Building an AI-Powered Global School: Bina Founder Noam Gerstein | Deconstructed VC by DVC

What about kids using AI? That's not a good idea. Yeah. How can AI help your teachers get to 90%. I'm glad you asked. Do you have engineers? 000000000000. I'm in love with what you do, but when you look at the business models of schools, you go, "Wait, what?" Legislators don't really know how to prom. It's going to be fun. She didn't use AI in a better way. You're all this. Just stop it now. So, welcome to the Deconstructed VC podcast. Thank you so much for having me. It is a pleasure to have you here. you're in a very important niche that a lot of people have ideas about and we are very curious today as always but not only from the business side but also as parents because nomin is it the right way to pronounce and it's a way to pronounce amongst many all of them are fine okay because today we are having Noam Gerstein she has created bina as a global digital primary schoolthat has precision education.

Mhm. For kids 8 to 12. Yeah. So we fully educate and when I say fully, I mean 5 hours a day, 5 days a week, 200 days a year, kids aged 4 to 12, cross geographically. So we have kids in different places in the world studying together every day. and it's a digital international school for little humans and they're adults. And you has founded the company in 2020 and now well well I got a micro grant in 2020. In 2021, we founded the company, but we very deliberately kept it tiny and beta because we're not in the business of moving fast and breaking kids. And so the method strategy was just to first prove a methodology, make sure that we really believe that this is superior education to what there is out there. then prove a market and make sure that there are people that love it and want it and want this type of life with their families and are willing to pay and and then start building the product that allows what this type of quality to scale.

Yeah, this is not the type of business when you can test hypothesis every every week. You can you can test a hypothesis every week and we do but those need to be very like the that it needs to be very specific and very planned because outcomes are not usually sometimes but yeah so just to talk a little bit about the concept first this is not homeschooling this is a remote school what what are the differences So basically millions of families are looking for stable international education that is attentive and that fits their lives and that is harder and harder to find. So they can choose old school which is inflexible let's say with varying levels of quality varied even in the fanciest schools you have like best case scenario 20 kids in a class which is a lot and it reflects a society that is not exactly how we live today anymore right the just the the structure of it their other option is homeschool and it means that you know it is very very hard to do.

It takes immense resources. It takes a very specific type of let's say familial structure to be able to hold this and a lot of people are very uncomfortable with the idea that you know they will have to educate their children because they're not teachers and it's a profession and it's a hard one. and so what we're building is this middle category for generation A and their adults that is not old school, not homeschool. It's it's this new thing. that that it's still schooling and very very high standards done by professionals. but it's not old school. It's meant for how people and their kids live today and probably will tomorrow. So a lot of people when they hear about you know and a lot of people who experienced school during COVID say you know appeal to this point that okay how would kids socialize? Mhm. So this generation and so we need to really remember that when in what during co we did not use systems that are crafted to do miracles in this.

We used stuff that is made for adults, definitely not for these stakeholders. It's not made for kids, not made for parents, not made for teachers. And it was hard for many many reasons. What most people missed during co is the playground and the soccer field less you know the math class. but it's very important to say that you know this generation are going to need two sets of you know social emotional toolboxes. One of them is digital and the other is physical. And obviously we strongly think that kids should be, you know, playing ball and like smelling each other's whatever like it's important, right? They need to they need to be physically engaged with each other. So for for the digital toolbox, Bina students spend a quarter of every day on social emotional learning. Mhm. So we actively work on negotiation skills and talk talking about our feelings and talking about our boundaries and and and discussing and collaborating and so on so forth.

So there is we take a lot of we put a lot of effort in crafting that all the lessons are live active collaborative real time with a small group of peers and very highly educated educators. and so that's one one aspect of it. The other aspect is working with families to ensure that the the digital time the kids spend are is on work and that everything that's not work is not digital. sure. The other the other things we really we're really close to the family, so we have kind of very active text life because our generation was obviously not educated to educate this way. And so we have a team that's called family care. and what they do is support parents in their parenting for and we do real time actionable suggestions. So for example, Anna learned how to count to five and back today.

here's a cool game that you can play with her. Five berries in two minutes, please. Okay. But we also do things that are a bit more radical and we kind of behave like an annoying grandma. Ben Ben was talking about breakdowns today. There's a cool breakdowns group not too far from your house. We booked him a trial for Monday at 3. Is that okay? Mhm. So, we're really pushy to ensure that actively engaged in their local communities. Then this year, we're going to try something pretty cute. I don't know how well it'll work, but we'll see. But we're going to start doing camps. So, twice a year, stargazing, total nature adventures, inviting the families as well as the kids to come. And it's nice for the families because we take the kids and but and do workshops for parents but the kids are all around like you know nature activities and stuff like that.

