As part of a select group of fellows in the Innovate for Africa Pilot Program, I have been working to develop my strategic thinking skills and understanding of how start-ups operate and how to help them grow and succeed within their niche. For this project, I focus on Schoolable.
Schoolable is a fin-tech company that focuses on providing access to affordable finance in the private school system in Africa. They provide tuition collection service for private K-12 schools. As a bit of background, It was founded in 2018 by Henry Chibuzor, a computer scientist alongside Angela Essien. Both were Classmates from the University of Uyo, Nigeria. The startup has been in a steady growth, and hit the skies having obtained a total grant of $190,000 from foreign investors - Y combinators and Founders Factory Africa.
Schoolable brings in a novel idea to hit the ground running across the educational and financial markets in Nigeria. As far as I know, they have no direct competitor. However, Schoolable needs to penetrate the market since they are trying to fill a nascent niche. Be that as it may, as many other businesses, they are plagued by the advent of the COVID-19 pandemic which has led to the lock down of all schools across the country. The pandemic is first and foremost a health crisis. This has crystallized the dilemma policymakers are facing between closing schools (reducing contact and saving lives) and keeping them open (allowing workers to work and maintaining the economy). The severe short-term disruption is felt by many families around the world: home schooling is not only a massive shock to parents’ productivity, but also to children’s social life and learning. Teaching is moving online, on an untested and unprecedented scale. Student assessments are also moving online, with a lot of trial and error and uncertainty for everyone. Many assessments have simply been cancelled. Importantly, these interruptions will not just be a short-term issue, but can also have long-term consequences for the affected cohorts and are likely to increase inequality.
The major operational processes for Schoolable include the conversion of tuition payment from a yearly/termly commitment to a monthly subscription for parents. They make the bulk payment to the school upon resumption whilst the parents pay in installments with a cost of credit placed at a rate of 10.72%. On the other hand, for schools, they ensure that payments are collected, tracked and reconciled seamlessly. Hence, schools can be assured of having collected up to 80% of their fees upon resumption. The payment plan, for most parents, aligns with the monthly basis of how they earn their income. Moreover, schools who subscribe to this plan can have good cash flow right from the resumption of the academic session. Furthermore, Schoolable has an icing on the cake with its interest on savings as many other financial institutions. However, the percentage interest is yet unclear in order for me to provide a comparative study.
With a lens into the SWOT Analysis, one challenge which schoolable seem to face is that there is little competitive advantage offered to the parents to engender them subscribe to their fee-payment plan. Any responsible parent would save upfront for the child’s tuition fees. This is the most normal savings method. Schoolable brings to the market, a plan which though, providing an assurance that the child's tuition fee will be paid, offers it at an extra cost i.e. 10.72% of the fee amount. Why would a parent seek such a plan if s/he has accumulated upfront savings for the child’s fees which cost him an extra 0%?
Another challenge would be that, in order for Schoolable to remain financially afloat, they would require a large pool of funds which indirectly means more market penetration. Charging an extra 10% for school fees may mean a lot for the parents but, it could be quite small to keep the start-up running if there are only a few subscribers.
On the other hand, this would be a great opportunity for schools to key into the fee collection plan. For every school that subscribes to this, there are hundreds of new parents added to the list of Schoolable’s customers. Hence, It would be a great strategy for the start-up if they appeal to schools instead of the individual parents.
Moreover, with the advent of the pandemic, it’s more difficult for parents to pay the children’s tuition fees. Invariably, schools are having a hard time with fee collection. Taking advantage of the times we live in, schools which collect their fees via Schoolable’s platform will make life easier for themselves. This is a huge opportunity for Schoolable to persuade schools to enroll onto their platform since such schools will acquire funds, upon resumption date, to run their expenditure thereof.
Following this study, it would seem better for Schoolable to shift towards a school-based rather than a parent-based strategy since they provide a more appealing offer for the schools. To do this, they'll require a good marketing strategy so as to persuade school owners to buy into the ideas. This would be a way of killing hundreds of birds (i.e. parents) with one stone (i.e. for each school that signs up to their payment plan).
A possible objective Key result could be to get ten schools to sign up within the next 12 months. To achieve this, a suitable marketing strategy needs to be adopted. Beginning with having, a comprehensive list of private schools in Lagos scaled according to the amount of students and cost of tuition fees have to be obtained. Good presentation materials have to be made in order to facilitate the campaign. Then, according to the priority, the heads of schools have to be met and such ideas proposed to them. Moreover, they have to follow-up these conversations as well as flood the online space with advert placements.