Q&A with Stefan Kiryazov, CEO of Lexicum
EdTech Times met with Stefan Kiryazov, CEO of Lexicum, a company that develops online-based tools to learn vocabulary skills, available in several languages (currently in beta). Below please find a very comprehensive conversation with Mr. Kiryazov.
Company at Glance:
Founders: Stefan Kiryazov, Martin Ruskov, Dimitar Atanasov
Founded: December 2013
Category: Ed Tech / language education / vocabulary
Product stage: Beta
LinkedIn company page: linkedin.com/company/lexicum
Company twitter: @lexicum_net
Founder twitter: @vroomfundel
Other social media: http://blog.lexicum.net/
ETT: Where were you based geographically before becoming part of Emerge Labs program? What makes London more attractive compared to other locations such as Berlin, the U.S., Singapore, etc.?
SK: When the project was conceived we were actually dispersed across three locations – Germany, Bulgaria and the UK. This gave us quite a bit of flexibility as to where to base our business. We eventually decided to keep development in Sofia and base the corporate entity and all other activities in London.
We were considering our options and in fact didn’t incorporate until we joined Emerge to preserve this flexibility. We considered London, Berlin and the Bay Area as possible locations, with London being the path of least resistance as two of the founders were already based in London. At first we were worried that it might be harder to start a language learning business in the UK due to the less central place language education takes in English speaking countries – after all, even though we are developing a global business, the local market is always very important for initial validation. What we didn’t initially take into account though is the attractive segment of people coming to the UK to learn English which evened things up for us.
Then we looked a bit closer into the UK’s ed tech community and we were impressed with the vast support network that the sector enjoys. The SEIS (Seed Enterprise Investment Scheme, http://www.hmrc.gov.uk/seedeis/, further information is also available at http://www.seis.co.uk/) is also a big advantage, enabling investors to back entrepreneurs in a tax-efficient manner. The straw that broke the camel’s back was the offer from Emerge Education who helped us get everything we need to start our business in earnest.
ETT: Where do you plan to focus geographically first? Any interest in coming to the US – why/why not?
SK: Our business is inherently global – we offered 13 languages from the start. Still, the geographical focus is important in the early stages while we’re validating our fit with the segments on the market – we’ll be focusing our efforts initially on the UK market. Europe is also a market we have pronounced ambition for as it’s close geographically and language learning is widespread – most professionals in continental Europe are bilingual or multilingual. Still, the US market is very central to us – at least when it comes to online campaigns, what works for the UK can easily be adapted for the US.
We considered basing our business in the US and we’re still open to the idea. We have already incorporated in the UK, raised a seed round and we have started addressing the market here. Still, it’s not inconceivable that we move to the US at some point, depending on our success with fundraising in the UK and on the markets we do best on. When we outgrow the SEIS scheme there will be one less thing keeping us in the UK so we might bring the US back into consideration.
ETT: What makes the startup environment more/less challenging in London vis-à-vis say, Berlin or the U.S.?
SK: We find the biggest advantage of being based in the US, and especially in the hottest tech regions, is the availability of funds – angels and VCs do tend to invest in companies based around them. When it comes to hiring, we’ll go against the conventional wisdom of the valley that it’s simply impossible to hire an exceptional team anywhere else – in fact we think it’s going to be much more cost-effective for a lean startup to hire a stellar team in Europe. In Sofia, for instance, we can get a top developer for under $30,000 – match that, valley!
Berlin is a great location for language education startup. In a parallel universe, not so different from our own, we’re probably based there. The language barrier might be a bit of a challenge – even though everyone there speaks English, German is still the official language. Luckily, our two business-oriented co-founders both speak some German, so this wasn’t a blocker for us. The tax framework is not as friendly to investors in startups as it is in the UK, however – we haven’t come upon an alternative to the SEIS that brings about comparable benefits, and generally business activities are more heavily regulated in Germany; we feel that there is also less investment – some of the top German investors are actually active in other markets.
ETT: How would you define the market segment your company is in?
SK: The simplest way to describe it is: Vocabulary builder
As it often happens with innovative models, we don’t fit squarely into the traditional segments in educational technologies. We could consider the various tools for building vocabulary – mostly flashcards engines really – to be a separate segment. We are a bit like them, a bit like a dictionary. If we are successful I believe that we’ll redefine how we look at both flashcards apps and dictionaries.
ETT: Why did you start a company, or build a product, in this particular segment?
SK: Vocabulary learning is ripe for disruption. There is a problem to be solved and money to be earned.
Learning thousands of words is a monumental task that learners have been struggling with for years. Technology has a huge potential to help, but it hasn’t happened yet. We decided to not watch idly as it happens but rather be the driving force.
Language education is a huge market – more than $40 billion for English alone – yet most of this is spent on paper textbooks and tuition. Digital tools are proving massively successful – not just the free ones but also costlier alternatives. General online language learning is already a very competitive space so we decided to do something different – we offer a cheap tool specifically for building vocabulary that plugs into virtually any approach to learning languages; after all, everyone needs to learn tons of words apart from whatever else they are doing.
ETT: Who is on your advisory board?
SK: Volker Hirsch, with two decades of experience as founder and director in mobile and edtech.
ETT: What customer need or market gap do you aim to address?
