Cindy Mi and Qi Lu Share Advice for Entrepreneurs Building Global Companies

Hi everyone, my name is Qi Liu. 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, the founder and CEO of WebKit. As many of the YC community in the U.S. or China know, WebKit has been a tremendous entrepreneurship success. Cindy, credit to your success, you have more and more become a role model for many entrepreneurs.

Today, I have the opportunity, and I want to go through a list of questions. Hopefully, we can share some of your insights and the learning you had over the years that can prove to be very calm and 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, and long-term drive are often key success factors. Can you show us where you grew up? In particular, what was it like when you had to move to a different province at the age of 14, I believe, and start a new school? What was the experience like and how did that impact you?

Sure, absolutely. Well, first, I'd like to start by thanking you for doing this interview and then congratulate you also on launching YC China. Thank you, this is really exciting for many young entrepreneurs and tech people because you're a role model for everyone for connecting the world and making it a better place by making these companies global from day one. So thank you so much for this event, I'm really looking forward to our discussion.

So, if I return to your question on the story of my upbringing, I was born in a little place, precisely in Zhangjiakou City, where the Winter Olympic Games will be held. Yes, but the reason I believed so much in lifelong learning is because I moved from Zhangjiakou to Harbin, Heilongjiang Province when I was 14 years old. In my math class, my teacher hated me; she thought I was the most stupid student on the planet. She just didn't believe I could learn, so I lost confidence in learning when I was a little kid. I thought, you know, 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 studied children’s English when I was 15 years old part-time, so teaching has been my passion. Learning has been the motivation that drives me all these years. Through teaching young kids, I learned that every child is so curious, and we should help them build a connection to the world with the best teachers, content, and learning experiences so they can imagine and explore.

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

That was very interesting. So, while what you shared was your early phase of experience motivated and shaped your spirit to become an educator in many ways to promote learning. But the interesting aspect for me is that learning English and also learning the blend with entrepreneurship. 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 started tutoring other kids in English when you were around 15.

Yes, and there's another very, very interesting aspect: you actually co-founded an English training school when you were 17 with your uncle. Tell us more about that and how those experiences shaped your spirit as an educator and also as an entrepreneur.

Sure, absolutely! So when we moved to Beijing, it was a very lean startup experience. We rented one classroom in the middle of nowhere—now today it's a busy room road—but by then it was a very rural area in the city. So we went and found students by the elementary schools that they went to and sent flyers to their parents saying, “Hey, come and learn with us! You don't have to pay and you get a gift, and if you like it, you can stay and continue to learn with us.”

The lessons that I learned from those early days were very important because it helped me really understand the needs of students and parents. To be an entrepreneur or a founder, there are so many things that one needs to do well. For example, how do we hire the right people? How do we ensure 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, but really I did all the errands. I was driving cars to pick up other teachers from like 20 kilometers away in Hangzhou, and when everyone went to bed, I had to continue to prepare for the next day. Running all those errands taught me so many things.

By being so close to the customers, namely our students, I had the privilege to understand much more about what every child wants and what every parent wants. Those understandings really shaped the way that I think about learning and education.

When I got the chance to build the second business, the VIPKid business, I then really understood deeply how difficult it is to build something from scratch, and what mistakes not to make, and how to do better.

That was a terrific experience! You went to run those errands while learning about the students' needs as well as the parents because, in education, the users are not the buyers. The parents actually pay. So understanding both students and parents is super important.

Well, you just touched on that, so naturally let me switch to the next key area of topic. I'm also seeing a list of questions about how you started replicating your second business. Initially, why did you see the opportunity that many others perhaps at the same time didn’t see, particularly in the English learning market? When you started, it was already a very competitive market. There are a lot of players in that space in China, and other people always say it’s hyper-competitive. What did you see as a unique opportunity that you latched onto, and how did you convince yourself and your team that you could win in this very hyper-competitive environment?

That’s a great question! When we started VIPKid back in 2013, the market was competitive, but the market size was about 15 billion U.S. dollars that parents spent every year. Chinese parents value education as an investment. So around 15% of our household income goes towards education, compared to 2% in the U.S.

That's in some ways the culture and the tradition. For absolute, Chinese parents value education and are willing to invest. That’s great to know, so it's 50% of household income they're willing to spend versus 2% in the United States—that’s terrific.

And although it's a competitive market, there are still a lot of pain points yet to be solved for the parents. The pain points that I identified from my 15 years in the classroom, being close to the students and parents, are a few.