We'll see how that goes. We need camps like this for adults as well. come come you should come. It's going to be fun. and so and then but and this is what we do right now in the future. we envision hubs. So co-working spaces, cultural institutions and offices as well as even like community centers where kids could be minded in active environment in multiple age but they're still recipients of the best education in the world. So that's kind of in the future you need more density than we have right now. So so you got small classes it's like eight people per class. you got a lot of people who work with them. and my question as a venture capitalist is how do you make it scalable? How do you make it a business? Mhm. So for our younger kids for our younger kids it's up to seven and for our older kids it's up to eight.

that is from a child's perspective. That is not from an educator's perspective. So we have two types of educators. We have teachers and co-teers. they have two different levels of pay grade and and they do a little bit of a different thing. There are many things that you could do in the digital realm that you cannot do in the physical realm. Mhm. This type of business has three main levers, right? You have CAC, you have lifetime and you have teachers time. Teachers time is very very valuable because it's the heaviest, as you mentioned, the heaviest line on our P&L. There are ways to optimize it. what we what we're doing right now one scheduling. So in old schools you cannot do a lot with scheduling because moving kids and humans around takes a lot of time and effort but that's not true digitally. Oh yeah.

So we can really think in very fascinating ways both educationally speaking as well as for for the business model with how how to shift kids around in completely different ways that really fit their skills that go very specifically on what they need but that they bounce into different learning spaces according to let's say their concentration skills and exact and maybe they're in different groups for different areas of their learning right so This is something this is something that we're testing right now. It also means that teachers are all educators are fully utilized one 247 well actually 24 is my next sentence. So we now have classes in Euro Africa. so from the very north to the very south of the time zones kids study together every day. Eastern and Pacific. By the end of the year, we're going to have classes in East Asia, that includes Australia, and Middle Asia will come in 26.

That means that we're going to have a 24-hour school beyond the fact that it's just really cool. and it allows families, for example, to be very mobile as much as they want. But it also allows educators to not teach one time zone, but one time zone and a half, which is an which is a huge margin difference. So those are just some of the some of the things that we're working. So compared to an old school where they work like 9 to3, your teachers can work 9 to5 or 9 to6. Yeah. Okay. Like a full day. A full day. But the thing is that in in old schools there are different assumptions. People some some research suggests that they spend 32% of their time with students. Some research suggests that they spend 50% of their time with students. But the rest of their working time they're doing stuff like a bunch of stuff.

All kinds of stuff. They do planning, they do meetings, they do this, they do that. The aim is that we consolidate the stuff, ensure that whatever h teachers right now do in schools that don't require humans are not done by humans. And we will get to that in a second. and what they do is connect with students, which is what they do best. And so the aim is to get to a pl where you are already way beyond 50%. But, but the aim is to get to beyond 90%. Mhm. So 90% time with students. With students. That's beautiful. so since we got there, how can AI help your teachers get to 90%. So I'm glad you asked. let's start with why teach digitally. Mhm. Because there are a lot of experiences for all learners, the little ones, the the their parents and the bigger ones, their educators that are not possible in the physical realm.

Okay. we want to get to places where if, you know, you and I are doing a project about an octopus, we can go talk to it and maybe it'll tell us all the myths in the world and we can compare the myths around octopuses. And then maybe we can do math on their tentacles and if we do really well, maybe it'll let us into their bloodstream. And then maybe we can minimize ourselves and understand why it is blue. Right? great experiences that we absolutely need. The imp the impossible and the unpractical and the dangerous and the expensive and the wonderful things that are great educational experiences and we should not be doing or can't be doing in the physical realm. this affects LTV. What we're building is a multiplayer 3D learning environment that is that is play genen. and we can and we can go a little bit deeper into how we're thinking about building it in a second.

So that is one reason. The second reason is that in old schools assessment was happening periodically. You and I went and had tests. Remember tests? Great. Yeah. So there is tests tend to not be a great reflection of how knowledge and skills are accumulated. And so we are in this amazing moment in time where you can move assessment from periodic tests to a continuum where everything they do is continuously measured and evaluated. And so teachers don't have to do it and it's accurate. Do you have a do you have a social score for children like you know in in China? there is a very very big debate in the education community. a lot of people say oh soft skills are unmeasurable. And that's not true. Mhm. Like can you measure whether kids are good or they're it's not a well good is one thing and we are not in the business of good and bad but we are in the business of you know active listening for example as a skill.

We can say a progression like how much how how how they progress on that specific skill for example right like they started out like when four when kids are four they're not active listeners okay it's not something that they're born with in most cases I know adults who are not active listeners it's a skill that you either are taught and and you acquire it or you understand why it's necessary and you acquire it or it never comes to you right we kind of think that we should teach it, right? And so there is like any other basically micro micro skill, there are ways to understand where kids are on the progression and what is the next step in their learning journey to get there. so shifting gears to well again AI so not shifting too much but can I just maybe follow up? I'm sorry.

yeah because we we're talking about the the whole education and we mentioned that you're doing precision education. Yeah. can we define what do you mean by precision and absolute pleasure? Yes, please. So it is to some extent high attentive attentiveness right and so the aim is to have continuous deep understanding of what learners know what they can do and to which depth at any given time which would allow us obviously to react with the next activity the next interaction and the next and and the next learning objective that is the most fitting to where they are at the moment. Mhm. So the idea is to reduce lag and to create a very quick feedback loop. Mhm. into what you know what's the next adventure, right? Good. sorry, now shifting gears to administrative stuff. How much do you think agents and LLMs right now can help just reduce this stuff that teachers do like assessing homework much?

