Speaker 1: On a recent trip to New York. I'm at a
Speaker 1: former school teacher. Hello, how are you? Hello? How are you?
Speaker 1: A days wind of high fine? Fie Fie. My name
Speaker 1: is yash A Glass, and I grew up in Jersey City,
Speaker 1: New Jersey. I went to Rutgers University, go are you?
Speaker 1: And then I had studied secondary education at Montclair State University. Yeah.
Speaker 1: She is a friendly, talkative person. She came to the
Speaker 1: interview with her two kids. Yeah. Taught for about seven
Speaker 1: years in private schools before taking a job at Kansas
Speaker 1: State University. Then she hit kind of a rough badge.
Speaker 1: I don't tell very many people about this part of
Speaker 1: our lives. I lost my home, I lost my job. Essentially,
Speaker 1: we lost everything, absolutely everything, to the point where we
Speaker 1: were sleeping out of our car and so um, we
Speaker 1: were homeless, and and so I had to do something.
Speaker 1: I had to do something different about our lives, and
Speaker 1: I had to do it immediately. Luckily, a job prospect
Speaker 1: came to her through a Chinese company called v I
Speaker 1: P Kid. V I P Kid was an opportunity that
Speaker 1: I found online through a Facebook group. This company has
Speaker 1: been a blessing for our family because now we're in
Speaker 1: our own space. I can pay our rent. It has
Speaker 1: given me a our life back. Yasha is only one
Speaker 1: of tens of thousands of American teachers who have quit
Speaker 1: the profession. Here in the US, it's been called a
Speaker 1: teacher dropout crisis, brought on by long hours, low pay,
Speaker 1: and lack of resources. Meanwhile, v I P Kid is
Speaker 1: promising its teachers a better alternative, tutoring eager Chinese students
Speaker 1: from the comfort of their homes, often for higher pay
Speaker 1: than what they would make in traditional schools. We have
Speaker 1: over two students now, over twenty thou teachers, and then
Speaker 1: on the refue of two thousand seventeen would be a
Speaker 1: five filling v that's v I P Kids. Thirty four
Speaker 1: year old founder Cindy me she's really into the numbers.
Speaker 1: As you'll soon see, her entire teaching philosophy is about
Speaker 1: how to enhance learning with data. Given all these numbers,
Speaker 1: we are not representing more than of the top on
Speaker 1: the learning market, and Cindy says she's only just getting started.
Speaker 1: We're not interested in beauty a after school tutoring brand, right.
Speaker 1: We're really interested in is to rethinking of how educational
Speaker 1: learning could look like in the next time years. Hi,
Speaker 1: I'm Brad Stone and I'm Peter Lstrom, and this week
Speaker 1: on Decrypted will explore the booming online education market in China.
Speaker 1: We'll see how v I P Kid came to lead
Speaker 1: the pack and check out the company's claims that it's
Speaker 1: curriculum is boosting learning outcomes for so many students. Cindy
Speaker 1: Me startup was just valued at more than a billion
Speaker 1: dollars and with a new data driven approach to learning,
Speaker 1: the v I P Kid has said it sites on
Speaker 1: changing the very concept of school itself. Education is one
Speaker 1: of the last major industries to see serious disruption by technology,
Speaker 1: and many people are still skeptical about bringing tech into
Speaker 1: the classroom. It's a high stakes experiment for v I
Speaker 1: P Kid, but the future of a whole group of
Speaker 1: children on the line. Stay with us. Yes, yes, now,
Speaker 1: I know h What is it? No up here? Hair here?
Speaker 1: Hair here? Hair the job? Noah. That's Yash online with
Speaker 1: one of her students, a five year old boy called
Speaker 1: Noah who lives in Beijing. Yasha is eight thousand miles
Speaker 1: away he from her home in New Jersey. She's up
Speaker 1: super early in the morning so she can talk with
Speaker 1: Noah during the afternoon and Beijing. They're using an online
Speaker 1: video conferencing system where they see each other and use
Speaker 1: a virtual chalkboard, in this case with images of a
Speaker 1: young girl pointing to her ears and other parts of
Speaker 1: her face. When Noah started, he was having a hard
Speaker 1: time getting into it. He was only four years old
Speaker 1: and wouldn't even say hello or imitate what Yasha said.
