Chinese studying abroad — an interview with Danny Wang

This is the third and final post in my series on Chinese studying abroad and the entrepreneurs serving them. I recently had the pleasure of interviewing Danny Wang, co-founder of WeblishPal, a platform that connects Chinese English language learners with native English speakers. WeblishPal focuses on serving Chinese students who are interested in studying abroad in North America.

Q: Tell us a little about yourself
I’m originally from Chengdu [in Sichuan province]. I got my undergraduate and graduate degrees from there. Before I moved to Canada I used to run a software company. We actually had a software product that was probably the first package tracking system for China’s private railway transportation companies. China had just opened up — before 1998 all the railway transportation was run by the State. But after that year they gradually opened up the market and allowed the private sector to get into it. I happened to be in that place so we got the first version of the software out pretty quickly, and then we got most of the top-tier private companies as our clients.

After that, I moved to Canada in the year 2000 and worked as a software programmer, architect, and consultant for many companies [including] Cisco, Baxter, and Harris. But I always wanted to run my own business, so that’s why I went to the MBA program at Rotman, University of Toronto. Before we graduated we had an entrepreneurship class and that was when I had the idea of creating an [online] platform that connects a Chinese English learner to a North American teacher. So after that class we thought it was a great idea and we wanted to make it real. So that’s how we launched our company in 2010.

…you have to get your hands dirty.

Q: What did you learn from your prior startup that you brought into business school and now into WeblishPal
I think the most important thing I learned from my first business is that you have to get your hands dirty. In the MBA program you learn all of that knowledge, you analyze things to death. But in the real world you have to do those little things and if you don’t do them nobody else will do them for you. So that’s the main lesson I learned.

Q: Did you get the idea for WeblishPal from your own experience, trends you identified in China, or somewhere else?
This idea came from my personal experience. I personally spent about 10 years learning English in China, from middle school all the way up to university. After I went to Canada I found that I struggled to even open a bank account — I had to ask other people to help me. The way that Chinese students learn English is not very effective. And I’m not alone. If you ask pretty much everybody in China how they learn English and what their strengths and weaknesses in English are, they would say: “I can read, I probably can write a little bit, but I can’t speak.” Basically, teachers [in China] teach English in Chinese.

So I see the real pain or the real issues for Chinese people when they learn English. And also I can see the trend of everything moving online. It makes sense because it can lower costs significantly. After I came [back] to China I talked to lots of educational institutions, including English training companies. The number one issue everyone is complaining about is where to find native English speakers as teachers.

There are 1.3 billion Chinese and [much of the] rest of the world speaks English, why can’t you just connect people [in China] to those who live in North America?

So those are the two reasons why I thought this idea was pretty attractive.

Q: How many people launched this with you in 2010
I have a cofounder named Barbara Tassa — she’s my MBA classmate. The idea came through the [Entrepreneurship] class. There were about 30-35 people in the class and everyone had to have an original idea and then we competed so only 8 ideas remained. If your idea wasn’t selected you had to join one of the 8 teams. My idea was selected and then I was able to persuade Barb along with another two people to join. But in the end only I and Barbara were interested in launching [the company]. [The others] were interested but to make it work [we required] entrepreneurial thinking — so not everybody was a great fit.

Q: Give us an overview of WeblishPal and where you stand right now
In 2010 it was just a piece of paper, so we launched the first beta at the end of 2010, in December. We just wanted to give it a pilot run [at that point]. Then we formally launched in September, 2011. We’ve constantly tested the idea and have improved it. Then we very quickly got a few hundred teachers and a few thousand students. And then we paused. We were thinking we should grow faster but we found that it was not growing as fast as we wanted. The biggest problem was that we were controlling the business in China remotely. So we felt like there was lots of information we missed [by not being in China].

We [realized] that at least one of us had to come to China because at that point we were both in Toronto. We were trying to launch an on-campus campaign, but because it was controlled remotely [from Toronto] it was hard to get real feedback and to know what was going on — what was going [well] and what wasn’t.

