Y Combinator Startup Podcast - #44 - Cindy Mi on Building VIPKID, the World's Largest English Learning Platform for Children

Episode Date: November 3, 2017

Cindy Mi is the founder and CEO of VIPKID. VIPKID is a 1-on-1 teaching platform where children in China learn english from North American teachers.Anu Hariharan is a Partner here at YC.

Hey, this is Craig Cannon, and you're listening to Y Combinators podcast. Today's guests are Anu Hari Huriran and Cindy Me. Cindy is the founder and CEO of VIPKid, and VIPKid is a one-on-one teaching platform where children in China learn English from North American teachers. And Anu, who you've probably heard on the podcast before, is a partner here at YC. So just a quick reminder before we get going, if you haven't yet subscribed or reviewed the podcast, we would appreciate it if you did. All right, here we go.

We are actually here for a private YC event, the Global Growth Conference, which has growth stage founders coming from U.S. and China. And I know Cindy, you're talking at the event. So thank you so much for taking the time to meet with us before the event. You know, why don't we start off with, you know, can you tell us a little more about yourself and what really motivated you to start VIP kids? Absolutely. So I started teaching young kids English when I was 15 years old.

So that's about almost 20 years ago. And what really what motivate me to start VIP Kid is the possibility of inspiring and empowering every child for the future. And just think about how we can connect the world of the best teachers, best content, and the most innovative learning experiences online is just amazing. So through all these years, teaching young kids English, I figured the paper, point for parents today is for their kids to be able to learn from the best teachers. And then the curriculum they learn nowadays are mostly out of date and they really want something fun and then, you know, content-based. So when we started a VIP kid, it changed everything for the parents

and the kids. Now, that many children in China are able to learn with best instructors from North America, learning content-based knowledge based on common course day standards and children having so much fun. And it's a great thing for the teachers as well. And this just fulfills my dream of making learning so different for the kids today. And we're still working on it to build something even more amazing for the future. That's fantastic. I remember when I visited you in Beijing, you know, I had heard about WEIB kids,

but I didn't realize that, you know, you pretty much built a global marketplace from day one. You know, I didn't realize that a lot of your English teachers were from the U.S. And you were teaching kids in China. Can you talk a little more about that? Because I thought that was interesting. And especially, you know, before you talk about that, I also give some idea for the audience on what is the platform, what is the product? Do you provide the curriculum?

And how does it work? Absolutely. So in the world of learning, we have this after-school tutoring space where children go learn after their schools, right? So this is extremely important in Asian countries, particularly in China. the parents in China spent 15% of our household income in after-school tutoring services. That does not surprise me at all given I come from India. Yes, right.

It is really important for the children because then they can get tutored on things they really like or things they need to work on, right? So for the space, we would usually have a brick-and-water tuning institutes operating across the country. So those are usually 20, 40 people classrooms with children learning there after school for like three hours a week or two times of two hours a week kind of thing. But then what VIP kid provides nowadays are very, very different from the brick-and-mortar setting. So we provide this live one-on-one, 25-minute classes with online tutors teaching live from the comfort of their homes. So for children, they're not learning a classroom set up with 20 other kids. They're by themselves.

So this is a very private lesson one-on-one. And then the teachers are the best we can find across the globe. Because if you think about it, we're today working with over 20,000 teachers in the U.S. And they're the best we can find. And everyone has to go through a very highly selective interview process. We only admit 5% of the teacher applicants. So children really enjoy it for the first time in their life. They can feel free to choose to work with teachers that they feel the best,

help them learn, and we're able to match the best teachers to them in the system. So this is about the teachers. The second highlight of the IPKKKKK product is that the content, the curriculum content is developed by a VIPKit curriculum team. We've got over 200 professionals working on this. We iterate at a weekly basis. So children really like it because it's based on common course, not just language learning. It's not just about grammar vocabulary.