Speaker 1: But eight months later he's able to follow along and
Speaker 1: speak basic phrases. Yasha and Noah usually connect three times
Speaker 1: a week for classes for twenty five minutes each. Yasha
Speaker 1: says that after six to twelve months, kids are usually
Speaker 1: comfortable enough to have basic conversations. While she's teaching, every
Speaker 1: part of Noah's progress is being tracked and tagged. V
Speaker 1: I p Kid is constantly reading the data to suggest
Speaker 1: adjustments that, according to the company, will help kids like
Speaker 1: Noah learn faster. There's a tremendous amount of measurement that
Speaker 1: occurs as a service to the student at the prament.
Speaker 1: That's Rob Hudder, a managing partner at Learned Capital. It's
Speaker 1: a Silicon Valley venture capital from that specializes in education
Speaker 1: and has put money into Cindy's startup. We essentially provide
Speaker 1: feedback on how well students are doing, and there's continuous
Speaker 1: reporting that goes back to parent. It's just like the
Speaker 1: reporting get at school, but it's more detailed and a
Speaker 1: heck of a lot more frequent. People like Rob look
Speaker 1: at the traditional method of teaching, one instructor at the
Speaker 1: front of a classroom, giving twenty or thirty kids all
Speaker 1: the same lesson at exactly the same pace. They think
Speaker 1: that's not only old fashioned, they think it's kind of crazy.
Speaker 1: Of course, all kids don't learn at the same speed.
Speaker 1: Of course, certain kids will respond better to examples with
Speaker 1: sports or superheroes or historical figures. But is that really
Speaker 1: better teaching? There are plenty of skeptics. It doesn't help
Speaker 1: that there have been so many online education services in
Speaker 1: the past that have failed to deliver on their promises.
Speaker 1: The whole thing was completely unrewarding to me. If you
Speaker 1: like teaching, the joy of that is in being with
Speaker 1: your students and interacting with them and drawing them out,
Speaker 1: and so it just doesn't happen online. That's a lane Clift.
Speaker 1: She's a writer who has taught at universities like Yale
Speaker 1: Middlebury in the University of Connecticut. Elaine wrote an influential
Speaker 1: article on the Chronicle of Higher Education a few years ago,
Speaker 1: and which she argued forcefully against the idea that online
Speaker 1: teaching is somehow better. She also thinks that just as
Speaker 1: a disservice to the students, I think it's actually very sad.
Speaker 1: And I have taught in Asia. There's a certain intensity
Speaker 1: in Asia. I can tell you their parents are driven
Speaker 1: to have some learn in English. I actually believe that
Speaker 1: we are we are changing as a species in ways
Speaker 1: that we are not even aware of. We do not
Speaker 1: that you lose a tremendous amount in your terms of
Speaker 1: whether it's your humanity or your courtesy or your patience
Speaker 1: or whatever when you don't have to interact with people
Speaker 1: face to face. Boy, Peter Elane is making a pretty
Speaker 1: strong statement about the kind of education that V. I. P.
Speaker 1: Kid is providing. That's it. I kind of some athletictor argument.
Speaker 1: I would imagine it's hard to learn from somebody who
Speaker 1: is literally halfway around the world. Yeah, I'd agree. I
Speaker 1: can't imagine my kids learning from somebody in a different
Speaker 1: part of the world, especially full time. Maybe for particular
Speaker 1: skills like a language skill, but overall education that seems
Speaker 1: very challenging. It is though a creative solution to this
Speaker 1: dearth of teachers. I mean, I guess it's probably better
Speaker 1: than nothing right in China, that's the challenge that they face.
