Innovating English Learning for the Digital Age: Max Azarov's Journey with NovaKid

Max Azarov is an experienced entrepreneur in the IT industry. He graduated from the Moscow Institute of Physics and Technology (MIPT) where he studied at the School of Physics and Mathematics, and he holds an MBA from the University of Massachusetts.

Max built his career in IT product management and software development across Russia and the USA, working for Cyber Vision, Digital 5, Google and LG Electronics. As a product manager for Google, Max was responsible for the global product as well as the Russian/CIS markets (Google Search and Google Maps). Products in his portfolio generated tens of millions of dollars in revenue. This experience was crucial for Max’s skills as a team leader and software developer, but he always wanted to use his IT knowledge to build his own business. In 2013, Max launched his first startup with Dmitry Malin: Cloudike, a cloud storage solution (white label) for carriers and service-providers, such as Vodafon, Vestel, and others.

His IT background, along with a passion for the EdTech industry gained from teaching English to his own children, led to the idea of a digital English learning platform. In 2017, Max co-founded Novakid in Silicon Valley (USA) with Dmitry Malin.

NovaKid is a Series B EdTech startup ($41,5M raise) and was ranked at #105 on the 2023 Inc 5000 list of the fastest growing companies in America (1st in the education category). This online English as a Second Language learning platform for children aged 4 to 12 has delivered over 14 million English lessons for kids since inception in 2017.

Recommended Resources:
Edtech Insiders
GSV N2K
Brighteye
TechCrunch

Transcript

Alexander Sarlin: 0:04

Welcome to Season Eight of Edtech Insiders where we speak to educators, founders, investors, thought leaders and the industry experts who are shaping the global education technology industry. Every week we bring you the week in edtech. important updates from the EdTech field, including news about core technologies and issues we know will influence the sector like artificial intelligence, extended reality, education, politics, and more. We also conduct in depth interviews with a wide variety of EdTech thought leaders and bring you insights and conversations from ed tech conferences all around the world. Remember to subscribe, follow and tell your ed tech friends about the podcast and to check out the Edtech Insiders substack newsletter. Thanks for being part of the Edtech Insiders community enjoy the show. Max as Rob is an experienced entrepreneur in the IT industry. He graduated from the Moscow Institute of Physics and Technology where he studied at the School of Physics and Mathematics. And he holds an MBA from the University of Massachusetts Max built his career in IT product management and software development across Russia and the US working for cyber vision digital five, Google and LG Electronics. As a product manager for Google Max was responsible for the global product as well as the Russian CIS markets. Google Search and Google Maps products in his portfolio generated 10s of millions of dollars of revenue. And this experience was crucial for Max's skills as a team leader and software developer, but he always wanted to use his IT knowledge to build his own businesses. In 2013. Max launched his first startup with Dimitri Marlin cloud is a cloud storage system for carriers and service providers such as Vodafone, WSDL, and others. His IT background along with a passion for the EdTech industry gained from teaching English to his own children led to the idea of Nova kid a digital English learning platform. In 2017, Max co founded Nova kid in Silicon Valley with Dimitri maolin Nova kid is a series B ed tech startup with a $41.5 million raise and was ranked at number 105 on the 2023 Inc 5000 list of the fastest growing companies in America. And first in the education category. This online English as a second language learning platform for children aged four to 12 has delivered over 14 million English lessons for kids since its inception in 2017. Max Azarov, welcome to Edtech Insiders.

Max Azarov: 2:35

Hi, Alex, thank you for having me.

Alexander Sarlin: 2:37

I'm really happy to have you here today. So before we get into all our questions, I want to know a little bit about your background, you know, you got into this English learning ad tech space, partially because of your own children. Tell us the story of how you got into the Nova kid and the ad tech business?

Max Azarov: 2:53

Yeah, sure. Basically, at some point, I actually for awhile lived in the US. And then at some point, I moved out, and that's where, you know, basically, I realized that I have a need for my kids to practice English because I wanted them to be, you know, at least bilingual. So I wanted them to be fluent, was a challenge to find, you know, a way for them to actually do it on a regular basis with someone who is fluent in English as well. Because, you know, a lot of teachers actually, they focus on teaching grammar and like the, like the theoretics of the language, and not really the kind of the actual practice of it. And I started thinking, so first of all actually got into speaking to him at home in English, myself and my wife, extreme in Russian. So this way, he actually started growing up bilingual. And then that kind of inspired me as well, to see like, oh, wow, that's so easy for him, you know, was a lot more painful for me, when I was kind of going through schooling and university and all that. So I started thinking, like, how can I use technology to actually solve this problem? And that's where, you know, I kind of on one of my trips to China, actually, I bumped into, there was a huge billboard with VIP kid ads on it in Shanghai subway. And I looked at us like, Why isn't there something like this in Europe? That makes no sense. Like, there should be something like this. And I would totally buy it if it was available. And that's how I kind of so I went to a partner that would work with a couple other businesses and said, You know what, I think we should do it. Thankfully, he was stupid enough to actually vote for it. And there we are.

