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Andrew Patterson talks to Craig Smith who is using a gaming approach to online learning, which young users love worldwide

Andrew Patterson talks to Craig Smith who is using a gaming approach to online learning, which young users love worldwide

By Andrew Patterson

Few businesses could claim to having been started at school but Dunedin based Education Perfect is living proof that having the right idea at an early age can these days morph into a viable business option.

24 year old Craig Smith, who was born in South Africa but came to NZ as a young primary student, created the learning platform while he was at high school to help him study for his French and Japanese exams.

Quickly realising that he needed to improve the functionality of his fledgling online platform as he began to expand the websites reach, he called on older brother Shane’s IT expertise and together the two brothers have built an international education company with an award winning learning platform.

Starting out as Language Perfect (the business has since rebranded itself as Education Perfect to reflect a range of new offerings currently in the pipeline) the web based business is essentially an online self-directed learning tool for mastering vocabulary.

Students are tested on their reading, listening and writing skills utilising an extensive range of words, verbs and common phrases available in over eleven languages.

A gaming approach for learning

What makes the platform such a hit with students is the gaming approach that underpins its methodology.

Essentially it’s a computer game 100% focused around vocabulary learning. And as any language student knows mastering vocabulary skills can often be the most tedious aspect of studying a language yet it’s also essential to gain competency in the language itself.

Students are able to learn at engage in a competitive environment utilising native-speaker pronunciation and regular testing. Every word is recorded by a native speaker for accurate pronunciation and the intelligent testing engine picks up and repeats any words students are struggling with.

Language Perfect currently offers a range of languages including Mandarin, French, German, Greek, Indonesian, Italian, Japanese, Latin, Russian, Maori and Spanish.

Starting out as a school project CEO and founder Craig Smith says it was his own experience studying languages that first gave him the idea for the platform.

“As a high school language student myself in 2004, I was studying French and Japanese and every student had to learn about one and a half thousand words in each of those languages. The biggest challenge I had was testing myself because the options at the time were generally quite ineffective and also you couldn’t hear the native speaker pronunciation of words. So over a few weekends I built a basic prototype really for my own use, never realising the any idea had any commercial applications.

“Then, when I got to university in 2008 I started to give presentations to schools and I thought because it was so useful for my friends and myself, maybe it could be a product we could actually sell.

“I was studying business at Otago at the time and that got me thinking about applying the concepts and business principles I was being taught at the time and how they could be applied to the website. However, in the first 18 months I demonstrated the site to literally dozens and dozens of teachers, but not a single person was even interested in adopting it in their schools.”

Getting a foot in the door

While frustrated at the continual rejections, Smith says he didn’t give up and the rejections made him even more determined to push on knowing how much the website had helped him personally with his own studies.

“At the time I couldn’t understand why they were so hesitant but then a lot has changed in the online learning space. Back in 2004 when I was at school not that many people were even thinking in those terms. What’s also ironic is that nearly all of those language teachers who turned me down a number of years ago are using the system today.”

Today Language Perfect is used in almost 80 per cent of NZ high schools and the business has more than 300,000 users globally.

Smith says probably the biggest thing that counted against him at the start was his age.

“I suspect teachers would've thought, what could an 18 year old have that we don't know ourselves and I remember the first time I presented Language Perfect there were maybe 80 teachers in a room in Auckland and about five minutes into the presentation one of the teacher's stood up and he said "This is rubbish," and walked out.

“Imagine that. You’re 18, you’re delivering your first major sales pitch and you’re told in front of a large group of other teachers that your product is rubbish. What didn’t help was that this particular teacher was from one of Auckland’s more well-known schools and was quite an opinion leader.

“However, I wasn’t put off by the experience. I just thought these teachers can’t yet see the value in the idea even though from my own experience I knew how effective it was as a learning tool. I was reminded of Steve Jobs experience when he said he doesn't ask the market what product they want, he decides on what he thinks they need and then shows it to them. I knew most of the teachers that day hadn’t tried the product so that was actually the most difficult aspect just getting people to try it.

“That’s when we started running competitions and instead of calling it a free trial we called it a competition which is effectively the same thing, but all of a sudden people perceive it differently and once they'd used it for a few hours then they saw the value and they ended up buying it .”

Learnings along the way

Smith says the constant rejection was actually a learning opportunity.

“I came to understand there are lots of different variations of the word no. Having spoken to hundreds and hundreds of teachers, some no's are just that but most no's with schools are actually code for: I'm too busy to do something right now come back to me later as opposed to a no meaning I will never use your product. The trick I found was to differentiate between the two to determine which no they actually meant.

“However our persistence did eventually pay off but it took us 18 months to get our first sale but that became the tipping point and word of mouth spread and then we found the market began to surge in our favour.”

Validating the market with students themselves was much easier.

“I was studying at Otago at the time and living in one of the uni dorms and for months I spent my evenings conducting trials. There were around 200 students in my hall of residence and probably 100 of them ended up being roped in to test the product.

“I'd sit behind them and the rule was I wasn't allowed to say anything to them because I knew someone had to be able to go through the website without any instruction. It's amazingly difficult to get someone to click on the buttons you want them to click on. So I'd sit there and watch them get stuck on a page and then I'd stay up until two in the morning and I'd make the button bigger and bigger and make it flashing until eventually they could push the start test button without getting lost. Things like that can literally take months. It's crazy how the tiniest detail can takes ages to fix. Then I waited until eight out of ten people that used the site were able to get into a test and complete it and at that point in time I was like we're good enough, now let's get schools on it.”

