Text | Photon Planet, author | Leng Zelin, editor | Wang Pan
Recently, Photon Planet exclusively learned from a number of VIPKID insiders that VIPKID co-founder and president Zhang Yuejia had a casual dinner with colleagues last week and recently left the company. To this end, we asked Zhang Yuejia herself for verification and obtained confirmation from the other party.
According to the data, VIPKID was founded in 2013, co-founded by Mi Wenjuan, Chen Yuan and Zhang Yuejia, focusing on North American foreign teachers 1-on-1 online children's English, and at its highest time it occupied nearly 80% of the market share in the segment.
According to insiders, Zhang Yuejia is proud of being in VIPKID and is also one of the company's souls. "For a long time, Mi Wenjuan and Zhang Yuejia balanced each other, with Zhang in charge of the company's main business departments such as sales and operations, while Mi was in charge of finance, investment and financing business departments."
Founder Mi Wenjuan has followed her uncle for many years of offline education, and another co-founder, Chen Yuan, is a friend of Mi, who has worked in foreign companies for seven years after graduating from graduate school, both of which lack Internet background.
In an interview in 2018, Mi Wenjuan mentioned that what helped us a lot in the investment process was to find one of the co-founders, Zhang Yuejia, and the entire operation was responsible for him.
"If there is no Yuejia, there will be no VIPKID."
Before Zhang Yuejia did not join VIPKID, Chen Yuan described their market and operation as being in a blind situation for a long time, until co-founder Zhang Yuejia joined in early 2015 to really set up a market and operation department.
When Zhang Yuejia accepted Mi Wenjuan's invitation, she was actually the co-founder of Baicheng Travel Network, and earlier, Zhang Yuejia also served in the marketing department of Zhaopin Recruitment for seven years, from the grassroots level to become a marketing director.
After taking over the sales department, VIPKID's revenue grew at a rate of 30% per month, and by the end of 2015, VIPKID had 6,000 paid users throughout the year, with an average unit price of nearly 13,000 yuan and a renewal rate of up to 80%. Cash flow turned positive in 2016.
However, the growth of VIPKID is not as simple as it seems. Since there is no enterprise to learn from, Zhang Yuejia once described it as "crossing the river by touching the stones", he tried the traditional traffic channels, and also went offline to distribute flyers, but the conversion rate is still very low.
In the view of Lin Lu, an early investor in VIPKID, the most correct thing Zhang Yuejia did was that in the case that VIPKID did not have much money on the books in early 2016, the first advertisement invested 60 million yuan, making the company quickly form brand recognition in the track.
In August 2020, at the VIPKID product strategy conference, Zhang Yuejia officially disclosed that the company's unit operating profit has been positive for two consecutive quarters, 90% of the channels have achieved profitability for the first time, the cost of customer acquisition has been reduced by 45% year-on-year, and the performance has maintained continuous growth.
With the vast majority of North American teacher resources at its disposal, VIPKID became the first profitable company on the track.
At that time, Zhang Yuejia said confidently in an interview with the media: "The north American foreign teacher one-on-one track has formed a certain barrier, and we have fought all the battles that this industry can fight." ”
Dry "moat"
However, the good times did not last long, just one year after VIPKID announced the profitability of the double reduction policy landed, for the blindfolded rush of online education put on a sharp brake, stock price knee cut, shrink business, layoffs, winter, transformation has become the norm of the online education industry.
At the end of September last year, Yu Minhong quickly announced the transformation path of New Oriental, one is to return to college students to graduate school, level 4 and 6, study abroad and various certificate training business; second, to continue to do book publishing business; third, to learn Luo Yonghao to start live streaming with goods.
In addition to K12 and subject training institutions, VIPKID, which focuses on North American tutoring, is also difficult to avoid. The "double reduction" policy clearly stipulates that it is strictly forbidden to hire foreign personnel abroad to carry out training activities. As a result, the moat that VIPKID had built for 7 years dried up overnight.
In August, VIPKID announced that it would no longer sell new course packages for foreign teachers, and would no longer renew courses for foreign teachers to old users. On November 5, VIPKID's online one-on-one live class was officially suspended, and more than 70,000 North American foreign teachers lost their jobs overnight.
The core business was damaged, and another pioneering business that Zhang Yuejia was responsible for before also "died" after a year of operation.
In January 2020, VIPKID announced the official launch of its online school brand "Rice Online School", which is responsible for Zhang Yuejia, positioning K12 live lesson products, focusing on English and mathematics. At the same time, it also announced $80 million series A financing from Tencent, Red shirt Capital and other institutions.
However, just one year after operation, in April of the following year, VIPKID announced that it would no longer invest in the rice online school, and Zhang Jiayue also returned to the group to take over the sales team again.
At present, we enter the VIPKID official website, and only adult English education courses appear in popular courses, making the name VIPKID no longer worthy of its name.
Because most online education adopts the "prepayment system" model, it also faces after-sales problems after the business is shut down, such as a large number of users asking for refunds of the cost of unfinished classes, and centralized refunds will put huge pressure on corporate cash flow.
Especially in 2020 and 2021, it is particularly difficult to experience the industry's large-scale cash-burning marketing.
VIPKID launched the "Change Lessons" action, hoping that users will replace the remaining lessons with intellectual AI classes, that is, online AI recording and broadcasting of oral language lessons. However, many users rejected the plan, and since then VIPKID has implemented a refund of 20% of the remaining 80% of the lesson hours can be exchanged for daily necessities in orange group Tesco, but it has still not been recognized by consumers.
According to the Black Cat Complaint Platform, the current number of VIPKID complaints is as high as 5533, the vast majority of which are related to refunds. In the same period, there were 1600 complaints about Good Future, 2179 for New Oriental, and 536 for Ape Counseling.
In fact, in 2020, the industry's hottest, the entire online education financing amount reached 53.93 billion yuan, more than the sum of the previous five years, but there is no VIPKID in the many financing lists.
According to enterprise investigation data, VIPKID has no financing news after completing the E round of 150 million US dollars in 2019. How long will the current cash flow be enough? Maybe only VIPKID itself knows.
Ideals and reality
On the last night of 2021, Zhang Yuejia posted in the circle of friends, "Today in history: a handsome young man joined the education industry with ideals, and in the blink of an eye, seven years later, wonderful and passionate. Looking forward to the next seven years, more can be created! ”
Looking at this text alone, most people will think that Zhang Yuejia is still full of confidence in online education, but in the current context, perhaps it has begun to appear at that time.
Crossing the zero point, VIPKID ushered in its ninth year.
This year, the Ministry of Education released the latest data, the compulsory education stage offline discipline training institutions have been reduced from 124,000 last year to 9782 at the beginning of the year, the reduction rate is 92.14%; the original 263 online off-campus training institutions have also been compressed to 34, the pressure reduction rate is 87.07%.
According to industry insiders, most companies have not found a suitable transformation path and are on the verge of life and death, and VIPKID is the same.
In fact, since the second half of 2019, VIPKID has had a number of senior executives leave, including COO Liu Huan appointed in March 2020, CFO Gui Lei, who joined at the end of 2019, Xu Xiaofei, senior vice president of marketing, and Liu Jun, chief academic officer.
Zhang Yuejia, who has always been proud of VIPKID, may also feel a deep sense of powerlessness.