Case Study: Startup Analysis

    Today there is a boom in social networks - both in the West and in our country, pioneers have warmed up the market and it is natural that many startups decided to make money on this topic. However, in most cases, it does not go beyond copying Odnoklassniki or Facebook, “just with a bunch of additional chips,” which, in the opinion of their founders, should entice users from already promoted resources. Nevertheless, the topic of social networks is still promising - you just need to pay attention to niche social networks. They have the maximum potential, and it is niche networks that, as practice shows , are now most in demand by customers. This social network will be discussed in this article, the original of which is posted on my site .

    The startup analyzed in this article is interesting to me for several reasons. Firstly, this is “our” startup (more precisely, Ukrainian, but I do not share Ukrainians and Russians). Secondly, its founders are aimed not at the Russian-speaking, but at the global market (which is rare for startups from the former USSR). Thirdly, the path that the founders of a startup go by developing their service is interesting. And fourthly, this startup is focused on a very promising, in my opinion, market. In addition, I am interested in assessing the prospects for the development of a startup when it has not yet posted all its functionality to the network, but at the same time I know from its founders how it will look in the near future. The article is large, so those who do not like to read long posts may not open it.

    At first glance, the is a twofold impression. On the one hand, it is made very high quality, and this suggests that it is made not new to the Internet business. The impression of the professionalism of the founders of this startup is further enhanced when you click on the link " Online Teacher"in the upper right corner - a few seconds later I was greeted by the user support operator and asked how he can help me. This level of user support is impressive and further strengthens the thought that this service was done by serious people. On the other hand, at first it seems that the developers of this service made a “childhood” strategic mistake that professionals in the Internet business would never have made - it seemed to me that they aimed the service only at people starting to learn programming languages I. Meanwhile, you should never target a service exclusively to the audience’s need, which it needs only once in a lifetime and for a short time - otherwise you will be doomed to constantly costly engaging an audience that,

    It’s like a site intended only for women preparing for a wedding: it usually takes two to four months to prepare for this event, at this time a woman develops frenzied activity on such a site, but then, when the wedding is over, she forgets about it and never returns . Consequently, the site owners are forced to attract more and more new audiences every month, spending time and money on this, gaining the loyalty of attracted visitors in the fight against competitors - but all these efforts go away like sand and water in a couple of months, as the wedding is played, the topics discussed are for the woman become not interesting and she leaves the site forever. No - services for women preparing for the wedding, of course, are needed - but only as an addition to other, longer-term needs of women: then there is a chance that, having played the wedding,

    The same applies to sites targeted only at beginning programmers who have only recently begun to study programming languages: sooner or later they will outgrow the need for an online service that checks the functionality of their simplest programs, professional software for developers will appear on their computers, and a service intended for beginners will simply cease to interest them. Consequently, all the costs of attracting their users and ensuring their loyalty to the service go "nowhere" just at the time when they seem to have to start giving returns. However,, as it turned out, has a very thoughtful and attractive business model, and this startup, I am sure, will be very successful. But first things first ...

    Description of the service and the history of its occurrence

    Startup is a web service and provides the ability to enter the program code in one window, and in the other - see the results of its execution - if everything went well, the result is displayed; otherwise, errors received as a result of execution are displayed. Currently, the service supports 12 programming languages, including Basic, Assembler, C ++, Perl, HTML, JavaScript, Flex, etc. (in order to see which programming languages ​​ supports, click on the arrow located above the upper left window - new tabs will open for you). The service also has a command line emulator ( CMD tab ), a file system that is individual for each registered user ( Files tab ), a list of tasks and a mechanism for working with it (Tasks tab ) and Public Chat , which allows both registered and unregistered users to communicate with each other. Users can create groups, and if you are connected to one of them, notifications for group members appear in the chat window.

    As I mentioned, in the upper right corner is the link " Online Teacher", when you click on which the chat window opens and the support service of the service immediately contacts you. I thought at first that it was a bot and therefore asked if I was talking to a person. In response, the support service looked at my IP address , offered to switch to Russian, which surprised me even more - you must admit that there are few services in RuNet that can boast of real-time support for their users, but actually turned out to be “our” startup. more precisely, then steal skim. I introduced myself and asked to support the operator to give my coordinates the service manager, so he contacted me. And the very next day, Alexander Vityaz, the head of the Electronic Business Center of one of the largest financial and industrial groups in Ukraine, the Privat Dnepropetrovsk group, which includes the largest privately owned Privatbank in Ukraine, which is known for its manufacturability. Alexander is the founder of

    As often happens, was not originally a business idea. The daughter of Alexander Vityaz lived in Israel and his father, who is in Dnepropetrovsk, decided that it was time to teach her programming. He tried to use the tools that were at his fingertips, but not all were even able to install remotely, and what was successful did not allow him to engage in remote training - the code was exchanged via ICQ, email, or a blog, and the execution results were also exchanged of this code. Having suffered this way for 2 weeks and realizing that it is impossible to effectively teach programming languages ​​in this way, Vityaz decided to find some kind of web service designed specifically for this. For two weeks the whole bank searched for a similar service, but did not find it, and had to do it ourselves. BASIC interpreter was done in 2 months. Then came Pascal’s turn, Perl etc. Now they are “fighting” with Prolog and LISP, in the plans of PHP. But I am already getting ahead of myself.

