From fitness to EdTech

My path to educational service has not been easy. I started out with a restaurant that I successfully sold, investing the money in a popular weight loss marathon a couple of years ago — Fat Busters. This format was a success in Russia, and I decided to launch a similar one for the American market. I found a development team and started producing content. But when I started offering the product to American bloggers for advertising, I saw no interest whatsoever.

There were two reasons. First, it took too much money and time to develop a competitive platform where everything was supposed to happen. And secondly, influencers refused to advertise our product because they wanted to create their own one and monetize their audience and competence.

Fun fact.

Many American fitness influencers are selling their workout and weight loss programs as PDF files for $300 000 a year without any digitalization!

We had to close the American project, but I got an important insight while working on it. I understood that influencers with a large audience are ready to launch their training courses and the only reason some of them don’t do it because they do not want to work on the technical part. That’s where I saw an opportunity for a new project and this is how Gurucan appeared.

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Changing monetization

At the beginning, we focused on influencers and offered to make educational mobile applications for them on a turnkey basis for a certain percentage of future profits. We quickly figured, tho, that influencers who make good money were not ready to work for the percentage that would suit us.

We changed the concept of the product to SaaS: we made a high-quality “admin panel”, where you can easily create educational content yourself. After its launch, we started selling subscriptions. Large clients like this format much more than the Revenue Share model.

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Differentiating from competitors

Our clients are well-educated “digital” people, with flexible thinking and a broad outlook. It won’t take them long to decide whether it is worth trying something new. If they see the value they buy, so we focused on giving them that value.

We analyzed our main competitors, identified their weaknesses and started building a project based on this, clearly separating from them. Therefore, our strategy now is to poach users from other platforms. We invest a lot of resources in training aspiring content creators, as well as trying to poach current clients from other platforms. This is the shortest path to money.

Speaking of the Western market, many users switch to our platform from Thinkific, Kajabi, Podia and LearnWorlds. We have one big competitor in CIS Getcourse. That’s where we get most of our Russian-speaking clients from.

Gurucan’s key advantage is its mobile platform. We make it possible to launch educational applications for iOS and Android quickly and easily, as well as to brand them, which is very important for our audience. Since influencers spend a lot of energy building their personal brand, it is for them to be able to use it in their application.

The application is a strong “anchor” for the client. Returning to our competitors’ Web platforms would be a step backward. Another key feature of the mobile application is the ability to use push notifications and a user-friendly interface to increase the number of users who actually finish your course and the involvement of students many times compared to web platforms.

Client case.

One of the first Gurucan users increased the number of people who complete her courses from 60% to 90% by replacing email notifications with push notifications.

Meanwhile, our competitors are OK with the churn of users as they are big and do see no threat in this, just yet as the Web is everything for them. We are taking a specific group of content creators away from them who already see the potential of mobile education. Our task is to grow and get the maximum resources from this niche and then expand horizontally.

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Russia vs The USA

At the very beginning of our journey, it was easier for us to test hypotheses and build a product in Russia, but now we are focusing on the American market because it is much easier to grow there.

First, American users are used to the fact that one program does only one function well, and it can simply be integrated with another program that performs another function well. In such a system, it is OK to replace one element with another or add a new one.

In the Russian-speaking market, huge systems that do everything are more in use, and switching from them to something else becomes a huge problem for business. As a result, potential customers are reluctant to implement new solutions.

In Western countries, the software market has existed for much longer than ours, so people are used to paying for software and willingly buy subscriptions. Few people attach a card with no money on purpose just so that the platform doesn’t charge them too much.

Secondly, we have connected PayPal and Stripe to our service, which suits 95% of our clients from the USA. For the CIS market, we had to integrate 9 payment systems, and we are constantly asked to integrate more.

I believe a business should be profitable at the start. For a smooth development, we planned to start making money in the Russian market, and then go to the American market with the money we’ve earned. The first part has been completed — we are making a profit from working in Russia and are actively developing the American direction.

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+ India and Africa

Additionally, we are conducting a large project with Indian neobank Openbank, that will promote our platform among their teacher clients. One of their co-founders was looking for a new learning platform and just googled us — so we launched a joint project.

Also, clients from Africa often contact us: being able to make a mobile application is critically important for them as their audience simply does not have computers, only smartphones. We do a preload for them: mobile Internet is still too expensive for many, so the ability to download lessons via Wi-Fi and then watch them is very relevant.

