- Chi Lu, partner at Y Combinator, interviews Cindy Mi, founder and CEO of VIPKIT
- Cindy Mi shares her upbringing and how moving to a different province impacted her
- She dropped out of high school but started tutoring English at 15, which sparked her passion for teaching and learning
- She co-founded an English training school at 17 and learned important lessons about entrepreneurship and customer understanding
- Cindy started VIPKIT in a competitive market but saw an opportunity to solve pain points for parents
- Chinese parents value education and are willing to invest, with 15% of household income going towards supplemental education
- The lack of qualified English teachers in China was a pain point that VIPKIT aimed to address
- VIPKIT now has over 60,000 teachers, almost three times the supply of North American teachers in China.

- VIPKid is addressing the challenge of teacher supply by connecting Chinese students with K-12 educators in the US
- Traditional learning content and methods are not engaging for students, so VIPKid focuses on providing interactive online learning materials
- Learning a language in short, frequent sessions is more effective than longer, infrequent classes
- Parents are looking for convenient and effective learning options for their children, and VIPKid aims to provide that through online classes
- VIPKid measures success through metrics such as student assessment scores, progress, engagement, and referrals from parents
- The company started with a small number of students and gradually expanded, iterating their content and technology platform multiple times
- VIPKid also focuses on ensuring teacher satisfaction and success
- The company believes in building something that customers want.

- The speaker discusses the importance of building something that users or customers want, using the example of VIPKid's humble beginning with four kids.
- The initial milestones for VIPKid included 20 teachers, 200 students, and multiple iterations of the platform and content.
- The business model of VIPKid focuses on providing value to both students/parents and teachers, with significant cost reductions for parents and a flexible and supportive teaching environment for teachers.
- VIPKid's focus on real value creation on both sides has led to a sustainable economic model.
- VIPKid has learned important lessons through iteration, including the need to focus on what is most needed and to be prepared for rapid growth.
- VIPKid has expanded its product to include Mandarin learning and has expanded its English learning product to include one-on-four classes.

- VipKid has expanded its English learning product to include one-on-four classes and a wider range of students from young kids to 18-year-olds.
- The goal is to build a global classroom that connects teachers and students with personalized content and fosters lifelong learning.
- VipKid has partnered with Scholastic, Houghton Mifflin Harcourt, and Oxford University to expand its content offerings.
- The company follows the demands of parents and students to determine product expansions.
- VipKid aims to empower teachers by developing intelligent tools and assistance functions to make their job easier.
- The company's global aspect is built through its teacher community, which is spread across all 50 states in the US.
- VipKid has a global team focused on teacher success, with offices in San Francisco, Texas, and New York.
- The team includes individuals with experience in education organizations and ad tech communities.
- VipKid has a transparent service platform called Hutong for teachers to communicate and receive support.
- The company's global vision aligns with the trend of startups aiming to become global companies.

- The speaker discusses the work of teachers and the teacher success team in building a global platform.
- They emphasize the importance of communication and collaboration between teams in different time zones.
- The speaker mentions the concept of a global dual headquarters and the investment in the team in San Francisco.
- They discuss the future of education, focusing on personalization and empowerment through technology.
- The speaker also asks for advice on the education sector and the role of technology in driving change.

- The speaker believes that the focus should be on learning, teaching, and completion, rather than just technology.
- They emphasize the importance of understanding how children learn, specifically in subjects like fractions, and using technology to improve teaching methods.
- The speaker also discusses the potential of AI and its ability to rapidly acquire knowledge.
- They mention the need to blend technology with passionate innovators to improve learning experiences for everyone.
- The importance of customer success and student success is highlighted, with personal stories shared about the impact of VIPKid on teachers and students.
- The speaker emphasizes the mission of VIPKid to inspire and empower every child for the future, and the challenges in building global competency and 21st-century skills.
- They advise young entrepreneurs to prioritize customer success and stay focused on their mission.

