LingoAce: Accelerate Growth with Moonshot Talent
Episode 13Visit Moonshot Series Page
- Differentiate yourself: Choose the hardest way to build a global company (08:00)
- Be ambitious about hiring moonshot talent (10:50)
- Hire and build out teams quickly (16:04)
- A good hire accelerates everything (17:44)
- Focus on what you can control (21:36)
Dewi: Hello, and welcome to Moonshot – a show by Sequoia India and Southeast Asia that profiles innovative startups and inspiring founders who are dreaming big, making an impact and driving change across the region. I’m your host, Dewi Fabbri, and throughout this podcast, we’ll be introducing you to founders and thought leaders who are helping shape the region’s startup ecosystem. We hope this podcast will give you fresh ideas on how to start and scale an enduring company.
Dewi: The global EdTech market, currently worth over $250 billion, is expanding rapidly as students of all ages turn to online learning. That’s all thanks to the cost and convenience of learning online, as well as educators looking for new, creative approaches to teaching. In 2017, Hugh Yao started LingoAce after he watched his son struggling to learn Mandarin. The program, which started off with a Mandarin Chinese curriculum, uses AI and machine learning, as well as gamification, to make learning fun for kids. On this episode of Moonshot, LingoAce Co-Founder and CEO, Hugh Yao chats with Abheek Anand, Managing Director at Sequoia India and Southeast Asia on how he’s driving LingoAce to become a global startup with international teams, what it takes to hire moonshot talent, and how the company launched its English program in just three months.
Abheek: Let me actually do a quick round of intros for Hugh and actually, rather than going into his background, maybe what I’ll do is, I will share a little bit of our perspective on how we met Hugh and give you guys a little bit of context on LingoAce and what the company is doing before turning it over to him. We first intersected with Hugh when a couple of folks in our Singapore office met the company, maybe in the first quarter of 2020. We met Hugh and at that time, it was a very small business. The company had maybe 20 people working out of a co-working space. And you know, while we really liked what he was building and really enjoyed the conversation, we had lots of questions in our minds. We had questions like, “Hey, how big is the market that Hugh is going after?” The business is quite early, let’s understand the business a little bit better. And so, you know, one of the things that we ended up doing – we took a little bit of time to try to understand the business. Fortunately, we got a chance to partner with Hugh in November of 2020. So, the story that Hugh will actually relate to you is all of 15 months old. I think that context is actually helpful to keep in mind, because sometimes, you know, when you see the progress that these guys have made, it’s hard to remember that the Series A was really done 15 months ago.
We partnered with Hugh and the company was basically building a global EdTech play with Chinese language learning as an anchor point. And, look in the 15 months since we’ve partnered, the company has grown, the product has grown, Hugh’s ambitions have grown and as is relevant for this conversation today, just the quality of the team that he’s hired has been absolutely fantastic. So, we’ll try to cover a few of these topics in today’s conversation – what does LingoAce do? How fast they’ve grown, what their ambitions are, what are some of the key things that Hugh did in the very early days that really helped him accelerate this path that he’s sort of been on for the last few quarters. And then, where do they want to be going next? And Hugh will give you guys some colour on that. But with that, let me turn it over to Hugh, and Hugh, maybe let me ask you a quick question. Give people, maybe a sense of what you guys are doing today or how fast have you grown. You said at the start of this conversation, you wish you’d grown faster, but you guys have been on an absolute tear. So tell us a little bit about the company. How big is it? Where are the employees? Let’s start off with that.
Hugh: Yes. So, I think the last two years definitely were really an amazing two years. You know, Covid-19 hit the world. So, many businesses are suffering but the last two years actually were extremely amazing for us. EdTech definitely is the most important sector and our business grew 40 times over the last two years, 2020 and 2021. And, from the customer perspective, at the beginning, we probably only had the customer from two or three countries but after two years we expanded our business to 100 countries. Actually, in more than 100 countries. And also, our team headquarters is based in Singapore and we have a team in the US, Indonesia, Thailand, Malaysia and China as well. So totally, our employees as you mentioned; when you met us as early as 2020, we only had roughly 20 plus employees. But actually right now, globally, we have 2,000 employees, plus another 4,000 are part-time, freelancers and teachers. So, if you count the teachers together, we have about 6,000 part-time and full-time employees together. So, that’s what we really achieved over the last two years. So, China is the biggest office we have. There are more than 1000 employees in China. So, that’s kind of where we are. Definitely, I think in the next few years, we believe we can grow more. So, as we sit down and talk about a plan, we believe in the next five years we have a big chance to hit $1 billion in revenue. So that’s kind of our target in the next four to five years.
