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.

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

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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

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Transcript

Craig Cannon [00:00] – Hey, how’s it going? This is Craig Cannon, and you’re listening to Y Combinator’s podcast. Today’s episode is with Cindy Mi, and Qi Lu. Cindy’s the founder and CEO of VIPKID. VIPKID is a one-on-one teaching platform where children in China learn English from North American teachers. Qi is the CEO of YC China, and head of YC Research. Alright, here we go.

Qi Lu [00:23] – Hi everyone, my name is Qi Lu. I’m a partner at Y Combinator. I’m also working on YC China. Today I’m very, very pleased to have the opportunity to speak to Cindy Mi, the founder and the CEO of VIPKID. As many of the YC community in the U.S. or China know, VIPKID has been a tremendous entrepreneurship success, and Cindy, a credit to your success, you more and more become a role model for many entrepreneurs. Today, I have the opportunity, I want to 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 become very valuable for many other young generation entrepreneurs. Let me start with sort of your early phase upbringing, because as we look at the many entrepreneurs, motivation, passion, long term drive for something is often the key success factors. Can you share where you grew up? In particular, what was it like when you had to move, I believe it was at the age of 14… Moving to a different province, and start new school. What was the experience like? And how did that impact you?

Cindy Mi [01:51] – Sure, absolutely. Firstly, I’d like to start by thanking you Qi for doing this interview and then congratulations also on funding and launching YC China.

Qi Lu [02:03] – Thank you very much. I appreciate it.

Cindy Mi [02:05] – 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 one.

Qi Lu [02:20] – Thank you.

Cindy Mi [02:21] – Thank you, so much for being here. I’m really looking forward to our discussion. To your question on the story of my upbringing and growing up. I was born in Hebei.

Qi Lu [02:31] – Hebei, I see.

Cindy Mi [02:35] – It was Zhangijakou City.

Qi Lu [02:35] – I see.

Cindy Mi [02:38] – Where all the Winter Olympic Games will be held. The reason I believe so much in life-long learning is because I moved from Zhangijakou to Harbin in Heilongjiang Province when I was 14 years old. In my math class, my teacher hated me. She thought I was the stupidest student on the planet. She just didn’t believe I can learn. I lost confidence in learning when I was a little kid and I thought school is probably not the right place for me and I should leave. 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. Teaching has been my passion and learning has been the motivation that drives me all these years. 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 that they can imagine and explore. 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 life-long learning mission for all the kids that they can learn better.

Qi Lu [04:10] – That was very interesting. What you shared was the early phase of experience motivated also shaped the spirit for you to become a educator in many ways, to promote learning. The interesting aspect for me is learning and English and also learning blended with entrepreneurism. Can you also tell us more about that aspect for example I believe you start learning English when you were 13 and you mentioned that you start tutoring other kids English when you were around 15? There’s another very, very interesting aspect, you actually co-founded an English training school when you were at 17 with your uncle, believe it or not. Tell us more about that and how those sort of blend together, shape up, sort of instill the spirit in you as an educator and also a entrepreneur.

Cindy Mi [05:13] – Sure, absolutely. When we moved to Beijing, it was very lean start up. We rented a one classroom, in the middle of nowhere. Then it was very rural area in the city. We went to find students by the end of 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.” 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. Then to be an entrepreneur or to find the business. There are so many things one 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 one by one and make sure everyone is happy and successful. I was the Chief Errand Officer by then.

Qi Lu [06:24] – Running all the errands, right?

Cindy Mi [06:26] – Running all the errands.

Qi Lu [06:27] – For the office.

Cindy Mi [06:28] – I was driving hard. I need to pick up the other teachers from like 20 kilometers away in Tongzhou. Then when everyone goes to bed I need to continue to learn more and to prepare for the next day. By running all the errands I think it just taught me so many things, but then by being so close to the customers, namely our students, I got privilege to understand much more on what every child want and what every parent want. Think those understanding really shaped the way that what I think about learning or education. Then when I got a chance to build a second business of VIPKID business then I 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.

Qi Lu [07:26] – That was a terrific set of a experience you went through and all the errands that 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. Understanding both students and the parents are super important. Let me switch to the next key set of area of topic I’m going to go through. Seeing the rest of questions about how you start, VIPKID your second business. Initially what 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 very competitive market. There’s a lot of players in that space. In China, a lot of people will always say it’s a hyper-competitive, very aggressive. What did you see as a unique opportunity that you latched on to and did how you convince yourself and your teams that you can win in this very hyper-competitive environment?

Cindy Mi [08:35] – That’s a great question. When we started VIPKID back in 2013, the market was competitive. The market size is about 15 billion U.S. dollars, parents spending every year. Then Chinese parents value education as an investment. Around 15% of our household income goes to supplementing education.

Qi Lu [09:03] – 15%, for household?

