- Learning from edtech founders (1): IMP Software
In this series of blogs, Aircury’s Joshua Perry talks to some incredibly inspiring edtech founders and captures the lessons we can all learn from their startup’s success. The first article in the series focuses on Will Jordan from IMP Software.
The most successful startups are sometimes the ones you haven’t heard about.
I’ve worked in edtech for six years now, and during that time it has been my job, for one reason or another, to understand the sector’s startups and their business models. During that time a few companies have really broken through and got great name recognition. Sometimes that’s because of an innovative take on an existing market (think of cloud MIS vendors like Scholarpack); other times a founder with a pre-existing profile in the sector comes up with a great idea (Daisy Christodoulou’s No More Marking, for example, or Bruno Reddy’s Times Table Rockstars). Some companies even manage to achieve a significant profile without much market penetration, maybe because they’re throwing a tonne of cash at a problem, or in the same way that people slow down when they pass car crashes (and no, I’m not going to name names!). Whatever the reason however, the general view is that we should all want that level of publicity: surely we need everyone to know what we’re up to if we are going to get the growth that will make us successful?
Well, I think that’s a mistake. And to explain why, I’m going to tell you about a conversation I had recently with Will Jordan, co-founder of IMP Software. If you’re not a school finance type, there’s a good chance you won’t have heard of them: they’ve only been around for a year, and also they are in the incredibly unsexy business of school budgeting and forecasting… BUT don’t let that put you off, because theirs is a heartening tale of rapid success underpinned by a succession of smart choices. Here’s what I learnt from Will:
- It pays to know your subject matter really, really well. When I asked Will what his advice would be to edtech founders, his first response was “Be an expert in the thing you’re trying to do”. He’s certainly taken his own advice: Will spent six years at a chartered accountants, then over seven years with PS Financials (acquired by IRIS in 2017) where his roles included training, implementation, sales and partnerships for MAT accounting software. In other words, you’d struggle to find someone who knows more about what schools (and MATs in particular) want from finance software. Along the way Will has collected tales of what he calls “anecdotal annoyances”: the things that people put up with in competitor products, and so if you have a solution for that problem, you can win easy brownie points during sales demonstrations. Of course you could try to tackle this (or any sector) without that level of accumulated knowledge, but you’ll inevitably have a tougher time of it.
- Complementary co-founders are a recipe for success. Will set up IMP with Dave Hall, a former colleague from PS Financials. Will handles commercials; Dave does software development. Both are also qualified accountants, and are therefore well-equipped to contribute to product scoping. That seems important - Will emphasised that he can suggest a feature, and Dave fills in the gaps when he’s developing from his own accumulated knowledge. There’s clearly huge respect and admiration between the two of them, despite being “total opposites” - and just as importantly, their skills are perfectly matched. Sales-focused founders can find themselves wasting money on the wrong software development approach; developer-founders can tinker with products that never get in front of customers. But if the founding team can do both things without eating into the company’s scarce cash, you’ve got a great foundation for a successful business.
- If the team is right, the product will come. From what I can tell, Will and Dave were a great startup team in the making long before they had the winning idea. They threw around a bunch of ideas before they landed on the right one, but the thinking process that got them to the right place was suitably methodical. Some people assume the idea is everything when starting a business; but Will’s story suggests that the right founding team will arrive at a strong product proposition soon enough.
- Great ideas can be boring to everyone except the target customer. Look, I was excited to write this blog because I like Will, and because the traction they’ve got is really remarkable (see point 7). But I’d be lying if I said I was excited because I dream of school budgeting and forecasting. But Will does, and that’s why they’ve been successful! Will has an uncanny knack for identifying real problems that customers definitely have, even if they haven’t realised it yet. He is quick to point out that this is very different from solving problems that don’t really need solutions. “Our whole product is built around pain”, he tells me: budgeting is hard for any school but it’s a particular nightmare for MATs, who have multiple pay scales and different approaches in different Local Authorities and… look I told you it isn’t the most exciting area! But it is complicated, and it needed the right people to care enough about the problem to solve it properly. And the best thing about boring niches is: other people are less likely to spend ages thinking about them! Everyone tries to build a maths teaching tool; but maybe the better path to success is to be the person that lies awake at night wondering how to represent the pay increments of Rutland and Enfield LAs within the same data model.
- Don’t be afraid to pivot. This blog is hardly the first place you’ll have heard this, but it does sound like this was a key factor for IMP. The big “lightbulb” moment in their early days was when they realised that the rest of the sector was focusing on budgeting, but forecasting was an equally important and much more poorly-served problem. Forecasting wasn’t their original focus, but by allowing the scope to change in quite a fundamental way they’ve now integrated both things in one tightly-focused package. That stretched dev capacity at times, and it sounds like they had to pull some all-nighters to get things working well for early adopters, but the decision is now paying dividends.
- If you really want to win MATs, put them first. Here’s Will on how most edtech software companies think about Multi Academy Trusts: “It’s like they’ve started by asking ‘How do we make these school-based products work for a MAT?’ It’s what people do, but it doesn’t work. And actually, it’s almost simpler if you start with the MAT.” This resonates with me: I’ve come across plenty of companies who market a flimsy MAT module as if it’s a game-changing way of appealing to groups of schools. Will has taken the opposite approach: they don’t make software for individual schools at all. IMP spotted that MATs had more pain than anyone when it comes to budgeting and financing, so they built the product from the bottom up to tackle that. Competitors may say they’re in the same space, but their time and attention is split between schools and MATs. The narrow focus has helped them be great for somebody, rather than average for everybody.
- Get as much sector feedback as possible. Many startups spend their first year building a prototype, or struggling to sign up a couple of schools for a small pilot. And that can be fine, if it makes the long-term offer stronger, and you can afford it. But IMP has proven that you can gain traction fast if you have the right product and you know your customers well. Month 1 was spent meeting three representative potential customers, getting their feedback and trying to learn as much as possible. None of those has gone on to be major customers for various reasons, but that’s not what mattered. Instead this depth of market testing helped them to sound more prepared in the next round of conversations that followed soon after, and as a result they signed up a couple of big MATs around the end of month two. Other customers joined at a rate of one or two a month until November 2019, when things really started taking off. They’re still barely a year in, and already they have 27 MATs with 329 schools between them. That growth was well beyond their original expectations, but they were well-placed to achieve it precisely because they made a point of speaking to as many smart people in the sector as possible.
- You don’t necessarily have to raise money. Speak to people who work in the edtech investment world, and they’ll tell you about how you go from spending a bit of your own cash to seed funding to seven figure funding rounds. It’s supposedly the standard startup story… but the more edtech ventures I see, the more I realise that the happiest founders are often those that managed to retain most of the equity for themselves. IMP have done just this — they got cashflow early, and the regular sales in their first year means they were able to invest in key staff while turning a profit! That’s not just good for them; it’s great for their customers too, who can be confident that the company is healthy, and the destiny is in the founders’ hands.
So that’s the IMP story. You won’t see them boasting about big venture capital raises any time soon. If you don’t work in a MAT back office, you may never need to know about them again. But whatever your business, there’s plenty you can learn from their stellar first year. And if you are that MAT finance person, struggling with your five year projections and cross school budgeting, there’s a good chance you’ll be hearing plenty about them very soon…