It has like math, language and arts, science, social studies, all the content in it. So it's really fun. And then when they learn these content, it's not just about the language. It's the content. It's a culture. It's a critical thinking and leadership, a lot of things behind it. So children are having a great, great time. And all these curriculum are designed for,

students out of the U.S., so don't speak English, and then they're designed for online learning specifically. So the way the things are skyfolded is so different from what would have learning the classroom setup. So a very unique content for the students. We have long-term, short-term assessment built all the way through. So students also do a lot of project-based learning after their session time, and then they just present to teachers the next session. So it's a content. And lastly, learning experience is so different. They have access to learning portal at all times. So they would usually take a 25-minute session two to three times a week,

but then the rest of time they would spend their time on their learning portal, reading books, doing practice sessions, working on a whole lot of other things we provide for them. So learning is consistent, and we have all the data. So we're able to do better learning analytics for the parents and also provide children with more personalized learning content. Got it. Great. That's fascinating because I think you touched on like at least three elements that make it different.

And I wanted to probe on one or two of them. Absolutely. Because there are a lot of ed tech online platforms. But I think the scale that you have achieved truly makes it unique. So you said you have 20,000 teachers all from the U.S. Is that right? Mostly and some from Canada. Okay.

So all from North America. North America. Got it. And how many students do you have? No, up to date, we've got over 200,000. students learning with the IP kid. Okay. And so are they all from China? They're mostly from China and we have over 2% of our students coming from countries like Japan, Indonesia, German, Australia and some of them in the US as well. Got it. Great. So one of the questions

I had for you is, you know, how long is this course of program? Like when does a child join VIP kids? And how do you keep them motivated? Because it was interesting you mentioned that the session length is 25 minutes and the rest they're doing, you know, they have to do on the learning platform. So what motivates them to stay on the platform? That's a great question. So our student, the youngest, the youngest, are three and a half. Okay. And the oldest goes up to 13 years old. Okay. What motivated the kids is the learning interest that brought to them by lively, encouraging North American teachers, as well as the engaging, uh, content that is very personalized to their need and also the gamified learning experiences

on our learning portal. So today, children make their own decisions of what they want to learn, what they do not want to learn. Parents cannot really help changing their mind. Good luck trying. But it really has to become that intrinsic motivation that I personally believe is very, very important. So if the child feels like he is empowered, encouraged by a tutor, encouraging him all the time saying, great job, brilliant, wonderful, you're really great, the best student I've ever taught.

He felt so great about learning that the love of learning sticks there. So it's really important that we build that within our kids. So they're able to set out to learn and explore themselves in the future. And second thing, I think really important for the kid as we help them build competency for the future. So by that, I mean, very interesting class design, instruction designs, or content that's skypulled, very interestingly. So for one class, we had a question for the kid and asking them, if you have all these rice on the floor, how would you solve the problem? Problem solving, right? So you would then have a chicken, you have the vacuum clean thing and a lot of other brooms, everything. So children always want to go for the chicken because they think is fun.

chicken eat rice, right? So it's like a lot of competency to help them through with their logic, thinking and everything else. So children feel they're not just learning, they're having fun, and also they're building different skills that they can future apply to other subject areas of their learnings. Great. So it's an intrinsic motive. That sounds fascinating. And I think the, as you mentioned, the one-on-one interaction with the teacher and that motivation also, you know, keeps them going to try different projects on the platform. Absolutely. I thought you mentioned one very interesting thing, which was you said, you know, you're looking

at North America for the teachers. So my question there was, you know, you started this company in China for customers, your students from China are the ones learning. How did you go about building this great network of teachers and especially for someone coming from China to the U.S.? And related to that, like today you mentioned you're at a five-personation. and acceptance rate. So what is it that you really look for when you're selecting a teacher to the platform? Yeah. So, you know, we are looking into a few quality that is really important to us

for teachers that work with the EPIC. One of the most important being love of kids. So you really have to, wanting to help children learn and grow. You know, it's not an easy job, right? You work with children who, you know, mostly barely do not speak English. And you're, you don't speak Mandarin or Japanese or Russian, and then you're there to help them learn. Three-half-year-old, this is fun. But at the same time, very, very challenging. So that intrinsic motivation of the teachers is really, really important. And secondly, qualifications and experiences, we're looking for people with a bachelor degree.

