EdTech

How Two People Made $2 Million in Online Education

Original in Russian: blog.skillbox.by
How Two People Made $2 Million in Online Education

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Why a Face-to-Face School Needed to Go Online

In the fall of 2018, Karina Gorshkova, a Master's student in the Political Science Department at Moscow State University, began her career as a history teacher at LUDI, a school for supplementary preparation for the Unified State Exam. She had always aspired to work at this school thanks to the innovative approach of its founder, Ilya Sozontov, who emphasized an individual approach to each student and modern teaching methods. Karina saw LUDI as an opportunity not only to impart her knowledge but also to inspire students to successfully prepare for the Unified State Exam in history.

He claimed that in his lessons, he provides assignments based on Oxxxymiron songs, and that students analyze texts from contemporary Russian media. Teachers also have the option of bringing tattoos and colored hair to class, creating a relaxed atmosphere. Karina shares her impressions of this approach to teaching.

Karina landed her dream job when Ilya Sozontov decided to transition to online education. He realized that a single brick-and-mortar educational center couldn't fully realize its potential, as the investment in methodology and program development was too great for a single institution with limited geographic reach. Opening new franchise schools seemed too slow and labor-intensive. Therefore, switching to an online format was a logical step to expand and optimize educational opportunities, reaching a wider audience and improving the quality of education.

Ilya proposed that Karina and five other teachers create an online course. The plan was for the teachers to host webinars and receive a percentage of sales, while Ilya would handle promotion. He immediately warned his colleagues that they would have to work without pay until the first course was launched. This stage lasted almost six months.

"We thought we could simply replace in-person classes with webinars without changing the program. However, in practice, this turned out to be much more difficult," notes Karina.

The online format changed the distribution of responsibilities within the team and fundamentally transformed the marketing model. According to Ilya Sozontov, the cost of attracting a student in person and online can be comparable. However, in Moscow, educational institution founders could set prices up to 8,000 rubles per month per subject for in-person classes. This underscores the importance of adapting marketing strategies to the new conditions in order to effectively attract and retain students in the face of increasing competition in the educational sector.

The LTV indicator for an in-person school ranges from 120,000 to 150,000 rubles, given that on average, one student makes purchases, according to Sozontov.

In the online format, the LTV is significantly lower, almost 10 times lower, but opens up opportunities to work with clients throughout Russia. It's also worth considering the higher percentage of "shrinkage"—there will always be students who stop interacting and stop responding to messages.

How almost the entire team left the project

Ilya and Karina decided to use the social network VKontakte as the main platform for promoting their public. However, the strategy didn't yield the expected results—only three people registered for the first webinar, held in September 2018. Among them was Karina's boyfriend, who came to support her.

In November 2018, Ilya created a personalized Instagram account for his course. Promotion on this platform proved more effective: high school students actively respond to the initiatives of the teacher, who shares his charisma, humor, and personal stories. Instagram became the ideal platform for audience engagement, allowing Ilya not only to attract attention but also to build trust with his students.

The decision to promote the courses through a personal brand proved successful, although the results were not immediately apparent. The strategy had a significant impact on the recognition and appeal of the courses, which ultimately contributed to increased interest and enrollment. Developing a personal brand became an important tool for attracting the target audience and building trust.

By early 2019, all of the project's teachers, with the exception of Karina, had left their positions. The reason was fatigue from working for free and a loss of faith in the online school's future success.

The girl shares her thoughts: "I approached the issue differently. I realized that I was ready to work for free now in order to secure a stable income in the future and build a solid foundation for professional growth. In terms of social studies textbooks, I chose an intensive path of development over an extensive one."

What helped the project take off

In February 2019, Karina and Ilya initiated the launch of the first paid three-month course on 20th-century history, which attracted about 150 students. Karina notes that this period was extremely difficult: there were no staff, and all tasks had to be completed independently. She was responsible for designing educational materials, creating presentations, and checking students' homework. This experience became an important milestone in the development of their educational project.

After completing this course, the school was able to turn a small profit for the first time. Karina's fee was even less than the income from in-person lessons at LUDI. A successful market position was made possible by a 30-day marathon held in May 2019. The goal of the marathon was to review the entire school history course in a month with daily lessons.

The students loved the intensive course, which helped the school build a solid base of positive reviews. Graduates who successfully passed the Unified State Exam (USE) willingly shared their impressions of the course with their younger friends, which contributed to word of mouth. This became an important factor in attracting new students and confirmed the program's effectiveness.

In the summer of 2019, Karina and Ilya completed their collaboration with LUDI and launched two annual courses, each linked to the teacher's personal Instagram account. Ilya teaches a history course, and Karina teaches a social studies course. Webinars for both subjects are held alternately, allowing for a deeper dive into the topics covered and ensuring interactive engagement with students. In the fall of 2019, approximately 550 students enrolled in both courses, the result of extensive work and effort. Months of unpaid work have finally begun to pay off. As a result, the school's student body increased to 1,000 during the 30-day intensive course in May 2020. This demonstrates growing interest in the educational programs and the successful implementation of the courses.

Why Expelling Online Students Is a Bad Idea

In the winter of 2019-2020, the school's founders made a significant mistake. Midway through the school year, they decided to implement a strict performance monitoring system, which resulted in students being expelled for absences and low grades. While the idea may have seemed effective in terms of motivation, it turned out to be financially unviable. With an average LTV of 15,000-20,000 rubles and a student acquisition cost of 2,000-3,000 rubles, this policy resulted in losses. It's important to consider that student retention should be a priority for educational institutions to ensure stable income and growth.