Speaker 1: They just have a shortage of good English teachers, especially
Speaker 1: native English teachers. V r P KID provides the curriculum
Speaker 1: for classes, but it's on the teacher to make sure
Speaker 1: that tailor their lessons to a child's interests and aptitude,
Speaker 1: and teachers that don't perform get phased out. There are
Speaker 1: a lot of behavioral avocacy related things we're watching out
Speaker 1: as well, for example, how good their students are doing
Speaker 1: in their U Unit assessment scores, their kids using the
Speaker 1: A class post class videws UH like exercises, how they're doing,
Speaker 1: how they do quizzes, how the teachers are reviewed that parents.
Speaker 1: This is the founder, Sindy me Again. We visited her
Speaker 1: at the company's headquarters in Beijing. It's inside a former
Speaker 1: daoas temple in the middle of a quiet Hutong, the
Speaker 1: traditional neighborhood of narrow alleyways and run down homes. The
Speaker 1: places overflowing with employees, most of them elbow the elbow
Speaker 1: at long desks. Cindy's office is often one corner jammed
Speaker 1: with the sofa and stools. She's dressed casually like pretty
Speaker 1: much everyone else, in a bright orange T shirt with
Speaker 1: a v I P Kid logo. She's an athlete who
Speaker 1: favored sports like skydiving and bungee jumping, though recently she
Speaker 1: spent more of her workout time in the company Jim.
Speaker 1: We offer parents new functions like they can watch the
Speaker 1: class all the time, and then they can edit a
Speaker 1: thirty second video and share it on a social network.
Speaker 1: So it's very easy for parents to monitor the entire
Speaker 1: learning process. Another your idea she's implementing. With so many teachers, now,
Speaker 1: parents rely on a recommendation service, not unlike the review
Speaker 1: system from Amazon. Parents can browse for teachers more likely
Speaker 1: to fit their child the standard processes. When they have
Speaker 1: a sign up to for the program, they then would
Speaker 1: be recommended by our service team the teachers that would
Speaker 1: probably most suable for their kids. But now we're also
Speaker 1: using data analytics and the machine learning to recommend teachers
Speaker 1: to those students parents from the system. So not only
Speaker 1: the service team um themselves, but also the machine and
Speaker 1: also Finally, the parents. Of course, they can always um
Speaker 1: if they have the time bross through all the twenty
Speaker 1: teachers and watch all the videos and find teachers. And
Speaker 1: we don't want to eliminate their opportunities of choosing right
Speaker 1: because parents really enjoy that, and most of the time
Speaker 1: when you're at school, you never get to choose the teacher.
Speaker 1: What's more, Robbed the venture investor has helped put together
Speaker 1: there are a group of professors from places like Stanford
Speaker 1: and Harvard who are using all the video that v
Speaker 1: I P Kid is generating for research. They want to
Speaker 1: figure out how they can refine teaching to make it
Speaker 1: more effective. Every every month we're genuating additional data of
Speaker 1: over a hundred TV hello, so it's a lot of data.
Speaker 1: That's one hundred trillion bytes, which is approximately the same
Speaker 1: as streaming one hundred hours of video and standard definition
Speaker 1: on Netflix. All this data helps reassure Chinese parents that
Speaker 1: they're making the right choice by signing their children up
Speaker 1: with v I P Kid. For example, who when Haa,
Speaker 1: who has an eleven year old son called Ryan, look
Speaker 1: through many of the tutoring options in Beijing, both online
Speaker 1: and off, and she finds v I p kids approach
Speaker 1: most helpful. I'm especially happy with the curriculum settings because
Speaker 1: you're always adding things that work for Chinese students. This
Speaker 1: is an area I'm especially satisfied with. Where does the
Speaker 1: tiger live? The tiger? And hey, that's Yah teaching Wu's
Speaker 1: son Ryan. He's been with the program about eighteen months.
Speaker 1: And the bear bear? To? Where does the bear live?
Speaker 1: The bear lives in the cave? To where does the
Speaker 1: bird live? And live? Day next? Can a bear live
Speaker 1: in a nest? No? The nasal co cuck. It will
Speaker 1: fall down, down, It'll fall down. You're right. Remember a
Speaker 1: lot of Chinese families only have one child, and parents
Speaker 1: are willing to do whatever it takes to get them
Speaker 1: the best opportunities. In big cities like Beijing, competition can
Speaker 1: be intense to get your child enrolled in a tutoring service.