People have a teaching certificate. It can be a TESO, TEPO, TESLB certificate. It can be a K-12 teaching certificate. So you really have to have that experience of, working with kids or student so that you know the best way to teach. I mean, being able to speak a language and be able to teach is a very, very different skills. In China, we have, you know, 1.7 billion people. Everybody speaks mentoring, but very few can teach.

So if you think about it's really important that somebody who's been in a profession long enough that knows how to engage our students' learning interests. And lastly, we're looking at. for teachers who are able to learn really fast. Teaching online is kind of different. Not in the classroom, you have this little video camera, navigate, and then, so it's really important that you learn fast. But we're also, although we only have a 5% acceptance rate today,

we're also thinking about how we can better empower our teachers because we think many of the teachers are really great. It's just if they cannot figure out how to teach online really fast, past our interview today, but if we do more efforts and help them more, I think they have all the fundamentals that we need. Being a teacher in North America, it's not an easy job. You know, it's not exactly the highest paid position. You spend many, minimal hours out of the classroom. You know, so richel is significantly surprising, I think, right? You just devote all their time and love to the kids. And I think they all deserve the best of two-day teaching online and teach students

across the globe. So we would love to spend more time building better empowerment tools so it can help them more. That's very interesting because when, you know, before I was going to talk to you today, I just looked online in the, in YouTube. And the first video that came up was from a teacher who said, I failed my first VIP kid interview, but here are the tips to, you know, pass the interview or how should we become a better teacher? And I thought that was very interesting. It's almost 20,000 a teacher-generated content is very rare. If you search for any company in the world, you wouldn't find all these professionally made content

from the supply side of the user for ourselves, right? Yeah. So let's go back to when you launched the company, right? Because you had to have a global marketplace from day one. You needed these teachers from North America and students from China. So talk a little bit about the first year when you launched. How did you source these teachers?

Yeah, that's great. The first part of your question. So the first year and a half was very, very challenging. Nobody bought the idea from both side of the marketplace. Parents think it's just challenging for kids too long online. They wouldn't imagine. And then investors thought this is such a dumb idea that you can never find enough students and teachers.

But from the teacher side, also, it took a lot of efforts to convince people. So by the end of the first year and a half, we ended up with only 20 teachers and 200 students. So bravo to all these people who believed our mission. But I think just if people don't see how it looks like, it's very hard for people to understand how it might work. So we did spend the most time in our first year and a half talking to everyone. Just sit down with them, explain, be very patient and have them understand how it will look like. and then if necessary, demonstrate.

So I remember, I think for the first 20 teachers, I think I talked to most of them. For the first 10, I definitely did recruiting myself. So we need to on Skype. By then, we didn't really have a system yet demonstrate to the teachers how it could work. You could just, hi, to your students, right? And it's not hard.

But if you can think about it for many people who do not speak Mandarin and who thinks it's really the hardest language to learn mostly, it's scary to teach young kids who don't speak English. So we just have to tell teachers it's really easy. So if you say, hello, my name is Cindy. What is your name? They'll get it.

50% of communication is non-verbal, right? So just be patient and explain to everyone, talk to the people, find out people who's willing to get on board at early stages. It's a very risky experience. But by the end of the year and a half, we're able to figure out a few things. One is how do we find teachers and students, right? So the thing there we found is referral.

So if you have a great quality product, people will love to talk to their friends about it. And if it's bringing them extra value for the student side, less expensive tuition for teachers have more income. Second thing is we figured out how do we build a content online. It must be skypiled very differently from it is in Puerto motor classrooms. and also with teachers who do not speak children's first language. And lastly, what are the system of functions that parents and students and teachers need the most? So we can start building something there.

