Can You Just Copy-Paste a Business Model?

SkyEng's International Misadventure Shows It's Not That Simple. Denis Smetnev , a former Skyeng executive and co-founder of uForce , shared this insight at the R-Founders Global EdTech class.

We all know the saying, "If it ain't broke, don't fix it." But what about when it is broke, and you're trying to fix it in a new market? SkyEng's foray into the international online education scene teaches us a valuable lesson: sometimes, simply copying a successful business model isn't enough.

Think about New York City. After a decade away, you might be surprised by the piles of trash on the streets. But give it time, and you'll discover the incredible food scene, especially the delicious sushi. SkyEng had the time, but it still couldn't crack the international market.

Denis explained that before he joined, SkyEng had attempted to go global, entering the market at a time when online education was still relatively young. It seemed like a golden opportunity.

"We launched SkyEng in 10 countries, but we only achieved profitability in two: Spain and Italy." ????????

What Went Wrong?

The problem was a combination of factors:

? Blindly copying the Russian model: In Spain, SkyEng tried to simply copy its successful Russian model, using Facebook advertising to reach potential customers. But those ads targeted the cheapest leads – think people with lots of free time, like laborers. Why? Because the ads were aimed at Spanish-speaking profiles, but many of them were immigrants from Latin America, which meant the cost-per-click (CPM) was low. They saw the same issues in France. Italy, however, was different.

? Ignoring market signals: Initially, SkyEng offered 50-minute lessons. But they observed that competitors were offering 25-minute lessons and seeing success. So, they shortened their lessons, cutting the value of each lesson in half. This hurt their profitability significantly, especially since they didn't move to a subscription model.

Key Takeaways:

1. Don't just copy: Before you copy a successful business model, be sure to understand how it really works in the new market.

2. Be flexible with your pricing: Large internal installment plans might work in one market, but not in another.

3. Focus your efforts: Trying to conquer too many markets at once can be overwhelming and lead to a lack of focus.

4. Listen to feedback: Don't get stuck in your own bubble. Pay attention to what people in the new market are telling you.

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