Speaker 1: Oh what do how are you guys teaing with? I
Speaker 1: got him to study English because it's something that all
Speaker 1: the kids are studying, and the kids his age are
Speaker 1: all getting classes. When I speak with my friends, many
Speaker 1: of their children go to elementary school, where if you
Speaker 1: haven't done external studies, it's hard to keep up. So
Speaker 1: for a number of reasons, we thought it would be
Speaker 1: best for him to study it. Let's Noah's mother, Gong Iowa.
Speaker 1: But because the online education sector is so new, many
Speaker 1: Chinese parents are having to try out these tutoring services
Speaker 1: without really knowing how much it can help their kids.
Speaker 1: It was the middle of last year. I thought should
Speaker 1: I get my son to learn a bit of English?
Speaker 1: And it turned out my classmates daughter was also studying
Speaker 1: VI I P Kids course. So I asked her how
Speaker 1: it was and she said it wasn't bad and said
Speaker 1: her daughter's class videos to me, and I thought she
Speaker 1: was doing fairly well. So I started and I signed
Speaker 1: him up. It will take years to know whether the
Speaker 1: company's prize methodology really works as well as it says
Speaker 1: it does. Unlike what you might expect, parents in China
Speaker 1: have been a bit behind their Asian counterparts and spending
Speaker 1: on extra classes outside of school. According to data from UBS,
Speaker 1: about seventy percent of children get tutoring outside of school
Speaker 1: in places like Japan, Taiwan and South Korea, but in
Speaker 1: China it was only thirty seven percent in two thousand
Speaker 1: and sixteen, and in just a few years, the Chinese
Speaker 1: market will be a whole lot bigger. Oh. Yes, Ubs
Speaker 1: says that figure will probably climb to fifty percent in
Speaker 1: five years, and at the same time, the number of
Speaker 1: kids in the kindergarten to twelfth grade segment will swell
Speaker 1: to about two million. Overall, the tutoring market in China
Speaker 1: is supposed to double in five years to about a
Speaker 1: hundred and sixty billion dollars peter As as with all
Speaker 1: things related to China, we are talking about some very
Speaker 1: big numbers, Yes, and Cindia set her sights on conquering
Speaker 1: a big part of this booming market. She says she's
Speaker 1: expecting to have a million students in just a few years.
Speaker 1: A million students by two other nineteen and tenderly students
Speaker 1: probably are not that far. I should caution it's not
Speaker 1: clear how realistic that goal is. But what's true is
Speaker 1: that v I P Kid is growing incredibly fast. Even
Speaker 1: the two thousand students Cindy has now is a massive
Speaker 1: lead from the last time I spoke to her, she
Speaker 1: had just fifty students enrolled in December. Plus, Cindy wants
Speaker 1: to expand the kinds of classes v I P Kid offers.
Speaker 1: Until now, the company has offered only English language training
Speaker 1: to Chinese students. There are two things we're thinking. We
Speaker 1: have now got over two percent students, almost two percent
Speaker 1: students coming from out of China, so uh, Korea, depend Germany,
Speaker 1: but we so we're not really launching any countries just yet,
Speaker 1: but it's definitely a possibility where But I think the
Speaker 1: ever Know model is pretty good. They just let it
Speaker 1: grow and organically and see which market picks up and
Speaker 1: grows really fast. Right and enough probably too then and
Speaker 1: UH find it designated a target country to to deploy. Okay,
Speaker 1: so v I p Kid is thinking globally. They're also
Speaker 1: thinking way beyond English language classes. Just a few weeks ago,
Speaker 1: the company added Mandarin classes that will be taught by
Speaker 1: Chinese teachers. Eventually, Cindy hopes to branch into many more subjects.
