Age of Learning Inc – Well-positioned for the Digital
Learning Environment – 7 September 2021
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Specialist:
Title:
Bing Chen (BC)
Former VP, Product Management, Enterprise Product Group, ABC Mouse at Age of Learning
Inc
Moderator: Nyree Hinton (NH), Third Bridge Sector Analyst
Agenda:
1. Product differentiation, offerings and development costs across age groups
2. USD 300m capital raised by Age of Learning and global partnerships overview
3. Educational technology trends, including adaptive learning, personalisation and AI
4. H2 2021 demand outlook
Contents
Q: Could you give an overview of educational services and how they’ve developed over the years you’ve been
in the industry? What key trends are you noticing due to coronavirus?
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Q: Which players are taking advantage of the challenges that other companies are facing in the industry,
such as being unprepared with technology? Who would you say is well-positioned to provide some of the
knowhow that many public and private institutions lack?
Q: Age of Learning seems uniquely positioned due to its content creation side. Could you discuss the
challenges of working in the content creation business, such as talent, the amount of resources, the years
needed to develop these programmes or the programmes’ success?
Q: How do you consider the curriculum development, content creation side and interaction point when
building out a product for higher education vs K-12? Children have lower attention spans. Could you
compare the development costs between the two or where a curriculum developer would focus their
resources?
Q: How does Age of Learning position its offerings and curriculums before universities or institutions,
whether small, private or public, as well as future prospects and new customers?
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Q: When did the concept of adaptive learning move to the forefront in the industry? You mentioned Age of
Learning’s Mastering Math product. What are some of adaptive learning’s growing challenges? Has it been
sufficiently proven or is there still a lot of scepticism? Could you outline the product’s overall tone or
possibilities?
Q: I presume you need data to feed AI and machine learning algorithms. Have you noticed any common
themes from the data across groups, such as different curricula offered by Age of Learning or different
subject matters? Is it based on different programmes?
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Q: How is the adaptive learning trend developing globally? You touched on China when discussing potential
areas of opportunity.
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Q: Age of Learning raised USD 300m earlier in 2021. How might the company consider using this capital?
Where are there opportunities for it to be more competitive, such as establishing more partnerships? How
would you use the capital if you were at Age of Learning?
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Q: What do you think sets Age of Learning apart from competitors, considering other players can’t easily
replicate its curriculum development? Does the sheer amount of the company’s capital allow it to make deep-
pocketed investments? Does it have a different approach to building out the curricula, such as not jumping to
the product side too early to cause a headache? What stood out to you about the company that perhaps made
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it strategically better-positioned vs peers?
Q: Do you think Age of Learning’s competitive moat to build more programmes is limited as children get
older, due to the consumer or student’s change of interest? How might Age of Learning consider offerings for
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children older than eight or nine?
Q: Where do you think the opportunity lies with Age of Learning’s current age group of 3-8-year-olds, given
some of the constraints you mentioned? Is it in rolling out new products in different learning areas? How do
you expect the company to be more competitive? How would you rate its B2B or B2C market share
penetration in this age group?
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Q: Do you think schools are more receptive now to players such as Age of Learning and their adaptive style,
perhaps due to coronavirus? What are you hearing around teacher adoption, given they were likely more
reluctant pre-pandemic but now want ways to keep children engaged?
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Q: Have you noticed any nuances between private and public institutions when rolling out products into the
school districts? Are private institutions more willing to onboard this technology, given there’s less
bureaucracy?
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Q: Could you discuss Age of Learning’s much higher retention rates than other market players? Do you
notice any differences in the strength of the company’s products as you move up the age groups it caters to?10
Q: You mentioned that students had to be present in schools to use Age of Learning’s school product pre-
coronavirus. How does that factor into teachers onboarding students with the technology vs selling into
schools given students are now at home? Could you discuss the challenges parents or teachers face in helping
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students become immersed in the technology?
Q: How would you assess Age of Learning or competitors’ ability to continue raising pricing, considering
overall trends, new entrants and account demand? Do you expect a scenario where a consumer chooses a
competitor’s product over Age of Learning’s due to it offering 10-15% less? Is there a price war dynamic
here?
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Q: You mentioned that Age of Learning has other products for the higher and lower ends of the age group.
How does that factor into trying to sell products as a package for the same 2-4-year-olds? Is that already the
case with products such as ABC Mouse or My Math Academy vs selling them individually?
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Q: Which US regions would you say are underserved or have opportunities for school districts, B2C or some
of Age of Learning’s product offerings? Where should there be a higher focus in edtech? Should it be geared
towards English? There’s a big push towards STEM, but how is that playing out in a region such as Florida?