Alexander Sarlin: 4:27

And the rest is history. Yeah, exactly. Well talk about some of the growth that you've seen in Nova. I really liked that insight that, you know, the immersion, you know, growing up in a bilingual household makes language learning feel incredibly easy. And learning it in a classroom makes it feel incredibly hard. So what you're doing another kid is sort of finding a middle way where you have that kind of conversational English and one of the things that you really focus on is the convergence of offline and online learning. And you call it sort of a phygital you know, combining physical and digital learning experience, and it's all about you know, equipping Students with the knowledge and skills to thrive in the modern world of work. So it's English language, but it's also for their adult lives. So tell us a little bit about how you think about this phygital type of learning how the physical and digital combined to benefit students and prepare them. First

Max Azarov: 5:15

of all, I would say that from the very beginning, the way we were designing our product is to be complimentary to public school learning or to you know, whatever is your primary, let's say mode of kind of getting this school program through, right, what often happens is a lot of the kind of additional language learning schools, what they do is they essentially kind of teach you the whole curriculum from scratch, they're basically just saying, hey, you know, public schools are crap. So we'll just do it all over again. And we thought that, you know, maybe that does not make a whole lot of sense, because based on the feedback we receive from our customers, they're actually quite happy with their public schools, but they're not happy with is how much actual language practice they get at those schools. So they're pretty efficient that you know, teaching, as I said, the theory of the language, or the kind of vocabulary or the grammar and stuff, but not so good at practice. This is where the inside was that, hey, let's combine this, you know, offline learning that happened at school with basically enabling students to reach out to someone who's fluent with a language via the digital means. And I would say, this is how the, you know, look at really got enabled, right, because one of the challenges, it's usually, you know, actually finding that person who's fluent in English within, you know, non English speaking country, and that's what you know, made it, it's a lot more technology, like video calls, and all that made a lot more available recently, that's what we get capitalized on.

Alexander Sarlin: 6:39

It strikes me as that might be one of the differences between sort of a Chinese company like VIP kid or VIP kid, and no VIP kid is that in Europe, English language learning is actually decent. As you're saying, there's some pretty good learning happening in school, there's just not nearly enough practice. And in China, sometimes the school learning isn't even there, or it's really, really weak. So there's, it's probably a very different approach than you see in other companies.

Max Azarov: 7:01

Yeah, definitely. I would say, even though there are similarities, and we were definitely inspired by VIP kid, and I've actually got acquainted even with, you know, VA co founder, which is, you know, was a very interesting conversation we had, but yeah, our product is definitely much more lightweight, and much cheaper, to be honest with you, as well. So there's definitely a lot of adaptations that needed to happen to make it successful in Europe. And outside of China, in general, tell

Alexander Sarlin: 7:25

us a little bit about what the experience is like for our family or a, you know, a school aged child learning through Novocaine just give us a little bit of a sort of day in the life so that as we keep talking, our listeners can really envision what this experience is. Yeah,

Max Azarov: 7:39

so you basically start by learning on our website, you book a free trial class, you just pick any day or time that works for you, then hopefully, you show up, that's it. And that's when the magic starts to happen. Essentially, you're paired with a teacher who's fluent in English, it either can be someone from English speaking country, or we have a what we call bilingual teachers score, you know, I would say, just as good, but you know, just happen to be living somewhere else, then you just see that your kid actually engages with a teacher, despite not really having a whole lot of English skills at all, you just see that your kid is having fun. And you're like, Wow, I did not think this was possible. And you just open your wallet, you buy subscription, and you know, sheduled classes, basically, there's a lot of flexibility there as well. So you can pick any day or time that works for your kid. Because you know, kids are really busy. Ladies and gentlemans these days, really hard to squeeze into their schedule. Basically pick anytime a day, you do weekly schedules, you can keep the same teacher if you like it. And we have some customers who actually prefer to have two teachers so they can swap like on Wednesdays, we have one teacher on like Fridays, we have another one just to have a little bit more variety in, you know, the styles and the accents, and just the culture in general. Hopefully, you just get so happy that you start recommending the kit to your friends, then it actually does happen. So we see I would say roughly maybe about like 25 to 30% of our new customers coming through either formula referrals, I've just been formula referrals.

