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.

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Transcript

Craig Cannon [00:00] – Hey this is Craig Cannon and you’re listening to Y Combinator’s podcast. Today’s guests are Anu Hariharan and Cindy Mi. Cindy is the founder and CEO of VIPKID. VIPKID is one-on-one teaching platform where children in China learn English from North American teachers. Anu who you have probably heard on the podcast before is a partner here at YC. 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. Alright here we go.

Anu Hariharan [00:28] – We are actually here for a private YC event, the Global Growth Conference, which has growth stage founders coming from US 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. Why don’t we start off with, can you tell us a little more about yourself and what really motivated you to start VIPKID?

Cindy Mi [00:51] – Absolutely. I started teaching on kids’ English when I was 15-years-old. That’s about almost 20 years ago. And what motivate dme start VIPKID 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 most innovative learning students. It’s online. It’s just amazing. Throughout these years, teaching on kids English, I figured the pain 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 And then the curriculum they learn nowadays are mostly out of date and they really want something fun and content-based. When we started VIPKID it changed everything for the parents and the kids. Now that many children are able to learn with the best instructors from North America, learning content-based knowledge based on Common Core State 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 feature.

Anu Hariharan [02:08] – That’s fantastic. I remember when I visited you in Beijing. I had heard about VIPKID, but I didn’t realize that you pretty much built a global marketplace from day one. I didn’t realize that a lot of your English teachers were from the US and you were teaching kids in China. Can you talk a little more about that? Because I thought that was interesting and especially, before you talk about that, also gives some idea for the audience on what is the platform, what is the product? Do you provide the curriculum and how does it work?

Cindy Mi [02:40] – Absolutely, in the world of learning, we have this after-school tutoring space where children go learn after school. This is extremely important in Asian countries, particularly in China. The parents in China spend 15% of our household income in after-school tutoring services.

Anu Hariharan [03:01] – That does not surprise me at all, given I come from India.

Cindy Mi [03:05] – That’s right. It is really important for the children, because then they can get a tutor around things that they really like or things they need to work on. For the space, we would usually have a brick and mortar training institutes operating across the country, so those are usually 20, 40 people classrooms with children learning there after school for three hours a week or two times of two hours a week kind of thing. But then what VIPKID provides nowadays after very, very different from the brick and mortar setting. We provide this live one-on-one 25 minute classes with online tutors teaching live from the comfort of their homes. For children they’re not learning in a classroom setup with 20 other kids. They’re by themselves. 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 US 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 teacher applicants. So children really enjoy it. And for the first time in their life they can feel free to choose to work with teachers

Cindy Mi [04:26] – that they feel best help them learn. And we’re able to match the best teachers to them in the system. This is about the teachers. A second highlight of the product is the content, the curriculum content, is developed by VIPKID Curriculum Team. We’ve got over 200 professionals working on this. We iterate at a weekly basis. Children really like it because it’s based on Common Core. It’s not just language learning. It’s not just about grammar, vocabulary, it has math, language and arts, science, social studies, all the content in there, So it’s really fun. And then when they learn this content, it’s not just about the language, it’s the content, it’s a culture. It’s critical thinking, 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 US that don’t speak English. And then they’re designed for online learning specifically. The way that things are scaffolded are so different from what would have learned in the classroom set up. Very unique content for the students. We have long-term, short-term assessment built all the way through. Students also do a lot of project-based learning after their session time. And then they just present to teachers the next session. Lastly, the 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 the time they would spend their time on their learning portal reading books,

Cindy Mi [06:01] – doing practice sessions, working on a whole lot other things we provide for them. So the learning is consistent and we have all the data so we’re able to do better at learning analytics for the parents and also provide children with more personalized learning content that way.

Anu Hariharan [06:18] – Got it, great. That’s fascinating, because I think you touched on at least three elements that make it different. And I wanted to probe on one or two of them, because there a lot of edtech online platforms. But I think the scale that you have achieved it really makes it unique. You said you have 20,000 teachers, all from the US, is that right?

Cindy Mi [06:38] – Mostly and some from Canada.