- Cindy Mi, founder and CEO of VIPKid, discusses her upbringing and how it influenced her passion for teaching and learning.
- VIPKid aims to address the lack of qualified English teachers in China by connecting Chinese students with K-12 educators in the US.
- The company focuses on providing interactive online learning materials and convenient learning options for children.
- VIPKid measures success through metrics such as student assessment scores, progress, engagement, and referrals from parents.
- The company has expanded its product to include Mandarin learning and one-on-four classes, with a goal of building a global classroom.
- VIPKid has partnered with Scholastic, Houghton Mifflin Harcourt, and Oxford University to expand its content offerings.
- The company aims to empower teachers by developing intelligent tools and assistance functions.
- VIPKid has a global team and a transparent service platform for teachers to communicate and receive support.
- The future of education lies in personalization, empowerment through technology, and blending technology with passionate innovators.
- The mission of VIPKid is to inspire and empower every child for the future, and the speaker advises young entrepreneurs to prioritize customer success and stay focused on their mission.

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.

https://twitter.com/wenjuan_mi
https://vipkid.com

Qi Lu is the CEO of YC China and Head of YC Research.

https://twitter.com/qilu

***

Topics

00:00 - Qi's intro

00:15 - Cindy's intro

1:15 - Moving to a new province as a teenager

4:15 - Being an educator and an entrepreneur

8:00 - Starting VIPKid in a hyper-competitive market

14:30 - Metrics for measuring product market fit

21:20 - How did she find the business model?

26:30 - What things did she try that didn't work?

30:15 - Strategy for product expansion

32:40 - Content expansion for Mandarin learning

34:30 - Building global companies

41:00 - Creating a global culture

43:50 - The future of education

47:45 - How should engineers and product managers think about edtech?

51:10 - Thoughts on AI

54:10 - Advice for entrepreneurs

Today I'm very, very pleased to have the opportunity to speak to Cindy Mi, the founder and the CEO of VIPKIT.

As many of the YC community in the US or China know, VIPKIT has been a tremendous entrepreneurship success and seeing the credit to your success, you more and more become a role model for many entrepreneurs.

Today, I have the opportunity, I wanna go through a list of questions.

Hopefully we can share a lot of your insights, what learning you had over the years that can prove to be very valuable for many other young generation entrepreneurs.

So let me start with sort of your early phase upbringing, because as we look at many entrepreneurs, motivation, passion, long-term drive about something is often a key success factor.

Can you share with where you grew up, in particular what was like when you had to move, I believe it was at the age of 14, I believe, moving to a different province and start a new school.

What was the experience like and how that impact you?

Well, first I'd like to start by thanking you, Qi, for doing this interview.

And then congratulations also on funding and launching YC China.

This is really exciting for many young entrepreneurs and tech people because you are the role model for everyone for connecting the world and make it a better place and making these companies global from day 1.

I'm really looking forward to our discussion.

So to your question on the story of my upbringing and growing up, I was born in Hebei province.

So it was Zhangjiakou city where the Winter Olympic Games will be held.

And the reason I believed so much in lifelong learning is because I moved from Zhangjiakou to Harbin in Heilongjiang province when I was 40 years old.

And in my math class, my teacher hated me.

She thought I was the most stupid student on the planet and she just doesn't believe I can learn so I lost confidence in learning when I was a little kid and I thought school probably is not the right place for me and I should leave.

So I dropped out of high school when I was in the 11th grade.

But nevertheless, I was very lucky because I started tutoring young kids English when I was 15 years old, part-time.

So teaching has been my passion and learning has been the motivation that drives me all these years.

And then through teaching young kids I learned that every child is so curious and we should help them build the connection to the world of the best teachers and content and learning experience and then they can imagine and explore.

And then through the experience of being an English tutor, I figured learning is also so important for the tutor or teacher herself because if only if you learn more you can then teach better and then creates this lifelong learning mission for all the kids so that they can learn better.

So what you shared was sort of the early phase of experience motivated, also shaped the spirit for you to become an educator in many ways, to promote learning.

But the interesting aspect for me is learning in English and also learning blend with entrepreneurship, entrepreneurialism.

So can you also tell us more about that aspect?

For example, I believe you started learning English when you were 13 and you mentioned that you start tutoring other kids English when you were around 15 and There's another very very very interesting aspects.

You actually co-founded an English training school when you were at 17 with your uncle, believe it or not.

So tell us more about that and how those sort of blend together, shape up, instill the spirit in you as an educator and also an entrepreneur.

So when we moved to Beijing it was a very lean startup experience.

We rented 1 classroom in the middle of nowhere, today by the Third Ring Road, but by then it was a very rural area in the city.

So we went and found students by the elementary school that they go to and then sent flyers to their parents and then say, hey come and learn with us and you don't have to pay, you get a gift and if you like it you can stay and continue to learn with us.

