19. July 2013–
Busuu co-founder Bernhard Niesner evidently has some female fans in high places, given that he was one of the handful of male speakers to grace the stage at DLDwomen this week. We caught up with him to find out his specific learnings from disrupting the online learning market and what his homework is for the rest of 2013…
Women are better learners than men
Because I was asked to talk here, we delved into some of the gender specifics on the site – it was pretty interesting stuff. We found that women do 64 per cent more tests than men and are 40 per cent more likely to achieve a goal if set within Busuu.
They’re also more social – they use video chat four times more than men, and they shop more with Busuu Berries.
TV advertising – be strong, be simple, have a call to action
We were lucky enough to win the SevenVentures Pitch competition at NOAH Conference 2012, so that afforded us €4m in media budget for TV spots on ProSiebenSat.1. It’s been an interesting experiment in how to do TV ads.
We’ve seen a significant impact, but we still need to optimise. It’s an expensive medium, and you need a lot of money to make it work. So you have to think carefully – are you after performance and positive ROI quickly or do you want to spend a lot of money to create awareness?
We had always been based on performance marketing so we have been very detailed on what we spend our money on. It’s about transactions for us. So we’ve changed to one that is much more of a call to action. What’s our name? What’s our service? Sign up now… It’s not more beautiful, but it’s more explanatory.
London makes more sense than Berlin for us. Both make more sense than Madrid.
We moved the whole operation this year from Madrid to London. We bootstrapped for a couple of years and enjoyed the nice lifestyle of Madrid, but it’s not the right place to grow a high-growth startup, especially with the economic downturn. It’s very difficult to recruit top talent, so we decided to pull the trigger and move the whole team to London.
Honestly, we should have done this move to London much earlier. We’re now 30 people, and we might grow to 40 by the end of the year, but we had two years of scaling slowly and we lost a bit of development and drive and we are now filling positions that we should have fulfilled much earlier.
Berlin was an option, but I still think it’s much more international in London, We need people with different language skills, which I think it is easier to recruit in London than in Berlin. Also there are more large media companies, large potential publishers or co-operation partners.
Online language learning is hotting up
It’s an attractive space. There are about a billion people learning English right now. We have witnessed massive traction – we now have 35m users around the world, and I think that this has caused a certain amount of attention. But the market itself is very big – at the end of the day, we have to see where everyone will focus. We have found our niche as the social network for language learning.
Our biggest challenge is engagement
After moving business and setting up from scratch in a new city, we’re now most focused on user engagement. I mean, it’s great, we’re growing by 40,000 people per day, but what we need is that 40,000 to come again and engage with the product.
Motivation is the biggest challenge – we need to create something that is fun enough and efficient enough that they return.
Ed Tech is still learning itself
To be honest I think we were one of the first “Ed Tech” companies – at the time that name didn’t really exist and we also were one of the first to apply ramification to learning languages. Now, suddenly, there’s a whole industry around Ed Tech suddenly and I think it’s still a really young industry and we still need to learn a lot. And there’s a lot we need to quantify in the benefits of such methods.
Bootstrapping worked for us
At that time when we were bootstrapping there were three or four players launching at the same time. One of those was LiveMocha, which raised $18m very early. But they got sold to Rosetta Stone for $8.5m. It was the opposite to bootstrapping – they raised a a lot of cash, but in the end they didn’t do a lot with the money, they diluted the shares and didn’t have a successful business.
We tried to build a real, sustainable business first – every euro we spent was ours or from our early business angel. We spent a lot of time on customer acquisition costs, lifetime value, the most efficient ways to acquire users. So, yes, I’m pretty happy with our current situation.
We have investors that now are helping us grow the company a lot (Brent Hoberman’s PROFounders Capital and private investors) but we’re not employees of a VC fund. And we’re not working for a company that is majority owned by someone else, it’s our company.
Emerging markets and mobile are key for us, but we’re not going to tackle China just yet
In emerging markets learning English is a route to success rather than a hobby. If a taxi driver in Rio – with the Olympics and the World Championship upcoming – can say 200 words in English, he might earn more money.
So people are much more motivated and engaged than in traditional markets. And of course, mobile penetration is big in these markets – we see that we have grown 50 per cent more in mobile than on the website in these markets.
And out of the billion who learn English – probably half of them are from China. This is a market that we haven’t tackled yet in the way we would like to. I think Brazil, Russia, Turkey, US is a big enough market for us now. We’d have to change the product substantially if we wanted to go into China, but it’s definitely on the roadmap for later on.
Next up is a badly needed redesign of the product and more adaptive learning. We’ve already launched live teachers in closed beta, so people can book a professional teacher and there are some more quite interesting projects in the pipeline, so watch this space…
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