(Courtesy Ariel Liu)
We recently spoke with Ariel Liu, the general manager of international growth at The ONE Smart Piano. The ONE develops smart musical instruments, including a digital piano with a smart keyboard, associated mobile apps, and other services that can teach anyone to play the piano within minutes.
We’ll learn more about how The ONE’s piano solution works, how they were able to raise venture funding from top investors such as Sequoia, and how The ONE piano became a best-seller in both China and abroad so quickly. The ONE has bigger aspirations to build an entire ecosystem around the piano and other musical instruments, so we’ll learn about how they’ll incorporate students, teachers, and parents into this environment, while addressing key pain points of the educational system in China.
Adam: Can you tell us a little about your story?
Ariel: Sure. At seven, I started learning piano, but I gave up in two years. People were saying it was because my mom was not a "Tiger Mom." I was so bored of all the practicing, and my teacher was harsh. Now, I am picking it up by myself using the smart piano and playing with my two-year-old son.
Other than this piano story, I started working on mobile and social apps back in college, and at one point built a Facebook app that acquired over 1 million users. After that, I joined Accenture for consulting and focused on connected devices and mobile apps. Five years later, I joined The ONE Smart Piano, and I have been with this company for more than two years, where I am now the general manager of international growth.
Adam: You have a stellar academic background, and had a comfortable consulting gig to boot. Of all the interesting companies and innovations that happened in China, you picked a product that was a smart product focusing on music education. What brought you to The ONE?
Ariel: In the beginning, it was pretty simple resonance with the product. As a little girl who had to practice two hours every day and with a harsh teacher, when I saw something that was easy and could get you to start to play something right away, I thought that it's something that could have changed my childhood. I can definitely see the value for people these days who are trying to learn music. So I think it attracts me at first sight because it has value to change people's lives, especially kids’.
I have been working on mobile and social apps, and also connected devices for quite a few years. I have seen the industry grow up like crazy and then cool down due to lack of real product-market fit or real user need. This made me feel that I need to figure out what the real user scenario is in the market that exists today that really creates value for people's lives and has a sustainable product lifecycle. Based on all those I came across, I thought The ONE was a perfect choice.
The ONE’s Growth Strategy
Adam: The ONE is not a typical industry that VCs are highly passionate about, such as the software business, where you can scale quickly and get great margins. So, how did The ONE attract investments? Could you tell us a little bit about the VC dynamic in China? And how did it affect your growth strategy?
Ariel: The whole mobile internet market has changed a lot from that of five years ago. When it started, it was something very scalable with super low cost and super high margins. But these days, traffic is getting so much more expensive. With all the internet giants in China, it is very difficult for start-ups to survive.
Meanwhile, if you look at the education market, it actually has been growing like crazy. Although it is different from the U.S., where people innovate technology and products and try to develop their own hobbies, in China, parents are willing to invest a lot from family income and put it into the children's education. This makes the Chinese education market hundreds of billions of yuan right away.
If you look at where people take their kids to learn classes, it's pretty much K-12 subjects we can learn at school, and then it's piano and a few other arts, and programming. This market is growing faster than ever. Meanwhile, it hasn't been changed in the past few years, which brings in lots of opportunities in innovations, especially mobile ones.
Adam: China is an extremely competitive market, especially when it comes to pure software solutions. A of entrepreneurs are looking into other areas that are less crowded. The physical product/offline-type solutions plus technology as an enabler, in your case a piano plus an educational mobile app, is a good market fit for China. But how you would extend it to the U.S. and beyond as well?
Ariel: The U.S. is a little different from China. In China, the mentality of the users is play to learn, especially the parents, they really want their kids to learn music. In the U.S., both the parents and the kids want to play for fun. Though the intention of the parents is a little different, the users' desire, for 80% of the population, is still to learn musical instruments and have it be fun, easy, and affordable. As we have seen from the U.S., Europe, Middle East, South America, even Southeast Asia, users' desires are pretty much the same.
Evolving the Product
Adam: The core underlying product and use case typically overlaps in different markets. There is differentiation in customization, marketing, sales strategy, and other considerations. Could you tell us about how you came about these products, how they work and are differentiated?
Ariel: We actually started with only one product, The ONE Smart Piano. Essentially it is a digital piano, but you can connect it to your mobiles apps on your iPad, iPhone, or Android tablets. When you open the app and select the song you want to learn, the piano will light up on the corresponding keyboard to teach you which key to press as you go through the song. It's essentially making piano as an easy game of following the lights. That's how thousands of users can learn how to play in a few minutes even without any previous training.
Starting from there, people always want more. Now you can play the songs a few times to practice and build up the muscle memory without the lights of the app. Meanwhile, we were developing more features in the app, so you can also learn from video lessons and games with more detailed instructions.
It was our first win in the market. Within four months' of product launch, it quickly became the best selling instrument online in China. From then on, we had hundreds of thousands of users as a base of a community to explore what's next. In the past three years, we started to expand both hardware and software; more importantly, we have further grown the entire music learning ecosystem. There are people who still want the keyboard as well, so that's why we have a 61-key keyboard coming out.