Abheek: Guys actually, there’s a lot to unpack in what Hugh has said. I know he has covered a lot of ground in this, but let me give you guys a little bit of next level colour into what Hugh just said. When he said he has grown 40x in the last two years; Hugh, I remember doing the maths on last quarter’s bookings, you were basically in the triple digits. When people say 40x, sometimes it could be a small number to a relatively large number. In this case, the company has gone from low single digits in bookings run rate to triple digits bookings run rate. And I know Hugh, you want to add another zero to that number and get to a billion soon. At least that, for us, is sort of the ambition and the target that Hugh is going after. I think the other thing Hugh, that you pointed out, which is absolutely fascinating, and not something that I’ve seen very often, if at all, is that even in today’s world, you are one of the few companies that has headquarters in Singapore, the majority of your employees in China, and the majority of your customers in North America and Europe. That is actually quite fascinating. When companies build global businesses from the very early days, often it is a team that is really sitting in one market, and then the customers are sitting all over the world. In your case, what you’ve done is you’ve got a team that’s also spread out quite globally. Just talk a little bit about team structure, culture. How do you think of the organisation? I know there’s a particular phrase you’ve used with us in the past for how you describe the company and the team. Just talk a little bit more about that.
Differentiate yourself: Choose the hardest way to build a global company
Hugh: Yeah, I think it’s more about a mindset. I think, as a founder and everything actually… There’s no limit. The only limit is yourself. So [you] yourself, put a limit and then you think, “We can’t do that”, “We need to develop one country”, “We need to focus on this”, all these kinds of things. But actually in our definition, we call ourselves a ‘native global startup’. So, we are not an MNC (multinational company), we are not a corporation, we call [ourselves] a ‘native global startup’. In my background, I have more than 10 years of working experience with MNCs from the US. I was working with Oracle, IBM, and Salesforce. So, basically I know how MNCs work. So, that’s why very deep in my mind, in my heart, I didn’t really have the fear. I didn’t have the fear to manage a global team because even when I was in Salesforce, I managed a global team. I had employees in Australia, in Japan, in Korea, in Southeast Asia and China. So that’s why I think it’s doable. And also, we have a very big ambition. So that’s why I think that’s the only way to differentiate us. I tell, not only the investors, but also my executive teams; I tell them that we need to do the hardest thing. So, if you choose the easy things to do, many people choose that way, right? That route is very crowded. But, if we choose the hardest way to build a global company from Day One, very few people compete against us. So that’s why you can see that in each country, we have some smaller entrepreneur competitors, but as a whole, nobody competes against us. So, we really have to take advantage of becoming a global company. We have a highly distributed organisation. So, our Head of Product is based in the US and our Head of Academics is based in China, and our Head of Finance is based in Singapore and myself, I am based everywhere. We don’t really have a physical headquarters concept. We really have this kind of structure that allows everybody to collaborate through the remote working mode.
So, I think a few principles are very important. It’s really about transparency, [which] is very important. So, because we don’t really work together face-to-face, that’s why [being] data-driven, transparent, and also trusting with each other is the fundamental culture in our company. So, every morning when I wake up, I just turn on my mobile phone. I can check all the data from every country. I know the performance in Thailand, Indonesia, Singapore, US, China, immediately, every morning.
It is all about performance data and after that, we identify the issues. Not only are our growth team and marketing team data-driven, even our curriculum team [is data-driven]. If you guys know the education industry, it is a very slow-growing business. They have been there for many, many years. So, even our curriculum team – they are using data to drive their development. Every time we have some iteration, we monitor the data. We do the A/B testing. We see the conversion rate, we see the retention rates, so that we can make the call, whether the improvement is in the right direction or not. If not, we can just adjust it very quickly. So that’s why [in the] last few years, we have iterated our curriculum, iterated our product in a very fast way. So, that’s the way we can work during the pandemic and remotely.
Be ambitious about hiring moonshot talent
Abheek: On the people front, and that’s one of the key topics for today’s conversation – one of the things that have always blown my mind is just how ambitious you are when it comes to hiring. You have these crazy ambitious hires and you managed to pull them off. Give us an example. How did you think about it? How did you get people on board?
Hugh: Of course, [when] you talk about one successful case, behind that there are many failed cases, right? So as a founder; actually, before I talk about the successful case, I will share with you – don’t be afraid of failure.