And then the lessons that I learned from those early days is very important because it helps really build up the understanding of the students, the parents, and then to be an entrepreneur or to fund a business I think there are so many things 1 needs to do well.

For example, how do we hire the right people?

How do we make sure we have the best culture?

How do we build our customer base 1 by 1 and make sure everyone is happy and successful?

So I was the chief errand officer by then.

So I was driving cars, like I need to pick up the other teachers from like 20 kilometers away in Tongzhou.

And then when everyone goes to bed, I need to continue to learn more and prepare for the next day.

So by running all the errands, I think just taught me so many things.

But then by being so close to the customers, namely our students, I got the privilege to understand much more on what every child want and what every parent want.

So I think those understanding really shaped the way that what I think about learning or education And then when I got the chance to build a second business, a VIP kid business, I then really understand and appreciate way more on how difficult it is to build something from the scratch and then what are the mistakes not to make and how to do better.

That was a terrific set of experience you went through learning all the errands, the learning about the students, what they need, also the parents.

Because education, In many ways, the users are not the buyers.

The buyers actually what pays is the parents.

So understanding both students and parents are super important.

While you just touch about sort of naturally, let me switch to the next key set of area topic.

I'm gonna go through, seeing the list of questions about how you start VIPKIT, your second business.

And initially, while you saw the opportunity that many others perhaps at the same time didn't see.

In particular, English learning market when you started was already a very competitive market.

In China, a lot of people will always say it's hyper-competitive, very, very aggressive.

What you see as a unique opportunity that you latch onto?

How do you convince yourself and your teams that you can win in this very hyper-competitive environment?

So when we started VIPKID back in 2013, the market was competitive.

The market size is about 15 billion US dollars parents spending every year.

And then Chinese parents value education as investments.

So around 15% of our household income goes to supplemental education.

That's in some ways the culture and the tradition for the China specific.

Because it is absolute truth that the Chinese parents value education and are willing to invest.

So it's 15% of household income they're willing to spend versus 2% in the United States.

And then, although it's a competitive market, but there are still a lot of pain points yet to be solved for the parents.

So, how to win, the pain points that I see from back then, 15 years of being in the classroom and being close to the students and parents are a few.

1 is we don't really have good English teachers that are out of China Even today.

So there are only 27,000 North American teachers, national-wide.

And the number is so little compared to our vast number of students.

There are 17 million new babies born every year and there there's about a million elementary school kids only in Beijing.

And today VIPKid has more than 60,000 teachers.

So supply has been a huge challenge and you know what parent want is a good teacher and I think a teacher can make or break a student's learning curiosity and sparks that lifelong learning spirit so it's really critical to have the best teachers and then even if the teachers are in China it's mostly very young like people spending a couple of years in China they're not really teachers so the teachers were able to find are the best K-12 educators in the US, coming from all different states.

really love our teachers, and they're the reason that we're successful, I think.

Students are still learning curriculums from many, many years ago, and it stays unchanged.

But when we have technology like all those pads and mobile devices, For children, it's much more engaging if they're able to explore.

And for example, read the online learning library, and they have the content to get access to, instead of just a whole set of book.

So the content has also been a challenge in the traditional service providing that parents can get access to.

And lastly, talking about language learning, if 1 can spend 15 minutes a day to learn the language.

It's much more effective than 15 minutes times 7, put into a two-hour weekend class, because more frequency helps memorizing better and utilizing the language in a much more effective way as a tool.

So those are the pain points that parents feel in terms of quality.

And lastly, parents today are so tired of bringing their children to children classes in the weekend is a more like challenging job than their day job.

So parents would prefer if children can learn from home and they can probably do yoga at the same time.

So all these pain points we've been rethinking how can we reimagine children's English language learning so we can bring more value to the kids probably 10 times better.

So that's why VIPKid launched by the idea that we want to find the best teachers, build this global classroom where we connect cultures and sparks the life and learning spirit for the kids.

So the product itself by what parents believed in and were comment on is at least 5 times better, if not 10 times, compared to the existing product and services.

Cindy, let me summarize a few key things, then I move to the next questions, sort of right connect to what you're describing.

Essentially, you, through your own experience, you identify a set of opportunity, unique insight.

1 is demand, essentially, particularly the Chinese parents, the China's traditional value, learning education, willing to spend, that's the demand is there and it's growing.

The second is you identify opportunity, essentially to use the internet to expand supply.

Because without the internet, you actually, a set of teachers in the United States won't be necessarily become a supplier.