One is that we don’t really have good English teachers out of China. Today there are only 27,000 North American teachers nationwide, and that number is so little compared to our vast number of students—there are 17 million new babies born every year, and there are about a million elementary school kids just in Beijing. Today, VIPKid has more than 16,000 teachers—that’s almost three times the over-supply! Demand is huge!

What parents want is a good teacher, and a teacher can make or break a student’s learning curiosity and inspire that lifelong learning spirit. So it’s critical to have the best teachers.

Even if the teachers are in China, they're mostly very young and have spent a couple of years in China, so they’re not really teachers. The teachers we do find are the best educators in the U.S., coming from all different states. Texas is our largest teacher state—we really love our teachers, and they are the reason that our teacher supply is sustainable.

Secondly, the content of our learning shows that students are still learning curricula from many years ago, which remains unchanged. Now, with technology like iPads and mobile devices for children, it’s much more engaging if they’re able to explore and, for example, read from the online learning library.

So the content has also been a challenge in the traditional learning structure that parents can access. Lastly, talking about language learning, if one spends 15 minutes a day to learn the language, it’s much more effective than 15 minutes times 7 for a 2-hour weekend class. Frequency is more effective for memorizing and utilizing the language, serving as a tool.

Lastly, parents today are so tired of bringing their children to classes on the weekends; it becomes more of a challenging job for them than their day jobs. They have no free time of their own. So parents would prefer if their children could learn from home, allowing them to do yoga at the center and not running around all weekend.

All these pain points made us rethink how we could reimagine children's English language learning so we could bring more value to the kids, probably ten times better. That’s why VIPKid launched the idea that we wanted to find the best teachers and build this global classroom where we can connect cultures and spark the lifelong learning spirit for the kids.

The product itself is what parents believed in and what they commented on. It’s at least five times better, if not ten times, compared to the existing products and services.

This is terrific, Cindy! Let me summarize a few key things before I move to the next questions. While you were describing, essentially, through your experience you identified a set of opportunities.

The unique links are essentially the demand, particularly from the Chinese parents and the traditional values of learning—they’re willing to spend. That demand is there and it’s growing. Then you identified opportunities such as using the internet to expand the supply because without the internet, those teachers in the United States wouldn’t necessarily have become a supply.

Third, technology enabled you to have that unique insight to say, “I can bring a lot more supply in another different way.” Next, very big insights included the content and devices that were available which can be more engaging, along with the product form, which you sort of tuned to language learning itself. This means moving to a smaller set of chunks, making it much easier and, as you said, five times better than alternatives—that’s terrific!

So, my question to you is that almost every startup founder grapples with the classical product-market fit. You’ve identified market order, and you can see the supply and demand, and you have the opportunity to bring them together. But ultimately, you still have a product that fits the market demand. You already elaborated quite a bit about some aspects of product content, device, short duration, and continued learning for lifelong learning.

But in the early days of VIPKid, as a founder, I’m curious if you had a set of measurement metrics or key success factors that you kept measuring so you could improve the product based on those metrics. When did you feel like, “I already found it; this is the product”? Help us walk through this. I think that would be super helpful for a lot of founders who are starting and trying to learn what insights you can share with them regarding finding product-market fit.

That’s a great question! We took a year and a half to find that product-market fit. It was a very long time! We had a few metrics that are still very important to us today, focusing on efficiency, effectiveness, and engagement of our students. That’s essentially what we believe represents user value for the product we created.

For efficacy, we would measure students’ assessment scores through various tests. So those are evaluations conducted by our teachers during livestreaming classes and practice quizzes. We build our curriculum content based on our scope and sequence that identifies the knowledge our students need to learn and the skills they need to master.

It’s critical for us to continuously check how a student learns, how they project their knowledge, and whether everything is efficacious. Effectiveness is then measured by how much progress a child has made from the time they spent on our platform.

Lastly, engagement measures how well a student rates the class, what feedback we receive from parents, and whether they keep returning for more classes. What’s their NPS score? Those are the very basic and fundamental metrics we look at when we evaluate product-market fit.

Throughout the first year and a half, what we did was a few significant steps. One is that we started by actually training four students.

Because we couldn’t find the fifth, we decided to only work with four. We took that MVP approach seriously. Some of the founding team from the previous ventures helped us find the first three students.

Over time, we gradually recruited ten additional students each month, so it made it almost 200 by March 2015. Throughout this experience, we iterated on our content and technology platform a couple of times.

Since resources are limited, we had to prioritize our efforts. We spent three months trying to build a new feature, and in the second half of 2014, we found that it didn’t work as expected. We had to focus on what was most needed and then quickly reorganize our resources to formally launch something by March 2015; otherwise, we probably wouldn’t have been able to launch anything!

