Navigating Policy Ambiguity and Market Dynamics: A Qualitative Study of EdTech Startup Founders in India

This qualitative study examines how Educational Technology startup founders in India navigate the intertwined challenges of policy ambiguity and dynamic market forces amidst a rapidly evolving educational technology market. Employing a constructivist grounded theory approach, the research captures the lived experiences of 23 startup founders representing diverse business models, geographic locations, and educational verticals. Findings reveal that founders engage in continuous interpretive sensemaking to decode vague, fluid policy directives arising from fragmented, often polycentric institutional frameworks. This study’s conclusions contribute to adaptive business strategies that reconcile compliance demands with innovation in the Indian context. Analysis reveals three core themes among participants: (1) policy elasticity, highlighting founders’ strategic navigation of ambiguous and shifting regulatory environments through informal relational networks and boundary negotiation; (2) adaptation and innovation, characterized by frugal recombination of existing resources, ecosystem leveraging, and resilience amid emotional and cognitive strain; and (3) strategic compliance, whereby entrepreneurs embed regulatory expectations into product design and organizational legitimacy. This study contributes a contextualized theoretical framework that expands institutional and innovation theory in India, an emerging market, by emphasizing the co-constitutive processes of compliance and entrepreneurial adaptation. Practical implications underscore the urgent need for greater policy coherence, formalized stakeholder engagement channels, improved entrepreneur-to-government communications, and supportive infrastructures to sustain EdTech innovation. Limitations include educational and geographic sample homogeneity and reliance on founder narratives. Future recommendations include a pursuit of longitudinal and cross-national analyses