Thought Leaders in Online Education: Paul Kellenberger, CEO of zSpace (Part 3)

Sramana Mitra: How do you find and recruit these developers who are very important to your success?

Paul Kellenberger: Over the course of the last three or four years in the education industry, there’s a set of events and a lot of conferences that we go to where both developers as well as end users and resellers traditionally go to.

Six years ago, we spent a lot of time at those venues. Today, we still participate in many of them. We built up a brand and are quite well-known in the US. By the way, I’m talking about within education. In China, we have quite a good brand as well. In the broader consumer market, we’re not known. It’s something that we’ve had to build up over a number of years. It’s one of those things where you see the videos on the website. We built those initially for marketing purposes.

The experience is much better than what the videos are. The videos are pretty unique. To your initial question, finding those developers was a lot of hard work. Now we have developers coming to us because people know who we are.

Sramana Mitra: What is the business model? All these developers are developing on your platform, and you get royalties from those?

Paul Kellenberger: Our business model is a combination of hardware, recurring software revenue, and some services. We work with the third-party developers at two levels. One is we have our own sales team. We create specific learning bundles for specific age groups or grade categories. We may resell some of the third-party applications. If they’re not in those bundles, we offer them up in a very much of a traditional app store model.

Sramana Mitra: If you look at your capabilities and your target market, where do you have gaps? If you were looking for developers to fill in some of these gaps, what are the pointers?

In our audience, there are a lot of entrepreneurs. I’m asking this on behalf of those entrepreneurs who are working in the EdTech space who might be interested in developing on your platform. What do you recommend for them? What are open spaces where they should be looking at building applications?

Paul Kellenberger: What is now called the CTE, which is the old vocational, is growing very fast. About two years ago, we had zero revenue in that space. Now it represents 50% of our pipeline.

We don’t disclose our revenue, but I can tell you we’re well up in the tens of millions of dollars. You can think of it as the old trades. Part of the reason it has resurged is, a lot of kids in the US have done their undergraduate degrees and can’t get jobs.

Our president signed additional funding to support this. It connects to high school kids getting to the point where they get a job. There are a number of different categories.

I know I’m picking the simple ones. Those are areas today where we have a handful of applications and where we’re looking for more and more developers. The funding is there in the market. It’s heavily funded under something called Perkins. It’s also there in China.

Set aside the whole geopolitical situation between China and the US for a minute. In China, more and more consumers have been buying cars and are more concerned about better healthcare. They’re buying more cars in the bigger cities. They don’t have the infrastructure, the number of mechanics, welders.

By the way, it’s not necessarily all trades. The other area that falls under CTE are things like robotics and hydraulics. That is more high-tech. Also learning how to develop in Unity or other development environments also fall sunder CTE. It is a growing area with not nearly as many developers and players.

Sramana Mitra: Very interesting. Is there anything else that you would like to discuss?

Paul Kellenberger: The message I’d leave is it’s one thing to read about zSpace and watch a video; it’s another thing to experience it.

Sramana Mitra: Great. Thank you for your time.

This segment is part 3 in the series : Thought Leaders in Online Education: Paul Kellenberger, CEO of zSpace
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