How does geography play into this? How might trends in urban areas play out in more rural areas?
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Q: Age of Learning’s offerings seem to be solid all round, so where might the company have weaknesses or
where could it invest more capital? Where might there be an opportunity? You discussed what the right
learning environment should be. What might be the right learning environment for the rest of 2021 and
2022, given there’s more instability around coronavirus, school districts and children’s learning?
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Age of Learning Inc – Well-positioned for the Digital
Learning Environment
Transcription begins at 00:00:03 of the recorded material
NH: Welcome to Third Bridge Forum’s Interview entitled Age of Learning Inc – Well-positioned for the
Digital Learning Environment. I am Nyree Hinton, and I will be facilitating today’s Interview with Mr Bing
Chen, former VP of Product Management for the Enterprise Product Group of ABC Mouse at Age of Learning
Inc.
Bing, before we start today’s Interview, please state I agree or I disagree to the following statement: You
understand the definition of material non-public information and agree not to disclose any such information,
or any other information which is confidential, during this Interview.
BC: I agree.
NH: Could you start by introducing your background?
BC: I’ve been in the edtech industry for over 20 years. I started off my career as a developer, building
products, serving K-12, higher education and also some government organisations. One of the first companies
I worked on is a product that allows for school-to-home communications. These are sending important
messaging from superintendents, principals, teachers to communicate and educate parents at home. That
company, it was sold to Blackboard, and that’s how I ended up running the product for the next six years over
at Blackboard as Blackboard Connect. I then left Blackboard and joined a company called Age of Learning,
where I served as the President and VP of Product for ABC Mouse for schools or Age of Learning for Schools.
More recently, I am now CEO of a company called 2BeLive, which is an online virtual teaching and learning
platform.
[00:01:54]
Q: Could you give an overview of educational services and how they’ve developed over the years you’ve been in
the industry? What key trends are you noticing due to coronavirus?
BC: I think, when you look at the education industry itself, education hasn’t changed in hundreds of years,
where people and students and educators have to go to physical environments, but with the advent of the new
net over the last 20 years, especially over the last 10, we see a lot of online courses being made available. There
are two sides to it. One is, on the consumer side, you will see companies like Coursera or Fun Academy put
materials up there, and the materials up there allow students or learners to come in and consumer them on a
consumer one-on-one basis. Then, as schools try to get into the whole online arena, they realise that they need
software to help put their courses online.
That’s where Blackboard in the early days became really successful. They were able to essentially have a
content management system for schools, and that content management system for schools led to a lot of
schools, especially universities, putting their courses online, to get more students learning online vs just going
into the physical classroom. I think, when it comes to online learning or online education, the higher
education space is definitely much more progressive than the K-12, and so, when COVID hit, all of a sudden, a
lot of teachers and students and administrators find themselves in a predicament, which is, “I don’t have kids
and teachers in physical classrooms. I need to go online,” and they’d very quickly jump online. The result of it
is pretty much, in my opinion, a disaster, because the teachers are not adequately trained to teach online, don’t
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have the right equipment or the right environment for them to go online. As a result of that, there’s quite a bit
of learning lost, which, as a whole industry, we’re all trying to address today. How do you address the learning
loss from 18 months of remote learning?
In terms of the trends that I’m seeing, a lot of schools and institutions are trying to figure out what a virtual
online education component looks like when they have a physical location or a physical school. Is that a
supplement? Is that a complete different offering? Is that blended, hybrid, whatever you want to call it? Those
are the questions that people are asking today. Some of the key trends we’re seeing, obviously, is trying to go
online, putting more resources online for consuming, but we’re also seeing, on the consumer side of things,
teaching, so teaching online, as well. Companies like Teachable, where educators come in and put their
information online and create a course and make money out of it, is also becoming a trend.
[00:05:29]
Q: Which players are taking advantage of the challenges that other companies are facing in the industry, such
as being unprepared with technology? Who would you say is well-positioned to provide some of the knowhow
that many public and private institutions lack?
BC: I think there are a lot of companies, a lot of organisations or services, that can do that. Age of Learning is
definitely one of them, because they have this online content component. As users, in this case, or students,
are remote, they need content. As teachers are remote, they also need content to teach, so Age of Learning
being a content provider is really set up to capitalise on this need at the moment. I also see other
organisations, such as the virtual school organisations. Virtual schools such as K12 Inc, Florida Virtual or any
other virtual provider, and there’s quite a bit of them out there, that traditionally have just been an online
school but function more as a homeschool type of curriculum, I also see them being the provider of that
knowhow to traditional schools, too.
