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Hao: Good morning everybody! We're calling from the Vietcetera office in Ho Chi Minh City again. I'm your host Hao Tran from Vietcetera. This is another episode of Vietnam Innovators. We're actually switching our schedule to Tuesday mornings now. Moving to today's show, we're super happy to welcome our guest, Michael Ngo. He is the country director of ELSA Speak. Michael has just joined ELSA; he's been the kind of start-up technology veteran in Vietnam and Asia as well. He's a very busy man, but he's made time for us so let's give it out to him here today. Michael, we'd love for you to introduce yourself!
Michael: I'm the country director of ELSA. I started back in June, landed in Vietnam about 2-3 weeks ago. I got out of quarantine last Monday with my 2 kids and wife.
Hao: So a pretty big commitment to move here, what was so compelling about the opportunity at ELSA for you to make the move?
Michael: Prior to ELSA, I was handling the marketing for South East Asia at a B2B SaaS company working in data analytics. After about a year, I got really bored of it. And prior to that, I co-founded a mobile commerce startup in Vietnam. What really drove me to do that was I wanted to create something that would allow people a platform to sell and get some extra revenue-- to have an impact. But I got really bored with selling those platforms and wanted to find something else that would bring me back to that: how to make an impact and change people's lives. This opportunity came up and decided to jump headfirst.
Hao: So you've been a founder for a startup here in Vietnam. How does someone like you, with an entrepreneurial background, also then go to work at a more established SaaS company and then go work at a startup as a director. A lot of people ask me, how do you find that motivation as a founder and continue that motivation as a high-ranking employee. What are the evolutions of that career path for you? Is it always the right time to be a founder? When is the right time to move on from that and do something else?
Michael: For me, it was more of a personal choice. When I co-founded the startup, we ran it for a while and I realized that as we were running it, there was a lot of stuff that you're figuring out as you go. But I got to a point where I realized I wanted more of a foundation. That was partly why I decided to go back to Singapore. I applied for an MBA program and started working corporate. This was kind of a later-stage startup, so I wanted that perspective of what it's like to take a company public. I wanted to finish my MBA and get that background as well. So between those few years, it was a big learning experience. So after all of that, I knew I wanted to go to a faster-paced, high-growth startup, not ground-zero.
Hao: Let's move on to ELSA, what is ELSA? What is the vision and mission of ELSA?
Micahel: ELSA stands for English Learning Speech Assistant. The vision came from our CEO Vũ Văn, a Vietnamese lady. She came here, studied at Foregin Trade University, went to the US, got her MBA and Masters in Education at Stanford. And it's come from her own personal story. She's obviously very educated, but she found that when she was speaking English, despite how good she thought her English was, people just weren't connecting with it. And so, she tried to find speech therapists and coaches, who charged ridiculous rates like $100 an hour, to help her. So that's where it came from. Her vision was to create a platform that would make it more accessible. Our mission as a company is to help 1.5 billion learners across the world.
Hao: That's great! And of the 1.5 billion, how far along are you guys?
Michael: Globally we're about 11 million.
Hao: So you're not even at 1%, but the market opportunity is still massive. And you mentioned accessibility. You have these super high-end speech therapists in training. Even just English language education is very expensive. Maybe you can deep dive into your role in relation to the company here in Vietnam. Although the company is distributed globally, why is Vietnam such an important market (aside from Vũ Văn's relation to Vietnam)? And what is your role as country director to move the wheel here in Vietnam?
Michael: There are two ways to look at it. Retrospectively, one is more on the profit side. We looked at what countries would really benefit from and help build the product out more. Like the large sample size.
Hao: Who are those people? Can you list three typical personas of your users?
Michael: There are young professionals, mid-20s to mid-30s. This group of people are very dynamic and are trying to improve their opportunities. And then you also have the older, more seasoned, and established 30-40-year-olds. This market is interesting because when you're at a higher management level, the last thing you want to do sit in a class with a lot of people because it might not be the image you want to portray. ELSA provides a solution for that because they don't have to be sitting in a class with other young professionals to learn, they can do it in the comfort of their homes. And then the last category would be the younger, high school up to college graduates. We have a lot of features coming out soon that will help with test-prep. One interesting feature that's getting some traction is being able to speak into the app, and besides getting your ELSA score you get an estimate of your potential IELTS speaking score too. So ELSA can also be used as a test-prep tool.
