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Small Empires: a startup tries to scale its human workers against an automated approach

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Open English has found widespread success, but its competitors have the low cost advantage

One of the reasons venture capitalist are so eager to invest in technology startups is that the mobile internet has enabled massive, global companies to be built with very little infrastructure and a small number of employees. Instagram had tens of millions of users and international reach when it was bought for a billion dollars, but was staffed by only a dozen hard working coders and designers.

Open English is a Miami based startup looking to reinvent the market for learning a language. Customers sign up from anywhere in the world and through the magic of the web, begin working one on one with a teacher. This can be a video session, or in the low-bandwidth areas the Open English reaches, simply a audio call.

The teacher walks the student through grammar, vocabulary, and most importantly, real live conversation. It's an alternative to the brick and mortar schools that require the extra work of getting to each lesson. Removing that overhead allows Open English to offer competitive pricing to a physical class, but for a one-on-one session.


From Our Sponsor: Inside Small Empires

The company has raised $120 million and scaled to more than twenty countries across the Americas. But it faces stiff competition from services like Rosetta Stone and DuoLingo, which don't have the overhead cost of hiring actual teachers to handle new customers. This episode is a deep dive into the classic startup conundrum: maybe software is eating the world, but what do you do when your business is built on the human element?