As they not only provide online schools as a homeschool, because they have the platform, they have the
content, what they need is get their teachers on it so that they can also teach virtually to students. The virtual
schools today, they lack the teacher piece because it’s considered homeschool, but if they were to include
teachers in this whole mix, all of a sudden, you have virtual schools that behave like real schools. Then, the
question is, will students go to the physical schools or go to the virtual schools? This is a huge debate, because
it means money will flow a certain way where students go. One side is the traditional schools don’t want to lose
money, but the virtual schools would love to get more students so that they can get more money. When it
comes to Age of Learning, they definitely have the ability to provide the content, which is why I think, when
COVID hit, they got a whole influx of new subscribers, because people are looking for content. In this case, this
is the consumer parent coming in and saying, “My kid is not going to school, I need to supplement their
learning. Let me just go subscribe and buy ABC Mouse to do, quote, unquote, almost homeschooling for my
kid or let themselves learn.”
[00:08:33]
Q: Age of Learning seems uniquely positioned due to its content creation side. Could you discuss the
challenges of working in the content creation business, such as talent, the amount of resources, the years
needed to develop these programmes or the programmes’ success?
BC: I think I would break it down into a few parts here. The first part is the knowhow to create the content,
and that has to be somehow tied to curriculum. When it comes to curriculum, there’s no one magic answer, in
just my experience over here, because everybody can create curriculum, including schools themselves. They
can create their own curriculum, and so, when you try to go into a school with a curriculum, they will
oftentimes question your curriculum. What that means is that it will take a long time for them to adopt and
purchase a curriculum, unless you have a lot of people using it, but to have a lot of people using it takes a lot of
time. Not only does it take a lot of time to create curriculum from the ground up, which is what we were doing
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at Age of Learning, it also takes a lot of time for customers to adopt and use it before you can show efficacy. I
think the cost of development for curriculum is extremely high, and at some point after you create it, sell it,
use it, you would have to repeat the whole cycle again, because curriculum gets old after a while. You have to
update it, and so the whole cycle begins all over again.
In the case of additional curriculum, and this is more for anybody who is a curriculum provider or a content
provider in this industry, it is a lot of money, not only on the curriculum side but on the digital interaction
side, as well. How do you make the curriculum or the content itself engaging for the user? That’s where Age of
Learning spends a lot of money on getting artists, designers, developers, building game engines to make it fun.
That’s also part of the whole trend in education today, is people don’t have a whole lot of attention when it
comes to online digital resources or just the whole online world. They want to learn some things in bite sizes,
so a learning activity can’t be long. It has to be short, it has to be fun, meaning it has to be gamified in some
way or another. Of course, the art quality, sound quality and just the overall experience needs to be very high,
as well, otherwise it will just look like it’s an old piece of content. Why use an old piece of content when there’s
a fun game out there that’s more engaging?
[00:11:41]
Q: How do you consider the curriculum development, content creation side and interaction point when
building out a product for higher education vs K-12? Children have lower attention spans. Could you compare
the development costs between the two or where a curriculum developer would focus their resources?
BC: I don’t have much experience in the higher ed curriculum content creation, but I can speak about the
early childhood creation based on my experience at ABC Mouse. It takes a lot of time. The first thing is your
learning objectives. You have to understand what you’re trying to educate, what you’re trying to teach in that
piece of content, and then, from there, you have to get all the pedagogy of what the teacher will be teaching if
the teacher were to do that in real life and somehow replicate that into this digital learning content. That
means hours and hours of conversations between the curriculum team and product design team, and these are
the game artists, the game designers, the art designers, to come up with the proper interactions to represent
that piece of learning objective.
Not only that, once you design one way, and of course, there are so many ways to learn something, you have to
user-test it, and that means hours and hours of testing with users before you can determine that is the right
content to use for that lesson. Once that is done, that’s when it goes into development, so building it out takes
quite a bit of time, as well. I would say the important thing, rather than put the expensive developers building
things out, is making sure that you have the right curriculum, the pedagogy, the learning objectives, all those
things defined upfront, and do more of the play-user testing upfront, because those can be more iterative and
agile, before you write a line of code. Once you write a line of code, it gets into a whole product or engineering
development cycle that is very, very expensive and time-consuming. That is just only for one content, and you
typically have multiple pieces of content to represent a lesson.
[00:14:24]
Q: How does Age of Learning position its offerings and curriculums before universities or institutions,
whether small, private or public, as well as future prospects and new customers?