Speaker 1: So we've launched a higher level great uh curriculum content
Speaker 1: as you go higher, Um, it's more content, it's more
Speaker 1: math science. They're not just learning language and aren't right,
Speaker 1: they're learning math science and all everything. So primarily we're
Speaker 1: not doing language teaching theoter and teaching, we're doing moreph
Speaker 1: The online US Elementary School North American Elementary School Experience
Speaker 1: that's why we really needed North American teachers. Taking online
Speaker 1: classes for after school English is one thing. But shifting
Speaker 1: a child's elementary education to a learn from home model
Speaker 1: that's a whole new ball game, and it could have
Speaker 1: ramifications for American schools already dealing with an exodus of teachers. Okay,
Speaker 1: so far v I P Kids model has been almost
Speaker 1: as popular with teachers as it has been with students.
Speaker 1: I am from a small town in South Jersey, Hamilton's
Speaker 1: or the blueberry capital of the world. This is Jennifer Enders,
Speaker 1: another teacher I spoke to recently in New York. I'm
Speaker 1: sort of adventurous at the same time, even though I
Speaker 1: still live in my small town. UM, my husband and
Speaker 1: I have been together forever. He's a full time singer, songwriter, musician,
Speaker 1: UM producers, so we've just been traveling and traveling. So
Speaker 1: I never really went into the classroom full time. And UM,
Speaker 1: I'm always like looking for something flexible. V I P Kids.
Speaker 1: Flexible hours are a big draw. It's also a good
Speaker 1: way for teachers to supplement their incomes. Teaching salaries in
Speaker 1: the US are notoriously not as high as many would like. Peter,
Speaker 1: did you find out the name of her husband's band.
Speaker 1: I did. It's the early November. Should check them out.
Speaker 1: They're pretty good. You gotta get up. He's been doing
Speaker 1: it forever and he's still going strong. So um Australia
Speaker 1: and Europe everywhere. And I started looking for other opportunities,
Speaker 1: more e s L opportunities, and I found the I
Speaker 1: P Kid and that was that was it. So I'm
Speaker 1: coming up to eighteen months with the company. As v
Speaker 1: I P Kids signs up more students and more teachers,
Speaker 1: at a certain point, the rest of the world may
Speaker 1: need to sit up and take notice. V I P
Speaker 1: Kid already has two hundred thousand kids enrolled in its program.
Speaker 1: That's more kids than the Boston or Dallas public school systems,
Speaker 1: and according to Cindy, teachers are applying to work with
Speaker 1: v I P Kid in droves. They accept less than
Speaker 1: ten percent of the teachers that apply. Importantly, the vast
Speaker 1: majority of the teachers that Cindy is hiring are based
Speaker 1: here in the US. Do we have a less than
Speaker 1: uh ten per cent about teachers from Canada and most
Speaker 1: primarily mostly in the US from the USA in other
Speaker 1: parts of the world too, to the UK, teacher, no,
Speaker 1: not yet, and once they're enrolled, it's up to the
Speaker 1: teacher to decide how many hours they work. Many teachers
Speaker 1: are working with v I P Kid on the side
Speaker 1: to supplement their income, but others like Jennifer are working
Speaker 1: full time hours. UM I try to aim for between
Speaker 1: thirty and forty. I've actually exceeded forty at times during
Speaker 1: high recruitment period. Some people watching this space think the
Speaker 1: one on one approach online just doesn't make business sense.
Speaker 1: Edwin Chen, an analyst at UBS, is one of them.
Speaker 1: From company's perspective, it's difficult to scale up because supposedly
Speaker 1: one teacher colony teach one students at sudden period up time.
Speaker 1: Edwin covers education companies in China. He thinks that brick
Speaker 1: and mortar companies like Tal Education have a big advantage
Speaker 1: over upstarts like v I P Kid. Tal Education when
Speaker 1: public in the US, and it's stock is more than
Speaker 1: double this year thanks to surging revenue. When you grow
Speaker 1: bigger and bigger, one it's difficult to source enough tutors.