Then we had an opportunity to set up a contract with a local partner at about the time I needed to move back to China. So that’s why I moved back to Shanghai in August [2012] and in these [few] months what I have learned about the Chinese market is way more than in the two years [I was in Canada]. So I think it was pretty worthwhile.

Q: Tell us a little bit more about your business model
Our original business model was pretty simple, like the eBay model plus the Facebook model. We connect people, and we outsource the teaching services so Chinese students can select from the tutors, connect with them, and then learn directly from them. It’s pretty much like eBay, the only difference is that the “products” sold on our platform are a service.

So we connect them, and also later on we added the social network integration features to the website. Meaning that once the students connect with tutors they don’t have to spend money and buy the tutors’ time, they can also connect with the tutors through Weibo or Facebook. For example, lots of Chinese people can’t access Facebook, but they can connect with the tutors on our platform, so that’s a great way for them to see what’s going on — how North American people think and what they are talking about. So that’s a great way for them to get a peek into the outside world.

Q: Was that originally in the plan or did the social networking aspect develop later?
It was originally in the plan but it was also part of the learning process. We had the idea that this platform had to be social, but we didn’t know how to do that until very late. We found that it was a great opportunity for us to connect different social networking platforms into the service, integrated as one. So we’re pretty much agnostic to all the social networking platforms. The users just have to connect on WeblishPal and they’re done.

The thing is, you have to come to the Chinese market to get to know the market — we didn’t know this when we were in Toronto.

Q: How does your eBay business model, with teachers setting their own prices, compare to your competitors?
There are a few direct competitors in China. First of all, I think the market is big enough. There’s no single dominant player in this field yet and everybody is still moving pretty fast. Secondly, I think everyone has a unique angle in tackling this market. For us, we are just trying to focus on the eBay model with crowdsourcing [the teachers] and social networking integration. Plus, because now we are focused on the study abroad market, we are also working with North American universities to provide extra service.

If you, as a student, want to study abroad and if you are accepted by a North American university, chances are you have to pass an English exam or test required by the university. If we have an agreement with the universities, our services can benefit those students because they can prepare for the exams online and they can save a lot of money.

For example, lots of students, when they prepare for those exams, have to go to Canada or the US. Under the current conventional offers, you get admitted and go to Canada or the US and you start preparing for those English programs. It takes you a year, or half a year, to pass those exams. The program itself costs you from $10k-$20k plus living expenses. So if you can prepare for the exam from China online that can save you a lot of money.

And that’s also an opportunity for North American universities. [You can] imagine the competition is pretty intense in China — students are looking for better schools, but they’re also looking for schools that can benefit them the most. So if a school can allow the students to prepare for that exam while they are still in China, that can save them lots of money and can suddenly make those schools pretty attractive to those students. So that’s a win-win situation.

The thing is, you have to come to the Chinese market to get to know the market — we didn’t know this when we were in Toronto.

Q: Cross-border businesses can be quite difficult. What advice do you have for entrepreneurs considering cross-border businesses?
Cross-border businesses are unique, niche markets, but [they] have high potential. For both Barb and I, it’s natural for us to handle things in the two different countries [separately] because we have the [local] knowledge.

We didn’t realize it’s a very big advantage until we met some of our local partners. Some of the help they need from us is pretty simple. Like one of our biggest partners, they probably have 200M RMB in revenues, and they’re trying to make their platform one of the biggest ones in China to help students study abroad. So their plan is to [contact] pretty much all the universities around the world and rent offices in as many of their buildings as possible. And it’s pretty simple for us, or any North American company — but they couldn’t figure out a way to sign a contract with universities. So the issues are simple like this, they seem ridiculously simple to North American companies, but they’re a great challenge to lots of Chinese companies.

This one is not the only example, I’ve met quite a few similar companies, great companies, who are making millions of dollars a year and yet they don’t know how to break into the North American market. On the other hand, we found lots of North American universities — it’s very hard for them to get in touch with Chinese students. 90% of them are relying on study abroad agents to recruit students, and that makes you wonder why. But once you see the challenges in the real world, simple issues for people in one country can turn out to be a great issue for people in another country. And once you see the problem you also see a big opportunity.

So, I think as a company, if you want to address a cross-border business, it’s better to have expertise from both sides.