Anu Hariharan [06:40] – Okay, some from Canada.

Cindy Mi [06:40] – All from North America.

Anu Hariharan [06:42] – North America, got it. And how many students do you have?

Cindy Mi [06:45] – Today we’ve got over 200,000 students learning with VIPKID.

Anu Hariharan [06:49] – Wow, okay. And so are they all from China?

Cindy Mi [06:53] – 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.

Anu Hariharan [07:05] – Got it, great. One of the questions I had for you is how long is this course of program? Like when does a child join VIPKIDs and how do you keep them motivated? Because it was interesting you mentioned that the session length is 25 minutes and the rest they have to do on the learning platform. What motivates them to stay on the platform?

Cindy Mi [07:25] – Oh, that’s a great question. Our students, then youngest are three and-a-half, and the oldest goes up to 13-years-old. What motivates the kids is the learning interest that is brought to them by lively, encouraging, North American teachers as well as the engaging content that is very personalized to their needs. And also the gamified learning experiences on our learning portal. Today children make their own decisions of what they want to learn, what they do not want to learn. Parents cannot really help.

Anu Hariharan [08:05] – Yeah, we try, we try.

Cindy Mi [08:05] – Change their mind. Good luck trying.

Anu Hariharan [08:10] – Yeah, that’s true.

Cindy Mi [08:10] – But really it has to become that intrinsic motivation that I personally believe is very, very important. If the child feels like he is empowered, encouraged by tutor, encouraging him, or let them say, “Great job, brilliant, wonderful, you’re really great, the best student I’ve ever taught.” And he felt so great about learning that the love of learning sticks there. It’s really important that we do that within our kids so they’re able to set out to learn and explore themselves in the future. And the second thing I think really important for the kid is we help them built competency for the future. By that I mean very interesting class design, instruction designs or content that scaffold very interestingly. For one class we had a question for the kid and asking them if you have all this rice on the floor how would you solve the problem? Problem solving, right? You would then have a chicken. You have the vacuum clean thing and a lot of other brooms, everything. Children always want to go for the chicken, because they think it’s fun. Chicken eat rice, right? It’s 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 in future apply to other subject areas of their learnings.

Anu Hariharan [09:34] – Great.

Cindy Mi [09:34] – It’s an intrinsic motive.

Anu Hariharan [09:36] – That sounds fascinating. And I think, as you mentioned, the one-on-one interaction with the teacher and that motivation also keeps them going to try different projects on the platform.

Cindy Mi [09:46] – Absolutely.

Anu Hariharan [09:47] – I thought you mentioned one very interesting thing, which was you said you’re looking at North America for the teachers. My question there was you started this company in China for customer, 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 US, and related to that, today you mentioned you’re at a 5% acceptance rate. What is that you really look for when you’re selecting a teacher to the platform?

Cindy Mi [10:18] – Yeah, we are looking into a few qualities that is really important to us for teachers that work with VIPKID. One of the most important be love of kids. So you really have to want to help children grow. It’s not a easy job. You work with children who mostly barely do not speak English. And you don’t speak Mandarin or Japanese or Russian, but then you’re there to help them learn, three-and-a-half year-old. This is fun, but at the same time, very, very challenging. That intrinsic motivation of the teachers is really, really important. And, secondly, qualifications and experience. We’re looking for people with bachelor’s degree, people have a teaching certificate. It can be a TESOL, TEFL, ESL basic certificate. It can be a K-12 teaching certificate. You really have to have that experience of working with kids or student and so that you know the best way to teach. Being able to speak a language and being able to teach is a very, very different skill. In China, we have 1.7 billion people. Everybody speaks Mandarin, but very few can teach. If you think about it, it’s really important that somebody who’s been in the profession long enough that knows how to engage a student’s learning interest. And, lastly, we’re looking for teachers who are able to learn really fast. Teaching online is kind of different. It’s not in the classroom. You have this little video camera. You navigate and then… It’s really important that you learn fast. Although we only have a 5% acceptance rate today, we’re also thinking about how we can better empower our teachers,

Cindy Mi [12:06] – because we think many of the teachers are really great. It’s just if they cannot figure out how to teach online really fast, they wouldn’t pass our interview today. But if we do more efforts and help them more, I think they have all the fundamentals that we need. And being a teacher in North America is not a easy job. It’s not exactly the highest paid position. And you spend many, many more hours out of the classroom. It really shows significantly surprising, I think. You just devote all your time and love to the kids. And I think they all deserve the best opportunity teaching online and teach students across the globe. We would love to spend more time building better empowerment tools so we can help them more.