Michael: I can't speak too far down the road, but with the newest feature we're going to be focusing on English.
Hao: And Vietnam is obviously where things get kickstarted. Is it the biggest market for ELSA too?
Michael: It is the biggest market in terms of users and revenue. We have about 5 million users alone in Vietnam. And we still have a long way to go because country by country, each country has different kinds of mistakes or accents they use when they speak English. So there's still a lot of tailoring we have to do when we go to different segments. So we have to get a certain large sample size to be really accurate for that specific country.
Hao: The younger generation here is what a lot of brands are going after especially in education. There was a study I heard about, that said, I'm not sure if this is exactly correct, but some Vietnamese families spend a significant amount of their disposable income, we're talking 20%-30% on their kids' education. Of course, ELSA is trying to get a share of that. How are you gonna get that? It's not just through performance marketing or more content, but what are some ways your team is engaging with the local community to achieve more users?
Michael: What I mentioned before is test-prep. We’ve formed a partnership recently with IDP, co-owner of the IELTS test. And we're working off of each other's services and they gave us special mention about our IELTS score predictor. That's one part of it. The other part is obviously going back to the source so there are two ways to do that. One is the English Centers and Test-Prep centers like YOLA and IMAP, so that really helps get to the student segment. When it comes to the professional segment, we're working with a lot of corporations, offering ELSA as an education training benefit. Because aside from that, we have an organizational dashboard so a company or school can have all their users registered on there and the organization can keep track of how their progress is.
Hao: So kind of like a B2B, not just going to individual people but to organizations, companies, selling these products as company packages. So at Vietcetera, we have 60-70 people, everyone speaks English and is fluent at some level, but what I noticed is that for a lot of Vietnamese, they’re writing and reading are phenomenal. Vietnamese, and anywhere in the world really, when it comes to verbal competency, that's where it's a challenge. And in your guy's experience, it seems like that's the next level-- reaching not only individuals but going to companies who recognize this issue. These companies come to you with their problems, and you guys are developing solutions based on that. What are some companies are using them?
Michael: I always use this term to describe what we do. It hasn't caught on, but I hope it will. In English, it's The Last Mile of Language Learning. If you can read and write really well, but if you speak and no one understands you, then it doesn't really matter.
Hao: Everyone starts at kind of the “book smart" level. If you can read and write enough, you will make it happen. But speaking, especially in a country that's not English native, how many opportunities do you have to speak with a native English speaker?
Michael: When we were at tech-fest last week, a lot of students came up to our booth and asked if they could practice English with us, which goes back to what you said about the opportunities people have here to speak with native English speakers.
Hao: Yeah. They're just starving for opportunities to talk to people like you.
Michael: Yeah but anyway, going back to your question about what kind of organizations work with us, now in COVID-times, where web-calls have become important and also the fact that Vietnam is a huge outsource market for developers, so spoken English has become super important these days. A lot of people have recognized that and are coming to us. Besides that, the current solutions that are available now are the more traditional centers, the feedback we get from them is that it's hard to track how the employees are doing. And because at work, everyone's really busy, sometimes other business projects take priority and a lot of that money gets wasted essentially.
Hao: So basically, you guys are giving more accountability to the system and are in charge of putting methodology and tracking behind it to help the CEO or director of a company to see that for example, of the 70 people enrolled in the class, 50 people are reaching the ELSA score, which is what by the way?
Michael: The ELSA score is a measurement of intonation fluency, and after every lesson, you also get a score too. So you would get your acceptance score, and also a mixed score, and ELSA adapts to the learner. When you first get into the app, you take an assessment test, and that test will tell you which parts you're not good at like maybe you can't pronounce your P's properly, so the app will plan your lesson around that, so you can work on that first.
Hao: Going back to the original values of ELSA and why it started, the accessibility in terms of price… maybe you can share more about the pricing and how it compares to the traditional options here in Vietnam. I know certified and licensed English teachers, for example, they make an unusual amount of money. There's a supply and demand gap even more so now, so that's an opportunity for you guys. So pricing, how much do you guys sell for and how much do people pay for it?