We have a three-party kind of system there. It's not just like share rights, writers and drivers. We have one more, so parents. Yeah, and the parent is the customer that's paying for it. Yes, and children makes decisions. So it's really important to keep them both happy. Got it. And so how did, so on the teacher side, you said after a year and a half, you had 20.

And how did you do that on the student side? You had 200? Oh, yes. It's the same thing. So our first four students come from one of our most early investors, Sanivation Ventures. And out of the four students, three comes from the company. So we have the two children of their CFO and the one child of the general. your console. And then what more comes from, uh, Jesse, my co-founder is a friend. So friend and

families. And then we started with the students for kids. And, uh, you know, they love it. Yeah. But for the first few classes, we have to sit the child down in one of the conference rooms in, uh, Sanivation Ventures offices. We used to be incubated there. So it's like similar to the, this YC office. And then teachers in the other classroom, like a conference room. And then parents feels like they have to watch both sides and how they go. It's really fun to see how they work together. We didn't know, like, we need to have a very solid backdrop of the wall. And there was a really colorful painting that blurs the camera and the master of the... So we did... A lot of experiences built up from those. But then after the four students, we then had a lot of videos that we can show

to other parents were like, oh, see, this is what your child looks like when they learn online. And particularly one thing was very impressive. When we saw one of our very first student, Lily, I think she lived in France when she was really little, and she was seven by then. She hated English. But then one day, the video camera turned off, teacher went away. Lily stayed in the classroom for like extra 10 minutes and just went back to see what's taught in the classroom.

And then she keeps saying, teacher, come back. Where are you? That is so great. That's a great time. Very heartbreaking. But, yeah, so she loved it. So you see how the connections are built across the screen. And it's something that even beyond my imagination.

And today, of course, I hear stories all the time from our teachers saying, oh, these are my kids in the country. You love them so much. But then it's really, very different when you see all these connections are built so well-connected world between the teachers. teachers and students. And when exactly did you launch? Was it 2013?

Yes, we launched in, we officially launched the market March 2015. So it's two years and a half ago. But we started October 2013, so exactly four years ago. Okay. So one of the things I've noticed even in the US marketplaces, right? Marketplaces are a long slog because it takes both sides to build liquidity. I mean, Airbnb has talked about this quite a lot as well. It took them quite some time to build that.

So a year and a half, you had 20 teachers, 200 students. At what point did you really think this is going to work? Was it at that point? It was at that point. And also a few other little points along the way. I think we're really looking for is efficacy through that year and a half. Because for students' learning outcome, that means the world, right? and just have to be valuable to the kids.

Otherwise, why would you want to be building this company? Because it could be commercially successful, but doesn't really last, right? So efficacy is something we look for. And after a year and a half, we find our students love the program, high retention, enjoy it. They are taking initiatives asking their parents say, can I have a class every day? Their mom's like, make a little bit expensive. Can we just do it a little bit less? And it's never happened before.

It's always a mom saying, can you learn more? I can say no. And also on the other end of the equation, our teachers, we need to make sure that this works for them. This is something that they relish and they feel comfortable doing. They want to do this for long term. And, you know, in this, in one of the oldest Chinese saying, we have, like, you have all the students across the globe, but they use, like, fruits to metaphor it. And then it's the same thing, right?

We're now bringing students across the globe to the teachers in the U.S. I mean, teachers in North America are really great. motivated people, I think they all love the kids like themselves. So they just, they feel this is, and also the extra income makes a lot of sense and it just helps the family so much in a way that I couldn't have imagined. Visited a few very small cities in Utah or any, like quite a lot of other states. And then there are a lot of local job opportunities. I think even if teachers wanted to make extra income, where can they go,

except for like driving Uber or some other retail opportunities. And now, today, many of the retail jobs are gone. So it's really hard for them. So I'm really happy that this provides all these great value for the teachers. And then so by that point, we figured, this is working. Everybody loves it. Kids love it, teacher love it, parents love it. You know, why don't we then scale?