Anu Hariharan [12:46] – That’s very interesting because before I was going to talk to you today, I just looked online in YouTube and the first video that came up was from a teacher who said, “I failed my first VIPKID interview, but here are the tips to pass the interview. Or how should we become a better teacher.” I thought that was very interesting.

Cindy Mi [13:06] – There’s almost 20,000 teacher-generated content. It’s very rare. You can search for company in the world, you wouldn’t find out these professionally made content from the supply side of the user for ourselves, right?

Anu Hariharan [13:20] – Yeah. Let’s go back to when you launched the company, because you had to have a global marketplace from day one. You needed these teachers from North America and students from China. Talk a little bit about the first year when you launched. How did you source these teachers?

Cindy Mi [13:35] – Yeah, that’s crazy, the first part of the question. 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 to learn 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 effort to convince people. By the end of the first year-and-a-half, we ended up with only 20 teachers and 200 students. Bravo to all these people who believed in our mission. But I think if people don’t see what it looks like, it’s very hard for people to understand how it might work. 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 what it will look like. And then, if necessary, demonstrate. I remember I think for the first 20 teachers, I think I talked to most of them. And for the first 10, I definitely did recruiting myself, so we dis it 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. We just have to tell teachers it’s really easy. If you say, “Hello, my name is Cindy. What is your name?” They’ll get it. 50% of the communication is non-verbal.

Cindy Mi [15:20] – Just be patient and explain to everyone, talk to the people, find out people who’s willing to get on board at a very early stages, 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? This thing there we found is referrals, 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 the teachers, have more income. Second thing is we figured out how do we view the content online. It must be scaffolded very differently. It isn’t brick and mortar classrooms, and also with teachers who do not speak children’s first language. And, lastly, what are the system function 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-riders and drivers, we have one more, so parents.

Anu Hariharan [16:20] – Yeah, and the parent is the customer that’s paying for it.

Cindy Mi [16:23] – Yes, and children make decisions so it’s really important to keep them both happy.

Anu Hariharan [16:27] – Got it. And 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?

Cindy Mi [16:37] – Oh, yes, it’s the same thing. Our first four students come from one of our most early investors, Sinovation 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 Counsel. And one more comes from my Jessie, my co-founder’s friend, so friend and families. And then we started with these four kids. And they love it. But for the first few classes, we have to sit the child down in one of the conference rooms in Sinovation Ventures offices. We used to be incubated there, so it’s similar to the YC office. And then teachers in the other classroom, like conference room. And then parents feel 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 we need to have a very solid backdrop of the wall. And there was a really colorful painting that blurs the camera and…

Anu Hariharan [17:47] – Oh!

Cindy Mi [17:48] – A lot of experience built up from those. But then after the four students, we then a lot of these that we can show to other parents, like, “See, this is what your child looks like when they learn online.” And usually one thing was very impressive. When we saw one of our very student, Lilly, 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, Lilly stayed in the classroom for like an 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?”

Anu Hariharan [18:29] – That is so great! That’s a great sign.

Cindy Mi [18:32] – 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 another country, love them so much.” But then it’s really very different. You see all these connections are so well-connected world between the teachers and students.

Anu Hariharan [18:56] – And when exactly did you launch? Was it 2013?

Cindy Mi [18:59] – Yes, we officially launched in market March 2015, so it’s two years and-a-half ago. But we started October 2013, so exactly four years ago.

Anu Hariharan [19:13] – Okay. One of the things I noticed, even in the US marketplaces, marketplaces are a long slog because it takes both sides to build liquidity. Airbnb has talked about this quite a lot as well. It took them quite some time build that. 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?