Alexander Sarlin: 9:15

When you mentioned that, you know, you see the kid having fun, clearly, you're sort of emphasizing the fun, the motivation that it feels so different than sort of staid classroom learning that focuses you know, purely on grammar or you know, syntax, it's really about conversation and practice and building a relationship and does a lot of the things that are really powerful and learning and

Max Azarov: 9:34

playing to what we actually did early on, I would say was a little bit intuitive. But you know, Also, thanks to you know, our early Methodists who helped us out, we really put in a lot of learning games into our curriculum so that teachers and kids are actually playing together. And that's really what helps to get over this kind of language barrier thing because, you know, in early days when we were just starting it, people would just say, Are you crazy? See, you're putting a kid who speaks barely any English at all, in the classroom with a teacher who does not speak his native language, and you expect some learning to happen, you must be nuts. Well, actually, which turned out to be correct, it actually works. Really Yeah,

Alexander Sarlin: 10:13

that sort of universal connection of playing a game together starting to learn about each other sort of helps people build the confidence to be able to start speaking without necessarily, you know, feeling like they have to be fluent on day one, there's been a really interesting shift in the education landscape at large towards sort of combining, as you're saying, in school learning with online learning that's really meant to enhance and sort of bring different types of flavors into into students lives, I think of companies like outschool, where you know, kids are in traditional school, but then they might go home and take a class on, you know, the history of Rome or on whales or on they have a famous class about the farts, the science of farts, right? And you take it online with a different teacher, and it complements what's happening in the classroom. And it's clearly you know, you're taking a really interesting approach to that in the language space. So tell us about how you see that kind of trend continuing in the future, that combination of traditional school learning with motivational, you know, fun, practice based game based online learning, how do you think that might evolve in the next few years,

Max Azarov: 11:18

I think it will definitely continue, the amount of hours that parents will invest in on top of public schools will grow in my opinion, just because I mean, it makes sense. Kids love it. It's not expensive, it's relatively affordable. It helps with learning motivation overall. I also think that probably in the longer term, I want to believe that we'll we'll actually see the number of hours in public schools go down so that basically public schools would just focus on something that's better to talk offline, and really enable parents to customize and kind of combine ala carte of experience for their kid, what makes sense for them, what really, you know, gets them into their kind of curiosity space. Hopefully, I'd also love to see some government assistance to that, right, so that parents would hopefully have some budget that they could actually allocate towards these initiatives towards this kind of complementary digital learning opportunities for their kid.

Alexander Sarlin: 12:15

Yeah, in the US, there's a sort of a growing trend of these ESA is these education savings accounts where families get some portion of the money that would be spent on their public schooling that they get to then spend on education. And you know, however they choose, it's very similar to what you're saying sort of bespoke put together the different pieces, it's been a really interesting trend to watch. Some states are really leading into it, and others are not I'm sure, in Europe, there are similar movements, at least bubbling up. And let's talk a little bit about your your teacher, or your sort of, I don't know if you call them coaches or tutors or teachers or language teachers, but you know, you have a whole suite of teachers, as you say, some are, you know, English, only speakers, some are bilingual speakers. And you know, one of the things that's interesting about this combination of in person public schooling, and then online schooling is that the online schooling can be global, it can be with people in other countries, it can be with people with other jobs are totally different backgrounds, when you're sort of recruiting or training or thinking about your teacher staff. What types of people want to do this kind of learning, this teaching? And you know, are they full time teachers? Do they have? Are they teachers and during the day, and then at night, they do online tutoring? Like, what are the sort of combinations of how these teachers plan their lives,

Max Azarov: 13:25

there's really different kinds, there's all kinds of people who come to us and all in all, I would say, there's definitely, I would say, biggest segments would be full time teachers who are really teach online full time, this is their job, they usually take lots of hours. And as a matter of fact, we actually have to limit them with how many hours they takes, sometimes we kind of overdo it. And we have another segment, which are, I would say more like lifestyle teachers who, you know, just may not even be interested in earning income. For them. It's more like just some fun, right? So for example, it could be retirees, that for them, it's more of a fun than an income source. Yeah, in terms of geography, it's really diverse as well. So we have, you know, teachers from the UK, like South Africa, who are, you know, much more kind of English, formal English speaking countries, but we also have lots of teachers from Philippines, for example, which are, you know, kind of English speaking, I guess, like a former US colony. We have teachers from Europe, for example, from Serbia, strangely enough, there's, you know, it's a really good source of high quality teachers for us. So it's quite diverse. Yeah,

Alexander Sarlin: 14:33

it's interesting to hear that there's sort of this combination of people who do it, you know, as their full time job. It almost sort of is a gig economy kind of thinking, right? And then people who are doing it because it does sound like a ton of fun to have to build a relationship and have play games and do conversations with kids who are learning English of different ages. Like that sounds like a really good way to stay mentally sharp and also just enjoy the connections that you're building. One thing that you mentioned that but I don't think we should take take this for granted is the sort of consistency of the relationships that are happening on Novocaine. It's not that you know, every time a kid logs on, it's a different person who they'd never met, and they have to build a relationship again and start from scratch, you're really building relationships. I think that's hugely important for the tutoring space. Generally, I'd love to hear you talk actually a little bit about that. Like, I'm imagine that your teachers, especially the ones who are there, just for fun, but I bet all of them really feel like they've built these deep relationships with the kids, they're tutoring, what does that look like? What don't they tend to say,

