Sramana Mitra: Talk to me a little bit about the go-to market strategy. It’s all user-generated content. You have a great coverage of high school, college students, and post-academic learning. What is the go-to market strategy? How do people find you? Is it all word-of-mouth?
Matthew Glotzbach: We’ve been fortunate that all of our user growth has been organic. There are two facets of that. One is word-of-mouth and sharing. Users love the product. We have a very beloved brand. They share with their friends and their study groups.
We’re not a traditional B2B EdTech company. We don’t sell to schools and institutions. Even if we don’t sell through that system, we still sit on top of that natural network of education.
Sramana Mitra: Teachers recommending to a whole class is a big viral spread.
Matthew Glotzbach: Exactly. In my organic chemistry example, if I’ve created this study guide, it’s exactly what everyone else in that class needs to study as well because they’re going to take the same final. That natural word-of-mouth and organic sharing is a huge growth for us.
The other is SEO. We have a large repository of high-quality educational information. Oftentimes, Quizlet shows up high.
Sramana Mitra: Do the users who generate users get compensated?
Matthew Glotzbach: No. The reason you create content on a UGC platform is for fortune or fame or both. In Quizlet, it’s for themselves. They’re creating content to help themselves study. It just happens to be really useful content for other people. The content creation motive is very different from a traditional social media platform.
Sramana Mitra: Interesting. How big is the company? How many people do you have? It sounds like you have scaled very well and it sounds like it’s a very organic lean-growth strategy.
Matthew Glotzbach: We now have about 200 employees globally. We have offices in San Francisco, Denver, and London. We’re predominantly technology-related employers. 70% of our employee base is product, engineering, data science, and design. We’ve worked to run the company in a fairly lean fashion to make sure that we’re running a responsible business.
Sramana Mitra: Could you provide any kind of revenue guidance?
Matthew Glotzbach: We don’t disclose revenue numbers.
Sramana Mitra: Are you getting close to an IPO?
Matthew Glotzbach: We envision Quizlet as a large standalone public company. That is the direction we are headed in, but probably not in the immediate future.
Sramana Mitra: Are we talking three years?
Matthew Glotzbach: It’s hard to say, especially with the world in the state that it’s in now. I think that’s a reasonable time frame.
Sramana Mitra: Are you seeing growth in the COVID context?
Matthew Glotzbach: We are seeing some interesting trends. We’re seeing massive growth outside of the US. We are used in over 130 countries worldwide. In our top 50 markets, we are seeing anywhere from 200% to 400% user growth starting in March.
In the US, it’s very uneven. It’s a reflection of how distributed our educational system is. Educational decision-making is not guided at the State and Federal level; it’s down to the individual school districts. The higher ed institutions are doing their own thing. It’s much more uneven and lumpy in the US.
Sramana Mitra: What are the top markets outside of the US?
Matthew Glotzbach: English-speaking markets – UK, Canada, Australia. We’re seeing rapid growth throughout western Europe, India, Japan, and Korea. We’re seeing significant growth across the board.
We saw Poland just shoot up over the last few months. We already had a decent-sized user base there. We saw it nearly double overnight. As we looked into it, the Ministry of Education gave targeted guidance at all levels. Quizlet was one of the recommended tools.
Singapore is another example. Every student in Singapore is using Quizlet.
Sramana Mitra: Are these free users?
Matthew Glotzbach: Most start out as free. The individual users are making the decision to opt in.
Sramana Mitra: What kind of conversion rates do you see?
Matthew Glotzbach: It’s still a small percentage – less than 5%.
Sramana Mitra: In the freemium business model, 4% conversion is at top end. If you’re doing 4% conversion, that is gold standard.
Matthew Glotzbach: You’re probably referring to the oft-quoted Dropbox 4% number. There are also other companies also that are north of 50% like Spotify.
Sramana Mitra: Great story. Thank you for your time.