Is it possible to start a company in the educational space that can reach several million dollars in revenue? Most of the innovation in the space seems to be coming from non-profits like Khan Academy.
Lets say I start an app that is targeted towards teachers and educators in general. Are teachers willing to pay for an app? Or is it the school that they have to get approval from and they get the school to pay for it?
Educational space is very challenging and doesn't operate like other sectors. Revenue in millions is possible for software companies that start very well-funded (example: Knewton) and rely on partnering with very large publishers, already well established in the industry to get to scalable distribution of product - to get it into many schools or organizations.
Educational sector is also very crowded believe it or not. I am in it, and my competitors are everyone from Scholastic to a website run by a single teacher out of their home offering their materials for free (no kidding). That said, the market is large, so competition is natural.
Teachers don't like to pay for anything, and when they pay they compare products and prefer cheaper (or free) options. It's very hard to get schools to pay - most pay with purchase orders and checks, which doesn't work with a renewable model a SAAS business relies on. Getting a district to sign up is mission impossible because each school has its own budget, so giving away your product is the most reliable way to grow a user (not customer) base.
If you are serious about building an edu app, reach out to me via LinkedIn and we can chat more about it in detail.