BC: Age of Learning has predominantly been a B2C company. Most of their revenue comes from consumers
because that’s how they started. They’ve been in business for over 10 years, and they started in the consumer
space and marketed to individual parents buying it. When I joined Age of Learning over five years ago, they
were trying to get into the school space, so they needed platforms and systems to allow a single-use product to
be deployed into schools and districts and different learning organisations. They did that very well, which is
how we ended up taking the product global and into some of the schools. One of the things they did that is
unique, I would say, is making the new development of products more adaptive. You’ll see this, you hear them
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talk about this quite a bit, which is personalising the experience for the user, where the software understands
what the user interactions are and adapts to their learning pace. You will see more and more of the
conversation now is adaptive personalised learning when they go into schools.
They have a product that is called Mastering Math. When I was there, that was a personalised, adaptive
product, and we were just testing with a few schools. It showed some good progress with both the artwork
design as well as the learning outcomes, where it personalises the maths learning based on how the students
interact with the characters and answer the questions. To the kids, it’s like playing a game, but to the system,
we’re understanding where they fall in terms of their understanding of maths. What I can say is the way they
are approaching now, it’s all on the personalisation and the adaptive front, so that it can help supplement the
teaching that is taking place in the classrooms. It’s a supplemental, personalised learning app.
[00:16:57]
Q: When did the concept of adaptive learning move to the forefront in the industry? You mentioned Age of
Learning’s Mastering Math product. What are some of adaptive learning’s growing challenges? Has it been
sufficiently proven or is there still a lot of scepticism? Could you outline the product’s overall tone or
possibilities?
BC: The Mastering Math product has been out in the market for years now, I would say close to three years or
so. It’s the first adaptive product by Age of Learning. That coincides with the whole AI movement, online AI,
AIA, big data in education, using data to understand where the trends are in the learnings to help inform and
direct the next series of lessons. I would say that the challenge over here, and this is my personal opinion here,
is really seeing the outcomes of whether the algorithms written by the programmer indeed fit into the
personalised learning required for each person. I think it’s still a little bit too early to see the results yet, to
truly say it works in a certain way. I know it works, because serving the right content at the right time to the
right user, based on some feedback information from my previous interaction with the system, is definitely
better than just some generic interaction coming back, but it requires time to learn, not only on the machine
side but also on the human programming side, to tell the machine what to learn.
[00:19:02]
Q: I presume you need data to feed AI and machine learning algorithms. Have you noticed any common
themes from the data across groups, such as different curricula offered by Age of Learning or different subject
matters? Is it based on different programmes?
BC: Unfortunately, a lot of this data that all companies have gathered is very private, so you don’t get to see all
the data. As a whole industry, I’m not able to see what the trend is in terms of the outcomes of all these AI.
There are a lot of AI companies that come and go, as well. The big AI companies, a lot of them are in China.
Unfortunately, nowadays, given what’s happening out there, I don’t know if we can see some outcomes from
all the data that’s collected to feed into the learning outcomes there. Are there companies out there in the US
doing it? Yes, I’m sure there are, but I don’t have too much information on that.
[00:20:49]
Q: How is the adaptive learning trend developing globally? You touched on China when discussing potential
areas of opportunity.
BC: I’m actually not able to talk more about that. I don’t have too much more insight to offer on this particular
topic or on adaptive learning.
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[00:21:29]
Q: Age of Learning raised USD 300m earlier in 2021. How might the company consider using this capital?
Where are there opportunities for it to be more competitive, such as establishing more partnerships? How
would you use the capital if you were at Age of Learning?
BC: Publicly, it’s mentioned that they want to do global expansion, and that has always been the plan of the
company, to take their product global. They want to serve all students globally. It is very difficult to take a
product global. It costs a lot of money when it comes to creating content and systems to support a global reach.
For example, ABC Mouse, if you take the US product and try to take it to China, we did that, but it was met
with quite a bit of challenges in terms of localising the content, localising the interface, supporting another
team just to manage that product. What we ended up doing was partnering with Tencent, to create a local
version of ABC Mouse that is completely different in look and feel while using the same sort of curriculum.
It is two different products here, so when I see them raise USD 300m to go global, I can completely
understand why, because it takes a lot of resources, a whole other team, a whole other department, just to
handle the product in a country. I think there’s ABC Mouse in China, there’s now ABC Mouse in Japan, and if
they want to take it into Korea or Vietnam or Indonesia, India, wherever it is, it’s going to require a substantial
amount of investment. Making sure the curriculum is aligned with the needs of the country, making sure the
design is suitable, as well, making sure that the content is localised and suitable for that region, it takes a lot of
money. The development effort and development costs are extremely high.