Max Azarov: 15:30

we definitely would encourage them to do that, I can't say that, like, 100% of them look at it this way, you know, there's definitely sound more like a mercenary type of teachers who just kind of, okay, teach my hours and then go do something, something else. But all in all, they're definitely passionate about what they're doing, and about really making a difference in kids lives. So we, you know, on the platform side of things would definitely make an effort to promote this consistency, and predictability for the kids. So on one hand, you know, teachers are human, so they get sick, for example, sometimes, or they need to take time off. And we make it really easy for a substitute teacher to be engaged. But on the other hand, we also make sure that in the long run, there is this connection maintained, and we're actually extending it. So this year, we're actually working on group learning experience, so that kids not only engaged with the same teacher in the long run, but they also have a group of other kids from different countries, different cultures, backgrounds, consistently meeting them, like on a weekly basis and learning together. That

Alexander Sarlin: 16:31

is very cool. I'm sure that it was a really exciting prospect for Nova kid. And I imagine families would also be really excited about the prospect of their kids being able to meet, you know, friends in other countries, and build relationships with other people learning English that are completely outside of their culture. It's really cool.

Max Azarov: 16:48

I think so this was an up division from the get go. But it's really difficult to you know, it's not that easy just to put a bunch of kids together and kind of make them have fun, especially if they don't really speak the same language. If they're like, English proficiency is limited, like, Okay, how do you make them interact? How do you make them have fun together? It is tricky. But we think we have a clue. I mean, long story short, it's also games, right? Just making group games, making sure that they have fun. But I think in the long run that should make this kind of relations piece even more important for another kid.

Alexander Sarlin: 17:22

Yes, I think it ties into some of the other trends we've been seeing in the in the sort of post pandemic ed tech landscape like this micro schooling movement, that we've been seeing a lot in the US where, you know, families combined, do sort of homeschooling but as a group so that people can build long term relationships with other kids, but outside of a traditional learning environment, and it feels like you're sort of doing a version of that which should be combined with their traditional schooling. I think that's really interesting. One more question just about this model, because it's so it's really intriguing to me, you know, that we had a guest a while ago on the podcast, and Charlie Edelman, who had made a documentary about the language learning landscape in China. And of course, you know, as you know, that Chinese regulations came in and really sort of wrecked a lot of that business, including VIP kid, completely, but really mess with them. And when that happened, a lot of the full time teachers who were had built these amazing relationships with these whole set of Chinese learners were just crushed. I mean, first of all, they were losing their jobs, but they were also losing their connections with these kids, they had really built relationships with, you know, I think it's really interesting. Obviously, Europe has a completely different regulatory landscape than China everywhere has a different landscape than China. But I'm curious what your thoughts are, as somebody who has obviously observed this space, about, you know, what happened, the sort of rise and fall of language learning of international, you know, online language learning in China, and sort of what lessons you've taken from that,

Max Azarov: 18:45

obviously, it was scary, what was happening was kind of good thing that it was not happening to us. But you know, we did get impacted. So we did get some, our share of black swans in Europe, which, as you might be aware, as well, but I guess my lesson was that, you know, there's really, there's always this regulatory risk, and I'm of the opinion that, you know, one shouldn't discount to saying, Oh, this is China, it's never gonna happen Europe, so that it actually might, you might take a different form or shape, it might be of different severity, it might have a different target, etc. But it might happen. So this reason does exist. And I think from this perspective, kind of positioning company as more of an additional learning rather than kind of connect hardcore credit credential learning. So for me, this was kind of additional reasoning behind this strategy. Because you know, obviously, if the regulator comes in most likely that will start coming in at the kind of licensed like credentialed learning space first, and you know, things can change quickly so you better be ready for just shoot to hit the fan and, you know, have this kind of mental stability as a founder to say, You know what, okay, the world is ending. Let's just pick things up and figure our way out of it. Yeah, it's kind of helped when all the kind of this Israeli Palestinian conflict broke out, because you know, we have a lot of students in Arab countries, we have lots of students in Israel as well, Russia and Ukraine, conflict broke out. So this for us, those black swans were actually quite painful. You know, from the business perspective, this definitely just prepares you, you know, things can happen outside of your control.

Alexander Sarlin: 20:23

Yeah, it's really interesting to hear you talk about it. And you're right. I mean, I think when you run a company that is sort of global by nature, and sort of international by definition, you sort of are vulnerable to both regulation, but also to work global events, like you're saying, you know, wars and conflicts and you know, all sorts of things actually affect your business in a way that may not be true. If you're, you know, if you're within a specific region or a specific country, it's really interesting to hear, you know, speaking of sort of that concept of stability as a founder, you know, we have a lot of ed tech founders who listen to this podcast, and we always want to dig into some of the aspects of the actual sort of business building. And Nova has done some really interesting things as a business. So first off, Novocaine is a totally remote and super international business. I believe you don't have a home office at all right?

Max Azarov: 21:11

That's correct. Yes. Yeah.

Alexander Sarlin: 21:12

So that's a type of business that's obviously grown since the pandemic, but it's still a little bit of a new model for many people, what would you say about what you've learned? And what would you offer to other ed tech founders about how to sort of thrive in a work setup that's both international and fully remote? How do you keep relationships? How do you make it all work? Especially in an edtech? Company?