Cindy Mi [09:05] – Compared to 2% in the U.S.

Qi Lu [09:08] – That’s in some ways the culture and tradition sort of China specific.

Cindy Mi [09:13] – Right.

Qi Lu [09:14] – Because it is absolutely true that the Chinese parents value education and are willing to invest. That’s great to know. It’s 15% of household income they’re willing to spend, versus 2% in United States?

Cindy Mi [09:25] – That’s true.

Qi Lu [09:25] – Terrific.

Cindy Mi [09:25] – Although it’s a competitive market, but there are still a lot of pain points yet to be solved for the parents. How to win the pain point that I see from by then 15 years of being in the classroom and being close to the students and parents are a few. One is we don’t really have good English teachers that are out of China, even today. There are only 27,000 North American teachers, nation-wide. The number is so little compared to our vast number of students. There are 17 million new babies born every year and there’s about a million elementary school kids only in Beijing. Today VIPKID has more than 60,000 teachers. It’s almost three times of the supply. Supply has been a huge challenge. What a parent want is a good teacher. A good teacher can make or break a student’s learning curiosity and sparks that lifelong learning spirit. It’s really critical to have the best teachers. Then even if the teachers are in China, it’s mostly very young people spending couple of years in China, they’re not really teachers. The teachers we’re able to find are the best K12 educators in the U.S., coming from all different states. Texas is our largest teacher state. We really love our teachers and they’re the reason that we’re successful. So teacher supply. Secondly, is the content of learning. Students are still learning curriculums from many, many years ago and it stays unchanged. But we have technology like all those pads and mobile devices.

Qi Lu [11:25] – Devices?

Cindy Mi [11:25] – For children, it’s much more engaging if they’re able to explore. For example, read the online learning library and they have the content to get access to instead of just a whole set of books. The content has also been a challenge in the traditional service providing that parents can get access to. Lastly, talking about language learning, if one has spent 15 minutes a day to learn the language, it’s much more effective than 15 minutes times seven putting to a two-hour weekend class. Because more frequency helps memorizing better and utilizing the language in a much more effective way as a tool. Those are the pain points that parents feel in terms of quality. Lastly, parents today are so tired of bringing their children to tutoring classes in the weekend. It’s a more challenging job than their day job, they have no free time of their own. Parents would prefer if children can learn from home and they can probably do yoga at the same time. All these pains points we’ve been really thinking how can we reimagine children’s English language learning. So we can bring more value to the kids, probably ten times better. 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 lifelong learning experience for the kids. The product itself, by what parents believed in and were comment on is at least five times better, if not ten times compared to the existing product and services.

Qi Lu [13:17] – This is terrific. Cindy, let me summarize a few key things then I’ll move to next questions sort of try to connect to what you’re describing. Essentially, you through your own experience, you identified a set of opportunity unique to yourself. One is the math, 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 the supply. But technology enable you to have that unique insight to say I can bring a lot more supply in a lot of different. That’s a second, very big insight. Third, is sort of the content and devices that are available can be more engaging. Fourth, is the product form. You sort of tuned the language learning itself, moving to a smaller set of chunks, making it much easier as you said five times better than ever before. That’s terrific set of insights that you identified. Now my question to you is almost every stop of founders will grapple with which is the classic product-market fit. Essentially you identify a market already, you see the supply and the demand and you have the opportunity to bring it together. Ultimately you still have a product that fits the market demand. You already elaborate quite a bit about the some aspects of product content device, show duration, continues learning

Qi Lu [14:51] – lifelong learning. But in the early days of VIPKID, as a founder, I’m curious, do you have a set of measurement, metrics or key success factors that you keep measuring and comparing and say this will help me to find the product-market fit. And keep improving the product, along those metrics. Then when do you feel like I really found it, this is the product to go with. Help us walk through this, I think that would be super helpful for a lot of founders that are sort of initially starting, going through this phase. They try to learn what the insight you can share with them on how to find the product-market fit.

Cindy Mi [15:31] – Absolutely. It took us a year and a half to–

Qi Lu [15:35] – A year a half, yeah.

Cindy Mi [15:35] – That product-market fit, it’s a very long time. We had a few metrics that are still very important to us today.

Qi Lu [15:46] – What kind of metrics?

Cindy Mi [15:47] – Those are efficiency, and effectiveness, and engagement of our students. That’s essentially what believe to be the user value of the product we created. For efficiency we would be measuring students unit’s assessment scores.

Qi Lu [16:04] – I see.

Cindy Mi [16:06] – We would then–

Qi Lu [16:06] – Test scores? Test scores, right?

Cindy Mi [16:10] – Yes, so those are evaluations conducted by our teachers live-streaming.

Qi Lu [16:13] – I see.

