If US won’t pay its teach­ers, China’s tiger moms will

Com­pany matches un­der­paid teach­ers in US with Chi­nese par­ents will­ing to pay

China Daily (Hong Kong) - - BUSINESS - By BLOOMBERG

Cindy Mi leans for­ward on a couch in her sun-filled Bei­jing of­fice to ex­plain how she first got in­ter­ested in ed­u­ca­tion. She loved English so much as a child that she spent her lunch money on books and mag­a­zines to prac­tice.

By 15, she was good enough that she be­gan to tu­tor other stu­dents. At 17, she dropped out of high school to start a lan­guage-in­struc­tion com­pany with her un­cle.

To­day, Mi is 33 and founder of a startup that aims to give Chi­nese kids the kind of ed­u­ca­tion Amer­i­can chil­dren re­ceive in top US schools. Called VIPKid, the com­pany matches Chi­nese stu­dents aged five to 12 with pre­dom­i­nantly North Amer­i­can in­struc­tors to study English, math, sci­ence and other sub­jects.

Classes take place on­line, typ­i­cally for two or three 25-minute ses­sions each week. Mi is cap­i­tal­iz­ing on an al­lur­ing ar­bi­trage op­por­tu­nity. In China, there are hun­dreds of mil­lions of kids whose par­ents are will­ing to pay up if they can get high­qual­ity ed­u­ca­tion. In the US and Canada, teach­ers are of­ten un­der­paid — and many have quit the pro­fes­sion be­cause they couldn’t make a de­cent liv­ing.

Growth has been explosive. The three-year-old com­pany started this year with 200 teach­ers and has grown to 5,000, now work­ing with 50,000 chil­dren. Next year, Mi an­tic­i­pates she’ ll ex­pand to 25,000 teach­ers and 200,000 chil­dren.

Over the years, ed­u­ca­tion ex­perts and tra­di­tional teach­ers have crit­i­cized on­line learn­ing, ar­gu­ing that noth­ing can du­pli­cate the face-to-face in­ter­ac­tion of a phys­i­cal class­room. In China, par­ents are so bent on get­ting their kids the best ed­u­ca­tion pos­si­ble they ’re some­times will­ing to try untested meth­ods that may or may not pro­vide high­qual­ity ed­u­ca­tion.

Qual­ity is key

Mi hired top peo­ple to help de­sign VIPKid’s cur­ricu­lum and has re­cruited aca­demic ad­vis­ers from re­spected Amer­i­can uni­ver­si­ties, but she’s mind­ful of the chal­lenges. “What keeps me up at night is not growth, it’s qual­ity,” she says, wear­ing a bright orange work­out top with her com­pany’s logo and name in large block let­ters. “We need to be re­spon­si­ble for the learn­ing out­come.”

VIPKid has big names bet­ting on its prospects. The com­pany has raised $125 mil­lion from firms in­clud­ing Si­no­va­tion Ven­tures, North­ern Light, Jack Ma’s Yun­feng Cap­i­tal and Se­quoia Cap­i­tal China. Bas­ket­ball leg­end Kobe Bryant in­vested and ad­vises Mi.

Si­no­va­tion, led by for­mer Google China chief Kaifu Lee, funded VIPKid when it was just an idea in Mi’s head and in­cu­bated her team at its Bei­jing head­quar­ters for 15 months be­fore prod­uct launch. “We re­ally felt ed­u­ca­tion could be re­shaped with the power of the In­ter­net,” Lee said.

Af­ter years of hard work, she dreamed of mak­ing a big­ger im­pact. She went back to school and stud­ied at Che­ung Kong Grad­u­ate School of Busi­ness and spent a se­mes­ter at Cor­nell Univer­sity in Ithaca, New York. In 2013, she pitched the idea for VIPKid to Lee, and his firm in­vested that De­cem­ber. Mi and her three co-founders moved into Si­no­va­tion’s of­fices and spent 15 months work­ing on the soft­ware and cur­ricu­lum.

China On­line Ed­u­ca­tion Group, known as 51Talk, be­gan con­nect­ing Filipino in­struc­tors with Chi­nese stu­dents for English classes on­line four years ago — and went pub­lic in June. It has 102,000 stu­dents across all ages taught by 8,000 teach­ers.

Tu­torGroup Co, which works in China un­der the VIPABC brand, boasts Sin­ga­pore’s Te­masek Hold­ings Pte as well as Gold­man Sachs Group Inc among its back­ers. The com­pany, which hit a $1 bil­lion val­u­a­tion in late 2015, of­fers maths and lan­guage tu­tors with many North Amer­i­can in­struc­tors and says it has spent al­most two decades in the mar­ket.

