The Real Problem with EdTech

EdTech is misunderstood. When founders hear “EdTech,” they picture classrooms, Zoom meetings, and digital textbooks. Investors see dollar signs—and, lately, red flags. But both views miss the essential truth about what education technology really is, and what it isn’t.

EdTech is not about content. It’s about motivation.

If you miss this, everything else collapses.

The Motivation Trap

When COVID hit, education went online overnight. For a brief, surreal moment, it looked like EdTech had solved its biggest problem. People assumed the hard part was getting students and teachers onto Zoom. But they were wrong. Technology solved access; it didn’t solve motivation.

MIT data reveals something startling: only 3% of people complete self-paced online courses. Think about that. MIT, arguably the best technical university on Earth, gave away free courses—and 97% of people still couldn’t finish them.

This wasn’t a problem of quality. It wasn’t a problem of content. It was a problem of isolation and accountability.

We humans aren’t built for solitary discipline. We evolved in tribes. We work best with deadlines, peers, competition, and immediate feedback. Online education strips these away.

The Accidental Truth

Every EdTech founder starts with good intentions. First they build courses. When those don’t stick, they add gamification. Then leaderboards. Then community forums. Eventually, desperation sinks in. Why can’t people just finish?

This is the accidental truth founders discover: EdTech is actually about the structure of human motivation. You can’t sell outcomes through mere content. Outcomes need friction: live interactions, real stakes, peer pressure.

Look at successful hybrid programs emerging now. Completion rates jump from single digits to over 90% simply by adding structured human interaction. Cohorts, live sessions, offline components—these aren’t features, they’re survival mechanisms.

Hybrid works because it reintroduces accountability. You don’t show up to class because you’re excited about the content; you show up because someone expects you to.

Test Prep Isn’t Education, It’s a Lottery

India’s test-prep market is a stark example. Millions prepare for exams, but only thousands get into their desired colleges or jobs. Why participate at all? Because it’s not education they’re buying—it’s hope. EdTech in India isn’t a knowledge economy; it’s a lottery economy.

The result? A brutal CAC (Customer Acquisition Cost) spiral. Companies burn 60-70% of revenue on ads to grab a share of fleeting hope. And when the pandemic boom ended, investors pulled back, leaving bloated startups stranded.

EdTech built on hope alone is fragile. It collapses under reality’s weight. Real education isn’t hope; it’s change. It has to deliver results.

Content is Cheap, Outcomes are Expensive

The rise of AI like ChatGPT and GitHub Copilot proves one thing: content has no value left. Information is abundant, almost worthless. You can learn Python, finance, or marketing online free. Yet people still buy expensive courses and memberships. Why?

Because content isn’t the value. The real value is transformation. EdTech’s job is to create environments where transformation becomes inevitable.

But transformation is expensive. It demands human effort, mentor feedback, accountability loops, offline experiences. It’s not about scaling cheap content, it’s about scaling effective experiences.

Motivation as Infrastructure

The best EdTech businesses emerging now don’t look like educational platforms. They look more like CrossFit boxes, bootcamps, or even software accelerators. They’re structured, social, and intense. They combine online convenience with offline intensity. They don’t just offer content; they offer structured accountability and clear, measurable outcomes.

Imagine a “Peloton for productivity”—you pay, not for videos or PDFs, but for regular live sessions where you’re forced to do the work. Weekly check-ins, monthly reviews, daily rituals that you’ve prepaid for. This isn’t education as we know it; it’s motivational infrastructure. It turns human nature into an asset, not a liability.

EdTech, Meet the Real World

Every EdTech founder secretly dreams of a pure online scale. But online-only platforms rarely achieve real-world transformation. The smartest companies now embrace hybrid models—physical campuses, structured offline sessions, real-world projects—because these elements convert attention into action.

Hybrid isn’t regression; it’s evolution. It acknowledges human limits. It admits technology alone can’t solve motivation. It pairs digital reach with human touch.

AI, Software, and The Future of Work

AI won’t replace teachers. It will replace repetitive cognitive tasks, freeing educators to focus on the one thing tech can’t automate: motivation. The future of EdTech isn’t automation—it’s amplification.

The role of educators and coaches shifts from delivering content to structuring experiences and providing emotional accountability. AI might teach Python better, but it can’t get you out of bed to practice.

How to Win in EdTech Now

Here’s the blueprint, based on everything we’ve learned:

• Solve motivation first. Education without motivation is entertainment at best, and distraction at worst.

• Hybridize aggressively. Combine online flexibility with offline accountability and community.

• Price transformation, not content. Outcomes are valuable. Information alone is nearly worthless.

• Export solutions. Problems you solve locally scale globally. India’s EdTech solutions resonate in markets where structured motivation is equally scarce.

• Reduce CAC through referral. Your best marketing comes from transformed students, not Facebook ads.