Cindy Mi [16:15] – And also the practice–

Qi Lu [16:15] – I’m curious, are these standard? What sort of test are you, similar to schools how they test English or you made something different?

Cindy Mi [16:23] – 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 needed to master. Based on those scope and sequence we develop our content. It’s really critical for us to go back and then check and then see how does she learn, how does this student learn. Then is everything very advantageous so it’s really important to have that. 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. Lastly, on engagement, how well is the student rating the class and what are the feedback from the parents. Does he keep coming back and taking classes every week and then does the parent refer our program to other parents. What is NPS score? Those are the very basic and fundamental metrics that we look at when we evaluate the product-market fit. By the first year and a half, what we did was a few steps. One is we started with actually four students, because we cannot find the fifth.

Qi Lu [17:45] – Oh so just four students?

Cindy Mi [17:47] – Or the fifth student.

Qi Lu [17:48] – So that’s the MVP right, that’s the most valuable product.

Cindy Mi [17:50] – And Sinovation Ventures, Dr. Kai-Fu Lee.

Qi Lu [17:53] – Oh they found it, I see.

Cindy Mi [17:54] – They had to help us find the first three because–

Qi Lu [17:58] – The first three, you found another one.

Cindy Mi [17:59] – That one was a friend of my co-founder Jessie’s kid. It was Lucy, Theo, Crystal, and Lovely. It’s very hard to persuade, even the four to start to learn with the program. Then later on gradually every month we would have additional ten students. It makes it almost 200 by March 2015. Then throughout this whole experience, we’ve iterated our content and technology platform a few times already. It’s critical to we only had limited resources as all the every entrepreneur in the very early days, start-up teams. We had a handful of content developers, and a handful of engineers. Where we spent those resources mattered the most. Then by iterating three times, three versions of our content, and two versions of our online learning platform, we found the most important tools or the ways that we need to build for our students. Similarly on the teacher side, we also make sure that our teachers are happy with the 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. It’s also a part of market fit for the supply as well.

Qi Lu [19:33] – You have to do both sides of it because you’re marketplace.

Cindy Mi [19:36] – Right, we are a double-sided marketplace. We have to do, but I think we have more responsibilities in a double-sided marketplace. We need to guarantee the quality of the whole experience for both students and teachers. Their success are what we believe to be the most important. 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, and like founding the company and everything. We chose to really lock ourselves in a little room and figure out all these fundamental challenges, an important part of market fit questions.

Qi Lu [20:15] – Terrific. There’s a lot of things I would actually have a couple follow-up questions based on what you described. What you shared is in many ways sort of YC also advocates for essentially it’s always about build something users or customer want, can be a very humble beginning. In your case, four kids essentially four kids and you start teaching but once you find the right fit it will grow, right? At some point from what you described sort of the key markers of initial market would be 20 teachers, 200 students and you have two iterations of a platform, some iteration of content. That in many ways showcases you find something. This is a terrific story, it’s motivating for many others start-ups. Don’t be so discouraged, “Oh I only have one user, two users.” Any big enterprise, they all start with small. In your case, it’s just a terrific that you start with how big. Sinovation Ventures gave you three students, you found another one, that’s awesome story. I have two little questions, I think sort of classic for a lot of founders also. One is the business model, the revenue models, because ultimately, we operate in the market. You need to make it a business wise, does income, otherwise it won’t sustain. How do you essentially get to the point where by the key segment of people to the parents, I believe I assume this in the case, doubting to say okay this is something good, my kid’s learning good stuff, I’m willing to pay for it. How do you find the business model, and making sure that this business model is viable,

Qi Lu [21:59] – and can provide sustained growth for an enterprise? Can you share with us that aspect of your experience? On the business development side?

Cindy Mi [22:08] – For the business model we believe that it’s essential to bring value to both sides of the market, the students, parents, and the teachers. 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%.

Qi Lu [22:31] – 50% is an awesome reduction.

Cindy Mi [22:31] – The parents used to pay about 600 RMB or less than 100 U.S. dollars to find a one-on-one teacher. As we talk about, there are only about 27,000 so good luck finding one, you can’t, it’s very difficult. 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 two hours for that half hour class and you’ve got to pay for it. Essentially parents find if they only pay for 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. They were paying about like $40 per hour of the one-on-one learning experience so it’s great. The teacher are really amazing. They are five times better than what they can find in China. If you multiply those values, you probably see ten times more the value created for our parents and students. Also they really love it, because they 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 and you learn. Now it’s very personalized. We can pair the most suitable, engaging, and motivating teacher for this child out of our 60,000 teacher pool. All this is value created for students’ parents. For teachers, similarly, if you look up on payscale.com you then find teachers get paid 16 U.S. dollars per hour of their tutoring services.

