Being in the entrepreneurial sector intrigues my curiosity all the time. If a company chooses the right sector and development path, how fast can it grow?
At the front desk of the headquarters of VIP Peilian in Shanghai, I saw a map, which shows that in the past three years, this online education upcomer reached more than 80 countries, with over 20,000 online one on one training tutors, covering more than 80% of the domestic music higher institutions. In the past two years, its business volume has climbed up by 12 times and 8 times respectively, becoming the NO.1 industry leader in the field of online music training expeditiously.
In the educational training segment worth hundreds of billions, a musical geek, who does not take the common path, founded a quasi-unicorn company in his unique way.
Join the hundred-billion segment and grasp the pain points
Music training is a fast-growing industry. Jiaqi Ge chose the right segment. The new technology and new media jointly brought by the Internet and capital have knocked music down from the pedestal and merged the boundaries of art and life. The hundred-billion worthy of music education segment was prompted by the desire to expand hobbies, diversify skills, enhance aesthetic taste through music, as well as the utilitarian motivation to give children a head start in life. Based on the statistics by the Chinese Musicians Association, there is a total of 30 million children learning the piano in China, growing at the rate of 10% per year. Meanwhile, the advancement of Internet technology has facilitated the rapid development of online education.
Riding the tide in a promising segment, you need to find the focus of growth.
On the whims of the conversation, Jiaqi Ge started playing the accordion. Melodious tune lingered in the room. Despite the fact that Jiaqi Ge was trained by a master musician and has hosted several solo recitals, he still considered himself an entry-level performer, far from realizing the unity of himself and the accordion. He blamed it on the practices during childhood. “when I was a kid, no one taught me how to practice efficiently.”
Jiaqi Ge found out that 90% of the children who learn musical instruments need one on one training. “We summarized it as “The 10/90 Rule”, where in the music field, only 10% of children are strongly self-disciplined, while 90% of them would encounter numerous troubles and need assistance from a tutor.” With sharp acumen, Jiaqi Ge targets at the three pain points in the music training market: the lack of time for parents to accompany children in practicing; the lack of professional skills in parents to teach their children; the inability to correct children’s mistakes in time, resulting in the formation of wrong muscle memory. Mistake correction by offline teachers is time-consuming and ineffective. Additionally, the intense home training with Chinese characteristics often creates tension between parents and children, which is an imperceptible and impactful pain point formed during one on one instrument trainings.
Gloria Ai: Since the beginning of 2019, iAsk Capital team has noticed during roadshows that the opening sessions were usually education themed and that the first presentations were education projects as well. It seems like more opportunities for the education industry have sprung up?
Jiaqi Ge: I don’t think so. Instead, it indicates that technology is making online education increasingly developed.
Gloria Ai: Do you think it is a process of quantitative change becoming qualitative, or a process that goes with the flow naturally?
Jiaqi Ge: Yes, ten years ago, only 2G network was available. How could anyone envision online education?
Solution goes online, demand confirms
It is difficult to find the pain point and create something from scratch. To build it up and materialize the solution, it’s a long journey ahead with unpredictable obstacles. Undoubtedly, every outstanding firm has gone though repeated suffering and hardships. The difference is that some of them turn out great, yet some collapse into ashes.
As the earliest pioneer in the online one on one instrument training segment, VIP Peilian tested it out with automatic recognition and monitoring of audio. However, due to low recognition accuracy, the inability to support the technology of improving the algorithm for recognition accuracy, the burden from finance and data analysis on a startup company, the business ended up in failure; after that, VIP Peilian tried out video demonstration of musical pieces for teaching. Nevertheless, the business pattern was defeated owing to fatal weaknesses of the lack of interactions via watching online videos and poor simulation of classes in real life; the third revolution introduced three business patterns in the form of a home assignment system, where parents recorded audio and videos of children practicing while tutors in the backend reviewed assignments in batches and provided guidance accordingly. The business mode couldn’t succeed because parents lacked professionalism as a “bridge of communication” and failed to spot children’s mistakes and improve practice effectiveness. It was a process of trial and error.
In the face of dead ends, Jiaqi Ge and his partners were struck by inspirations. “Parents are not proficient at music performance. It is unrealistic to solve the issue through parents. Can we create exercises by ourselves and assign tutors to students remotely?”
After several revolutions, in an industry with huge market demand, Jiaqi Ge found the leading strategic position by locking in the piano training segment, and gradually expanding to VIP one on one training for the violin, the accordion and the Chinese guzheng as well. Jiaqi Ge believes that one on one tutoring tackles the pain points of geographical and time constraints as well as parents’ lack of time and professionalism to correct mistakes. The pattern of one-on-one training enables real-time communication and interaction between teachers and children in terms of playing techniques, rhythms, etc. The effectiveness is self-evident. It allows professionals to utilize their expertise and frees parents who are no expert at music from disorderly and inefficient accompanied training or even “fights and quarrels”, easing the tension imperceptibly.