Q: How do you and Barbara complement each other, and how do you split up the work?
Basically, we focus on the two markets. I focus on the Chinese market and [Barbara] focuses on the North American one. She’s working on attracting potential teachers and also working with some universities in North America. Since I came back [to China] I have been working on the technical side. I’m leading the development team and am also working on the business in China.

Q: How big is your team right now?
We have about three full-time developers, and we also have some part-time business development people in China. In Shanghai we have two business development people so they all work for us part-time. Also, we have one part-time business development person in Beijing, plus myself. In North America we have Barb, plus another part-time sales person.

We’re also looking for funding, so that’s a major constraint we have now. That’s the next big step.

This in-depth understanding of your customers can change your strategic decisions.

Q: Early on, how did you learn about your customers?
This actually had two stages. Before I came back we used Survey Monkey to survey people and then we used small-scale surveys in universities among people who were actually learning English through our employees in Chengdu. We had a few employees in Chengdu back then. But that type of survey was kind of indirect because we were not there. So all the information we got was filtered.

After I came back [to China], it gave me the opportunity to actually go to the campus and start talking to people. That gave me much [richer] information, which made a huge difference.

Q: How has your strategy changed over time and how did you make those decisions to pivot?
It depended on the situation and our understanding of our customers in the different stages [of our growth]. For example, when we first launched the program we pretty much targeted everybody: people who want to study abroad, young professionals, and people in high school. Because we thought it was infinite — you can find everyone in North America to communicate with those people in China.

But as we [better] understood our customers and we found people in our target customer groups, [we learned more]. Our primary target now is people who want to study abroad. That’s why [we target] university students and our primary business partners are study abroad agents and language training companies. These are the two types of partners. This in-depth understanding of your customers can change your strategic decisions.

Another thing is the environment, or the opportunities, change. We have found some local partners and have felt that those partners could bring some more opportunities, especially in the study abroad field. That was another factor in us refining our customer base and focusing on the study abroad field.

…don’t think you’re Chinese and you know everything… you don’t!

Q: How have you found those partners?
Different ways. To give you one example, we met one partner at a pretty random talk, and then we kept developing the relationship. They have become one of our biggest strategic partners. After I came to China I went to different educational expos, exhibitions, and conferences and there were lots of institutions working in this industry. That’s the primary way we developed our partnership with other organizations. Of course, if I randomly run into great people, why not.

It’s pretty easy to establish business relationships in China because people are very aggressive about finding more opportunities.

Q: How have you found it as a returnee. How has spending so much time abroad affected your relationship-building in China?
The easy part: because I have knowledge from [abroad] it’s easier for me to connect with expats or international companies. For example, if you put me and some domestic business people into one room and try to connect with those international companies I find that I have less problems than they do. So that’s the easy part.

But the hard part is, since I have [been out of] China for more than 10 years — you have to restart your network and you need to connect with new people and sometimes you need to learn from scratch. The biggest lesson I’ve learned is don’t think you’re Chinese and you know everything… you don’t! It’s also a learning process. That said, it’s a much shorter one [for returnees] than for pure foreigners.

Q: What advice do you have, if any, for returnees who are coming back now?
First, give yourself some time. Building a network and developing business relationships takes time. Secondly, for myself I think reading helped me a lot, learning how to bump into people, connect with them, how to follow-up. You can find lots of useful tips from books or by just asking for help. Third, just be humble. Don’t think “because I’m Chinese I know China,” no you don’t. You have to relearn things.

Q: What advice do you have for people with cross-border business ideas?
I think the first piece of advice I could give, of course, is you have to have people in both countries. And also, you have to evaluate the strong relationship between your partners because you’re operating between two countries so there could be lots of miscommunication, misunderstandings, and disagreements. You have to have a very effective way to address those issues. So I think those are the two biggest challenges that cross-border companies will have. I think there’s no silver bullet, you just have to work those relationships out. It takes time, but it will turn out to be a great relationship.

I look forward to reading your thoughts on this interview with WeblishPal co-founder Danny Wang. Sign up for email updates below so you don’t miss future posts!

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