Cindy Mi [24:25] – Then you’ve got to commute as well, half an hour one way. Two 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. Generally, we’re talking about the few million K-12 teachers and English language teachers national-wide, in the U.S. or Canada. The value for the teachers then they are willing to teach a global student all these but unless they move to China or Asia or like Japan, they can’t do this. Also teachers, many of teachers, are female. Then when they have children they become stay-at-home moms for a few years. That’s a really great, the teachers are doing this for the family, but at the same teachers need to supplement family’s income. If you are in Salt Lake City in Utah, what are the other options as a teacher to make those supplemental incomes. Then VIPKID brings value to our teachers in a way that we pay our teachers about 20 U.S. Dollar per an 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. We have a very, very strong teacher community. Teachers are connected with each other online. You see the 30,000 YouTube videos that teacher created and the Facebook community, we have teacher conferences. All these value put together, are again value created for our teachers. We want to make sure that we are here to facilitate the communication, the culture connection, the learning, and everyone is successful.

Cindy Mi [26:10] – And there becomes then the VIPKID business model.

Qi Lu [26:13] – Gotcha, gotcha. It’s terrific. Essentially fundamentally focus on real value creation on both sides. Then the economic model becomes very natural and sustainable. I have related questions which is lot of stuff always need to be focused on which is animation iteration. Because ultimate to build that long term success in business there will be things you have to try. I’m curious to, you are learning what sort of iteration you mention, iteration on content, iteration on platforms, what sort of things you tried that didn’t work. Sort of the things you’re learning. Often you learn a lot more by trying something that didn’t work and then you can actually move on to a new set of experiments. Others important learning lesson you can share with the other stops from this.

Cindy Mi [27:02] – I’ve got two lessons that I learned that are very deep memory for me. One is we tried to build too much for the technology platform we started from day one.

Qi Lu [27:15] – It’s a common mistake for our employees here.

Cindy Mi [27:17] – You would always mention, oh this would be perfect have this and that and that and then get a blueprint that is so impressive to everyone. We had to understand that there are limited resources. We did spend three months try to build this in the second half year of 2014, but then we found it didn’t work. We should focus on what’s most needed and then we reorganized our resources and were able to launch something formally March 2015. Otherwise we’ll probably won’t be able to launch anything by then. The funny fact is that off the blueprints we built by then four years ago, some of the work we haven’t even finished today. It’s not a three month job, it’s a probably ten year job that we’ve blueprinted. Second thing was we were not ready for growth but one of the key opinion leaders, one of the student parents, she owns a Weibo blog and she posted–

Qi Lu [28:21] – This was called the Big V then?

Cindy Mi [28:23] – Right, the Big V. And she posted on Weibo, about 2,000 parents sign up for the day and we took us three months to call them back. We probably should be thinking about oh we’ve been building the product-market fit, it takes a long time. But what if in the middle of the timeline something exploded and then you’ve got to be ready for this. But because it’s negative, our customer satisfaction, if they didn’t get respond along the way. So the solution we had was everyone becomes a customer service person and our engineers really hated it when they are asked to make phone calls to the parents.

Qi Lu [29:05] – That’s really good that you did that, that’s terrific.

Cindy Mi [29:06] – Our engineers said I didn’t want to talk to people that’s why I become an engineer. Why do I have to call parents? It’s really difficult, but we did manage to make sure 2,000 customers get addressed and responded and connected in the time span of three months. But there were a lot of unsatisfactory voice, people saying are you guys for real, where are you? Nobody’s calling me, what’s wrong with you.

Qi Lu [29:29] – That’s awesome, Cindy. Let me, Cindy, sort of move one step up, obviously looking back you have sort of early beginning now it’s very clear VIPKID is going through tremendous. Just walking up the stairs this morning, going through that building, it’s very impressive and now you have almost 10,000 employees with massive growth. At the core, it’s always about product. My understanding is your product recently go through a lot of expansion. For example, you are getting into Mandarin learning and essentially moving from English to another language. In some ways the market’s sort of reversed, the learner would be in maybe North America, the teacher would be in China. It’s a swap if you will of the original product. Also you have expanded your English learning product from sort of the classic one-on-one into one-on-four. And you also expand the range of students from all the way from sort of zero. I’m imagining a zero young kid learning, to 18 years old. How are you envisioning, how do you strategize to pick these product expansions? How do new product initiatives come together to catalyze the next phase of growth for VIPKID?

Cindy Mi [30:52] – The theme of all these product services we built, our common theme, it is to build a global classroom.

Qi Lu [31:01] – Global classroom, okay.

Cindy Mi [31:03] – That is shared by many, many teachers and students.

Qi Lu [31:07] – That’s the theme that ties everything together.