SK: Learning a language involves memorizing thousands of words and the tools and methods currently in use are ineffective – there is a lot of room for improvement in vocabulary acquisition, there are no tools on the market that offer a good solution for learners to keep track of all the word they learn.
ETT: What makes your product/business model different from that of your competitors?
SK: We innovate in three different ways.
First of all, instead of pushing lists of words to learners we let them record their own words when they look them up in the dictionary. This gives a personalized experience that is so important for engagement in learning.
Second, we offer a ubiquitous tool that can be used for capturing words both in class, on the go or on the web – the solutions currently on the market tend to focus on only one of these scenarios. They can reach out for our tool whenever they feel the need for it.
And finally, the model for working with language teachers is also innovative – we offer a free tier for the whole class if a teacher decides to endorse the product. Students are only asked to pay if they want to keep using it after finishing the class. In other words, we ask them to pay if they feel that the tool has grown to be part of their lives beyond the classroom.
ETT: Are you a disruptor, and why so? Do you believe you will remain as a disruptor in near foreseeable future or become a more mature company? Why?
SK: We are changing language learning for good. If successful, we’ll disrupt vocabulary acquisition the way the iTunes store disrupted the music industry. People still broadly use paper to learn vocabulary – the field is yet to be digitised.
Nowadays people no longer get excited about products that get a few million users – you need to get to tens of millions to be “hot” and prove that you have a future. Thus, we’ll need to be very innovative, very disruptive, until we get past the 10 million user mark – that’s when we’ll need to focus on maturing and building a stable, predictable organization. Until we get there I’m afraid we won’t be hitting our annual turnover forecasts with 1 percent accuracy.
ETT: Who are your core customers?
SK: We are focusing on learners who have a conscious need for learning a language and are already doing (and paying) something about it.
One key segment is people who attend paid language courses – they can always benefit from a tool that makes their learning more efficient and blend it into their day to day use of the language
Next come the people who live in a country where their native language is not spoken – expats, immigrants, gap year travellers.
ETT: Could you tell us about other startups or product builds that you have been a part of and what your role was?
SK: Stefan and Dimitar built a flexible e-commerce platform in 2006. Some of the online stores based on it are still in operation. Stefan was also the venture lead of groupdocs.com in 2011.
In the late 2000s Martin worked on a series of digital authoring platforms that pioneered what are now known as ribbons in MS Office and gave rise to interactive online magazines.
ETT: Did you or do you currently have a mentor who is/has been helping you through the startup stages of the company? Who is that mentor?
SK: We have a few mentors who have been very helpful:
- Rahim Hirji, CEO of Maths Doctor – marketing advice, key introductions
- Ben Barton, founder of Zondle – advice on community building
- Sam Loose, CEO of Knowledge Transmission – marketing & PR advice
ETT: Please tell us more about your product stage and what we should expect to see from your company in the next 12 months – i.e. describe your next milestones.
SK: At the moment we offer a beta that includes the key functionality of our product – looking up, storing words and exercising – on a web app for bigger screens (computers, tablets) and we’ll be rolling out a mobile web app next week.
Next on our list is a native iPhone app and more features for use in the classroom, i.e. tools for teachers to prepare vocabulary lists for their lessons and send them to the students devices.
In the mid-term we’ll be covering more platforms (mobile, browser plugins and others) and we’ll be building collaboration and gamification features to keep users engaged and motivated.
ETT: Where do you see the education technology market going in the next few years?
SK: There will be exciting developments in ed tech in the following years, both in the classroom and in self-paced learning. More and better content will become available for learners – a lot of it in bite-sized chunks for consumption on the go. There will be winners and losers as traditional ed tech providers seek to modernize through acquiring and assimilating smaller, more innovative companies – sometimes successfully, sometimes not so much.
In school some classrooms will be tangibly affected – but not all, at least not in a few years. First of all, technology needs to become much cheaper, much more ubiquitous, in order to become inherently intertwined with the learning process. At the current stage, even in the schools that have invested in digital tools, students get only as much digital content in their lessons as their teachers are willing and capable to deliver. We won’t be able to get all teachers to use tech heavily in a few years – but some will and more and more students will experience the difference.
ETT: What advice, if any, do you have for someone thinking about launching a company in the education technology market?
SK: Whether to do B2B or B2C is a very important question for any budding ed tech enterprise. That’s of course valid for any industry but even more so in edtech.
Selling edtech products to commercial organizations is close to traditional tech business development but doing B2B with schools is a very specific market, cyclical in nature, with formal budgeting processes – one needs to build a solid network and intimate knowledge of the process. In many cases it might be easier to use channel partners who have established networks and are pre-screened distributors in many schools. To sell a B2C ed tech product requires a very different marketing approach – segments of customers need to be identified and campaigns to reach them need to be devised; it’s an altogether different focus, so an entrepreneur needs to decide early on whether they’ll be selling to schools or someone else will be paying for their product
EdTech Times thanks Mr. Kiryazov for such thorough conversation with us, and we recommend you check out Lexicum at:
Yevgeny Ioffe, or as people call him, Yev, has been working in both the startup world and established companies. His career spans from joining Xplana Learning as it launched to Cengage Learning to MBS Direct when it acquired Xplana in 2009. Yevgeny brings to EdTech Times his passion for start-ups and technology, along with his interest in the ever evolving world of edtech. Yevgeny obtained his BSc and MA from Brandeis University and MBA from Boston College.