Max Azarov: 21:33

Yeah, well, first of all, I'd like to say we're still figuring it out. It's still kind of work in progress. I think if somebody tells you, you know, what, I know how to do it, then just don't believe them. You know, very fresh, very new. That's the lesson number one. But you know, all in all, you know, you really have to just hire people that are a little bit more autonomous than you would have otherwise. But you know, when I said that, I kind of realized that when you do a start up, you want to hire these kind of people anyway, right? You don't want junior staff, when you start your startup, that's kind of probably similar to both offline and online, you want people that are more independent. And we're very, very big fans of no rules, rules book, I read tastings, and we definitely kind of take to heart a lot of basically kind of minimizing the, the number of rules and maximizing the personal responsibility, and really trusting our staff really trusting that they know and they do the best for the company. Because when you don't see them day to day, you kind of have to do it. The sob also have this kind of unlimited vacation policy and all that. So another lesson learned is that the there's definitely downsides, but the benefits far outweigh the downsides. Because you can, you know, literally hire a person halfway across the world within like a couple of days. And we have a routine. So kind of the routine way of business is like meeting somebody 12 months after they started in a company for the first time face to face. And then other kind of interesting learning is that when this actually happens, when you meet this person face to face for the first time, it doesn't really feel like it, you just feel like, okay, you know, we know each other already, you know, so not a big deal. It doesn't feel like Oh, finally, we met online. Now I know you, right now I know, you're truly right, it just doesn't feel like that. And to me, that shows that there's, you know, there's we kind of crossed the Rubicon as a species, right. And we actually can make connections without physically get being next to each other.

Alexander Sarlin: 23:31

I love the so many of the points you just made in there, the idea of, you know, focusing on autonomy and sort of looking for people who work on their own, but that you can build really strong relationships. So you know, I've had that experience with a number of different roles at this point where you work with somebody for a very long time before you meet them in person. And then when you meet them, you know, there's like a moment of, oh, you're taller or shorter than expected, that you know them already, you know, what they like, you know, how they work. So I love that point. And then, you know, speaking of the Reed Hastings, so, you know, we'll put a link in the show notes for this episode to the Reed Hastings book, because that is a really interesting citation. When I was at Coursera years ago, they brought in a couple of Netflix folks, and who brought with them, that sort of Reed Hastings, Netflix, you know, way of working and all of the principles you're saying in there about, you know, really try to minimize roles and maximize personal autonomy and sort of trust each other. They really brought that with them. And it was really interesting to see the it's sort of ripple effects on the culture there. So yeah, it definitely resonates all of these ideas. So you know, another aspect of startup world that you've been successful at is raising money, you know, raising funds, critical aspect of all startup growth, and it's pretty difficult in this environment. Considering your experience in securing funding for NOVA Can I think you have over $40 million in your series B correct me if I'm wrong there. Can you share some advice about for other ed tech entrepreneurs about you know what makes a successful raise, especially in this sort of Ed Tech wintry kind of tricky invite arraignment we're in right now. Sure,

Max Azarov: 25:02

well, first of all, we were actually lucky to raise it before the winter started. So that you know, there. So I guess some luck is definitely needed in terms of both timing and also connections. But you know, I'd say, in our case, two things contributed. One of them was personal connections, actually, our first investors where we knew them before they invested in, okay, so one of the investors actually invested in another business that I started before, so there was really some trust involved, and they could just write a check and say, you know, what, I think you're a good guy, I think you'll figure it out. So I think, you know, if you do have this kind of network that you can lean on, that is definitely going to help to get things started. And then it's just kind of building really, I would say, being disciplined, by allocating some time to maintaining this relationships with investors. So even today, when we don't really need to raise the money right now. I mean, we're right now we have this great balance sheet, we're not really looking to raise but I still invest time into writing this newsletter for all these kind of funds that I'm in touch with. Because you know, what, when you actually need the money, you need those relationships to be alive and well. So you need to maintain them, you need to, you know, sync up with them, you need to talk to them, you know, I mean, in this day and age, you would think, why would you want to talk to somebody like, well, they're human, you know, there's humans on that you're working for those funds, and they just want to see your face once in a while. And to kind of get a feel for of I mean, are you sad? Are you happy, like, you know, what kind of energy comes off of you, and so on. So just invest this time, build the relationship way ahead of the time before you need to raise the money? Because very often, what happens is investors will not say yes, but they will say, You know what, I'll track you. And I'll come back in six months. And if you do what you say you will do, then we'll talk