Gloria Ai: The beauty of art is beyond description. It can’t be standardized. Each student trained by a certain teacher should have diverse levels or styles. How does VIP Peilian standardize the process?
Jiaqi Ge: We divide the trainings into two stages. The first stage aims at playing notes and rhythms correctly and smoothly. The second stage is based on the first one, which is to express emotions. However, most children are still in the first stage. More often than not, we try to teach children how to play notes and rhythms correctly and smoothly. There are various techniques for training. For example, sometimes we practice quickly, sometimes very slowly to feel the notes. It all depends on the level of practice for each child.
Back to the product and do something worthwhile
A promising segment must be competitive.
Whether it is an Internet giant with ample traffic or an established education company with solid reputation and brand influence, they all want a share of the online education market. In the education segment, VIP Peilian is confronted with competition from two perspectives: the first one is the direct intense competition in the vertical industry; the second one is the competition from scaled educational platforms.
Surrounded by competitors, is VIP Peilian equipped with its own backbone, or an indestructible wall?
In the era of hard-core entrepreneurship, the reckless growth path along the trend of scale, capital and squandering is not be able to support the rise of an entrepreneur. It ultimately relies on rationalism in commerce that emphasizes products or services.
葛佳麒认为，VIP陪练的本质是一家教育公司，其科技的升级或探索是为了提升服务品质。他这样和我解释VIP的含义 ， “虽然每个孩子只是我们80万用户里面的一个，但是他对于每个家庭就是100%，他对于我们每一个员工也是我们的100%。”
Jiaqi Ge believes that VIP Peilian is in essence an educational company. Technology upgrades and explorations are meant to improve service quality. He elaborated on the meaning of VIP: “Even though each child is only one of our 800,000 users in total, they’re everything to their family and to each of our employees.
VIP陪练内部秉承一句话， “我们做有价值的事情，而不是做牟利的事情” 。让每一次练琴都有价值，葛佳麒希望孩子们在课程里面获得真正的价值， “我们不希望完全靠‘填鸭式’给到孩子音乐教育，我们希望营造一个有利于发展音乐素质教育的环境，让孩子们自愿地去看、去了解，然后对他的成长有所帮助。”
VIP Peilian internally upholds a belief that goes “We work for a valuable cause, not a profiteering one.” Each training should be worthwhile. Jiaqi Ge expects children to obtain real value from the curricula. “We disapprove the method of cramming for music education. We yearn to create an environment that benefits the comprehensive quality education for music, so that children would voluntarily explore and learn, which would be beneficial to their growth.”
A brief and vivid demonstration of VIP Peilian’s emphsis on value is a children talent show named “Tian Cai Xiao Qin Tong”. Jiaqi Ge repeatedly highlighted: “Growing up, a child would certainly feel attached to the stage. They need to enjoy the moment on the stage and show their brilliance.”
Being the protagonist of the stage, streaming pleasant melodies from the fingertips, shining on the stage with audience immersed in music…… These stories about dreams and growth not only indicate Jiaqi Ge’s ideals, but also move children and parents.
Entrepreneur’s ideals are consolation and can be motivating and healing in the fierce entrepreneurial competitions. They are the ultimate goal of business.
Gloria Ai: Having listened to the description of the ideal scene, I couldn’t help but wondering, if you only had one choice for life to be a certain role, would you prefer to be a child trained by VIP Peilian, or a tutor, or Founder of the company?
Jiaqi Ge: I think there’re things I would like to pursue from these three roles. Without us, the management, or my partner, VIP Peilian wouldn’t have achieved this much, or made a difference. We pinned a sentence on our corporate WeChat account that goes: “99% of humankind maintain the balance of the world, while the remaining 1% push it forward.” All the trivial things we do today will accumulate in bits and pieces and gradually change the society and the world. You might not see its value in the long history, but you will create value if you keep going this way.
Guardianship entails a moat
Jiaqi Ge is convinced that “dedication to valuable causes” will inevitably yield its rewards as time goes by. However, the cruel reality shows that ideals are far from supporting businesses to stand out, or even to survive. Guarding the ideals entails a moat.
Jiaqi Ge summed up the moat of VIP training as a strong faculty, advanced Internet technology and management excellence.
Strong faculty reserves
Faculty is the core resource and key weapon for one on one training platforms. There are over 20,000 tutors on the platform of VIP Peilian. The company recruits experienced music teachers as one on one training tutors from normal music schools or professional music institutes through screening and probation. With the flexibility of working part-time, especially in the face of the challenge that “an outstanding musician might not necessarily be a qualified teacher”, VIP Peilian enhances tutors’ teaching skills from multiple aspects through training, research and assessment. The company designed a training system for music theory, child psychology, and so on, and collaborated with 107 music higher institutions on developing a teaching and research system, so as to highlight the strengths of extraordinary tutors, assist tutors in solving in-class problems, tackle teaching weaknesses and facilitate the improvement of teaching skills exponentially. VIP Peilian allocated 80% of the funding from Series A to C rounds on teaching and research. Jiaqi Ge upholds that teaching and research is the foundation that requires time, energy and financial resources to stay firm.