Cindy Mi [31:09] – With amazing content that is personalized and also connect cultures. It sparks this lifelong learning for everyone. It comes to the one-on-one, VIPKID, and then we have our our one-on-many, our one-on-four model, and then we have Mandarin learning and other curricula set. We follow the demand of the parents and students we work with and we believe that by building this global classroom we then had a great chance to personalize learning for the kids with data, technology. Also my dream and goal, as a tutor or teacher myself, is to empower our teachers better by building more intelligent tools and assistance like functions so that our teachers’ job can become much easier in the days to come. They can make more income and be happier.

Qi Lu [32:09] – This is super helpful. It’s essentially a cohesive thing of global massively expanding classroom that’s personalized in technology and data can enable both sides. The learner to learn better, the teachers to be able to teach better. In that context, content always seem to play an important role. My understanding is VIPKID also sort of launched a set of initiatives to expand content. For example, you had a recent partnership with Scholastic that including sort of premier content like Harry Potter’s and also with Houghton Mifflin Harcourt and Oxford University. I’m curious, this sort of English content, then speaking of Mandarin learning what you think would be sort of the marquis catalyst Chinese content that can help the Mandarin learning? I’d be curious to see how you envision the content aspects of expanding of your product portfolios.

Cindy Mi [33:10] – Right, so similarly, we also follow the needs and demands of our students and parents. For the Harry Potter content, the Scholastic partnership, we also have a lot of reading library, like readers that we introduce to the platform. That’s based on the skill that we believe to be very important reading for our children, to have a global library. And we also work with partners like Lexile to measure childrens’ reading ability then to measure how they’ve learned with our major curriculum together with the reading library content. And also for the Houghton Mifflin Harcourt content, we’ve introduced Journeys and Collections which are the elementary school and high school curriculum for American students at school today to be accessible and available for China’s international school students who’s willing to later on take a global international school path. Then we’ve partnered also with SSAT.

Qi Lu [34:15] – Oh, okay, okay.

Cindy Mi [34:17] – So that we’re then able to provide our students with a very exclusive opportunity to sign up and to take that assessment. Also for primary, so for junior, for young kids as well, as a third party assessment tool.

Qi Lu [34:33] – Okay so let me maybe take our conversation to one more step which is the global aspects. Because earlier you mentioned emphasizing in many ways VIPKID the product map and the long term vision aspires to be a global classroom that’s personalized learning. That also fits into the sort of the biggest themes that we see, particularly at the Y Combinator, that there’s more, more global innovations. New start-ups, they all tend to have aspirations to be global company and VIPKID is something that’s very unique. Your beginning is global because you connect the supply demand through a global platforms. Can you share with us with sort of your learning experience how do you initially build sort of global aspects from beginning, from get go. What are the challenges that you had to overcome by building global company that’s based in China?

Cindy Mi [35:29] – Absolutely. I was at the first Founder’s Forum two years ago. Last year and also this year.

Qi Lu [35:36] – This year as well? Good to have you for both of the Founder’s Forum.

Cindy Mi [35:40] – I really love the Y Combinator family, the community, and then the topic Anu gave me for the first year was a global company from day one. It was a very interesting topic, and I think at VIPKID is about to make this happen for a few reasons. One is I think we believe that with our teacher community we are global from day one. I personally interviewed and persuaded our first 20 teachers. The first one was extremely challenging.

Qi Lu [36:14] – Actually how did you do that? Do you fly to the United States or you interview remotely? How do you do it?

Cindy Mi [36:19] – I interviewed remotely, but I did spend three months trying to find teachers in the U.S., before I founded VIPKID. Portland, Oregon, Los Angeles, California.

Qi Lu [36:31] – You mentioned Texas, did you go to Texas?

Cindy Mi [36:32] – I didn’t go to Texas, but then upstate New York. I even went to Toronto, Canada to find teachers. By spending three months there full time I understand it is extremely difficult for people to come to China but if they were allowed to work from home and it will be something really beautiful for teachers. Because every teacher wants to have… As a teacher helping like seed the learning of every child and student across the globe by the Chinese saying. It’s a value that teachers want, teach work locally and teach globally. So the community is essential for our global prospective. Our entire supply side. Our teachers coming from all states, and Texas is our largest state.

Qi Lu [37:19] – All 50 states?

Cindy Mi [37:20] – All 50 states. And then for the Texas community, we’re very proud of our second teacher conference Journey in August, Dallas, Texas this year. The former First Lady, Laura Bush keynoted the session. She spent the whole afternoon. Our teachers feel so proud of being acknowledged and praised by her. Then Orlando is where we had our third teacher conference. The city named VIPKID day for the–

Qi Lu [37:50] – VIP day for whole city?