Every time I talk with investors, my tone is really, “Hey, we don’t really need money. We just need talent. Can you give me some names?” So, [for example] the ‘name’ is actually a candidate from Goldman [Sachs] and he has worked in the education industry for more than a decade. So basically, he has helped a lot of the education companies, including BYJU’S. He really helped these companies raise money, go for an IPO, go public. So that’s why he knows the education industry inside out. A very senior guy. So, I spent probably two or three months really sharing my vision about the company and also the uniqueness of ourselves.
And even more than that, I introduced him to Abheek and also another investor from the US. So basically, I used Abheek as my resource to really help me to convince [him]. Abheek did a very good job helping us share what is Sequoia’s investment logic. So, actually, I used every resource I could to really convince this guy to join us. From the first engagement with him to officially [getting him] onboard, it took me about seven months. But I never delegated it to my HR or HR team. So, I held it personally. If you think about it, they don’t want to talk with your HR Director or HR VP or TA, no way. They only talk with you. That’s the first thing. It’s really about using all the resources around you. So, as a founder, you are not alone. So why do we take money from Sequoia? Sequoia is the most important resource for you, right? So, use every single part you can leverage, like [I did] myself.
So, that’s kind of an example. Of course, when he joined us, he definitely brought a lot of difference. So firstly, on a daily basis, he stretched myself, because as a founder, we have our own limits, so we have our family background and educational background, working experience… So, these are the sources of our strength, but at the same time, it could be our limit as well. So that’s why if we can have people from completely different backgrounds, he or she can really stretch us every day. That’s very important. Very often we will have different opinions, but we can debate, we can discuss, we can work out a solution. I think this kind of structure is very important. So, around me – he is just one – [but] there are a few others, they are from different cultural backgrounds, they’re from different educational backgrounds. So that’s why [I] myself can be stretched with their different opinions.
I would also highlight [that a] co-founder is very, very important for success – because everyone including, actually we know that; including you, including myself, we have a weakness, right? So as a CEO, everybody has a weakness. So that’s why actually, it is very, very important [that] we need to be very frank with ourselves. I have self reflection, not every day, I would say [but] every week or every other week, I have a certain period of self reflection. What have I done [in the] last one or two weeks? Can we do it better? Can I do it better? So, this kind of self reflection is very important. I realise, I do have weaknesses [while working] in this company. I’m good at strategy but it means that I’m not good at execution. The company is very good at execution, but I’m not. But, how can I [then] do that? Find a Co-Founder who is very good at execution. So, he or she can really fill the gap. So for example, I’m really data driven. I’m really strategy driven. I’m not a relationship driven person. But, actually in your company, you need somebody to care about people. Otherwise, the company cannot really go that fast. You will be broken. So that’s why, my Co-Founder, cares for people. Actually you [can] find the people who compliment you and really grow the business. That’s the most important thing. So that’s my sharing – just be brave and break your own limits. And also, just try to talk with anyone in this world who can help you. So, that’s my experience. And also leverage the resources around yourself.
Hire and build out teams quickly
Abheek: Hugh, I’ve heard this story many times and every time I’m very inspired. How much time today do you spend on human resources – hiring, team, culture?
Hugh: I think, a minimum of 50 to 60 percent, [at the] very minimum, because it’s different. If your business is a core technology-oriented business, when you grow; for example, WhatsApp… So, WhatsApp, even when they were sold to Facebook, it was a very small team. I remember, it was 50, 60 employees, right? So, in that sense, the culture might not be that important. But in our case, we grew from 20 to 2000. So that’s why culture is very critical. So that’s why [for] hiring, culture – I spend a minimum of 50 percent of my time on weekends. On weekdays, sometimes I have a lot of internal meetings, so that’s why I put interviews on the weekends.
I think two weeks ago was the most crazy weekend. I had 10 interviews in a day. So, the whole of Saturday. So, that’s what my calendar looks like. So, hiring is the most important
task and the culture now becomes even more important, because we hired a lot of talent and we need to make sure they can be integrated in this company with a single culture. Because they are people from different companies, they have different backgrounds. We need to make sure they believe the same thing as myself. So culture becomes more important than hiring right now, but hiring was always the most important thing for me.