    Naturally, since there were no thoughts about the business when creating, the service was not promoted anywhere. But as soon as he was posted on the network so that Vityaz could finally educate his daughter, almost immediately signals began to come from people who accidentally stumbled on this project on the Internet - most of the calls came through chat. It turned out that such a web service is needed not only by Vityaz and his daughter. There were requests from teachers from around the world who want to study with their students using - and for them they made a system of virtual classes, as well as a student-teacher interaction systemin which teachers can give assignments to their students, communicate with them and evaluate the tasks completed by students. The service has gained great popularity among programming teachers in the Czech Republic. Then it turned out that was recommended for work in several Spanish colleges. But if the teachers are Czechs, Spaniards, Americans, etc. brought their offline groups to the service, because using it was more convenient for them to train their students, even if they were near them, the Indians “just got” Vityaz with their requests to create a platform where they could be registered by teachers and sitting in India, to train Americans and residents of other English-speaking countries in programming.

    So Vityaz came to understand that a good business can come out of a project “for a daughter” - for this, a platform should be created on which teachers and students can meet, communicate, study and work on joint projects. And also pay each other for tuition. That is, the service is turning into a global educational social network dedicated to computer science. Although Vityaz himself prefers to call it "a large open university of computer science." The software of the social network is already undergoing testing and is scheduled to be launched in March this year.

    Business model

    To build a social network in which some users can earn on others, and those, in turn, are willing to pay for the services received, is the dream of any startup. Indeed, in this case, the efforts to attract an audience to the site will be largely taken by those users who want to earn money by teaching others how to program - they will advertise their services that they provide on this service, in blogs, forums, communities, promote your page in this social network in search engines, which means the cost of attracting visitors for the startup itself will be very low. An example of such a service is, for example, eBay - the aggregate advertising activity of sellers on eBay is much higher than the advertising activity of eBay itself. And the CodeIDE founders seem to have managed to find that very niche is not going to take money for using its platform. The main earnings of the service will consist of commissions from making payments from students to teachers - since Vityaz and the Privat group already have an infrastructure for this: a service for servicing p2p transfers from one card to a card , especially since credit card payments are wide common and familiar abroad.

    The second source of income is various premium services (for which premium services additional money will be taken, Vityaz is still thinking).

    The third source is advertising and affiliate deductions for the sale of programming books and specialized software through a service from stores selling these products (now visitors often ask them to sell textbooks on C ++, Pascal, etc.).

    We should not forget about earning money by giving teachers the opportunity to stand out - it seems that after a sufficient number of teachers of programming and the courses they offer, some of them will be willing to pay for promoting themselves and their courses on social networks in the same way as they are currently promoting users of Russian dating services their profiles.

    Well, in the end, the service can independently teach its visitors programming languages. The first payment for this service was made in September by a 52-year-old Bahrain customer who decided to learn Perl. The cost of one lesson, according to Vityaz, is from $ 15 to $ 25 dollars - but now it is more necessary not for earning, but for a better understanding of the needs of customers. At the same time, he believes that this will not create competition for those who want to teach on the service - firstly, the demand from students greatly exceeds the supply, and secondly, teachers are unlikely to compete with outside English-speaking teachers. Teaching programming by service employees is more likely to demonstrate to both students and third-party teachers the capabilities of the service.

    The prospects of the service and the assessment of the factors of its successful development.

    Already now we can say that the service is quite successful. Not yet possessing most of the planned functionality, it is already popular with its visitors - programming teachers are using it now, teaching with their help their offline groups of students. Today, the service attracts from 500 to 4000 visitors per day - and this despite the fact that it is still not progressing in any way (the founders of the startup made only a few presentations of the service in technical universities of Ukraine). The main sources of traffic are the Wikipedia English section (from pages dedicated to programming languages) and StumbleUpon, a service for surfing the Internet through pages recommended by other users - its usershave already left 115 admiring comments about

    The main success factor for (both current and, in my opinion, future success) is that Alexander Vityaz builds the service based not on his own ideas about how it should look, but listening to the wishes of its target audience. The need for developing online classes and a student-teacher interaction system was prompted by teachers from the Czech Republic who wanted to use the service. Wishes to create a social network in which those who wish to learn programming and teachers could find each other came from Indians. According to the wishes of users, smaller improvements to the service are being introduced.