Cindy Mi [19:35] – It was at that point. And also a few other little points along the way. I think we’re really for is efficacy through that year and-a-half, because for students’ learning outcome, that means the world. And you 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 found our students loved the program, higher attention, enjoy it. They’re taking initiatives, asking their parents, saying, “Can I have a class every day?” Their mom’s like, “May get a little expensive. Can we just do it a little bit less?” And it’s never happened before. It’s always the mom saying, “Can you learn more?” And the kids say, “No.”

Anu Hariharan [20:21] – Yes.

Cindy Mi [20:22] – 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 feel comfortable doing, they want to do this for long term. And in one of the oldest Chinese saying we have like you have all these students across the globe, but they use like fruits to metaphor it. And then same thing, we’re now bringing students across the globe, the teacher’s in the US. I mean, teachers in North America are really great, motivated people. I think they all love the kids, like themselves. They feel this is… And also the actual income makes a lot of sense and it just helps the families so much in a way that I couldn’t have imagined. I visited a few very small cities in Utah where any… Like Colorado, other states. And then there aren’t a lot of local job opportunities. Even if teachers wanted to make extra income, where can they go except for driving Uber or some other retail opportunities? Today, many of the retail jobs are gone. It’s really hard for them. I’m really happy that this provides all this great value for the teachers. And then so by that point we figured, mm, this is working and everybody loves it. Kids love it, teachers love it, parents love it, you know, why don’t we then scale? I think then you have all these matrices that venture capital people would evaluate on, translate it, would be like retention and LTV, right? And then if everybody’s referring everybody, it’s a low acquisition cost, so everybody’s very happy with where we are

Cindy Mi [22:11] – and then we’re able to really grow the sell program. But I think it all comes down to efficacy for both sides.

Anu Hariharan [22:16] – Got it. And how big was your team in the first one-and-a-half years?

Cindy Mi [22:19] – Like 20ish people. We started with a few people. We believe in the like lean startup way. You just have to build from very small team and then just gradually grow your team. We had very few people for the first year-and-a-half.

Anu Hariharan [22:38] – And are they all based in China?

Cindy Mi [22:39] – Yeah, they are. By then.

Anu Hariharan [22:42] – By then. And today you obviously have scaled it very well from 20 to 20,000 teachers and 200 to more than 200,000 students. How is your team today? How big is it? Where are they located?

Cindy Mi [22:55] – Our team today has over 3,000 people. Most of the team locates in Beijing. And we have office in Shanghai, but we are very proactively building up 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 dual headquarters, here in San Francisco, close to all the teachers. We’re building up a team here in San Mateo.

Anu Hariharan [23:26] – Oh, that’s interesting. It makes natural sense now that you have 20,000 teachers. But I’m curious, how did you manage recruiting teachers being in Beijing the last two and-a-half to three years?

Cindy Mi [23:39] – Community would be the key word. Of course, referral of a relative would be the second the second keyword right after community, empowerment, something we believe in. Teachers, if they’re in the US and very disenfranchised, dislocated already, and so across Pacific Ocean is not that far away. I’ve been teacher for the past 20 years, so teachers feel that me and my team really have a sense what they need the most. And we really are there for them all the time. From day one, they feel that they’re so connected to the community that they want to contribute. The way we do this is by referrals. And our teachers would, as you see on YouTube, post their own experiences, five minute video where very well educated. Then people will ask questions and then they would answer them and they will 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 teacher feel incentivized to do this. But I think at the very core, though, is teachers feel that they’re heard and they’re empowered in everything that we do on a daily basis. 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 the board. A letter from San Francisco or Beijing doesn’t really make a difference if people feel culturally they’re so connected. We do work professionals in Beijing that are North American from the US or Canada.

