July 22, 2020

"This is a watershed moment for EdTech": A conversation with Bernhard Niesner on what businesses need to survive COVID-19

As many businesses grapple with the threats generated by the economic crisis brought on by COVID-19, Bernhard Niesner’s experience is one we can look to and glean survival strategies from. 

Bernhard is the co-founder and CEO of well-known language app Busuu and an EdTech industry pioneer possessing invaluable insights on how to persevere through struggles and come out stronger on the other side. He talks us through EdTech’s big moment and reports that the businesses who survive today’s hardships will be those that react quickly. 

Key Takeaways:

  • COVID-19 is a watershed moment for EdTech. When COVID-19 hit and schools closed, more people began exploring the world of EdTech, a world they may never turn back from now that its benefits have been realised.
  • Strong culture is created in the real world. Remote work can teach us a lot and has its benefits but it is in physical working environments that culture really gets its traction.
  • Build a sustainable business that survives the tough times. The way to survive many of the challenges that a business will face is by having the foundation of a business that offers real value to real users.
  • Make cuts deep and make them early. It does no good to put off the tough decisions. For the health of your company and for the health of employees who can stay on, do what’s necessary as early and quickly as possible. 

How did you get into EdTech and what is Busuu?

I always knew I wanted to become an entrepreneur and while completing an MBA in Madrid I met my co-founder, Adrian. We shared a love of learning languages. This was in 2008 and we felt at that time that the traditional ways to learn languages weren't very innovative or useful, took a lot of time, and were expensive. We set ourselves the task of coming up with a better concept, and from there Busuu was born.

Busuu has been a pioneer of EdTech for 12 years. We’re a leading platform for language learning with over 100m users that teaches 12 different languages. Everything on the platform is enhanced by artificial intelligence. We constantly analyse learning data about our users and we are using that information to make the language learning process more intelligent through a combination of self-paced courses, peer-to-peer learning and live-tutoring.

What are you seeing from a Busuu perspective, and internally as a company, the impact COVID-19 has had on the EdTech sector?

If running a startup is a marathon, then running an EdTech startup is an Iron Man.

For many years, venture capitalists have been reluctant to invest money into this sector as user success takes a long time to gather. It’s much more difficult to learn a language online than it is to buy a pair of shoes.

This COVID-19 crisis is a watershed moment for EdTech. Right now we have large parts of society attending school online and everyone who was reluctant has likely had to implement it on some level. 

I’m happy that EdTech is proving to be one of the winners of this crisis. It’s sad that it took a global pandemic to push this industry forward but now there are a lot of people who are able to benefit from the tools and solutions that we provide as an industry.

In terms of Busuu, business has been thriving. We’re currently experiencing peak user engagement with 50% higher session times and reaching record revenues which are up 80% year-on-year. When lockdown ends, I believe people will stick with Busuu because they’ve experienced an app that is more effective and is a fraction of the cost of traditional language learning.

What is Busuu’s culture and how have you adapted it to this current situation?

I’m a big believer in Peter Drucker’s statement that ‘culture eats strategy for breakfast’. The best companies in the world are made by building an amazing culture. 

We’ve had times in our business where we didn’t get the culture right, where we hired too fast and we didn’t align on values. The business struggled. It definitely taught us a lesson and from then on I wanted to clearly articulate our core values.

In our company, we require a lot of interdisciplinary, inter-functional and cross-functional collaboration making it important to meet face-to-face at least some of the time. I was never a fan of the fully remote set-up but this experience has changed my opinion and I now see its value and the ways we can adapt to it and maintain our culture. I still believe that a strong culture is created in the real world and not online, but we’re embracing the benefits of remote and will look to explore a hybrid model in the future that incorporates physical interactions.

We’ve also been able to hold Friday socials that occasionally incorporate talks from some of our board members or e.g. a performance from an online magician. That’s something that wouldn’t have been possible outside of lockdown and we are keen to explore these new formats to see what works best. 

You started your company in 2008, at a time of a global recession, are there any lessons that you can take from that time to today?

Busuu has seen a few crises and through those, we have been prepared for this current one. In 2008, my co-founder and I were two of the few from our MBA class who started their own business. A few months later, Lehman Brothers collapsed and the world tumbled into a financial crisis so we were glad that at least we had created our own jobs. It was tough all around and we had to bootstrap with no salary for 2 years. It taught us the lesson that the best way to fundraise is by generating real revenues from users. We created a sustainable business and those are the ones that prove watertight in times of crisis. 

There will be companies failing who are otherwise excellent businesses but who have run into unexpected difficulties from COVID-19 circumstances. It’s really important not to take anything for granted when things can change that quickly. 

In 2014, you had to restructure the business.

What kind of advice do you have for entrepreneurs who are in that situation and having to make difficult decisions?

Letting people go when we were running out of cash was one of the toughest moments in my life as an entrepreneur. But unfortunately, sometimes you have to make cuts and make them early for the sake of the company and for the employees that you can keep. Ben Horowitz says, ‘If you eat shit then don’t nibble’ — excuse my French — but I believe that to be true.

This is the time to make sure you’re putting your business in a stronger position for the future. After making the necessary changes, we were able to bring the business back on track and six months later we had secured a €6 million investment from McGraw-Hill Education. Things move quickly, so be nimble and resilient. Perseverance is crucial in a founder and going through the bad times just might make your business stronger in the long run.

What are your views around the future of EdTech?

I’m excited to see where artificial intelligence takes EdTech. As an industry, we have been talking about this for quite some time and over the years, more and more useful applications have come to light.

For example, we use A.I. for our intelligent vocabulary trainer. Our community has completed over 10bn exercises and this data pool is growing by 13m exercises every day. With this amount of data we are able to show the right word for each individual user at the right time. To give you an idea, the word ‘hello’ is relatively easy for non-English native speakers because they have been exposed to it but e.g. the word ‘designer’ is more complicated for Chinese users. Therefore for Chinese speakers,  we need to surface this word more often and in shorter frequencies. That’s just one example of how we’re using A.I. and we’ll keep using it to improve our functions. 

I’m a big believer that A.I. will not replace the human teacher in the learning process but will elevate the human to a super teacher who is fully informed about their students’ states of knowledge. It feels like we’re just scratching the surface and I’m excited about the possibilities of the future.

What’s on your learning playlist?

I can strongly recommend the ‘Hard Thing About Hard Things’ by Ben Horowitz. Busuu was not a great business in 2014, and there were important lessons we had to learn. Having gone through the struggles that I’ve gone through as a founder, I would say this book taught me a lot.


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