[00:24:03]
Q: What do you think sets Age of Learning apart from competitors, considering other players can’t easily
replicate its curriculum development? Does the sheer amount of the company’s capital allow it to make deep-
pocketed investments? Does it have a different approach to building out the curricula, such as not jumping to
the product side too early to cause a headache? What stood out to you about the company that perhaps made it
strategically better-positioned vs peers?
BC: I think what really stands out is the quality of their UI, their interaction and UI, especially the UI side,
because people can make interactions. A click is a click, a touch is a touch, a drag is a drag and so on, but just
their sheer quality in terms of the visual representation, the audio, those are the key things. They have a lot of
very good artists there, they have sound experts they record. On the pedagogy curriculum side, I think there
are quite a few educators out there that know how to create a curriculum, but translating a curriculum into an
activity, that is where they stand out. They know how to do that very well, and then, of course, having the
programmers to program it out using their engines, the Age of Learning ABC Mouse engines or platform
engine, they also know that very well.
Over the years, ABC Mouse and the Age of Learning product ecosystem, they have created engines that can
support all these different types of gamified experience for the user. To do and create those engines in a way
that is scalable, where you can create thousands of learning activities using one engine, and they’ve got a lot of
engines, that takes time, that takes money, and then having all those engines work within the ABC Mouse
environment or their new adaptive platform environment, that also takes a lot of money. For a company to
come in and try to do that, replicate that, you have to do so much. You have to go first get the curriculum, get
the design, get the interaction, get people liking their interactions, and then go build the engines so that you
can build more than just one activity. ABC Mouse has more than 10,000 activities, so try to match up to that.
If you go to a customer and you present the 10,000 activities or more and you show that these are super high-
quality, you have avatars that can run around the screen in 2.5D, they can talk to each other, they can jump,
you can dress them up, they can chat, those now feel more like a real game, so it stands out.
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[00:27:23]
Q: Do you think Age of Learning’s competitive moat to build more programmes is limited as children get
older, due to the consumer or student’s change of interest? How might Age of Learning consider offerings for
children older than eight or nine?
BC: I think, for any company, they would love to have all students in all age groups, from K-12 into higher
education, etc, but what Age of Learning did very well is focus on the early childhood at a time when no one
was focusing on it. Before, over 10 years ago, you may have some old DVD-ROMs that people have been using
that have been translated into maybe some online mini-games. That’s the Reader Rabbits or whatever it is, the
Magic Schoolbus DVD-ROM game that you play on your computer. Age of Learning came at a time where they
took all the experience of those CD-ROM activities and made it into a single app, so that, as a parent, you can
just buy one app and expose your child to all these different learning activities.
When it comes to the age group, they really focus on the early childhood, which is the 3-8-year-old. In fact,
they didn’t start with eight-year-old because they know that it takes time for them to build content, so it only
really started with three-year-old to maybe five-year-old, the pre-K, the kindergarten, and then slowly did they
go up to first grade and then second grade. Then, they realised that the market has changed in the sense that
the user base has become more mature, which means they need a second product. That’s why you see a
different product out there called Adventure Academy with a different look and feel, different interaction,
different curriculum serving the third grade and up.
They would like to age up, but ageing up also means more competition. In the early childhood area of the
market, there are less players, although now I can see a lot of new players coming in. There is Homer, there is
BrainPop and all those coming in, but in the second grade, third grade and up, there are also a lot of
companies out there that have been traditionally B2B, selling to schools and districts. Companies like
Renaissance, they’re very strong. They’ve been just going around acquiring companies to beef up their product
line. Companies like Epic Reading, which was recently acquired by Byju because they have an audience in
schools, in K-12, those elementary schools, in this case. It becomes a much more crowded space once you hit
the school age group from first grade and up. There are so many players out there, so it’ll be very challenging
for Age of Learning to go in there. Those are some of the things I felt, too, trying to go in there with a product
and a curriculum that is new. It’s extremely difficult to penetrate the market unless you can show efficacy,
unless you can show the user base.
[00:31:19]
Q: Where do you think the opportunity lies with Age of Learning’s current age group of 3-8-year-olds, given
some of the constraints you mentioned? Is it in rolling out new products in different learning areas? How do
you expect the company to be more competitive? How would you rate its B2B or B2C market share penetration
in this age group?
