ChapterIIntroduction I.1Background Educationtechnology(EdTech)hasbecomeoneofthemostpromisingbusinessesin thelast5years,becausebusinessgrowthinthisfieldhasexperiencedasignificantincrease bothinthecontextofinvestment,transactions,andrevenue.TheIndonesianEdTechsector hasexperiencedgrowthsimilartotheglobalEdTechinvestmentlandscape.MostEdTech companiesinIndonesiahavebeenestablishedwithinthepastsixyears,coincidingwiththe rapidincreaseininternetpenetrationrateinthecountry(Bhardwaj&Yarrow,2020).EdTech penetrationstartedin2015andcontinuedtogrowuntilthepandemic.Thisisindicatedby EdTech’sglobalgrowthin2020-2021whichistheyearwiththehighestgrowthinthis industryinthecontextofrevenuegenerated(GlobalData,2022).Hereistheinvestmentdata inEdTechacrossvariouscountriesfrom2010to2022.Thisinvestmentdataalso simultaneouslyreflectsthelevelofinvestorconfidenceintheEdTechindustry. Figure1.1EdTechFundingTrendsinVariousCountriesfrom2010to2022(HolonIQ, 2023) TheEducationtechnologyindustryisdividedintoseveralmarketsegments,including K12(elementary,juniorhighandhighschool),students,workersandevenforinstitutional needs.Thetopicsofferedareverydiverse,rangingfromacademictopics,workpreparation topics,tocreativeandlifestyletopics.AccordingtoBhardwajandYarrow(2020)each segmenthasadifferentbusinessmodelpreference.Userneedsrelatedtoproductsinthe 1 industrymustbeabletobeansweredproperlybytheactors,becausewhencompaniesare unabletofulfilwhatusersneed,userstendtomovetocompetitors(Sikandar&Rahman, 2020).Itshouldbeacknowledgedthattheeducationtechnologyindustryisanindustrywitha verythinbarrierofentry,meaningthatthenumberofcompetitorsinthisindustrywill increasewithinacertainperiodoftime.Theneedtofulfilwhatusersneediswhatmakes manyEdTechactorsonlyfocusonprogram/productfacilitieswithoutconsideringthe scalabilitybusinessmodelintermsoftheamountofprofitgenerated(Bhardwaj&Yarrow, 2020).ThecomplexityofthisproblemisoneofthereasonswhymanyEdTechesfail.Inthe following,theresearchershowsarichpicturethatmakesiteasiertodescribetheeducation technologyindustryinthecontextofsegmentationandproblemsfrequentlyencountered. Figure1.2RichPictureofEdTechIndustry(sourcefromownpresentation) Throughtheimageabove,itcanbeseenthattheEdtechindustryinvarioussegments hasalmostthesameproblems.Thisproblemisnotfarfromtheproblemofhighoperational 2 costs,customeracquisitionwhichcontinuestoincrease,shortlifetimevalueandultimately hasanimpactonprofitabilitywhichalwaysdecreasestotheworstpoint.Inthecontextofthe workingprofessionalsegment,anarticlepublishedbyHolonIQ(2021)statesthatmany EdTecheschoosethecohortbasedbusinessmodelbecauseitisbelievedthatuserspreferit morethanthevideocoursemodel.However,cohortbaserequiresaminimumquotaof participantsintheclasstobeabletoruntheprogram.Abusinessmodellikethiscertainlyhas higherrisksintermsofmarketingandoperationalcoststhanotherbusinessmodels.What needstobeunderstoodisthatthecomplexityoftheproblemforthecohortbasedbusiness modelisnotonlyamatterofneedingtoincreasesales,becauseadditionalsalesdoesnot solveretentionandlife-timeproblems,whichareimportantfactorsforcompany sustainability.Thistypewilllaterbediscussedfurtherbyresearchersbecausetheresearch objectinthisstudyistheEdTechcohortbaseintheworkingprofessionalsegment. Furthermore,Itmustbeadmittedthattheeducationtechnologyindustryisanindustrywith retentionratesandlifetimevaluesthattendtobeshort,especiallyduringthepost-pandemic periodwhenactivitiesarestartingtoreturntonormal.Offices,campuses,andschoolsare startingtoreopen,meaningthatitisverylikelythatEdTechuserswillonlybuyorusethese