    The tactics of developing the service was also chosen to match the strategy of “listening to users” - Vityaz posted on the network a product that he needed, not even imagining how he could monetize it, allowed users to it, and simply began to listen to them carefully. And since Vityaz listens attentively, there is a high probability that the service will ideally suit the needs of users. By the way, this saves Vityaz and a lot of money - users are engaged in consulting for free. This, of course, was a wise step - and unusual, since everyone prefers to lay out a finished product with all (well, or almost all) of the functionality. Many are afraid that their idea will be stolen by competitors, but, as the CodeIDE experience shows, perhaps these fears are exaggerated. Even more than that, Alexander Vityaz would like to see competitors appear

    The second - and no less important - success factor, which allowed, by the way, including for a long time to carefully listen to the wishes of users, is the ability to use the already existing infrastructure of the Privat group for the needs of a startup, not including its maintenance costs Privat has its own call center with one and a half thousand operators (including operators who are fluent in English), some of which are served by chat. The same thing happens with programmers who improve the service every day - most of their working time they are involved in servicing other Privat businesses. Such an opportunity to use the capacities of a large business group without the need to pay for them, and allows to slowly develop its service,

    Having your own payment system that allows you to make settlements between people, and using a very common and familiar to users from "solvent" countries tool - a credit card - is also a definite plus. At the same time, will contribute to the development of, and vice versa. At the same time, users, of course, will be able to use third-party payment systems for settlements between themselves.

    It should also be noted extremely well-chosen market - education + computer science. 100% of the target audience (those who want to study or teach programming) has a computer and Internet access, regardless of what level of Internet penetration in their country. There are no established competitors in this niche, the market is huge, and demand is huge. also plays into the hands of the “fashion” for obtaining IT education, and the stereotype that is available in all countries that IT education is the best way to find an excellent job and improve your financial situation.

    It is also necessary to mention that does not need to create a demand for its services - it exists already now, but you can fully satisfy it only by doing offline courses.

    The network already has educational social networks that offer training in, say, foreign languages ​​- for example, It is in demand among users, but the emphasis is placed on the “pandering” of those who speak one language and want to learn another. This allows users to create pairs for learning languages, but affects the quality of education - to develop conversational practice, communication with a native speaker is ideal, but a professional teacher should teach the basics, and in iTalki there is no division into teachers and students. Yes, and the iTalki business model is different - the service, apparently, does not plan to make the resource a place for professional languages ​​of each other, so it will not attract professional teachers as a place to make money. The advantage of is its orientation to the provision of "professional" educational services, for which it is not a pity to pay money.

    About once a month Vityaz receives an offer to sell, and these proposals are mainly received not from venture capital firms, but from “profile” investors - companies engaged in distance education. But selling the service now is, of course, stupid - given that Vityaz and the Privat group do not experience a lack of funds. On the contrary, the Privat group has a rather significant amount of money that it would like to invest in Internet startups at an early stage (Vityaz calls the money prepared for these purposes not even venture, but angel), but so far has not found any quality third-party projects. But the interest of “specialized investors” suggests that the project is interesting to the market and, most likely, will fire.
    PS:When I write an article based on an interview with someone, I always send it to this person before publication - maybe I misunderstood something and misinterpreted it in quotes or in the statement of facts ... When I sent the article to Alexander Vityaz, he unexpectedly asked me to add to the article "A bit of tar", believing that some would think that it is advertising. But, firstly, I can’t stand the amendments made by the speakers to the article, with the exception of corrections in their quotes or statement of facts - to interpret and comment on the facts as I see fit, is an inalienable right of every journalist, and secondly, why I should I look for flaws in a startup even at the request of its founders, if I really liked the project? Moreover, I think that readers themselves will be able to criticize the startup’s business model and find flaws in it. In any case, this is precisely what I hope for. I think that Alexander Vityaz is waiting for the same thing - in order to once again adjust the development plans of his service in accordance with the wishes of users. Therefore, criticism of and my conclusions made in the article are welcome in every possible way.

    PPS: If you are making a really interesting startup and you want it and the business model on which it is based to be analyzed on, you can contact me through my profile on the site. The material will turn out with the coincidence of several points: 1) you are ready to speak quite frankly, not getting off with common phrases; 2) you are ready for the fact that I will not allow you to make changes to the articles (even if this is an article about your startup) and I will not remove materials from the publication (even if this is material about your startup); 3) you cannot influence my assessment of your startup, which I will present in the article; 4) your startup will actually seem interesting to me. I don’t take money for publishing articles, but you won’t be able to influence my assessment of your startup either. So those who wish are welcome!

    The original article is here . When reprinting a link to is required.

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