BC: I think, in the B2C side, they’re definitely the dominant player. It’s very hard to compete against them in
B2C because they spend a lot of money, you see a lot of TV ads. If you turn on the kid channels, you’ll see
probably an Age of Learning ABC Mouse ad up there running. For parents coming in, they have the history
that parents trust and a price point that they can afford. Every year, there are about three-point-something
million new kids coming into that age group of 3-5-year-olds, that a percentage of those parents will buy and
that will keep the company revenues up there. I think they will still continue to just invest in that ABC Mouse
core app, and just improve on the UI and improve on some of the things to keep the market going.
They definitely see that there is another huge market in schools, as well. I think, in the US, there are close to
40 million students in K through six or K through seven. There are a lot of kids in that age group, and they
would like a percentage of those kids, as well, which is why they’re investing into their personalised learning
and taking it into the school world. Of course, in that school world, they have to differentiate themselves from
the Nearpods and the Epic Readings out there or the BrainPops out there, and what they’re saying is, “Our app
is adaptive, we’re personalised, and your kids using it will learn by themselves without too much work by the
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teacher.” The other products, they have a lot of teacher components to them. ABC Mouse is all about self-
learning by the kid, because it’s adaptive. Let the software, let the app, let the algorithms teach your kids to
master a subject, and in this case, it’s maths and reading.
[00:33:55]
Q: Do you think schools are more receptive now to players such as Age of Learning and their adaptive style,
perhaps due to coronavirus? What are you hearing around teacher adoption, given they were likely more
reluctant pre-pandemic but now want ways to keep children engaged?
BC: The COVID pandemic has opened up administrators to use more technology, and therefore, having a
personalised app to supplement the teaching, I think, is going to be a unique proposition, at least in the
marketplace. Other products that used to be used by teachers at school, where the teachers just assign some
lessons and kids learn on their own without the adaptive part, now, with the adaptive part, they’re going to be
more interested, because the adaptive piece will essentially help supplement the teaching by the teacher and
let the kids learn at their own pace. I think they’re in a good position with these two offerings that they have,
which are the adaptive maths and adaptive reading products, so that more educators are willing to listen to
what they have now and perhaps even try it. If the results show positive, and that is kids who use it learn and
are able to master certain subjects or certain skills, certain knowledge, then more and more schools are going
to use it. Then, that’s when you see every other company out there all jumping on the same bandwagon, at
least in terms of how they promote their product or position the product to say that, “We are adaptive, as
well.”
[00:36:06]
Q: Have you noticed any nuances between private and public institutions when rolling out products into the
school districts? Are private institutions more willing to onboard this technology, given there’s less
bureaucracy?
BC: Not on the adaptive side. It was early, back in the days when I was there, so there wasn’t much difference
at all. Generally, private institutions, they’re more open to adopting new technology coming in. Private
institutions are smaller, so on a total contract value basis, they’re not spending as much money, and then it
also helps them differentiate their offerings to their parents, to say, “We have an adaptive tool,” or, “We have
this new app that others don’t have. They’re more willing to sign up for new technology or new learning apps
compared to school districts. School districts already are bombarded with so many different programs that
they are using at the moment. There is IXL, there is Nearpod, there is MyON Reader, Freckle, Exemplar
Education. There are just a whole bunch of other programs that school districts have, so in order for Age of
Learning to go in, they would have to displace something else and take the money that’s already being
budgeted for another program and transfer it over here, so it’s going to take a while for any newcomer. This is
not just ABC Mouse. Any new company trying to offer a new program to a school, it’s going to take a while,
and a while could mean anywhere from at least a year to a couple of years, to show that there is efficacy in
using that program at a school before they start adopting it.
[00:38:07]
Q: Could you discuss Age of Learning’s much higher retention rates than other market players? Do you notice
any differences in the strength of the company’s products as you move up the age groups it caters to?
BC: When I was there, they were giving away the school product for free, and that’s why we were able to get a
lot of users on it. Retention is very high because there’s no cost associated with it on the school side. On the
consumer side, I don’t have that information so I can’t share that, but we know it’s pretty high, as well,
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especially if you can sign a parent up for an annual subscription vs a monthly one. Make your annual much
more attractive and valuable, so they just buy once and they can just let their kids use. I don’t know what the
retention is now with COVID in schools. Back when I was there, it was used in schools while the kids were in
schools. They had to physically be present in schools before they used it. They’d use it in the library, they’d use
it in class rotations on devices, on iPads or tablets during rotation, so they’d have to be at school to use it. I
don’t know what the retention is at the moment on the school side.