Alexander Sarlin: 26:56

Yep, it's a really great insight about the sort of value of keeping relationships warm, and maintaining relationships, especially with investors. But I think you know, in general, just keeping relationships with those in your circle warm so that you know, when you need help, which people do especially, you know, in now, this ad tech winter, you have these strong relationships that you've actually maintained and sort of stoked over time. And it makes a lot of sense, it reminds me a little of just speaking of the Reed Hastings book, one of my favorite business books is Reid Hoffman's, the Startup of You. And his advice, there is exactly what you just said, it's like, you know, it's all about relationships. He's the founder of LinkedIn. So obviously, you know, that's his MO. But also, if he's like, you know, he says, like, keep a fund for just flying out just to have coffee with somebody just to maintain a relationship. And you know, always be pinging people and always respond to people and just really don't go totally in a hole. Because keeping that network really alive, it's the most valuable thing you can do. And I think that's extra true for, you know, startup founders who have a lot of things that they need in terms of hiring or raising. So terrific advice there. One of the other things that's been really remarkable about Novocaine. And I'd love to hear your talk about this, I think this will also be relevant to founders is your growth, you've made it into the sort of Inc 5000 list of the fastest growing companies in America. And you've actually, you know, you're the number one on the education number one education company on that list and coming in at I think, 100 out of 5000. That's very high. So you've been growing a lot. And you mentioned, you know, the healthy balance sheet, what factors do you attribute to this success to the growth of the company and the growth of the user base? You mentioned, sort of rapid hiring that comes with the International remote culture. But what other things do you attribute to the growth of Novocaine? Well,

Max Azarov: 28:42

having a brilliant marketing team definitely helps. And I have to tell you, it's not as easy as just kind of pumping in more money into Google or Facebook, and just getting more of those leads turned out, because, you know, inevitably, at some point pretty early, what you're getting into is like, there's this ceiling, beyond which you just cannot push, right, because of the kind of the level of brand awareness, the level of brand trust that you have today, is just not allowing you to get more customers into the funnel. And this is really kind of the big learning for us is that you really at some point, not necessarily right away, but at some point, you've got to start to consciously start thinking about the branding about the top of funnel advertising like, you know, why should my potential customer be even aware of me? Why should they pay attention to my brand? I mean, what do I offer that resonates with their life values and so on. So these things, not something you usually think of when you just started, you know, a company usually just when you start a company, you just kind of try to plug the holes and kind of try not to crash but once once you feel like okay, this performance marketing piece is not really driving the growth anymore. You just got to look at this kind of top of funnel advertising brand position. shebang, and so on. And you got to have got to have the right people in your marketing team that actually can pull this off. And I think we're quite fortunate that we have those people on the team, I think, and that's part of that. And other part is, you know, innovate on the product side of things. You know, that also helps. So it can help both with bringing more value to your current customers, and, you know, growing this way, because not always you need to grow through a number of customers, right? Sometimes you can grow by just charging more, right. And we were actually quite lucky that our customers were willing to pay more to us. And actually, last year for us was, I would say, mostly focused, not really so much on growth, but on profitability. And basically, within a matter of one year, we completely recalled our unit economics, as well as the, you know, finished the year with a positive EBIT da, which for us was quite an achievement, I would say, because before that, we were, you know, your typical kind of cash burning, it'd be that negative startup. And then just to switch into this mode of like, okay, breakeven, you know, healthy unit economics contribution margin, I really had to drill this into my executive team. So not everybody really knows what the contribution margin is, and they really can't keep track of it. So that was important. So yeah, these things do help.

Alexander Sarlin: 31:21

Yeah, the strikes me listening to the different sort of pieces of your answer that one thing that some of this has in common, you know, the idea of being able to charge more and still keep your user base because they find so much value in your product and really trust the brand. And you mentioned the sort of high word of mouth and viral marketing and referral marketing earlier on. And this idea of, you know, when you hit the ceiling, on performance marketing on sort of pumping money into Google ads, and the like, building that brand, so building the brand, and building trust, and making people sort of really believe in Nova kit as something that aligns with what they're looking for works in many different ways in your favor. And it's obviously been a big driver of success, I'd love to double click on it a little bit. Because, you know, I think a lot of edtech companies, especially early stage, don't think as much about their brand as they might if they were a fashion company, or a liquor company, or you know, companies that are really extremely brand oriented. I'd love to hear you talk a little bit about Nova kids brand, you know, what does it mean to build a brand in the EdTech space that makes your users really trust, you really feel like you're aligned with what they want for their kids? What they want for their lives? Like, can I ask you to just flush that out? Because I think it'd be really valuable for our listeners

Max Azarov: 32:33

to hear? Well, first of all, I think this is probably one of the biggest opportunities we have as a company that really, no, very few of our competitors actually do it. So if we look at the kind of the overall landscape of the EdTech brands, and specifically language learning brands, there's basically, sea of sameness, as they call it, right? The customers don't really differentiate, they just look, you know, like, whatever I found at Google prices. Right? Okay, let's do it. And, you know, I wish I could say that we figured out the answer, we still also kind of on our path towards learning that. But you know, one thing is for sure that, first of all, you got to be on consumers mind, which means that you have to have not just I would say that you have to have a deep relationship with digital influencers, that's kind of one thing that we learned over time. Because early on, it's very tempting to do this kind of like a one off collaboration. It's just like, Okay, we'll give you the money, you do the post, and, you know, we kind of get the leads and kind of say, goodbye, right? Or maybe we come back to like coffee or later, when we need more. But really, if you want to be able to brand that you really have to maintain this relationship on an ongoing basis. So that this influencer, really speaks about your brand really, ideally uses your product showcases the product to their subscribers to their user base, and kind of translates this trust, this way, as well, as you know, learning really how to use mass advertising instruments, such as digital TV, and even offline TV can be useful as well. But you know, really difficult, difficult to get it right. But we actually had a very good experience in a couple of markets where, you know, we ran some TV advertising, and we actually saw a significant uplift in lead generation. So this is kind of we broke through the ceiling in this way.