Michael: We offer a lot of different packages and are flexible in how we work with our customers. For example, if it's an E2C customer, we'll do from 1 year to a lifetime package, and for B2B, we're much more flexible depending on their needs (1 month-1 year sometimes too). In terms of pricing wise, on the B2C side, a lifetime package where they could come back to us anytime would be around $100 dollars.
Hao: Wow, so instead of, as you mentioned earlier, spending $100 an hour on a speech therapist, whereas this is $100 for a lifetime. How does that work for you guys? Are you making enough money? Let's talk about the finance part of it. Where is ELSA in terms of business? How many offices and people do you guys have and what's the future of the company financially?
Michael: We're a pretty distributed company. In terms of office locations, we have Vietnam Japan, India, Indonesia. Vietnam is the biggest in terms of sales, marketing, and operations. We also have offices in the US and Portugal.
Hao: It seems to all come back to Vietnam though since you guys have the largest market here in terms of revenue, users, headcount… Will Vietnam always be a top market for ELSA? Hard to say?
Michael: I want to say yes! I'd like Vietnam to be our top market for a long time, but obviously, for the success of the company, we want Vietnam to be one of many. That's when we'll kick it off.
Hao: For those of you that don't know, Vietnam is around 100 million maybe a little less than that in terms of population. You mentioned these other offices like Indonesia, with 270 million and India with almost 1 billion. So right now, let's say you have 5 million in Vietnam (which is 5% of the population), 5 million in India, that's not even 1 percent, so for India, you guys have a market opportunity of hundreds and millions of people. It really started with all the experimentation and understanding of users here in Vietnam, I'm sure that's helped inform the product. That's great to hear!
Michael: The market in India is a great opportunity for us because English is widely-used there too, so the pronunciation bit is really important. Whereas, for some more developed markets, that English base is what needs to be built before we can even work on the pronunciation.
Hao: Can you share some final notes about why the English language is so important in the context of Vietnam for these ambitious, young professionals at work, to get ahead, to get to eh next level of their career? Why should today's young people pay attention to today's English education and how it could help enable the next level of success for them in Vietnam?
Michael: I want to go back to my story a little bit. My family immigrated to the US, we weren't very well-off, so education was the biggest thing for us. There was a point in university where I told my mom I wanted to do 5 years of university, and she said that’s great! just don’t come home. So education, for myself and my family, that’s an example of how education is important to us. In terms of where it’s going for Vietnam, as everything is moving to Vietnam for the next decade, working with foreign multi-nationals is super important. And because of that, opportunities will go to people who are bilingual, who are not necessarily just English, but Chinese, Korean, etc as well, but English predominantly will give you an edge.
Hao: I can definitely agree. You look at Vietnam right now, and companies are starting to slowly think truly on a global scale. You can think of the high-end Vin-group, they're starting to slowly sell cars and phones in the US and those ambitions are truly global. I’ve heard stories where internally, companies are just beginning to adopt a more international mindset. You can also say, the percentage of international companies that exist in China, how many of those are from Vietnam? It’s probably still a fraction of what China is. So in terms of new job opportunities, wealth creation, there’s so much left to be unlocked and it sounds like the English language is one of those keys to get there.
Michael: This is also why we launched our CSR program. During the peak of COVID-19, we offered ELSA for students free for 3 months to help tie over the lock-down period. That was a global effort and a lot of students signed up for the campaign. What we noticed was that being at base, we were still talking to people who were relatively more fortunate who had access to technological devices. What we wanted to do was take on an initiative where no child gets left behind. So we launched a CSR campaign, partnering with an NGO called Good Books to raise funds to build libraries in disadvantaged schools to make sure they have what they need to build that foundation for learning. If you guys want to join the CSR, you can join by looking up #ELSA_abetterVietnam on Facebook. We want to train teachers from those schools as well to arm them with the skills to pass the passion of learning onto the students.
Hao: Thank you so much Michael for joining today's episode of Vietnam Innovators. Hopefully our listeners here today have learned a little bit about not only innovation happening here in Vietnam, but also more specific how ELSA is one of those driving forces specifically in technology, education, accessibility, and the many challenges you guys are trying to solve. Thank you again for joining the show today!