Cindy Mi [25:21] – Our teams are, although located in Beijing, from here. And also teachers are very special teachers, like education, educator, community. With the team in this share economy work or marketplace world, but from an 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 move forward, although we’re scaling really fast, and teachers know it. And they can see all the iterations of our curriculum, product that makes things different on a daily basis. It’s really important what you do instead of what you say and in a world of social media, everyone just talks to everyone. We have all these teacher communities, some of them have over 8,000 members. One of our teaching communities on Facebook run by a teacher called Shannon Aubrey, and she was invited to the Facebook Summit in Chicago with 110 community leaders, and she’s one of them. I’m very proud. And people like her are advocating VIPKID across the board and we just launched our San Mateo office this year so we have very experienced veterans in the edtech community like Kevin Kleng who travels across the US and go to every state and meet with all the teachers. And every month, I think we have over 50 teacher-initiated meetups.

Anu Hariharan [27:00] – Oh, wow.

Cindy Mi [27:01] – It’s not us, it’s them. But then we have people as teacher evangelists who go there and talk to them all the time.

Anu Hariharan [27:06] – Yeah, that’s the part of the community. 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 both sides to sort of work with each other to build this. What is your vision for VIPKID? Five years from now, what do you think it could be?

Cindy Mi [27:28] – Oh, five to 10 years, we would love to have children across the globe to be able to learn with VIPKID. 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 learning experiencing, teaching experience, very, 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. If you think about it, 63% of our high school kids, in 63 of our rural kids in China does not get to go to high school. And two billion of the world population still lives on three US dollars per day cost, right? The world of the learning is so essential to our humankind that if… Online learning today has the possibility to be the game changer for the future. With online learning, things can be way 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 next 20, 30, 40 years and schools are going to be very different. What do children need for the future? Can we embed all this love of learning and competence of future for them in the things that I would teach them. Our dream is really to be able to do that across the board. Not just with 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.

Cindy Mi [29:17] – And just possibility of really reimagining, rethinking what K-12 of education can look like at a global level in the next 10, 20 years is 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 San Mateo. It’s all the learning science that we need to discover. We’re working with Daphne Koller. She used to be professor in Stanford and co-founder of Coursera, and Stanford Professor, Bruce McCandliss on children’s early childhood education, and also a few others. 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 together.

Anu Hariharan [30:04] – That’s such a wonderful mission. I mean, Kudos to you for sort of starting from age 15 and sort of realizing it and being able to almost deliver on that mission. And you’ve already started that with English. And I know you have plans to do the reverse. I know a lot of US kids would be interested in learning Mandarin.

Cindy Mi [30:22] – Absolutely.

Anu Hariharan [30:23] – And I thought it was interesting you mentioned AI. 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 bit more about how you see AI in edtech, a particular in VIPKID? Is it about a personalized curriculum? Like what is sort of your vision there?

Cindy Mi [30:43] – Our vision with AI is to be able to personalize students’ learning, and also to empower our teachers in their work. We have, after compression every month, over 100 terrabytes of data, so it’s a lot of data. And then we might be the only company that possesses all these audio, video content, interaction of student teachers, and all this learning data across the board. We then have a great opportunity to figure out what motivates student 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. Before, people wouldn’t think about edtech.

Anu Hariharan [31:42] – Yes, yes.

Cindy Mi [31:42] – They would think about all the other companies, but if you think about the edtech today, there are quite a few companies that are in the unicorn family already on board, 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 shared economy marketplace companies who are top tier AI people, and researchers also from university, they’re interested and they see this possibility of how this can be really different. Also talking about teacher empowerment. And if you think about teacher’s job is really hard. How do you remember every one of your students? How do you remember every little detail of how they work? And how do you real-time respond to their interactions in the classroom to best help them? It’s a lot of hard work. I think with AI everything can be made a lot easier, and then 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. It’d 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 benefit to everyone.

Anu Hariharan [32:52] – Well, thank you so much, Cindy for taking the time. I’m sure a lot of our audience would have gotten a lot from how much you’ve really perceived here. And congratulations on all the progress.

Cindy Mi [33:03] – Well, thank you so much, Anu, for having me.

Anu Hariharan [33:05] – Thank you.

Craig Cannon [33:06] – Alright, thanks for listening. As always, the video and transcript are at blog.ycombinator.com. If you have a second please subscribe and review the show. Alright, see you next time.