The funny fact is that of the blueprints we built four years ago, some of the work we haven't even finished today. So that's probably a ten-year project that we ended up working on.

The second lesson I learned was that we were not ready for growth. A key opinion leader—a parent who owned a Weibo blog—posted about us and drove about 2,000 parents to sign up in one day, and it took us three months to call them back.

So we probably should have thought, “Okay, we've been building this product-market fit; it takes a long time, but what if, in the middle of that time, something explodes?” We had to be ready for this, but it resulted in negative customer satisfaction if they didn't get a response in a timely manner.

The solution we had was that everyone became a customer service person, and our engineers really hated it when they were asked to handle that—so you can imagine. But we managed to make sure all 2,000 customers were addressed within three months.

There were a lot of unsatisfactory remarks—people would ask, “Are you guys for real? Where are you? Why are you calling me?”

So now, let me see. Moving one step upward, obviously looking back, you have been growing tremendously. Just walking up the stairs this morning going through our building, it’s very impressive.

Now you have almost 10,000 employees with a massive set of businesses. Of course, it’s all about product. My understanding is that your product has recently gone 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 sort of reverses: the learner will be in North America while the teacher will be in China. It’s a swap of the original product. And you’ve also expanded your English learning product from classic one-on-one into one-to-four and also broadened the age range for students from zero to 18 years old.

How do you envision and strategize to pick these product missions, and how do those new product initiatives come together to catalyze the next phase of growth for VIPKid?

The theme of all of our product services is to build a global classroom, a global classroom that is shared by many teachers and students. This theme ties everything together, with amazing content that is personalized.

It also connects cultures and sparks lifelong learning for everyone. So it makes sense that the one-on-one VIPKid format should be complemented with our one-to-many model, as well as the mentoring and other curricula we are building.

We follow the demands of the parents and students we work with and believe that by building this global classroom, we have the best chance to personalize learning for the kids using data and technology.

Additionally, my dream and goal as a tutor and teacher myself is to empower our teachers better by finding more intelligent tools to assist them, making their jobs easier, so that our teachers can teach better, earn more, and be happier.

Gotcha! This is super helpful. It essentially showcases a cohesive vision of a global, massively expanding classroom that’s personalized using technology and data to enable both sides to do better.

In that context, content always seems to play an important role. My understanding is that you have also initiated a series of partnerships to expand the content—such as the recent partnership with Scholastic, which includes premier content like Harry Potter, as well as partnerships with Houghton Mifflin Harcourt and universities. We could say these are essential English content relationships.

As for Mandarin learning, what do you see as marquee catalysts or Chinese content that can help in Mandarin learning?

We follow the needs and demands of our students and parents very closely. With the Harry Potter content from the Scholastic partnership, we also have a lot of reading libraries—a set of readers that we introduce to the platform—based on the skills we believe to be critical for children learning how to read.

For the Houghton Mifflin Harcourt content, we reintroduced journeys and collections which form the foundation for elementary school and high school curricula for American students. This content is now accessible for international students in China who wish to embark on a global education path.

Additionally, we partnered with SSAT, so we’re then able to provide our students with a very exclusive opportunity to sign up for and take that assessment, along with TOEFL Primary and TOEFL Junior assessments specifically designed for young kids as well as third-party assessment tools.

I see. Okay, let me perhaps take the conversation one step further. Earlier, you emphasized the need for a global classroom. As you mentioned earlier, VIPKid’s roadmap and long-term vision is about being a global classroom that personalizes learning.

This aligns with the biggest themes we see today, particularly in the YC community, where there is a drive towards more global innovations and startups aspiring to be global companies. The way you started was truly unique—connecting supply and demand through a global platform.

Can you share with us your experience of building these global aspects from the beginning? What were the challenges that you had to overcome while establishing a global company based in China?

Absolutely! I was at the first founders’ forum two years ago, last year, and also this year, so it's so good to have you here! I accompanied the family community, and the topic you gave me for the first year was “Global Company from Day One.”

If you’re happy, we can make this happen for a few reasons. One is that we believe 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! For teachers in the U.S., we started remotely. I spent three months trying to find teachers in the U.S., which is quite humorous in hindsight. The first few teachers were from Portland, Oregon, and Los Angeles. They appreciated that they could work from home while helping kids across the globe. Every teacher wants to lend assistance and contribute to the learning of every child, so it was a beautiful value proposition.