Our high-end products, such as a full piano, came out to satisfy our customers in this category. But our newest product, Piano Hi-Lite, is an accessory and a smart device that works with any existing piano. You don't even have to buy a new piano. If you have a keyboard or a piano at home, you can just get this bar, put it on the keyboard, and you will be able to play and enjoy the experience right away. Hardware is straightforward to understand, and our software that started with simple features now has videos, tutorials, and user communities.
More importantly, looking at the bigger ecosystem, we are helping all the users - teachers, schools, parents - who want to get more involved in improving the teaching quality and efficiency. That's why we are developing a whole piano classroom solution. As an individual, you can get a piano and an app to start playing in a few minutes. The teachers can use the classroom solution to teach multiple students at the same time. It used to be 1-1 lessons, which are expensive and inefficient, but now teachers can teach 10 students at the same time with carefully-designed curricula and fun and interactive activities at a much lower cost. We are trying to build this win-win situation for the whole ecosystem and grow the whole community.
Adam: When I first think of a piano, I think of an expensive product that not everyone buys, but actually, a lot of us start with learning to play piano in school or at home, so your accessory is a very scalable thing. It also makes me think about self-driving cars, where some players try to build specific components from the entire stack while the others try to corporate with existing cars, which is comparable to your solution. My question is that how your accessory can work with all existing pianos? Do you just put it on the keyboard and it is touch-based?
Ariel: Yes, pretty much like that. All of the 88-key standard pianos will work. We create a highlight bar to put on the top of the keyboard. The light bar has advanced sensors. It will monitor the movement of the keys and translate that into music signals to communicate with our app.
Engaging with the Broader Ecosystem
Adam: Will your product face pushback from current teachers who are used to 1 on 1 classes? How will you involve teachers in your solution, especially in the case of multiple students?
Ariel: We thought about this when we started. Of course, people were comfortable with the traditional way of teaching piano. Among all the piano teachers that we talked to, they were nervous about the cost of teaching getting more expensive, such as the classroom rent, and the kids having other activities to lure them away from practice.
Most of the teachers who tried our classroom solution are happy with it because learning piano with our products is more like the experience of playing Angry Birds; you have different lessons and have levels to finish up. After you finish the classes in piano classroom solution, you can still continue 1-on-1 training. So, the piano classroom solution is not competitive against the piano teachers, it rather becomes a recruiting channel for the teachers.
Over 72% of students give up piano within two years because of the expensive cost and the boredom. But if the kids have fun with piano and play their favorite songs, they will have more patience and stay longer.
Adam: That's interesting. You’re widening the funnel and growing the size of the market for everyone because it is much more fun.
Ariel: Yes that’s right. In China, another thing that is different as well is that all the educational resources tend to rush into big cities, while the bigger portion of the populations lives in small cities and villages and don't have access to top tier education resources. While there are some solutions these days to provide online classes and live teaching sessions, they are still too expensive for them to access. That's why we start to work on the piano classroom solution. We have top tier experts, including Lang Lang, one of the most famous pianists in the world, to help design curricula to make the learning experience fun, helpful, and easy to adopt for teachers who have basic training. They can bring the learning experience to lower-tier cities where people have less access to these resources. This solution helps to change the mentality of location-based education for those who choose to stay in their hometowns.
Competition and Global Strategy
Adam: Can you tell us about your competition?
Ariel: I don't really see that many direct competitors at this stage. As I mentioned, we are creating a new vertical industry as a smart piano. And we are trying to make the cake bigger for everyone in the industry through piano classrooms, introducing more music learners, and integrating piano hi-lite to make the piano smart. In Chinese market, there are copycats from time to time, but we don’t see them as high threat at this moment, considering our brand and all the partners around, I think we are in a good position.
Adam: For global strategy, you set up the U.S. office and sell as a top-seller on Amazon, and you are going into Canada as well. Tell us a little bit about your global strategy and what we can expect as customers abroad?
Ariel: Globally, as a smart hardware company from China, we have our own challenges and advantages. The advantages are straightforward, such as the Made-in-China efficiency and lower cost compared to the existing players in the global market. The challenges are how to find the right product-market fit, how to maintain the core technology advantages, and how to continue to innovate and improve.
Adam: As for customer service, if I buy this piano in the U.S. and have problems setting up, I probably want a lot of help. Is your customer support in the U.S. as well or is it mainly China based?
Ariel: We have both to provide real-time support and we have resources to instantly help with issues, product exchange, and replacement as the user wants.
Adam: I feel like the piano industry is a little behind when it comes to the use of technology. Classical music is beautiful, and I used to play it, but it is a bit traditional. You are creating not only a software and hardware product but also the platform for musicians to find students and opportunities. The technology can go even further and you will have an extremely strong position because the product, the ecosystem, and the network effects will occur in a very exciting way.
Ariel: Exactly. It is the direction we are going right now. After we have the hardware, software, and classroom experience, the next step is to further build up the community and support all the members of the community. This includes not only students, but also the schools, the teachers, and the parents. Right now, we have 200,000 users all around the world, and they love it!