While many educational companies that focus on adult education are struggling, LingoAce has seen amazing growth. Just 4 years after its inception in 2017, it completed Series B and C bringing total funding to $180 million and the company grew its revenue 40x between 2019 and 2021.
After interviewing Hugh Yao, the company’s CEO and founder, and observing the company’s growth patterns, I can share some preliminary lessons from LingoAce’s success that will apply to many industries.
Focus on the customer, focus on the product
The main reason for the rise of LingoAce is the focus on a specific customer segment and on a specific product. LingoAce focuses exclusively on young children between the ages of 3 and 15 and only teaches two languages (Chinese and English).
LingoAce understood from the beginning that the way a child learns is completely different than that of an adult. Children don’t like the repetition or discipline required to learn a foreign language.
LingoAce has therefore invested heavily in gamification and stories. For example, in one of the games they had me play, you had to find apples, and each apple contained a word: I could see LingoAce redirecting the difficulty of the repetition so the kids would enjoy the lesson. Likewise, LingoAce’s games reward creativity. As any Mandarin learner knows, the first 800 Chinese characters are difficult. However, once you know these Chinese characters, you can guess the meaning of the words that connect them (e.g. 木=wood；头=head；木头=trunk). Then learning Chinese is really fun.
The company offers a twelve-unit course with four sessions in each unit. In each lesson there is a character (a tiger, a horse…). After learning the lesson, the child can “save” the figure. This identification with a character is very useful in developing a child’s attachment to the language itself. The games also feature activities like singing, basketball, and even rapping! Doing these activities with the teacher makes language learning more fun, and the fond memories almost always include what was said and heard…that is, vocabulary.
LingoAce has a deep understanding of consumers. For example, the company examined learning and playing habits between the sexes. Boys are very interested in games with challenges and competitions: winning is very important to them. Girls, on average, prefer collaboration and self-expression. Strategies for optimizing learning processes are therefore different depending on gender. It is optimal for girls to give them a place where they can fully express their ideas. For boys, nothing beats a little challenge. On average, LingoAce found that girls learn languages slightly better than boys at a young age. The gap disappears in puberty.
Know where your market is
According to CEO Hugh Yao, “Many executives realize it is too late for them to learn Chinese and want their children to learn it. The biggest market is America”.
LingoAce’s second largest market is Southeast Asia. In fact, the Chinese economy has a significant and growing influence in the region. In Southeast Asia, many companies now require official diplomas proving that the candidate has a certain level of Chinese. They often require the HSK5, a diploma issued by the Chinese Ministry of Education, the level of which is difficult to achieve.
In France, LingoAce has noticed that many people are increasingly striving to learn English for international careers. Chinese is still a distant goal for many French families. That’s why LingoAce has focused on English learners.
But LingoAce’s real strength is that its true home, the Internet, allows it to set up shop anywhere, with little or no overhead, and to gain market share from teachers who are often based in different countries. Actually, in some countries like America, Europe and Southeast Asia, there may be many customers willing to learn Chinese but few teachers. LingoAce connects you with teachers in other countries. By connecting supply and demand, LingoAce has gained a significant competitive advantage. “We cover 2 subjects in more than 100 countries. We are a truly global company. »
Understand your growth engine
LingoAce leverages two growth engines:
-Word of mouth in a small network.
First of all, their customer retention rate is very high. The reason LingoAce has been able to grow so quickly is because they care as much as possible about customer feedback. Another reason is that they focus on the market segment with the highest lifetime value: children. That simplifies the business model. Most adults only attend classes for a few months, while children can attend classes for several years. That’s why so many adult language companies struggle.
LingoAce has also invested heavily in educational technology to determine if kids are truly happy during class. The company’s artificial intelligence analyzes the percentage of the child’s speaking time, whether their eyes are on the lesson and most importantly… their time to smile.
Second, LingoAce’s growth relies on word of mouth. Families are recommended by other families. Mothers sometimes recommend LingoAce to entire classes of their children, resulting in LingoAce acquiring over twenty clients at a time. Word of mouth accounts for a staggering 60% of business growth, while growth driven by advertising or other marketing tools accounts for just 40%.
Follow your passion, be sincere in your work.
Hugh Yao, the founder, started learning English at the age of twelve. He was fluent in English when he started at Qinghua University, one of the top universities in China.
“If I couldn’t speak English, I couldn’t have had this career and I couldn’t have started this company. I would have become a completely different person. Most people who come to a country and don’t speak the language stay in their language and miss opportunities.
When I went to Singapore, my son, who was five years old, started speaking Chinese as a second language. His mother and I spoke Chinese and he replied in English. I really wanted to pass our language on to him. So I became interested in teaching my son Chinese. Being a data scientist and engineer, I naturally imagined how I could streamline the process. That’s how I started LingoAce,” Hugh told me in an interview. »
Five years after its inception, the company has truly gone global. “We have offices in the United States, Singapore, Thailand, Indonesia and Malaysia and we will be opening an office in Amsterdam. LingoAce’s management is also very international. The leader of the educational program design team has a Ph.D. in Education from Stanford, their director of growth strategy has lived in Japan for many years, their chief financial officer is an American with a Princeton degree and is fluent in Chinese…
In summary, a focus on a specific product and customer segment, a deep understanding of the market, an original growth engine and a genuine passion for their work have made LingoAce a virtual unicorn. Whether your child wants to learn Chinese or English, or you want to learn from their strategy for success, there is indeed much to learn from LingoAce!