Our teachers are from all 50 states, and we are particularly proud of our second teacher conference held in Dallas, Texas. Former First Lady Laura Bush gave the keynote. It was an inspiring session, and our teachers felt proud to be recognized in such a structured environment.

We had our third teacher conference in Orlando, where the city named that day “VIPKid Day.” That was a great honor and a well-recognized contribution by their mayor. The energy from our fourth teacher conference in Chicago will be equally strong as we signed an MOU with that city’s mayor to help underserved communities learn Mandarin.

This is the global community that everyone cares deeply about, and the value is tremendous. Our teachers and local communities come together to support each other.

Secondly, we have a global team from day one as well. Today, we have an office in San Francisco, and we just opened a new office in New York. My team members come from organizations such as Teach for America and the United Nations, bringing diverse experiences to help ensure teacher success.

We have implemented a very transparent service platform for our teachers. We utilize a task and request system where our teachers can reach out to us with questions or support they need.

We proactively communicate with our teacher community and have many amazing volunteer leaders who, through various social media platforms, facilitate local events. Our teacher success team ensures everyone is connected and thriving.

I think that’s a critical aspect of this team, and we acknowledge their contribution. The work environment in our Beijing office is very focused on giving our teachers a global experience.

We’ve built a culture here that prioritizes customer service for our teachers. Ultimately, we recognize the difference between leadership and management in these circumstances. The leadership team stands committed to improving the educational journeys of our students.

I should also mention some of the challenges have stemmed from building a global culture that is tactfully aware of the nuances with teams working across various time zones. When scheduling meetings, we are careful not to need people to wake up in the wee hours. When there’s collaboration, leadership prioritizes fairness and equity in the spirit of maintaining transparent operations.

First and foremost, we treat any issues or practices from the perspective of what’s best for teacher success, and our teachers often appreciate that.

Cindy, that’s powerful! The culture is best shaped or most shaped by leaders’ behavior, and that’s true for many successful organizations.

Let’s switch gears to the last stretch of our data this morning, which looks forward to the future of education. Particularly, in the context of a massive new wave of technological advancements, such as AI, can you share with us your big, bold, and ambitious visions for the future of education?

The common theme here is about the big global classroom that we’re able to build on the cloud. Two things drive this: personalization and empowerment. Personalization means that learning should be engaging, effective, and enjoyable. However, every child is different.

So how can we find the most appropriate, engaging, and motivating teachers for each child? How do we make sure that personalized learning is based on a knowledge graph that we build to guide everything we offer our students?

The second aspect involves empowering our teachers. The teaching profession has long been one of the most challenging roles, but the common traits of good teachers are present across the board: a passion for students, an understanding of their needs, and creating real-time interaction for motivation and inspiration.

This is where we can utilize technology to develop intelligent tools that support our teachers and help them perform their jobs more effectively. With these systems in place, teachers can instruct larger groups of students than ever before, track their progress, and ensure they make a lasting impact on the entire classroom.

That’s a very powerful vision for the future! My final question for you, Cindy, looking back and forward at your incredible journey, what key advice do you have for today’s young generation of entrepreneurs? If there’s one important piece of advice you’d like to share, what would it be?

That’s a great question! The most important thing is always the most apparent thing, but it’s always so hard to stick to it every day—even if you think you believe in it! You really need to check your actions and your agenda to see if you’re investing the most time in it.

My answer would be customer success. I think the core of VIPKid’s success is rooted in our parents, teachers, and colleagues. All 10,000 of us want student success above all else.

It’s a common dream that every parent has—the dream for their child to learn and be curious and excited about knowledge. That’s the dream we share for the thousands of VIPKid students we serve.

Despite all of the challenges of being a global company—cultural nuances, time zones, and product-market fit—we work on this together because of our shared goal: student success.

Teacher success is also important. If we align our efforts around this common vision, we can do significant things. Personally, I would fly 25 hours to be at our teachers’ conference in Orlando even after doing a business meeting. I stood there for four hours so that our teachers could take photos with me and share their stories.

More than half of those moments were filled with emotion as many teachers expressed how VIPKid transformed their lives by helping them find a balance between their careers and families. They often tell me of the impact we make in their lives.

We take these lessons to heart. I often partake in 10 customer phone calls a day, and those touchpoints are what fuel our drive to continue to solve challenges.

I think this is very important to remain aware of our students as we move ahead. Thank you so much for the inspiring interview session today! On behalf of Y Combinator’s community members, thank you for your time, and best wishes for continued success with WebKit and your inspiring journey!

Thank you! Thank you very much!