productsinashorttime(Jaiswal,R,2022).TheMobileAppEngagementBenchmarkReport byAlchemer(2021)alsostatesthatEducationappssawsomeoftheworstretentionratesin 2020,especiallyinannualretention(4%comparedtothemacroaverageof35%). Ofcourse,thelowretentionrateisinfluencedbymanyfactors,includingtheuser's learningpreferencesandtheuser'slearninggoals.Jaiswal,R(2022)explainsthatwhenusers haveachievedtheirgoalswhenusingourproducts,theywillnolongeruseourproducts, that'swhyeverybusinessmustbeabletoprovidenewgoalsforitsuserseverydaysothat theycontinuetosurviveinourproducts.Weakretentionisoftenassociatedwiththe relevanceofthecontentprovidedtotheneedsofourusers.Forexample,acompanythat provideslearningforgrade2highschoolstudents,themaximumuserwillstayonthesame contentis1year,meaningthateveryyearthecompanymustbeabletoacquirenewusersto maintainrevenueanduserstabilityatthecompany.Anotherexampleisthelearningplatform forworkpreparation,wherewhentheuserhasgottenajob,theworkpreparationcontentwill beconsideredirrelevantortheurgencyoftheneedwillbelow. Theimpactoflowretentionrateshasdirectimplicationsforhighcustomer acquisition,whyisthat?Becausecompanieshavetoacquirenewcustomersallthetime becausecustomerswhohavealreadyboughtbeforearenotdesignedforretention.Thisis supportedbytheMobileAppEngagementBenchmarkReportbyAlchemer(2021)thatmost 3 educationalcustomeracquisitioncostsarehigherthaninothersectors,theeducationindustry hasanaveragecustomeracquisitionof$862.Thismeansthatthiswillhaveanimpactonthe profitabilityofcompaniesinthisindustry. Apartfromtheproblemoflowretentionandhighcustomeracquisition,scalabilityis alsoanissueforsomeEdTechplayers.Asmentionedabove,therearemanyEdTech companieswhosefocusisonfulfillingwhattheuserneeds.Thisaccomplishmentisofcourse basedonthecompany'seffortstocontinuetosurviveandwinthemarket,butthiscondition turnsouttohaveanimpactonanimportantprincipleinabusiness,namelyscalability.As explainedbyBhardwaj&Yarrow(2020)thatusershavetheirownpreferencesforlearning, forexample,someprefertolearnusingvideos,someneedliveclassesonline,someeven needliveclassesoffline.Departingfromthispreference,intheendthereareseveral EdTech’sthattaketheformofabusinessmodelthattendsnottobescalable,forexample providingliveclassesbothonline,sothatithasimplicationsfortheemergenceofaminimum classquota.Especiallythosewhoprovideliveclassbyofflinelearning.Thiscondition certainlymakesEdTechcompaniesexperiencestagnationbecausetherearemany requirementstobeabletomeettheneedsofeverysingleuser,oneofwhichiswaitingforthe minimumclassquotatobefulfilled.Ifitisnotmetthenthecompanymustrefundtheuser. Ofcoursethismakesthecompanysurroundedbyinsecurityandrisksthatarebigenoughfor itssustainability. TheproblemsabovehaverecentlybecomequitesignificantissuesforEdTechplayers, it'snotuncommonformanyEdTechcloseafter1-2yearsofoperation(Upadhyay,H& Pathak,S,2022).SeeingEdTech’sslowdecline,Feldstein(2023)inhisarticleregardingthe futureofEdTechfundingpredictsthatin2023EdTechwillbecomeevenmoredifficult, especiallyintermsofinvestorsupport,thiswillcertainlyhaveanimpactonthesurvivalof companiesintheEdTechindustry.OfcoursethisconditionbecomesatriggerforallEdTech intheprocessofrunningtheirbusiness.Theyneedtoimmediatelyprepareabusinessmodel thatissustainableandabletoadapttomarketneeds.Onlyinthiswaycantheysurviveand thrive.I.2CompanyProfile Intheyear2020,threevisionaryleadersconvergedtheireffortstogiveriseto Dibimbing.id,anentitythattranscendstheconventionalrealmofadigitallearningplatform. 