Cindy Mi [37:51] – Yes, 29th of September. It’s a great honor for our teachers because they feel as a citizen their contribution is so well-recognized by their mayor. Our very first teacher conference is in Salt Lake City, Utah. It’s where teachers are so loving and passionate. We will have our fourth one in Chicago next year. But we just signed an MOU with the city mayor of Chicago by helping the interest of community in Chicago the kids to learn Mandarin. We’ll be provided programs for free. This is the global community that everyone cares so much about and it’s the value is tremendous for the teachers and the local community. That’s a very important reason. Secondly, we have global team from day one as well. Today we have a San Francisco office. We just launched a new city office on the Howard Street, 301 Howard. And our teams come from

Qi Lu [38:50] – Interesting. What that team does, you actually didn’t realize, you have a team in San Francisco. What does that team does, do they do like customer service or product development? What’s their role? I’m very curious to learn.

Cindy Mi [39:04] – So the team is essentially about teacher success.

Qi Lu [39:07] – Oh okay.

Cindy Mi [39:08] – We have people, mostly San Francisco, but we also have a Texas, a Dallas office as well. Then we have a team in New York and everywhere. So the team are from organizations like Teach For, Teach For America. Like tech communities in the U.S., people who’s worked in United Nations, those institutes globally, to help teachers be successful. We have people who really cares about teacher success and they are from the local communities that knows how to do it and how to communicate with our teachers. We’ve built a very transparent service platform for our teachers. We have a called… It’s our posting system where our teachers can send us tasks or questions or tickets or anything that we need to work on. We communicate very proactively with our teacher community and we have teachers keeping leaders informed on those Facebook groups and initiated local events, like community events. But those are some of the worker facilitated by our teacher success team. I really love and admire our U.S. team because they constantly fly to all different states and sponsor a teacher event and make sure teachers can have a great time. Whenever there is something we need to work on or address they will be in the teacher’s house the next day and be there to make sure that they’re successful. It’s because we’ve got the right people to be out…

Qi Lu [40:52] – That’s perfect, I think two key success factors. One is the wonderful community, the other is the teams that’s on the ground in the United States.

Cindy Mi [41:01] – If I may say, the last one. The last one I think is where people in our Beijing office we really make sure that we have a very good communication and we cater for a different timezone. Oftentimes, it’s difficult.

Qi Lu [41:15] – I was going to ask you.

Cindy Mi [41:18] – It is difficult.

Qi Lu [41:18] – Because a lot of global relations what they struggled with, it’s difficult to build a global culture that’s being very mindful about the other teams would be 16 hours away. When we schedule meeting, we don’t want to schedule meeting where people have to wake up in the wee hours. How do you, I’m curious, how do you sort of cultivate that? So that the Beijing teams it’s very mindful about the U.S. team. The U.S. team is also when they collaborate, they really sort of think for the other side. Make sure that working creatively involved with it internally. People really work together to build success for the global path.

Cindy Mi [41:57] – Firstly we make sure when we operate we have the most availability to our teachers in this organization we set up. If you think about how teachers can apply an interview with VIPKID, it’s 24 hours. We have a team that works on night shift.

Qi Lu [42:16] – Oh, night shift, I see.

Cindy Mi [42:16] – To make sure teachers have access.

Qi Lu [42:19] – So you have night shift team.

Cindy Mi [42:20] – The value, I think, then very naturally would impact how the team work together. I was asking the head of my global business development team and he said I have a morning call at 4AM, a morning conference call, not a morning call. A morning call would be 3PM, and because of the time differences and then you work with… But then I think it’s just the culture is lead by example if the leadership teams want to do this and they would accommodate more to the teams that are not in the big office. I think it made much easier, and also we have this concept of do global. Teachers sometime will say this is too good to be true, are you guys for real? You’re so far away. We want teachers to understand that with our American headquarter in San Francisco office is there to make sure we have teacher success. Our team is there, it’s so important and critical to our future success and we’re keeping, investing in the team. Now it’s a 30 people team. We’re investing the team to be a 200 people team. We want to make sure that the team there has more they can execute on and help the teacher with so that we can build the culture.

Qi Lu [43:43] – Terrific. Particularly that one thing you mentioned, Cindy, the culture is best to shape emotion to behavior. That’s true for so many successful innovations. Maybe switch gear to the last stretch of our dialogue this morning which is looking forward to the long-term future, the future of education. Particularly in the context of massive new wave of technologies for example, AI, that will give us so much more technological capabilities. What is your big long-term more ambitious vision for the future education? Because you already have a very, very strong, vibrant pathway. What’s that vision with those new technologies? Can you share with us?