Mi’s goal was to de­liver not the cheap­est way to study, but rather the most ef­fi­cient way to learn for the time and money in­vested. She knew Chi­nese par­ents would pay if they saw their chil­dren ac­tu­ally learn­ing, rather than wast­ing ti me with poor teach­ers or pro­grams.

Mi brought in Lane Litz, who had worked in three coun­tries on how chil­dren learn sec­ond lan­guages, to lead de­vel­op­ment of a stan­dard­ized cur­ricu­lum so the com­pany would have con­trol over what was taught.

The team worked on easyto-use soft­ware that would al­low stu­dents in China to learn from na­tive English speak­ers a half world away with real-time au­dio and video links.

The soft­ware works a bit like cor­po­rate video-con­fer­enc­ing. A typ­i­cal 25-minute les­son has about 30 slides and the cur­ricu­lum builds from ses­sion to ses­sion so a child can de­velop their vo­cab­u­lary and flu­ency.

Par­ents buy a pack­age of lessons and their chil­dren can then select which teach­ers they want. A block of 72 classes is about $1,500, or about $21 each.

Dou­glas Gao, 10, be­gan study­ing English as part of an early trial group in 2014 and has kept go­ing.

His fa­ther, Vic­tor, says the price is com­pa­ra­ble to a group English class his son took, but those were in­con­ve­nient and in­ef­fec­tive. Now Dou­glas is speak­ing in com­plete sen­tences and his 6-year-old brother has started the pro­gram.

“Of course face-to-face is the most ef­fec­tive method for learn­ing, but kids these days are very com­puter-friendly so it’s very easy for them to pick it up,” the fa­ther says.

VIPKid re­cruits teach­ers through re­fer­rals and so­cial me­dia and gets 10,000 to 20,000 ap­pli­ca­tions a month. Prospec­tive hires are tested and screened and about one out of ev­ery 10 ap­pli­cants are ap­proved, Mi says.

Suc­cess­ful ones take VIPKid’s train­ing cour­ses for about a week and need to pass a fi­nal test be­fore start­ing work. They’re not re­quired to have de­grees in ed­u­ca­tion, but do need a bach­e­lor’s de­gree and some teach­ing ex­pe­ri­ence.

VIPKid says most of its in­struc­tors are ex­pe­ri­enced cur­rent or for­mer teach­ers. April Baker, a 42-year-old sin­gle mother in Penn­syl­va­nia, started teach­ing with VIPKid in Au­gust, in part be­cause of fi­nan­cial pres­sures from her di­vorce last year. She teaches most days be­tween 7 am and 9 am and of­ten again from 8 pm un­til mid­night.

The $20 to $22 an hour she makes helps sup­ple­ment her in­come as a fit­ness in­struc­tor for se­niors, and the flex­i­ble hours al­low her to look af­ter her kids.

VIPKid of­fers reg­u­lar in­cen­tives for teach­ers, in­clud­ing com­puter gear and T-shirts. Mi says she hasn’t be­gun to think about an IPO be­cause there is so much work to do i n man­ag­ing growth. She thinks it may be only t hree or four years be­fore VIPKid has a mil­lion stu­dents, a dizzy­ing prospect for a three-year-old en­ter­prise.

She sees an op­por­tu­nity to im­prove the ef­fec­tive­ness of ed­u­ca­tion with such an enor­mous group of stu­dents and she’s set up a re­search in­sti­tute to work on de­vel­op­ing best prac­tices.

Robert Hut­ter, man­ag­ing part­ner of the Sil­i­con Val­ley ven­ture firm Learn Cap­i­tal, is chair­man of the group, and its ad­vis­ers in­clude pro­fes­sors from Stan­ford, Har­vard and the Univer­sity of South­ern Cal­i­for­nia. “The sheer scale of this pre­sents the op­por­tu­nity to ex­am­ine the­o­ries that you couldn’t look at i n your own l ab,’’ says Bruce McCan­dliss, a pro­fes­sor at Stan­ford’s Grad­u­ate School of Ed­u­ca­tion who will help de­velop the re­search agenda.

... kids these days are very com­put­er­friendly so it’s very easy for them to pick it up.” Vic­tor Gao, fa­ther of 10-year-old Dou­glas Gao the num­ber of stu­dents of all ages taught by 8,000 teach­ers of 51Talk


Yang Zix­uan, 8, a stu­dent at Bei­jing No 2 Ex­per­i­men­tal Pri­mary School learns English through VIPkid on­line cour­ses.

Cindy Mi, founder of ed­u­ca­tion startup VIPKid.

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