I think then you have all these matrix that venture capital people would evaluate on. Translated would be like retention and LTV, right? And then if everybody's referring everybody, it's a low acquisition cost, right? And so everybody's very happy with where we are. And then we're able to really grow this program. But I think all comes down to efficacy for both sides. Got it. And how big was your team in the first one and a half?

years. Oh, like 20-ish people. So we started with a few people. So we believe in the leading startup way. So we just have to build from a very small team and then just gradually grow your team. So we had a very few people for the first year and a half. And were they all based in China? They, yeah, they are. Okay. By then. And today, you know, you obviously have scaled it very well from 20 to 20,000 teachers and 200 to more than 200,000 students. So how is your team today? How big is it? Where are they located?

So our team today has over 3,000 people. So most of the team are located in Beijing. And we have office in Shanghai, but we are very proactively building an office here in the Bay Area. And we believe that since our teachers are all here, it only makes the most sense if we want to empower them the best. have a due headquarter here in New San Francisco close to all the teachers.

So we're built up to a team here in San Mateo. Oh, that's interesting. So how, I mean, it makes natural sense now that you have 20,000 teachers. But how did you, I'm curious, how did you manage recruiting teachers being in Beijing the last, you know, two and a half to three years?

I think, you know, community would be the key word, I think. And of course, referral over reality would be the second keyword right after community empowerment, something we believe in. So teachers, like, they're in the U.S. and very disfranchised dislocated already. So across the Pacific Ocean is not that far away. But I've been teacher for the past 20 years.

So teachers feel that me and my team really understands what they need the most. And we really are there for them all the time. So from day one, they feel that. they're so connected to the community that they want to contribute. So the way we do this is by referrals. And our teachers would, as you see on YouTube, post their own experiences. Five-minute video, very well educated. And then people ask questions, and then they would answer them. And they would say, hey, if you want to apply, click on this link. And if they refer teachers successfully,

we'll definitely give them motivations on their referrals. And then teachers, if you'll incentivize, to do this. But I think at the very core, though, is teachers feel that they're hurt and they're empowered in everything that we do on a daily basis. So we communicate to our teachers very frequently. We have a weekly newsletter that goes out to every teacher sharing with everyone what's happening across board. So, you know, a letter from San Francisco or Beijing doesn't really make a difference. If people feel culturally, they're so connected. And we do work with the professionals in Beijing that are North American people, so like from U.S. or Canada. So our teams are like, although located in Beijing from here, right?

So, and also teachers are a very special teacher, like education, educator community. So, you know, with a team in this share economy world or marketplace world, but from education perspective makes them feel that we're the most trustworthy, efficacious learning company that they've ever seen. And we really implement every little thing we do, making sure that we're doing the whole efficacy goal as we go move forward, although we're scaling really fast and teachers know it. And they can see all the iterations in our curriculum,

product that makes things different on a daily basis. daily basis. It's really important what you do instead of what you say. And in a world of social media, everyone just talk to everyone. We have all these teacher communities. Some of them have over 8,000 members. One of our teacher is on Facebook run by a teacher called Shannon Mubrey. And she was invited to the Facebook summit thing in Chicago with 110 community leaders. And she's one of them, very proud. And people like her are advocating VIPA. across board and we just launched our summer to office this year so we have very experienced veterans in a tech community like Kelvin Kling who travels across the US and go to every state and meet with all the teachers and this every month I think we have over 50 teacher initiated meetups oh wow so it's not us it's them but then we have people as teacher evangelists to go there and talk to them all the time yeah that's the part of the community I mean it's so fascinating to hear you almost have three sides, you have the child, you have the parent,

and you have the teachers, and they're quite distributed, and you've gotten, you know, both sides to sort of work with each other to build this. You know, what is your vision for a VIP kid? Like five years from now, what do you think it would be? Oh, five to ten years, I think. We would love to have children across the globe to be able to learn with VIP Kid. and we're seeing five to 10 million kids learn, and we want to work with many more teachers

and make both students and teachers' life and teaching experience very different. And I think what's more important is a longer mission. Our mission is to inspire and empower every child for the future. So if you think about it, 63% of our high school kids, 63 of our rural kids in China does not get to go to high school. And 2 billion of the world population still lives on a three U.S. dollar per day cost.

