, along with the margins you're going to pay out for business. On the flip side, the opportunity costs could be in the millions, depending on the size and scope of the opportunity. For example, the partner should know how to sell in that specific market, know the right opportunities, and have existing customers who know the budgets and procurement processes. Even if there are many unknowns, going straight for the partner model can save you enormous costs and the risk of hiring people blindly. With the channel, you can close a sale quickly, and many of those costs become variable.
It's a good question. In my experience, the most profitable partnerships come from the partner to the vendor. The partner has qualified some leads, knows their clients well, and sees a clear need for the other vendor’s proposition. After qualifying those needs, they approach the vendor or vendors. This model is customer-driven, validates initial demand and is in a scenario where a partner is more likely to commit.
Another interesting type of partnership, especially in EdTech, is the ecosystem-led model, where platforms provide core technology embedded in the educational architecture of businesses. This involves teaming up with platform providers and integrating with point solutions or content providers. By integrating well and reducing friction, you can provide a better experience for the end-customer, which can drive higher adoption, customer satisfaction, and engagement. This can also lead to higher renewals and retention. This tech-content integration model, if done well, can have incredible impact.
You can approach two types of personas in these big platform companies. One is salespeople. For example, if you're selling in Colombia, speak to the local rep for a platform like Canvas and introduce your offering. Their feedback is invaluable as they know their clients well. Another persona is partnerships managers, often called business development, strategic partnerships, or technology partnerships. Their job is to bring in third parties that resell and complement their offering in their ecosystem. Look on LinkedIn or ask someone in the company to pass on the right contacts.
I can share a few examples. One is partnerships, which we've discussed. Some companies are transitioning from B2C to B2B products or propositions to rapidly expand revenues.
Another strategy is product-led growth, which reduces friction for trying out your product, often for free, in a self-serve manner. This helps build a business case for higher-tier subscriptions by demonstrating value to multiple users in the same organization.
Teacher-driven solutions also work well. Products pushed to teachers can create a network effect as teachers love to share tools that make a real difference to them. Activating this through referral strategies or capturing community communication can accelerate lead generation.
First of all, companies must have a sound pedagogical framework and validation that their products have a real impact, whether academic or economic. Without this baseline, their sustainability and survival are at risk.
In terms of go-to-market, a few things are key. Brand is very important. Marketing leaders must focus on brand to further differentiate, as the market is getting quite noisy. Building communities around the brand is also crucial, depending on what you’re selling.
Second, the customer funnel from top to activation has a lot of noise and low conversions. Investing in AI to reduce inefficiencies from one step to another is essential. For example, imagine a webpage where the content varies based on who you are, where you are, and which page you clicked on beforehand. This is called conversion rate optimization, and there will be more sophistication and adoption of this, tied to a more formal account-based marketing strategy.
I think there will be fewer SDRs (sales development reps) relative to account executives. The current ratio, often one to two or one to three, will decrease because outbound is difficult. SDRs will become more data-centric growth hackers, using AI tools to improve personalisation, increase contact points and yield better conversions. They will still exist, probably with higher pay due to their increased value.
There will be more investment in building formal partnership programs. Lastly, there will be more investment in client success, ensuring customers are well-supported, protecting renewals, and expanding later. Being obsessed with client success means being obsessed with the customer experience and satisfaction. If you don’t do it, your competitor will, and this could be the primary reason why you go out of business.
Invest in Blue Ocean strategies. This approach can be transformative by innovating and updating your positioning to articulate your impact for customers and society. Following the Blue Ocean framework helps you find unique market opportunities and unlock significant value.
This is a topic concerning a lot of EdTechs at the moment. Regulatory changes, such as the drying up of ESSER funds, charging VAT on private school tuition in the UK, or AI policies in some countries, are major concerns. To navigate these challenges, talk to customers to understand how they will embrace these changes and assess the potential impact on your business. Work with them to find countermeasures. Diversifying across several markets can also help contain risks associated with regulatory changes.