"After losing almost 2 million rubles on this hypothesis and seeing no noticeable increase in academic performance among the remaining students, I concluded that this practice must be abandoned. "If I had continued for another month, it could have led to a cash flow shortfall," Ilya shares his experience.

The school's expulsion policy for academic failure remains in effect. Students are aware of this from the very beginning of the school year and accept it as the norm. As a result, expulsions are relatively rare. The education system strives to support students by providing them with opportunities to improve their grades and academic performance, which helps reduce the number of expulsions.

Despite the expulsion error, the first year of study ended with successful results. Fifteen students from our school achieved perfect scores on the Unified State Exam (USE), a third of whom scored over 92 points, and half over 85 points. Such achievements testify to the high level of training and professionalism of our teachers. The pursuit of quality education and student support have led to outstanding results.

Memes, parties, and other ways to attract students' attention

In the summer of 2020 Last year, Ilya and Karina created a unique name for their educational school—"Mom, I'll Pass!" Previously, the school operated as two separate signature courses, without a unified brand. In the 2020–2021 academic year, a third subject—Russian language—was added to the existing curriculum, significantly expanding the range of instruction and attracting more students.

In 2021, the school's student body reached 1,100. On average, each student takes 1.5 courses, bringing the total number of unique students across three courses to approximately 1,600. This is three times more than at the beginning of the previous academic year. The average monthly fee ranges from 3,700 to 4,200 rubles.

Tuition fees vary depending on the student's level of engagement. The basic rate includes lectures and webinars, as well as homework, which is graded by supervisors. More expensive plans offer expanded features, including more frequent feedback from mentors and teachers. This allows students to gain a deeper understanding of the material and improve their skills. The choice of plan depends on your educational goals and needs.

Currently, the "Mom, I'll Pass!" project has 15 permanent staff members, including teachers, designers, and methodologists. Additionally, 45 mentors oversee study groups, each consisting of 35 students.

The school's main promotion channel is the Instagram accounts of its teacher bloggers. They not only create content for preparing for the Unified State Exam (USE), but also share memes, talk about their personal lives, and discuss current TV series and political events with students. This helps create a trusting atmosphere and attract attention to educational materials, which, in turn, promotes effective learning and increases the number of subscribers.

Ilya shares memories of how his mother came to visit and taught him how to roast a turkey. Meanwhile, Karina talks about her experience with the Sputnik V vaccine. At the end of each webinar, she and her students watch a video clip. Natalia, who teaches a Russian language course, explains the concept of pleonasms using examples from the series "Inside Lapenko."

The "Mom, I'll Rent It Out!" project is actively expanding its presence on VKontakte. Ilya notes that this social network provides more convenient opportunities for promotion. In February 2021, the school for the first time achieved a level of service sales through VKontakte comparable to results on Instagram. This testifies to the growing popularity of the platform and the effectiveness of its use for educational initiatives.

Teachers are actively striving to create a community of students. Some first-year graduates are already working as curators at the school. In August 2020, Karina and Ilya rented a loft for a party with graduates, and in the future, they plan to organize New Year's celebrations. This helps strengthen the bonds between students and graduates and creates an atmosphere of support and collaboration in the educational process.

What is the "flipped classroom" method and why is a psychotherapist needed?

The annual course consists of two semesters and an intensive course in May. In the first semester, students study the entire curriculum to familiarize themselves with the material and prepare for Part I of the Unified State Exam. In the second semester, they review the entire curriculum, but with a focus on Part II of the exam. The final stage is a month-long review and a super-intensive marathon, which helps consolidate knowledge and improve results.

Karina and Ilya use a "flipped classroom" approach in their teaching. This approach involves students independently mastering theoretical materials and focusing on practical exercises with their teachers. Instead of traditional textbooks, they developed a video lecture course, which they update and re-record annually to ensure the information is current and improve the quality of instruction. This approach allows students to better absorb the material and apply it in practice, which contributes to a deeper understanding of the subject.

Karina notes that many online schools take a lax approach to creating teaching materials. In most cases, they simply adapt well-known school textbooks, using their own formats, such as tables and diagrams. However, such materials essentially lack uniqueness. Our educational materials are original and available exclusively as part of our course, making them valuable for students seeking high-quality knowledge.

The webinar is a key element of the educational process. The instructor covers the topic in detail, providing students with the opportunity to ask questions and complete assignments in real time. Typically, 20-30% of students attend webinars, as many find it more convenient to watch recordings of classes at a time convenient for them. Webinar recordings allow students not only to review the material but also to deepen their knowledge, making them an important supplement to their core education.

A psychotherapist conducts a monthly webinar discussing effective methods for overcoming pre-exam stress and managing study load. Participants receive valuable advice and strategies to improve their resilience during exam periods.

An innovative feature of the school is a group assessment system, more accurately described by the term "seminar." For an additional fee, students have the opportunity to study with mentors in small groups of no more than six people several times a month. This creates a deeper interaction between participants and teachers, promoting better assimilation of the material and the development of teamwork skills.

How much did it cost to build the school and how much does it generate?

Ilya invested 500,000 rubles in his business, a significant portion of which was used for advertising in the first six months. As a result of these investments, the current monthly revenue of the courses is 4.8 million rubles.

The company's main expenses include employee salaries and marketing. According to Ilya, marketing costs will increase as the market becomes increasingly competitive. Currently, profit accounts for approximately 40% of total revenue. This underscores the importance of effective expense management and a strategic approach to marketing efforts to maintain competitiveness and increase profits.

According to Ilya, opening a similar school from scratch today would require an investment of 2.5 to 5 million rubles.