Alexander Sarlin: 34:22

Yeah, it's fantastic. When you say digital influencers in your space, would that mean sort of parent influencers, like Mom, blogger, people who make videos on Tiktok, and Instagram around parenting tips and things like that? Not

Max Azarov: 34:34

necessarily parenting tips, but you know, anybody who has parents as their audience, right, so they got to travel they could do, basically, it does not have to be parenting tips. Let's put it this way.

Alexander Sarlin: 34:46

That makes sense. It's really interesting. The, you know, the field of brand marketing in this sort of digital age is really interesting. I mean, the fact that you sort of mentioned influencers first, I didn't expect that but it makes a ton of sense as I hear you say that right? I mean, Building a brand is, that's a lot of what building a brand looks like these days. And then you know, moving into video, which can be expensive may become less expensive now that there are all these AI tools, but can be expensive to make, you know, video ads, but it can have a huge lift if you sort of get it right. Totally.

Max Azarov: 35:16

And I would say, usually production is not really the biggest part of the expense part is actually, you know, getting all these influencers in the row. And actually, another point I wanted to make is kind of a litmus test for me whether or not your brand actually works. If you look at your own social media accounts, like you're on Instagram, you're on Facebook. And, you know, if you look at most of the brands out there, their social accounts are just dead. I mean, they're just grapes, you know, you have basically a content with like, five likes, and you know, and that sort of stuff. Yeah. And that's to me, that means that the brand is kind of neglected. Right? Yeah. And what we did, you know, kudos to our marketing team, social marketing team, specifically, I basically told them guys, you know, I don't want you to be benchmarking yourself against our competitors, because they suck, you know, their social accounts are really, really, they really suck. Right? So I want you to be benchmarking yourself against Red Bulls of the world, I want you to be benchmarking yourself against the influencers, right? And these guys have engagement rates of like, 5%, even 10% Sometimes, and before we started this, our engagement rates were like, 0.00, something, right? Like, almost zero. And, you know, nowadays, we are like in the single digits already. And hopefully, we can push it even higher than that. So that's, that's also a good way for a founder to realize like, Is my branded content really resonate with my customers or not? And if not, then, you know, you need to take action.

Alexander Sarlin: 36:49

Yeah, really insightful comments. And I love the sort of emphasis on, you know, I mean, you're mentioning the language learning space, and how there's this sameness and people don't differentiate, you know, I obviously think of Duolingo as, as an exception to almost everything in the EdTech space, it's sort of taken off in its own way. But you're right, so many different players are just sort of come across the same way. And Duolingo is not a competitor to you, especially. I love the insight. And I think ad tech founders should really take this to heart of not necessarily benchmarking against other edtech companies, when you're doing something that ad tech companies aren't particularly good at, like branding, right? Red Bull is a perfect example of a company that puts a huge amount of effort and money and thought into, you know, they brand, you know, whole sporting events, they do all sorts of things to get noticed. And it's like, Well, if that's best in class, let's see where they go. And let's have that as our Northstar not you know, the other ad tech company that competes with us down the road that is has, you know, nothing going on, it's like doing better than them doesn't mean much. So I think that's super powerful. Yeah, I really, I really liked that insight. I feel a light bulb going off when I hear that, and I bet others in the space feel that too. They're probably thinking, oh, yeah, we should stop looking at our competitors, Instagram and start looking at some other Instagrams. So you're in this really interesting growth space, it's sort of this this phygital, combining traditional schooling with online, it's language learning, it's international, it's sort of built on post pandemic world. We are obviously in ad tech insiders, we try to look at ad tech from a very broad lens. And you know, you're somebody that you've come from Google, you've been in the tech space, you understand product really well, you know, when you zoom your lens out from what you're doing at NOVA kid to sort of, you know, broader, what trends What do you think is next for the EdTech? Industry? Like what have you learned in your experiences, you know, raising money, building a brand, having rapid growth in hiring and working internationally and remotely? You know, what do you see coming in the next few years? Where's ed tech going to move? Given all the technology trends and the social trends we've seen in the last few years?

Max Azarov: 38:49

Well, maybe I will comment on something that's a little bit closer to Nova kid rather than kind of do overarching scheme. I mean, over arcane, of course, I mean, we can colonize the galaxy, and really great. Well, actually, not necessarily us, I think humans will not colonize the galaxy, we're a little bit too fragile. But let's say the creations of us with artificial intelligence that actually can survive in space will eventually colonize the galaxy. I think this will happen just as an aside.