[00:39:46]
Q: You mentioned that students had to be present in schools to use Age of Learning’s school product pre-
coronavirus. How does that factor into teachers onboarding students with the technology vs selling into
schools given students are now at home? Could you discuss the challenges parents or teachers face in helping
students become immersed in the technology?
BC: That’s a very difficult thing to do when you have to scale, especially when you’re talking to schools that
have thousands of students and you have to deploy it. One of the things I did was we built a platform to send
out accounts to individual parents, so that the parents, because we’re talking about younger students here, can
help download the app and log in. Age of Learning has a platform that can actually do the deployment of
accounts and administration that the schools can use themselves, so it’s actually given to school
administrators to help deploy that. I think, as long as you can get a log-in to a parent, getting on board and
using it should be very easy, because that’s how consumer parents today get on ABC Mouse. It’s just a matter
of getting the right code to log in so that code and that user account can be traced back to a school user, which
means the reporting can then go back to a school administrator on how many parents, aka the students, have
logged in. How much time do they spend? Are they learning or doing anything on it, or not doing? I don’t see
this to be a challenge to ABC Mouse at all. They already have a system that has been tried and true and used
for many years to do this kind of a deployment.
[00:41:49]
Q: How would you assess Age of Learning or competitors’ ability to continue raising pricing, considering
overall trends, new entrants and account demand? Do you expect a scenario where a consumer chooses a
competitor’s product over Age of Learning’s due to it offering 10-15% less? Is there a price war dynamic here?
BC: I think there will be a price war. The incumbents who are in schools, if they know that another provider is
coming in, they’ll definitely be willing to negotiate on the price. That’s number one. Number two is that the
price point, at least from when I was there, was based off the consumer price, so on a per-student, per-user
basis, it’s annualised. It’s taking the monthly fee and annualising it for the student and then offering some
kind of discount, because when you take the USD 7.99-per-month fee and you apply it to a student at a school
district, that’s too high. You don’t pay USD 7.99 per month per student for a piece of supplemental curriculum.
Even when you come up with the annual fee on the consumer side, which could be anywhere between USD 60
to USD 80 per year, that’s also very, very high.
I think, in order for Age of Learning to be successful, they’ll have to definitely be more price competitive to
other solutions on the school side, where it’s less so about the fees collected per student but more about,
“What is the total contract value for all the different districts out there and schools? How many percent of the
districts can I capture in America?” If I’m focusing just on the US, there are 14,000 districts, and a sub-set of
them will be my students in kindergarten to second grade or maybe up to fifth grade. If I can capture 50% of
the market, that’s a lot of students out there. That’s easily 20 million students out there. You’ve got to look at
the big picture here in terms of the pricing, and less so about the per-student individual costs when it comes to
school licensing.
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[00:44:39]
Q: You mentioned that Age of Learning has other products for the higher and lower ends of the age group.
How does that factor into trying to sell products as a package for the same 2-4-year-olds? Is that already the
case with products such as ABC Mouse or My Math Academy vs selling them individually?
BC: That’s been done before. If you go to the App Store, there are some packages available, too. On the App
Store, you can see they have taken ABC Mouse and created mini-apps out of ABC Mouse. One of them is the
Magic Rainbow Traceables. Magic Rainbow Traceables is teaching a child how to write letters and numbers
and different characters. That is actually an activity within ABC Mouse that has been broken apart, and I think
that whole packaging thing was meant as a way to allow parents to see even more value than just one app. You
can come in and see multiple apps, with one of those multiple apps focusing on a certain type of activity,
whether it’s just reading or maths or writing. Packaging has always been tried at ABC Mouse, as well, so when
you buy ABC Mouse in schools, you’re not just selling ABC Mouse. You’re also selling and bundling it with the
maths or the reading program. I think this is just one of those things. Depending on the customer and what
they wish to acquire, there could be a single product price or multiple solutions bundled into a single price.
[00:46:44]
Q: Which US regions would you say are underserved or have opportunities for school districts, B2C or some of
Age of Learning’s product offerings? Where should there be a higher focus in edtech? Should it be geared
towards English? There’s a big push towards STEM, but how is that playing out in a region such as Florida?
How does geography play into this? How might trends in urban areas play out in more rural areas?
BC: Personally, I think there are different access levels based on where you are. If you’re in an urban area,
urban schools, urban communities, you tend to have more internet, more better devices, more access to
resources as compared to the rural areas. The kids in the rural communities don’t have the right technology,
don’t have the right internet access, and sometimes don’t have the right access to the apps to help them learn,
as well. That’s where, over at ABC Mouse, I also worked with the public libraries to deploy ABC Mouse in those
libraries, so that it can serve those communities in the rural parts of the country to give them access, and in
this case, it’s free access. It’s given away free to libraries, and libraries can then give it to their patrons to have
access to ABC Mouse. They’re not getting the school version that includes teacher lessons, teacher guides or
teacher instruction pieces. They’re just given the consumer piece in this case.
