Around the world, technology is helping to break down barriers between people.
Today, an Instagram post in Canada was liked by someone in China. Using Pinterest, a dressmaker in Italy sold to a customer in China. A Facebook user in Germany connected to an old friend in Japan.
But when KL Wong, a British-educated resident of China, looked at the digital landscape a few years ago, he saw something missing. Wong, who has a degree in law from Cambridge University and is fluent in English, Mandarin and Cantonese and is working on French and Japanese, saw language as a huge barrier. With a background in developing software for the early education market, he witnessed the strong demand for English-learning apps in China and knew the social revolution that had powered mobile messaging apps could be taken to another level.
The result is HelloPal (CSE:HP, FSE:27H, OTC:HLLPF), a mobile messaging, language learning, and travel application that launched last year and allows users to talk to someone who speaks French, German, Tagalog or dozens of other languages using their natural voice. With more than 1.2-million users already logging onto HelloPal, the app has achieved the kind of stickiness that most would envy.
Hello Pal is betting on the social aspect being a key driver in its popularity, as compared to language learning platforms such as Rosetta Stone or Rocket Language, which are more about interactive but isolated learning experiences.
Cantech Letter talked to HelloPal founder KL Wong about what’s next for the company.
Can you tell us how Hello Pal got started?
I was originally in the early education software business catering towards pre-school children. After moving to China in 2013 and seeing the strong demand for English-learning apps, I decided to leverage our experience and create a social language learning app for older children where children could share their voice recordings and native-speaking children of that country could listen and comment on them. The key was to enable children to be able to meet and communicate with other children from other parts of the world, similar to how we used to have ‘pen pals’ before the age of the internet, so that children could start appreciating other languages and cultures and recognize themselves as world citizens. However, as we had concerns over how accepting parents would be of this idea, we decided to use the same concept and do it for adults instead. As we did that, we started to realize that our efforts would contribute towards people getting to know people of different races and nationalities better, and we were so excited at that possibility that we decided to make it our mission – to bring the world closer together!
What about the management team and board. Do they have the kind of experience you think can help?
Absolutely! Most of our team members originated from our early education software business, where we were dealing with language learning content in many different languages. All the experience we had in creating content and content management tools, localizing to different languages, and developing apps in general has already helped us enormously in terms of speed and know-how. Our recent additions to the management team in China and Canada have also made our perspectives even more international than before, which I believe is crucial given the international nature of what we do.
The largest investor in Hello Pal is Hans Xu from the New Margin fund. How important is his financial backing and strategic advice?
Hans Xu’s involvement has been crucial. As the senior partner of one of the largest and most well-known venture capital funds in China, he has helped us not only from an investment point of view, but much more importantly, in leveraging his invaluable network both in China and abroad. The contacts and relationships he has brought have already helped to open many doors for us and brought forth many opportunities which otherwise would not have been available. The great news is, he has barely gotten started!
How has the initial app launch gone? What kind of uptake is the app having?
The app launch has been great. We released the app a little over a year ago with not much fanfare but were surprised to see an immediate uptake from users. Sometimes we would even have sudden massive spikes in new users from a country, and we would later find out that some influential blogger had written about us. Although in the beginning the traffic increase caused problems and outages to our servers, it was still a great problem to have! With our recent listing in Canada and fundraising, we’re now looking to do more significant marketing, and our growth rate continues to increase. We recently announced having surpassed 1.2mm registered users!
Can you tell us about how Hello Pal caters to language learners and travelers?
People who download our app generally can be classified into three groups: those who are just interested in meeting new people (social users), those who want to find language partners (language learners), and those who want to meet locals before they travel (travelers). Although our current app caters towards the needs of all three groups, it is really more focused towards the needs of the social group and is not dedicated towards the other two. Instead of building more features into our current app to cater towards those needs, we are instead building separate apps dedicated to language learning and travel. Our travel app will be released before the end of the year and its main objective is to allow people to travel for free. The thing to keep in mind is that all our apps go back to our main mission, which is to help bring the world closer together. Making it easier for people to travel, and helping them learn each others languages are two key aspects to furthering that mission.
What is the role of gamification to Hello Pal?
We have plans for gamification, especially when we build our dedicated language learning app as gamification is particularly useful when it comes to learning things since dry, boring material can be made to be fun through the gamification process.
It seems that the chat app space is very crowded. Do you feel Hello Pal has a defensible advantage or moat to its business?
Yes I certainly do. The chat app space is indeed very crowded, but the key difference is that our app requires a lot more than just app or software experience in order to be successful. First, our kind of app needs to address an international audience right from the get go, which is much more difficult than doing it country by country. In particular, the app needs to work in the East and West simultaneously and this is not an easy feat. Just imagine asking an American app developer to launch its app in China. In this regard, I believe we are well-suited to do this given our background. Second, there is also a large element of language/cultural know-how that is needed in order to make it work well. And this is where our team’s experience with educational and language content spanning multiple languages comes in very handy. Thirdly, I also feel that our strategy in addressing the three separate yet inextricably connected sectors (i.e. social, travel and language) together is a unique way of doing things. All of this will be run off the same back end platform and consolidated user base. The novel aspect of this approach is in the suite of apps appealing to different types of users. This allows the company to focus its marketing efforts on different groups of users adding to the diversity of its user base. This also provides for the future apps to launch with an immediate large and active user base in place.
How will Hello Pal make money?
Very mature and proven revenue models already exist with social apps, language learning apps, and travel-related apps. Social apps make a lot of revenue through ads and sponsorships, VIP memberships, and even micropayments from virtual items like stickers. Language learning apps can sell courses in addition to ads, and travel apps can link with airlines and hotels and tour agencies. Given the fact that we are or will be in all three sectors, we have the luxury of choice of all those revenue models. That further gives us the flexibility to make as much of our core services as possible free to our users, including for services which would normally be charged for. The exact model we choose will be decided over time through experimentation and user feedback.
When do you see the company turning a profit?
It very much depends on when we start to implement our revenue model, but this is most likely going to be in the second half of 2017.
What do you want to accomplish in the next twelve months?
We aim to have all key offerings launched, including in the travel and language learning sectors, and for everything to be working well as a coherent whole. To date there has been very little user acquisition marketing and PR spend. Our marketing team is growing and we are putting in place a comprehensive marketing program. The initial user growth we have seen clearly shows the platform is on trend and has an offering that appeals to many people. We are excited to start on our marketing efforts and expect our user numbers to grow even faster. As well through our management and strategic advisors network we are working toward partnerships with large strategic companies. On the public company side we are also working on our IR initiatives to make sure we have a wide global audience watching our progress.
Disclosure: Hello Pal is an annual sponsor of Cantech Letter