But technology enable you to have that unique insight to say, I can bring a lot more supply in another different place.

So it is sort of the content and devices that are available can be more engaging.

You sort of tune to the language learning itself, moving to a smaller set of chunks, making it much easier, as you said, 5 times better than the alternative form.

So that's a terrific set of insight that you identified.

And then my question to you is, almost every startup founders will grapple with, which is the classic product market fit.

Essentially, you identify a market already, you see the supply and the demand, you have the opportunity to bring them together.

But ultimately, you still have a product that fits the market demand.

You already elaborate quite a bit about some aspects of product, content, device, short duration, continuous learning, lifelong learning.

But in the early days of VIPKIT as a founder, I'm curious, do you have a set of measurement metrics or key success factors that you keep measuring, comparing and say, this will help me to find the product market fit and keep improving the product around those metrics.

And then when do you feel like I really find it?

I think that would be super helpful for a lot of funders that are sort of initially starting going through this phase and they try to learn what the insight you can share with them on how to find the product market fit.

It took us a year and a half to understand that product market fit.

We had a few metrics that are still very important to us today.

So those are efficiency and effectiveness and engagement of our students.

And that's essentially what's believed to be the user value of the product we created.

So for efficacy, we would be measuring students' unit assessment scores.

So those are evaluations conducted by our teachers, live streaming, and also the practice questions.

I'm curious, are these standard, like, what sort of test, similar to schools, how they test English, or you invent something different?

So, similar to schools, but we do build our curriculum content based on our scope and sequence and the knowledge that we need students to learn and the skills we need to master.

So based on those scope and sequence, we've developed our content.

So it's really critical for us to go back and then check and then see well how does she learn, how does a student

and then is everything very efficacious so it's really important to have that.

And secondly on the effectiveness we would then be measuring of all the time that is consumed on the platform, how much progress has the child made, and then lastly on engagement, how well is the student rating the class and what are the feedback from the parents and does he keep coming back and take classes every week and then does the parent refer our program to other parents?

So those are the very basic and fundamental metrics that we look at when we evaluate the product market fit.

So by the first year and a half, what we did was a few steps.

1 is we started with actually 4 students.

And that 1 was a friend of my co-founder Jesse's kid.

So it was Lucy, Theo, Crystal and Lovely.

It's very hard to persuade even the 4 to start to learn with the program.

But then later on, gradually every month, we would have additional 10 students.

And then throughout this whole experience we've iterated our content and technology platform a few times already.

Because It's critical to, we only had limited resources as all the, like every entrepreneur in the very early days, start up teams, and so we had a handful of like, and content developers and a handful of engineers.

So where we'd spend those resources matter the most.

And then by iterating 3 times, 3 versions of our content, and 2 versions of our online learning platform, we found the most important tools were the ways that we need to build for our students.

And similarly on the teacher side, we also make sure that our teachers are happy with

schedule, they find it convenient to teach, they have the essential tools that they need, and they have the content that is very well designed by our team.

So it's also a part of market fit for the supply as well.

You have to do both sides because you're a marketplace.

Right, we are a double-sided marketplace, we have to do both.

But I think we have more responsibilities than double-sided marketplace.

We need to guarantee the quality of the whole experience for both students and teachers, and their success are what we believe to be the most important.

So by piloting the program with 20 teachers and 200 students in the first year and a half.

When everyone was like 2014 it was the year where everyone celebrates entrepreneurship and grow like funding the company everything.

We chose to you know really lock ourselves in a little room and figure out all these fundamental challenges and important part of market fit questions.

I will actually have a couple of follow up questions based on what you described.

But Cindy, what you shared is in many ways sort of why I see also advocates for essentially it's always about build something users or customer want.

In your case, 4 kids, essentially 4 kids, and you start teaching.

But once you find the right fit, it will grow, right?

So at some point from what you described, sort of the key markers of initial milestone will be 20 teachers, 200 students, and you have 2 iterations of platform, 3 iteration of content.

That in many ways showcase you find something.

It's motivating for many others startups.

Don't be sort of discouraged that, oh, I only have 1 user or 2 users.

Any big enterprise, they all start with small.

In your case, it's just terrific that you start with a humble beginning.

Sinovation Venture give you 3 students, you find another 1, that's an awesome story.

So I will have 2 related questions, I think sort of classic for a lot of founders to go through.