4 Dibimbing.idisnotmerelyaneducationalinitiative;itstandsasacomprehensivesolution addressingapervasiveissuewithinthegraduatecommunity–unemployment.Thegenesisof Dibimbing.idemanatesfromthepersonalexperiencesofitsfounders,whoobserveda high-achievingpeer,astudentfromthefinestuniversityinIndonesia,grapplingwith unemploymentfornearlyayear. TheinceptionofDibimbing.idisrootednotincomplexitybutinasimplenarrative thatformsthefoundationofthisinitiative.Thefoundersdrewinspirationfromafellow student,academicallyaccomplishedyetfacingchallengesinsecuringemploymentdespite graduatingfromaprestigiousinstitution.Atthisjuncture,theyrecognizedthatthe impedimentdidnotstemdirectlyfromintelligencebutratherfromadisparitybetweenthe skillspossessedandthosedemandedbytheindustry. Witnessingthestrugglesoftheirpeers,oneofthefounderstooktheinitiativetoteach digitalmarketing–askillinhighdemandwithintheindustry.Truetothenatureofthe demand,theindividualsecuredtheirfirstjobataprominentstartupinIndonesiaafterbeing equippedwiththisskill.Thispivotalexperiencebecamethecatalystforthefoundersto establishDibimbing.id,recognizingtheneedtobridgethegapbetweenwhatistaughtin universitiesandwhattheindustrytrulyrequires.Theplatformwasconceivedasaresponseto thesystemicissueofemployability,aimingtoprovideaholisticsolutiontothechallenges facedbygraduatesinnavigatingthecomplexterrainofthejobmarket. Dibimbing.id,therefore,representsmorethananeducationalplatform;itstandsasa transformativeforceaddressingthepracticalneedsofgraduates,aligningeducationwith industrydemands,andfosteringacommunityofindividualswhonotonlypossessacademic excellencebutalsothepracticalskillsnecessaryforsuccessintheprofessionallandscape.1.2.1Vision Dibimbing.idenvisionsitselfasaninexhaustiblereservoirfornurturingdigitaltalents. Informedbythefoundationalvaluesoffun,inclusivity,andaffordability,theorganizational visionextendsbeyondtraditionalparadigms.Thecoreambitionistoempowerstudents, facilitatingtheirjourneytowardsheighteneddigitalproficiency. 1.2.2Mission a.CustomerObsession:Dibimbing.idisunwaveringlycommittedtoprioritizinguser advancement,ensuringatrajectorythatconsistentlysurpassesindividualexpectations. 5 b.InnovationFirst:Attheheartofourmissionisthecommitmenttobeaninspiring, interactive,andcontemporarilyalignedlearningplatform,attunedtothedynamic needsofthedigitalindustry. c.Inclusivity:TheethosofinclusivitypermeatesthemissionofDibimbing.id,ensuring uniformaccesstoeducationalserviceswithoutprejudiceorexclusion. d.PeopleEmpowering:WithintheorganizationalcultureofDibimbing.id, empowermentisnotmerelyavirtuebutaguidingphilosophy.Everyindividual associatedwiththeinstitutionisencouragedtobeempoweredandcontribute meaningfullytothebroadercommunity. 1.2.3Dibimbing.id'sCoreOffering Dibimbing.idtranscendstheconventionalboundariesofacareerpreparationplatform tofunctionasapivotalconduitconnectingaspiringprofessionalswiththeirenvisioned careers.Themission,deeplyingrainedinaddressingunemploymentconcerns,revolves aroundprovidingempoweringeducationandenhancingthedigitalskillsoftalentsdispersed acrosstheIndonesianlandscape.Thisambitiousobjectiveisactualizedthroughstrategic collaborations,boastingextensivepartnershipswithover200mentorsand550+hiring partnersfrombothburgeoningstartupsandestablishedenterprises. AtthecoreofDibimbing.id'sphilosophyisanunwaveringbeliefinthetransformative powerofeducation.Thecommitmentextendsbeyondmereemployability,seekingtonurture acommunityofdigitallyskilledindividualspoisedtonotonlysecuremeaningful employmentbutalsothriveintheever-evolvinglandscapeofthecontemporaryjobmarket.