Empowerment of Internet technology
在线陪练是互联网技术不断向教育渗透的结果，它依仗互联网技术的发展，不断实现自我革新、突破。譬如VIP陪练提出了 “智能教室” 概念，能够捕捉老师上课过程给学生做了哪些动作，这些动作持续时间有多长。通过这些大数据，不仅能将每一个学生在每一节课中的表现反馈给家长，还能对整个课堂质量进行管控。葛佳麒总结，恰恰是不断迭代的互联网技术，成为VIP陪练的杀手锏之一。
Online one on one training is the result of the continuous penetration of Internet technology into education, which relies on the development of Internet technology to continuously achieve self-innovation and breakthrough. For example, VIP Peilian proposed the concept of “Smart Classroom”, which captures tutors’ in-class actions and how long the actions last. Based on the big data, not only can each student’s in-class performance be shown as feedback to parents, but the in-class teaching quality can be monitored. Jiaqi Ge summarized that it is the continuous development of the Internet technology that contributes to one of the key weapons of VIP Peilian.
Assembly line management
In the early days of VIP Peilian, it took them 12 months to break one million on sales from scratch, yet, it rocketed from one million to 30 million within half a year. As Jiaqi Ge analyzed, “In early stages, we allocated a great amount of energy and capital on developing various assembly lines, including teacher training, recruitment, sales management, class advisor, customer acquisition, technology, development, etc. The level of internal assembly line management has reached 80%, which lays a firm managerial foundation for keeping VIP Peilian’s swift growth under control. “Only by building assembly lines can we tackle the impact of heavy traffic.”
Founder’s dual identity
Those who major in music usually go for two typical career paths. The first one is to become musicians themselves and establish the image of celebrities. The second type is to become music teachers. Jiaqi Ge created a third type, which is to build an online platform and gather hundreds of thousands of tutors to cultivate more children.
In terms of artistic accomplishments, Jiaqi Ge is still remarkable. He graduated from the Music College of Shanghai Normal University. He served as Music Director of the Shanghai Spring International Accordion Festival and Producer of the concert of the 64th Coupe Mondiale World Accordion Championships. He also created musical pieces for shows, including Got Talent, Shake It Up, and so forth.
From the hall of art to the rapids of business, in a sense, Jiaqi Ge is also engaged in a “slash” career. He gives off the temperament of an artist and an entrepreneur, and spreads his interpretation and insights of art in the form of business. For one thing, with his professional and sharp acumen in music learning, he is able to capture the strong market demand, constantly adjust strategies and accurately grasp the relationship between offline main course learning and online one on one training. The natural advantage as a music professional prevents VIP Peilian from hitting a decent number of obstacles. In the meantime, as a manager, Jiaqi Ge does a great job with ease. “Founder is a managerial position, which involves a large share of gaming with human nature. Management is about managing minds and ourselves, while serving people. Not only should the founder constantly improve the mechanism and system, and be civil, but also needs to find talents and be responsible for business consequences.”
With a sturdy moat, VIP Peilian has made great progress and obtained strong traction in the capital market. In the early 2018, VIP Peilian received hundreds of millions of RMB in Series B financing backed by investment institutions such as Tencent and Orchid Asia, breaking the domestic funding record on comprehensive quality education in history. In November 2018, it won another $150 million in Series C financing, surpassing its own previous funding record in the industry with an unparalleled momentum.
Undoubtedly, there still exist plenty of challenges in a fast-growing leading enterprise. For example, how to keep up faculty quality with accelerated expansion, and how to cope with the difficulty of controlling the marginal cost for one on one service and achieve sustainable profitability.
Hopefully, the times will reward those who work hard, and VIP Peilian will live up to the expectation of the times, maintain a strong entrepreneurial backbone as well as sentimental ideals, and become the top 1% to boost the development of the world.
Gloria Ai: To imagine VIP Peilian in the coming decade, what do you think it will become?
Jiaqi Ge: I think it will no longer be a platform for one on one training in ten years. It should be a comprehensive service platform for music education, such as providing services on music theory, musical instruments, skill assessment, etc., we hope to drill down the path of comprehensive music education and offer users more value and better experience.
Gloria Ai: In ten years, where do you think you will be and what will you be doing?
Jiaqi Ge: I think there are countless possibilities in life. In ten years, maybe I will refocus on art, play the accordion, write songs, paint, take photographs, etc. In my opinion, life is full of possibilities, but VIP Peilian will eternally be one of the art pieces that I created in my lifetime, and I hope it will be perfect.