So the world of learning is so essential to our humankind that if online learning today has a possibility to be the game changer for the future. And then with online learning, things can be, we're more efficient, efficacious, and also the cost is going to be much lower. And then if we can just bring this to every child in the world, this can be really great. And then also the world is going to be very different in the next 20, 30, 40 years, and schools are going to be very different. So what do child need for the future? Can we embed all these love of learning and competence of future for them in the things that we can. teach them. So I think our dream is really to be able to do that across board, not just to the

families who can afford it today, but also to all the families that can not afford it today, but in the future, maybe if we can build something for them, it'd be really great. Just a possibility of reimagining, rethinking what a kid job education can look like at a global level in the next 10, 20 years, it's very, very exciting to the team. And it's part of the reason that we're also building a growth in the AI team here in Samatel. It's all the learning science that we need to discover working with Daphne Collar from, she used to be a professor in Stanford and co-founder Kossara and Stanford professor, Bruce McAllenellis on children's early childhood education. And also a few others.

I mean, so for all these professors, I think it's really great for us to be working with them to figure things out so we can build this amazing future to get in the future. That's such a wonderful mission. I mean, kudos to you for, you know, sort of starting it from age 15 and sort of realizing it and being able to, you know, almost deliver on that mission, right? And you've already started that with English. And I know you have plans to do the rivers. I know a lot of U.S. kids would be interested in learning Mandarin.

Absolutely. And I thought it was interesting. You mentioned AI. I mean, I think it's almost becoming a common theme across most products. And especially in China, I've seen a lot more companies, put AI at the forefront of it. Can you talk a little more about how you see AI in that tech, and in particular in VIPKid? Is it about a personalized curriculum? Like, what is sort of your vision there?

Yeah. Our vision with AI is to be able to personalize students learning and also to empower our teachers in their work. So we have, after compression, every month, over 100 terabyte of data. So it's a lot of data. And then we might be the only company that processes all these audio, video, content, interaction of student teachers and all these are learning data across board. So we then have a great opportunity to figure out what motivates students to learn. how does a teacher work the best?

How do we match students and teachers? How do we personalize their learning path? So there are a lot of things we can discover from all these amazing data and be really great to find the best people in the industry. I mean, before people wouldn't think about ad tech. They would think about all the other companies. But if you think about the ad tech today,

there are quite a few companies that are in the unicorn family already. So people are thinking, oh, this might have a future. And also, many of their kids are users of these products. So people from the growth teams of Sherry Khan Marketplace companies who are top-tier AI people and researchers also from university, they're interested in see this possibility of how this can be really different. So also talking about teachers' empowerment,

if you think about teachers' jobs really hard. How do you remember every of your student, how do you remember every little details of how they work and how do you real-time respond to their interactions in the classroom and the best help them? So it's a lot of hard work. I think with AI, everything can be made a lot easier and teachers can just do what they're best at.

And then if the work is more efficient, they can probably make more money income in the given amount of time that they work with the kids. So it would be very beneficial for both the kids and the teachers. And parents, of course, they would always want to see, like, how their children are doing. And all these would just bring a whole lot of benefit to everyone. Well, thank you so much, Cindy, for taking the time. I'm sure, you know, a lot of our audience would have gotten a lot from how, you know,

how much you've really perceived it. And congratulations on all the progress. Well, thank you so much. I know for having me. Thank you. All right. Thanks for listening. So, as always, the video and transcript are at blog.

combinator.com. And if you have a second, please subscribe. and review the show. All right. See you next week.