Alexander Sarlin: 39:21

But yeah, please focus on your space.

Max Azarov: 39:24

As far as our space, I think, what's one of the trends that excites me is I think that the international schooling will become a lot more accessible to the parents. So nowadays, it's a very niche, very kind of a super premium segment. Like if you want to have international education for your kid, basically, you get ready to pay probably like$10,000 a year or so. So even if you do it online, it's still super expensive, or you have to send them actually somewhere abroad, in which case, you know, it's a whole lot more money than that. But on top of that, there is all these prerequisites that your kid actually has To be already fluent in English in order to even enroll into these programs, so what I think will be happening is that the international education will just become a lot more commonplace as the globalization continues to go. I mean, I'm a big believer in globalization and all kinds of the recent turmoil, I think, just a blip. I mean, eventually, you know, we're going into a much more unified world. And this globalization will have to be supported by more access to international education. And that's where, you know, I'm hoping no, the kid will become, you know, a big player in because eventually, we want this to be not just an English learning platform, but something that you can essentially bolt on to your, like a local public school at suddenly get this kind of internationally recognized. Now a good degree. So I'm hoping that this is kind of where things are going. And I really excited about it, but both in terms of cost, but also in terms of the accessibility, so hopefully, you know, we can make it cost a lot less so rather than, you know, 1000s of dollars, maybe several hundreds of dollars, but also not have these kind of stringent requirements on the upfront.

Alexander Sarlin: 41:04

Fantastic, I love that. So sort of, you know, much more of a unified global education system access to international education that we've never seen before, both cost and access perspective. And then, of course, colonize the other planets, and we can, then it'll all will be helpful, it will be good. Because if you're on Mars, you can still take education from people on Earth who speak any kind of language. And you know, there's no distance that I'm, I'm just playing with you. But I agree with you. I love that vision. And, you know, I mean, one thing that is interesting to me about this international education, we've talked a little bit on the podcast about how you know, the AI translation capabilities, also, I think, can play a role in that sort of access that you're mentioning. And you know, instead of requiring that students be fluent in English, or have X number of years or have a TOEFL score of XYZ to be able to engage in an international program, you might be able to start, you know, having less language and actually use these sort of AI translation tools or live tutors or things you live or virtual tutors to be able to sort of supplement and scaffold. Until then, you know, South Korea has this incredible tutoring culture, it's just had it for many years, but nobody else in the world has any access to it, because it's on Korea. And so I love your vision of sort of teachers from anywhere being able to really, really influence education for students all over the world, and the cost and access, which had been the big, big barriers and language barriers coming down. That's really inspiring. And I'd love to see that world. I would love to see it. And I think it's coming and I'm part of it. Yeah,

Max Azarov: 42:39

it's coming. And we're making

Alexander Sarlin: 42:40

Exactly. So we always end the podcast asking about a resource you would recommend. And you already mentioned the Reed Hastings book, which we'll definitely put in the show notes for this episode. But you know, you have such interesting experience in product and growth in language learning and international. What would you recommend for anybody? And in ed tech startups? Of course, what is a resource you would recommend for somebody who wants to dive deeper into any of the topics we discussed today?

Max Azarov: 43:05

Well, first of all, I'm a big fan of edtech insiders. So I think you acquire, yeah, if you're not subscribed yet, you should definitely do that. I really love the kind of weekly recaps and it really helps to stay abreast with the technology. But you know, surprisingly, there's not really a whole lot of high quality information sources, specifically looking at Tech, so I'm kind of resorting to some of these newsletters. So for example, GSV has a pretty good newsletter and 2k. Right. I also has a pretty good newsletter, I would say definitely, I would subscribe to dose. And you know, on top of that, I would say just kind of TechCrunch and that's probably about it for me.

Alexander Sarlin: 43:47

Yeah, terrific suggestions. I love the end. Okay, well, I'm like a religious reader of it, and Staley. So that's a lot of work. But it's still really amazing. And then right i newsletter amazing. Brad is one of the sharpest venture firms in Europe that focuses on Ed Tech. So I love those suggestions. TechCrunch always has, you know, cutting edge news in every sector, but you know, anything that happens in education, they tend to cover it, not everything, but you know, things that sort of break through into that sort of mainstream world. Terrific suggestions. As always, we will put links to all of those resources in the show notes for this episode. We won't bother putting at Tech insiders link because you know, everybody who's on this listener is already aware. They're aware. We want to pick your brain about some branding, as well. I'd love some advice there. But thank you so much Max as Rob, CEO and founder of Nova kid, which is changing language learning internationally and growing very quickly. Thank you so much for being here with us on edtech insiders.

Max Azarov: 44:46

Thank you, Alex, for having me.

Alexander Sarlin: 44:48

Thanks for listening to this episode of Ed Tech insiders. If you liked the podcast, remember to rate it and share it with others in the tech community. For those who want even more ed tech ins either subscribe to the free ed tech insiders newsletter on substack