1 is the business model, the revenue models, because ultimately, we operate in a market, you need to make it business-wise, there's income, otherwise it won't sustain.

So how do you essentially get to the point whereby the key segment of people, which is the parents, I assume this is the case, they are willing to say, okay, this is something good.

How do you sort of find the business model and making sure that this business model is viable and can provide a sustained growth for an enterprise?

So can you share with the aspects of experience on the business development side?

Yeah, so for business model we believed that it's essential to bring value to both sides of the market, the students and parents and the teachers.

So for the students and parents, the value in the business model is we have lowered significantly the one-on-one learning experience, the cost for the parents by more than 50%.

used to pay about 600 RMB or less than 100 US dollar to find a one-on-one teacher.

And as we talk about, they're only 27,000, so good luck finding 1.

And then it's literally impossible also to find a teacher and have her come to your house every day for half an hour, because the commute will be 2 hours for that half-hour class and you've got to pay for it.

So essentially parents find if they only pay for a small class tuition for one-on-one experience, they have multiple times of value created and also on top of that 50 to 60% less than they had to pay for one-on-one offline.

So they're paying about $40 per hour of the one-on-one learning experience.

They're 5 times better than what they can find in China.

So if you multiply those values, you probably see 10 times more the value created for our parents and students.

And also children really love it because previously they cannot find, you can never choose your teacher.

You can only go to a training like an Institute and there is a teacher for you, you sign up, you learn.

We can compare the most suitable, engaging, and motivating teacher for this child out of our 60,000 teacher pool.

So all these are value created for students' parents.

And for teachers, similarly, if you look up on payskill.com, you then find teachers get paid 16 US dollar per hour of their tutoring services.

And then you've got to commute as well, half an hour 1 way, 2 hours you get paid 16 on average.

Of course not in New York or San Francisco where parents pay tutoring a lot of money for SSATs or ACTs.

But generally we're talking about like the few million K-12 teachers and English language teachers National wide in the US or Canada.

So the value for teachers then is they are willing to teach a global student audience, but unless they move to China or Asia or like Japan they can't do this and also teachers many of teachers are female and then oh

when they have children they become stay-at-home moms for 4 few years that's a really great The teachers are doing this for the family, but at the same time teachers need to supplement families

and if you are in Salt Lake City in Utah, what are the options as a teacher to make those supplemental incomes?

So then VIPKid brings value to our teachers in a way that we pay our teachers about $20 per hour, we make sure they don't have to commute, they can even stay home and teach in the early morning and then spend the whole day with a kid, with a family.

So we have a very, very strong teacher community.

Teachers are connected with each other online.

You see the 30,000 YouTube videos the teacher created in the Facebook community, we have teacher conferences.

So all these value add, you put together, are value created for our teachers.

So we want to make sure that we're here to facilitate the communication, the culture connection, the learning, and everyone is successful.

And there becomes then the VIPKIT business model.

So essentially fundamentally you focus on real value creation on both sides and then the economic model becomes very natural and sustainable.

So I have related questions which is a lot of startups always need to be focused on, which is, you mentioned iteration.

Because ultimately, to build a long-term successful business, there will be things you have to try.

And I'm curious, too, you are learning, what sort of iteration you mentioned, you know, iteration on content, iteration on platforms, what sort of things you tried that didn't work, sort of the salient learnings.

Often you learn a lot more by trying something didn't work And then you capture the learning, move on to a new set of experience.

Are there important learning lessons you can share with the other startups, founders?

I've got 2 lessons that I learned that are very deep memory for me.

So 1 is we try to build too much for the technology platform when we started from day 1.

It's a common mistake for a lot of companies.

You always imagine, oh, this will be perfect.

And then build a blueprint That is so impressive to everyone.

But then we had to understand there are limited resources.

So we did spend like 3 months trying to build this in the second half year of 2014.

We should focus on what's most needed, and then we reorganize our resources.

able to launch something formally March 2015.

Otherwise, we probably won't be able to launch anything

And the funny fact is that of the blueprints we built by then, 4 years ago, some of the work we haven't even finished today.

So it's not a 3 month job, it's a probably 10 year job that we've blueprinted.

And second thing was we were not ready for growth.

But 1 of the key opinion leaders, 1 of the student parents, she owns a Weibo blog and she posted.

So about 2,000 parents signed up for the day and it took us 3 months to call them back.

So we probably should be thinking about, oh, we've been building the product market fit.

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