A family affair

Trying to organise the business and get it up and running as well as trying to build the back end eventually lead to Smith to call on the services of his older brother to help out.

“My brother Shane was studying medicine at the time but he has more advanced coding skills and so he started designing all the back end and building the database and I stayed doing the website design and the front end interface and got people to help me do the sound recording and everything. But it certainly was an experience where I was involved in every element and that was the fun part.”

Since those early days language perfect as grown quickly to the point that it now has students using the platform all over the world.

“We've got about 30,000 students in the United Kingdom and a large chunk of users are in Australia. We’ve got a couple of schools in America and the majority of schools in New Zealand are now using Language Perfect. And next on the radar is Asia.”

Online learning accelerates

As the scope of online learning grows the business is adapting itself to the shift that it taking place to one of self-directed learning as well as reflecting changing curriculum requirements.

“We’ve had a lot of schools, particularly in Australia, who have come to us and said: there's this new Australian curriculum, our students have all got laptops now, the publishers are coming to us with online text books which don't really make the most of what computers can achieve and actually the most successful tool we've got is Language Perfect, so if you could just build something really excellent for science and maths and English and history we would use it, so that's what we've done and that's what we’re now focusing on.”

Schools are charged a $30 fee per student per year, less than $3 a month, allowing students and teachers to derive maximum value from the website both at home and in the classroom,

“Where the system is particularly successful is when teachers can assign homework online. Then instead of having to mark it themselves the students do it in their own time and in a very gameified way where they get scores, compete with friends and teachers get a report to see not only who's done the homework but which elements they struggled with so the teachers themselves also get a lot of benefit from the system as well.”

Increasingly there are numerous free online offerings appearing, with the US based Khan Academy, which is fully underwritten by the Gates Foundation, being one of the largest. Smith says that it’s about providing the relevant content, which varies from country to country, that matches the curriculum students are studying.

“We differentiate our system by having really customised content to a specific curriculum. So in NZ we follow the exact NCEA curriculum, modelling previous exams etc. Having the actual vocab list students need to know here in New Zealand is completely different from a generalised presentation. We also run global events that make it fun with prizes and certificates. There's a very gameified feel about the website which students really like. Added to that is the really critical element of top notch service and customisation for schools, so whatever a teacher needs, we're going to give them.”

Effectiveness of online learning

At a time when there is plenty of debate about the effectiveness of online tools Smith believe that as a recent student himself he can see the value of the site as it uses the same motivations and features that students use in the real world.

“I think that students want to be able to learn at their own pace. They want to be able to extend themselves, perhaps go backwards if they need to or jump ahead if they want to advance. They want to be able to try subjects. And the most important element of online learning is that it's very non-threatening. Unlike a classroom situation, there's no penalty at all in online learning if you make a mistake which encourages you to try things.

“There's a lot of merit in students being able to solidify key learning components in that environment and the classroom should be about applying those concepts once you know vocabulary, use that class time to actually have conversations with your teacher which makes the best use of their skill set and the classroom time with students as well.”

Khan Academy founder Sal Khan describes it in his book The One World Schoolhouse as “flipping the classroom” where students so the actual learning at home or in their own time and classroom time is used to consolidate and reinforce that learning.

Teaching entrepreneurship

Following a long line of high profile entrepreneurs who never completed their university studies, Smith has firm views about how tertiary business education will need to adapt to the needs of entrepreneurs in the future.

“While I think there’s a lot of really useful information that is taught in a university environment it's delivered in a very sort of PC environment where the goal is to get everyone to pass. Whereas the harsh reality in a commercial environment is that in each industry one or two businesses are going to succeed and maybe three if it's a big industry and everyone else is probably going to fail. They're literally going to go out of business. It’s actually quite ruthless and I think that if a business course wants to prepare students for the real world, it needs to be really intense.

“I did a sales paper where one assignment literally involved selling a bag of firewood for 20 dollars and if you could do that you could earn an A. I took what I thought was a more creative approach and I went and tried to get sponsorship and create a brand around this sales assignment and I ended up raising a few thousand dollars. I was really pleased with my efforts but rather than being rewarded for my efforts I was penalised for getting side-tracked from the course and not sticking to the specific requirements of the assignment. That was the day that I left uni. I actually went and handed in my resignation and said I really can't see how, if this is a sales course why this isn't selling. What they had assigned had no brand or value creation when that's what business is really all about; taking simple things and delivering value for customers and stakeholders.”

So what’s the big goal for Education Perfect in the future? Smith doesn’t hesitate.

“It sounds a bit corny but I wrote down on a bit of paper a few years ago that my goal was to unite the world through education and it’s actually quite a nice thing to think about that what we're doing is much more than a commercial enterprise. We’re creating a way of empowering and motivating and inspiring people to achieve success and that's why I'm here today.”

“Eventually I could imagine us having 250 staff right here in New Zealand managing a global business that stretches around the world.”

Watch out Khan Academy.



Sector: Online education
Founded: 2007
Staff: 20
Ovnership: Private (Founders and associated interests)
Turnover: not disclosed
Annual growth rate: 100%
Profitable: Yes
External investors: None


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Great story -will remember the name Craig Smith