We believe in mobile education. And since in Asia, Africa, Latin America, most people do not have computers, but smartphones, education in a smartphone will grow very much.

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An inspiring product

Thanks to self-reliance, we can feel more confident and make more deliberate management decisions.

On September 1, 2020, we launched our English-language website gurucan.com. We’ve developed a different pricing policy for the United States and redesigned the value proposition. We had the first large sales in November: that month our revenue exceeded $16 000.

We are now making sales with a check of several thousand dollars. I think it’s a very good result for a startup. The market is showing us we do what users need.

For the past six months, we have been focused on the product: we added new features almost every sprint thus covering the main needs of users. For the next six months, we will be focusing on growth.

The goal is to poach more users from our competitors. To do this, we use several promotion channels:

• SEO: we optimize keywords, make a system of high-quality backlinks and constantly post useful content in our blog.
• Social proof: making as many cool use cases from different verticals as possible. When a person sees success stories of people who are similar to themselves, they are much more willing to buy a product. We will grow customer reviews, reviews on software selection sites.

We also test paid advertising channels: despite the fact that ROI (Return On Investment — a payback ratio demonstrating the profitability or loss of a business, taking into account investments — Startup Jedi) is a little lower, we were able to include paid advertising into our cost estimate. It was difficult since our competitors are not using paid channels since user price is too high. We can afford it, since there is a flagship product that can pay off such a CAC (Customer Acquisition Cost — the cost of attracting a customer to purchase a product / service — Startup Jedi).

There is a product demo tour in our sales funnel, which we run via a video call. This is a very effective way to showcase a product, answer questions and collect feedback. Now 7% of those who come to the demo tour become our subscribers. We are constantly improving the funnel and increasing this indicator.

We are also preparing to redesign the entire service. Design in our niche is a very important part of the product. We did not understand this at the start. Our audience produces beautiful content and wants to use beautiful solutions that can inspire their work.

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Pros and cons of the pandemic

During the lockdown, the flow of our clients quadrupled. But it should be noted that many of them came because they panicked. When classic offline businesses were closed, people began looking for a “life preserver” and resorted to us — but they did not have a real request for digitalization.

As soon as the opportunity to work like we used to returned, such clients left us. They simply did not fully understand why they needed online education and did not believe in it. And we had to make a lot of effort training such users — but it allowed us to pump our support service to incredible heights.

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Team

The co-founder and I are the classic Hucker and Hustler. I am in charge of the business component, and my partner Dmitry Ponomarev is responsible for technology. Dmitry Egorov took care of legal issues, developing strategy and fundraising since he has vast experience in these matters, and he also became our first investor.

My partner Julia is in charge of the content part, preparing content for the blog and conducting demo tours for potential clients. A total of 11 people are working on the project, half of them working part-time. This makes us flexible as we can easily grow or cut the number of people in the team or replace a specialist if they do not fit.

We’ve learned a lot from our mentors at Sber500. We got much better in marketing, discovered working instruments and the ways to get more with fewer resources.

Furthermore, we keep calling our mentor from 500 Startups Timur Daudpota once every couple of months, and he knows exactly how to organize marketing and sell. He’s my favorite mentor.

The head of the sales department of the Avocode service organized a special boot camp for our team about sales in the American market, after which our results increased significantly.

We managed to attract a very cool marketer to the team — Daniil Kopalevich. Prior to that, he worked as Head of Marketing at HelpCrunch (a Ukrainian company that is successfully developing in the American market). Today Daniel advises us and adjusts the marketing strategy.

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Raising investments

Now we are passing validation testing on the benefits of mobile applications, and we plan to raise the next round of investments in March when we show investors a proven idea.

People buy our product. When we first sold for $3 000 in the US, I didn’t even believe it right away. No way someone would pay so much to a company from the other end of the world, let alone from Russia! But we are getting more and more clients like this, so I understand that we need investments to multiply this success.

Roughly, we want to raise $1.2–1.5M in the Seed round. We’ll use this money to poach even more users from our competitors.

We want to partner with investors whose vision of the future is similar to ours. Likewise, we are looking forward to the rapid growth of mobile education, especially supplementary education. If an investor is interested in working in this area or has competencies in it, we’ll be more happy to work with them.