Google threat to Edtech Startups?

What happens when Edtech Startups enter Google’s Market

Last week I hosted our first EDUKWEST Live event in London with our friends and supporters at Macmillan Digital Education. We put a lot of effort in the preparation of the event and naturally I was thrilled to get such amazing feedback from the audience. If you missed it, don’t worry. Here is the recap and it won’t be the last event we will be hosting this year.

The topic of this inaugural event was tutoring, a booming vertical in the UK. And looking at the latest edtech headlines from across the pond, it also is strong in the States.

Part of the event was dedicated to a short presentation in which I focused on some general thoughts and big trends including the threat Google has become to edtech startups that are too close to Google’s core product: search. The edtech startups I see as mostly endangered are marketplaces and directories.

To my surprise most founders at the event didn’t seem to be that much concerned about Google’s dominance of search, so I thought I might need to elaborate a bit on my apprehension.

Founders want to play in Google’s Sandbox

First of all, the classic question of “What if Google enters your market” doesn’t work in this scenario. In our case the opposite happens as marketplaces and directories enter Google’s territory. If you boil it down a marketplace, directory or bulletin board is nothing else than a vertical and curated search engine. The user enters her search and gets a list of matching results, either tutors or courses.

In my example I pointed to the untimely demise of TeachStreet and Tutorspree, both essentially got killed by Google. TeachStreet was on the killing list during the Panda update as for Google the TeachStreet team was spamming search results with their tutor and course listings. In the case of Tutorspree it seems that other changes to how Google works, e.g. less space for organic search results, hindered them to grow the way they needed to grow.

Now, most entrepreneurs in the verticals mentioned above usually tell me “OK, but Google won’t go into the tutoring space, it’s not interesting to them.” This again is only partly true and also does not matter. Sure, Google won’t build a tutoring marketplace but then they also don’t have to.

Google is becoming the one-stop-marketplace

Google itself can be turned into any marketplace the user needs that moment. Why do you think Google wants local businesses to sign up for Google+ pages. The moment someone searches for “piano lessons Boulder” relevant schools will eventually show up prominently in the search results. Just like Google is doing it with restaurant reviews and flights, already.

If the user will then be able to book directly, pay through Google Wallet or get a quick online session through Google Helpouts there is simply no need to go for a vertical search engine anymore. We all know that people are lazy and that each extra click has an impact on the conversion and sale.

Wyzant currently is the outlier in the space, probably because they managed to create a viable marketplace with a huge reach during the time Google was occupied with other projects. But think about it, Google has reached a point where it will be very hard for them to acquire new users as they are essentially dominating the space. Hence Google needs to find other ways to grow revenue.

Google doesn’t want to share their users with other providers anymore, especially when they are in the same space. The key is to keep users tied to your ecosystem as long as possible and make them use your stuff.

Therefore, I would start to worry more if I had launched a tutoring marketplace or something similar and think about ways that cut my dependency from Google traffic and that will keep my customers, learners and tutors alike, happy and loyal to my service.

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