Cindy Mi [44:29] – Absolutely, so the common theme there is for the big global classroom that we are able to build on the cloud. Two things, one is personalization. The other is empowerment. The idea for personalization is that learning should be engaging and effective and efficacious and fun, but then every child is so different. How can we find the most appropriate and engaging motivating teachers for the child? Then how do we make sure there is a personalized learning path based on the knowledge graph that we’ve built. The content, like massive bank of readers, and learning content and books and everything. Then also how do we make sure that the way teacher engage with a child is most focused on how this child learns and then what are the methodology, the training we need to give to teachers. Then the empowerment section I think for teacher’s job it’s been almost most challenging job of human history. But then the common traits for good teachers are very, very similar. The passion for your students, the love, the understanding of this child, and then the real time interaction between the child and the teacher to motivate and to inspire. How do we help our teachers feel the more effective tool so that they would have a AI tutor, AI teaching assistant. I mean to help our teachers to do their job better. Our teachers can be more effective and they can get paid more. They can be happier with what they do and they can make more impact because if they can only teach one, like teacher ten students, they can probably later on teach a hundred students

Cindy Mi [46:26] – even a thousand students when we’re able to empower our teachers with technology.

Qi Lu [46:31] – Terrific, that’s very, very powerful vision for the long-term future. My final question to you, Cindy, is looking back and looking forward on this very, very inspiring journey. What is the key advice that you would have for today’s young generation of enterpreneur? Just thinking about studying or just studying, if there’s one important piece of advice to them what that would be.

Cindy Mi [46:59] – A great question, but at the same time may I also ask you a question on the technology piece?

Qi Lu [47:05] – Sure.

Cindy Mi [47:05] – Because I think you’re the model for ever like parents who are tech background and want to be global and help their children learn better so I have two questions.

Qi Lu [47:19] – I will give you my answers but I would make sure that you also give the important advice to the founders.

Cindy Mi [47:28] – Most important one, but I think my question to you is one is how should an engineer product manager, or anyone in tech, think about the education sector going forward? Beause traditionally it’s fin-tech that matters more, it’s med-tech, medical like technology matters more. What are the opportunities in education technology that every parent, if they’re able to change the world and make it better for their children going forward, what should they be thinking about for the sector? Also, on the AI question, what are the things you believe to be the driving force for the change for the future?

Qi Lu [48:04] – I will share some of my thoughts with the obvious caveat, these are from coming from my personal observation. But I’m not a domain expert, this is more observing from a macro perspective and to project that into the education space. In many ways, Cindy, what you articulated earlier is my views very, very expansive, comprehensive vision because you addressed the learning side, the teaching side, the platform, the personalization, the knowledge graph that connects everything. On top of that, here’s a couple of things, for me that’s important. One is I think ultimately technology should be able to transform pretty much everything we do as a society. And education is perhaps among the most important. To me personally, it’s always about education, medical services. Because these are the only two human professions that are unique that make human better. Education perhaps will pay it to be more emphasized because if imagine every kids, or every adult could always learn more, can become wiser, empowers more knowledge. The world would be a much, much better place. There are so many positive things that can come out of learning. Personally, I taught actually briefly in Qinhuangdao City before I went to Carnegie Mellon. And I’ll always have this sort of lingering passion for teaching because it’s fundamentally important. Having said that, I also sort of observed education for the past couple thousand years hasn’t really changed that much. Technology hasn’t really make a massive uplift or transformation yet. What you have done, in many ways,

Qi Lu [49:53] – is a tremendous step forward. What I think, at its core, for the innovators in the ed-tech space need to think about is the end to end complete learning scenario. Because technology is only a means to solve a end. I cannot sort of put the horse before the cart. With technology, sort of focusing on technology, I think the other way around. I think we are all better off thinking that learning, that teaching, the commercializer. Let’s say, for example, early childhood, what I learn is sort of my incomplete knowledge. A 6th grade in the United States learning fraction, mathematics, is actually the defining moment. That would be the most sort of leading in the careers on this kid’s intellectual development. There’s a lot of sort of cutting edge technologies, including brain scans too. To analyze how a 6th grader’s learn fractions and I was sort of holding on to that incomplete analysis. How do we teach, how do we understand a 6 year old, a 6th grader’s learn fraction mathematics and then use that to make sure that our contact, our teachings, our learning experiences are truly transforming to the next level that every kid’s will be given much, much better opportunities to learn fraction mathematics. That opens the door for them to whether they want to be a artist, want to be an engineer, they can all be better off. I will focus on scenario, in 20 scenario then think and say well technology can do it, that’s sort of one piece of thoughts. The other is on the technological side of it, this is my personal view. AI is massive, we have impressive set of

Qi Lu [51:32] – technological capabilities. For me, I will understand that what’s the core essence of what AI is. My view on this is, AI is about a rapid efficient way of acquiring knowledge. We can use sensors, cameras, whatever sensors to observe a phenomena and use deep learning, machine learning sort of techniques to rapidly distilling the knowledges. Because knowledge is power, as Bacon said, what is knowledge we would understand. With the early cusp of understand fundamentally how human learn. How kid’s learn language, how adult can learn a new programming language, or new manufacturing skills. With the very early cusp, I think VIPKID is a powerful platform, global platform. With additional technological capability, you will be able to get so much more personalized data to figure out, at the early frontier, how kids learn language. I’m pretty sure you’ll expand your part on the map how let’s say a kids learn artistic skills, drawings, dancings, or designing new machineries. You know the future’s unlimited, the peers can’t wait to blend technology with passionate innovators like yourself. And then truly use the opportunity in front of us to make learning so much better for everyone. I’m pretty confident with that, the world would be a vastly better place, for decades to come.