Speaker 1: Quality tutors and to the teaching quality are very dependent
Speaker 1: on the individual teachers. Is relatively more difficult to standardize
Speaker 1: the services you provide to the children. But when I
Speaker 1: push Cindy and how she feels about moving away from
Speaker 1: the classroom model of teaching, said she thinks learning online
Speaker 1: has distinct advantages. I find the in person session uh
Speaker 1: to be the same when it's face to face like this,
Speaker 1: and when it's online, so that covers the whole like
Speaker 1: in person thing. But then it can be more effective
Speaker 1: when it's online because teachers can use um ay are
Speaker 1: argument in reality they would use apps so that when
Speaker 1: it teach about um hitting, they can have a baseball player,
Speaker 1: uh like an animated image that is so it sounds
Speaker 1: very like, it looks very real for the students because
Speaker 1: otherwise you would have demonstrated right. And then it's very
Speaker 1: like when they talk about dinosaur, a dinosaur pops up
Speaker 1: on the screen. Do you see online learning in the
Speaker 1: ability to kind of do this online learning as an
Speaker 1: opportunity to supplement in person learning or do you think
Speaker 1: there are opportunities to surpass in personal teaching? I think,
Speaker 1: for for current, for now, it's a supplement of the
Speaker 1: in person learning for the school like schooling experience, I think,
Speaker 1: but not necessarily in personal learning because parents are choosing
Speaker 1: online learning over um like training center of learning. But
Speaker 1: then over the long term, if we think about learning
Speaker 1: reimagined and rethink schools, and then I think there's a
Speaker 1: great opportunity. This would go beyond anything that we can imagine.
Speaker 1: Peter Indie stories incredibly inspiring. But you know, we're both parents,
Speaker 1: and I'm not sure i'd feel personally comfortable making online
Speaker 1: education the bulk of my kids education. Would would you?
Speaker 1: With my two kids, I don't think I would either.
Speaker 1: I'd be hesitant to send them online for very substantial
Speaker 1: periods of time. But I would say that parents in
Speaker 1: China are not making that choice in this case. They're
Speaker 1: looking for any edge they can to get their kids ahead,
Speaker 1: to give them good education opportunities, and online is where
Speaker 1: they need to go to get good English teaching. These
Speaker 1: are also all for profit companies. I mean, do we
Speaker 1: need to be dubious of, you know, a company that
Speaker 1: is oriented towards a profit motive also being responsible for
Speaker 1: our children's education. That's a really good question. As we've
Speaker 1: seen in the States, for profit companies providing education services
Speaker 1: have run into tons of trouble. Boy a lot of
Speaker 1: this gold rush mentality here in the education sector in
Speaker 1: China does It does really remind me of some of
Speaker 1: the destructive booms and tech here in the States. It does,
Speaker 1: is you and I are old enough to remember a
Speaker 1: few of the booms and technology in the past. I
Speaker 1: remember I used to order dog food from pets dot com.
Speaker 1: It was cheaper than this store and they brought it
Speaker 1: right to my door right Well, but back then the
Speaker 1: business model was a mess. Now now they've kind of
Speaker 1: figured that out. But I guess the question is, you know,
Speaker 1: can these education companies make the business model work? Yes,
Speaker 1: you're seeing this competition play out in China right now.
Speaker 1: His parents rushed to find better education alternatives for their kids.
Speaker 1: They have dozens of choices online and off. Our vision
Speaker 1: is to be the best education globally, so we want
Speaker 1: to really make sure that we're able to build the
Speaker 1: best learning experiences, efficacy for the students for the future.
Speaker 1: And that's it for this week's episode of Decrypted. Thanks
Speaker 1: for listening. We always want to know what you think
Speaker 1: of this show. Get in touch at Decrypted at Bloomberg
Speaker 1: dot net or I'm on Twitter at PLS drum and
Speaker 1: I'm at brad Stone if you haven't already subscribed to
Speaker 1: our show wherever you get your podcasts, and while you're there,
Speaker 1: please leave us a rating interview. This goes a long
Speaker 1: way to get this show in front of more listeners.
Speaker 1: Special thanks to David Ramley who helped with reporting for
Speaker 1: this show. This episode was produced by Pia Gudcary, Liz Smith,
Speaker 1: and Magnus Hendrickson. Alec McCabe is head of Bloomberg Podcasts.
Speaker 1: We'll see you next week.