I think, when it comes to subject matters, ABC Mouse, they’ve done a very good job at meeting the needs of the
lessons needed by children. What I mean by that is that all the different topics and subjects, they try to cover it
all, from literacy to language arts to STEM. They do quite a bit of that. There was one piece that people asked
quite a bit, and that was social-emotional learning. At least when I was there, it wasn’t that well-built-out. I’m
sure, by now, they have added a few more activities to include the social-emotional learning side of things to
help a child grow. I think it all depends on the company that you’re talking to. There are some companies that
are focused on certain subjects and that’s all they do. In the case of Age of Learning, what they have is their
core product, ABC Mouse, it’s covering all subjects, all topics, and then they have very specialised,
personalised learning apps, such as the reading and the maths, that will focus in only those areas. On the
STEM side, they are not doing a whole lot of personalised learning for STEM that I know of, but more using
the Academy. They have a new product called the Adventure Academy. They built a lot of STEM subjects or
STEM activities into the Adventure Academy for the older kids, especially videos in there to help with the
learning there, but not on the personalised, adaptive side, because I think a lot of those things require hands-
on types of activities.
[00:51:07]
Q: Age of Learning’s offerings seem to be solid all round, so where might the company have weaknesses or
where could it invest more capital? Where might there be an opportunity? You discussed what the right
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learning environment should be. What might be the right learning environment for the rest of 2021 and 2022,
given there’s more instability around coronavirus, school districts and children’s learning?
BC: I don’t see a whole lot of weakness, because they have such a very strong design and development team
there, and design also includes curriculum, as well. They have amassed quite a few very good curriculum
experts, especially on the adviser side. They can advise on what curriculum and topics and subjects to create. If
I was to say a weakness, the weakness would be the time it takes to actually create an activity. It takes a long
time to create a learning activity, and a long time translates into very expensive to create one. There’s no magic
bullet. After you create it, you have to expose it to a child, and that’s only a very small piece of what the child
will be learning in terms of the overall scope of a topic or a subject, or even a theme here, meaning you need
multiple activities to teach something, as well. I wouldn’t say it’s a weakness. Rather, it’s a challenge for them
when it comes to creating the content.
Then, in terms of the learning environment, I don’t think there’s a perfect answer to that, too. The learning
environment just depends on the experience that the learner has. In this case, this is all about personalised
self-learning, asynchronous learning as some people may call it, where the child or the student is just
interacting with the device and the app. It takes time to get enough data. How long are students engaged with
that application? If it’s self-learning, how quickly are they able to learn and master and then repeat? Over
time, do they forget, or do they need to come back and refresh what they learned? ABC Mouse and all the
learning apps of Age of Learning are really directed at independent learning, but I think there’s a second part
that is equally as important, and that is the teacher-guided piece. I truly believe that there need to be strong
educators, or just educators, that can guide students beyond just what the app can do. That human-to-human
interaction, the ability to sense and discuss things outside of what the learning objective or the learning
requirement is at that moment, is also very important in helping a child grow, as well.
In the perfect world, at least for me, it’s combining the two pieces. The educator piece, and if we’re talking
about, in the future, what that might look like, I think it’s the ability for a teacher to reach a student remotely
so that we address the pain points of travel, distance and maybe social restriction, as well as having the right
content to help the child learn independently. You’ve got to combine those two. That’s where the next wave, I
think, of education changes will come, and that is you’re not just sitting in the same room looking at a teacher
talk about the same subject or the same material on a screen, where you have to be present. I think the future
is you can do that independently from anywhere, and you can also have asynchronous adaptive learning that
can help supplement what the teacher teaches so that you can learn at your own pace. Not everyone learns at
their own pace. We’re all trying to force education one way, which is the same way it’s been taught for
hundreds of years, but with technology, it can actually be more personalised and just much more learner-
friendly.
[00:56:11]
NH: I think that’s a good place to end the Interview. Let me close by saying thank you, Bing, for your time
today. We were able to cover a lot. Thank you, clients, for joining Third Bridge Forum’s Interview. If you’d like
to speak with Bing in a private call or meeting, please let your relationship manager know. Have a good one.
BC: Alright, thank you.
Transcription ends at 00:56:26 of the recorded material.
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