A good hire accelerates everything
Abheek: I remember another story. I’m sure a lot of you have been tracking what happened in China in the EdTech market when the government changed regulations overnight and basically the category disappeared. I remember having a conversation with Hugh where, you know, at that time we were starting to talk to investors about our Series C. And by the way, we ended up doing an internal Series C. So, you know, Sequoia led that round alongside other folks internally. But you know, external investors were asking this question, “Hey, the China market has completely disappeared. Does that have an impact on us and LingoAce as a business?” I remember Hugh your comment at that time, your comment was, “This is an amazing time for me to hire all those people”. And I guess, you know, one thing that I want to maybe bring out because of the talent we were able to hire, we were able to launch our second product very quickly. Share a little bit of that story. How did you find these people? What was the product like? How quickly did you manage to launch?
Hugh: Yeah, okay, that’s proof why I spend so much time on hiring. Because I believe [that] hiring really changed the whole space of the company. So, if you don’t really understand the background of the education business in China, the education business in China was the largest education business globally. So immediately we did all the mapping of some top companies. So we understood the whole structure, we identified who is who. So that’s why within a month, we built the English live team. So, as you know, actually, our core business was Chinese. For the first four years, we only focused on Chinese education, but actually, we thought [this is the] right timing, so that’s why we acquired the entire English [team] and the live curriculum and the teacher team from a company. So that’s why the whole team was built within a month. So actually, they know each other, they know the subject very well. They know how to manage teachers.
From the day we started to build the department, and to the date we soft launched the product, it only took us three months. So three months actually is an amazing story. It’s not just, you know, the China team. If you think about the teachers [who were] hired in the US and the UK, and the curriculum was built in China actually, and also the teacher management is in China, and also the marketing team is in Singapore. So the first country we launched in is Thailand, so the customer acquisition team is in Thailand. So you think about [it], the US, China, Singapore, Thailand – four countries working together to finish one product launch within three months. Actually even more importantly – it’s not really about your launch, right – it’s about the quality of the launch. So first, we set a very good target. For example, the alpha tests, we set the customer and the satisfaction rates. We put 8 out of 10 as kind of, you know, the criteria. So eventually we hit 8.9. So in the beta test, we put 8 again; but actually we passed that with nine points. So basically, the first launch we just exceeded our target significantly. The only reason is, we hired very good talent and we trusted them, we gave them resources and we made sure the global process worked together. So that’s why a good hire can save a lot of the efforts of the team. If I [had] just used my existing team – they are the Chinese subject experts – when they launch a new product for English, there are a lot of traps and a lot of lessons they need to learn, right? So for a startup, I think time is the most precious resource for us. So, as a founder, we need to understand, is this a tactical play or strategic play? In a tactical play, of course we can have the negotiation, we can have all the comms and the benchmark, all these kinds of things. It takes a few months to close one hire, but in the strategic play, every day matters. So that’s why I think a good hire really accelerates everything. That’s why in our company [in the] last few years, we have [had] a few gamechangers. So that’s why I think we could grow 40 times over the last two years.
Focus on what you can control
Abheek: Hugh, that was awesome. And look, I think one of the things that, at least from our perspective, has always blown my mind is, you know, how nine months ago we were all worried about what was going on in China and not realising that behind all that stress, there was this amazing opportunity that you recognized and you managed to say, “Hey, let’s ignore the noise. Let’s find the people”. That was really, I think one of the things that you bought a tremendous amount of clarity to. You know saying, “Hey guys, whatever will happen in the market will happen. The one thing we can control is this amazing talent.” It’s a, literally, almost once in a lifetime opportunity to hire from, you know, a decacorn or from like the best talent from those companies, and you did that really well.
Hugh: Yeah, actually I do call it a lifetime opportunity. So I truly believe that; some investors worry about, “Hey, maybe the competition landscape would be different.” I think that’s not really under our control. What we can control is just to get the best talent to develop our products and drive our expansion. That’s something we can control. So that’s why be positive and ready for any change. So, every change is an opportunity for a startup. So that’s why, for us, we just need to grab the opportunity.
Abheek: Thank you so much Hugh for all of your insights. Look, everytime I talk to you, I walk away with many things and this time around as well I was making some notes on some of the stuff you said. On behalf of the team today, Hugh, thank you for your time.
Dewi: You’ve been listening to Co-Founder and CEO of LingoAce, Hugh Yao in conversation with Abheek Anand, Managing Director at Sequoia India and Southeast Asia. Thank you for joining us. I’m Dewi Fabbri, and for more interesting startup stories, visit our website sequoiacap.com or follow us on your favorite podcast platform.