Cindy Mi [53:03] – Thank you.

Qi Lu [53:05] – That’s sort of how I, but treat that as sort of layman’s comments. I sort of often fancy myself to be a teacher, even though I do talk for a year as a teacher at Fudan university. In the future, there is opportunity. I certainly would be interested in content of YC China or YC overall. Cindy, I would love to explore future opportunity we can collaborate helping more innovators figure out new technologies, new way of teaching and learnings and hopefully that can be synergistic to VIPKID as well.

Cindy Mi [53:41] – That’s really exciting, thank you to you. To add on what you said, a learning science is a huge opportunity here to help more kids and I totally agree with you that we should start from the scenario where a 6th grade child learns fractions in math and I apparently failed when I was a 6th grade. The 7th grade is where I had the most challenge learning math and if the child can be assisted and helped with technology of learning better, it just builds so much better foundation for the future learning. Thank you for the great visionary comments.

Qi Lu [54:19] – Thank you. Can we come back to sorry your wisdom if you can share with us and if there’s sort of one piece of feedback or advice to the young founders today? What that would be?

Cindy Mi [54:32] – The most important thing is always the equal to the most apparent thing. And it’s always so hard to stick to it every day even if you think you believe in it and by then I think you would need to check on your actions your like agenda, schedule already to see if you’re investing most time on it. My answer there is customer success. For VIPKID, the core of its success is because parents, teachers, are colleagues. All 10,000 of them. Ultimately, what we want, is student success. The young minds being sparked to learn and curious and imagine and everything. It’s the dream that everyone wants for their own children is whatever want for the hundreds and thousands of VIPKID students. There are a lot of challenges that we talk about global company, the culture, the work time-zone, the technology, the day one product-market fit. But then how does everyone keep, how do everyone work keep working together? Going through all the challenges, because they’re always a lot of them. It’s the common goal that we want student success. Then go to the teacher success part is also important that we can rely on this. I personally would fly 25 hours to be at our teacher’s conference in Orlando because I had to be in another business meeting. And after flying 25 hours straight, I went to the conference straight away and I stood there for four hours so that our teachers can take photos one-on-one with me and then everyone shared with me in three sentences their own story and more than half are in tears.

Cindy Mi [56:20] – And everyone thanked the VIPKID platform because they said, Cindy, make sure to tell your team it’s their diligence answering all the post questions and communities made our success so that our teacher said, “I’m a retired teacher, I broke my leg last year, I can’t teach, but I need the income so VIPKID really helped me loving my kid and then making a income.” Another teacher said, “I had breast cancer, but I was pregnant. I worked so much I cannot have a healthy baby. VIPKID gave me the emotional support, the income opportunity and then now here’s my photo of my lovely baby.” It’s customer, student, success, teacher success that are so critical. Our team, many of our wake-up calls are a set of ten customer phone calls from the previous day. Some of us would do it 9AM on the way to work, 7AM on the way to doing in the gym. Or for me, 6:30AM to listen to all those customer feedback and then it motivates the team greatly too. Go to work, and solve the challenges. The thing is very apparent but is very difficult to stick to it every day and make sure that everyone does it. I think the VIPKID team bears in mind that our mission to inspire and empower every child for the future. It’s such a challenging goal because for the future already it’s a difficult topic. What we want for the future for our children is a global kid, global cities, and then how do we build up their 21st-century skills and how do we build up this global competency. This is something that we really need to work on. But the inspiring and the empower itself

Cindy Mi [58:12] – is also very challenging. Because it’s not just teach the children, give them the fish it’s teach them how to fish. Make sure that they’re inspired to learn, they want to learn. All these like mission and then vision we have drives the team forward and I think as a young entrepreneur it’s very important to check on this every day and to figure out whether we’re doing the right thing.

Qi Lu [58:34] – So well said, Cindy, it’s truly inspiring. Thank you very, very much for the wonderful interview session today, on behalf of Y Combinator’s community members very much want to thank you for your time and best wishes for continued success with VIPKID. It’s inspiring journey.

Cindy Mi [58:54] – Thank you.

Qi Lu [58:54] – Thank you.

Cindy Mi [58:54] – Thank you.

Qi Lu [58:55] – Thank you very much.

Craig Cannon [58:57] – Alright, thanks for listening. As always, you can find the transcript and video at blog.ycombinator.com. If you have a second, it would be awesome to give us a rating and review wherever you find your podcasts. See you next time.