I mean I think homework is a different story but I think the as multimodels actually progress the way and there are some pre definitions that need to be made for this to for this to be truly valuable both educationally speaking as well as like bottom line right those luckily correlate right the double bottom line in this type of business is very nice and striking but let's say that other 50% or 70% depends on who you are asking I would claim that a good let's say if we land on the 50% a good 47 of it and to really you know make sure that their students are seen and heard and understood that I think is crucial but I think on objective measur measures if they could avoid spending time on it takes a lot of time as well as on planning plenty now it would require very informed configurations informed I mean by learning sciences very informed configurations to make sure that it's scaffolded in a hallucination proof way right so there's actually a lot of IP that needs to be done for this to be tight but plenty.

There's a lot of debate about you know use of AI by students and use of AI by teachers going on right now. So 40% of schools in the US forbid the use of mobile phones and only 10% of schools in the US have any policy on AI which is funny given that 90% of students use it. a lot of times this policy is just let's ban this all like our Laltus Hills sorry Laltus high school I don't know is is banning you know Chad GPT perplexity claude everything. Yeah and they also use AI detectors. So like our daughter recently got an F I think for her ethnic studies paper. It wasn't just it wasn't scored. Yeah. But they emailed me saying that, "Oh my god, she used AI to to answer that." And and did you take off your fat and go like this? What did you I I was actually very He was sad that she didn't use Yeah.

in a better way. No, I mean like the the whole thing is bug is because it's a handwritten essay. Oh my god. Yeah. So even if she used the eye, she at least processed it and wrote it down. And I was this close to using AI to respond to that email. Did you not in the most chat GPT way? No, I actually denied like I was like, "No, this is my daughter. I'm not going to." Yeah. Like But if it was me and But it but it's funny there's also the school that was recently all over the news which adopted use of the art for tutoring and their GPA scores got to top 1% of the nation. Claude has launched a new learning mode which we'll speak of a little bit. Yeah, we also can mention Sal Khan who did the Khan academia. He was the first one who implemented Jai into the system because he had an access to that before everyone.

I don't think they like they can in my opinion they can do much more but at least they already implemented like AI tutors so the the way the kids can actually talk to. But I wanted to to ask you about like policy making here like let's imagine for for a moment that you can write any policy in the world and this would get adopted by the majority of schools. What would the policy say? I mean don't get me started on what I think of schools before AI. You're just stop it now. No, I'm just joking. But I I think I'm not going to give you a policy answer. and I think there's there are several things that are convoluted here. One is there is a confusion between medium and content. Those are tools. the question is how you use them, what's in them, right? what you feed them and how much control you have over the content as tools they have pathways, right?

Some of them are very very helpful for learning and some of them in terms of pathways, this is before we get into content, right? Oh yeah. And some of them condition a mind for a very specific pace, right? And now there's the world of what's in it, right? And so I think and in the the realm of banning phones is we can't have control of what is inside the phone. So we just can't then we are not doing it. I think there is a place for a policy in my h in my humble opinion policy makers are the ones that have the responsibility to decide what should be banned. to some extent as well as parents. So it depends on you know you know how you know the belief of role of government and the the parental role and it's our responsibility right to to decide what type of content our our kids are exposed to and why.

It's those are decisions. It's not a given right and those are decision we have agency. Oh yeah, governments have agency to decide, well, this is not so good for our youth, so we're not going to allow it. Period. Or until X age or whatever. There are ways to do this. This is this is what policy is for, right? Like we don't let fouryear-olds drink because that's not a good idea, right? And so there are other ways to decide what type of content or what type of behavior is is ne is allowed here or not allowed here. And it could be allowed here in this country or allowed here in this state or allowed here in this household or allowed here in this community. But it is definitely an adult decision. Oh yeah. that we should take responsibly. and so that's that's and and so I don't have a problem with the machine.

I do see that there are good reasons to have some beef with what's in it. Yeah. What about kids using AI to they must but they have to learn how it's built, what it can do and what it cannot do, how to operate it, and how to evaluate the response, right? So, I think we can I mean it's it's a little bit like you know when we were kids and someone would say like never use a computer or like never use a tractor. It's kind of that's that's not a good idea. Right? But we have to understand what it can do and what it can't. And the calculators are simple in that way. They always give you the right answer. It's a single source of truth. comes from, you know, a simple arithmetic calculation. What about topics that are more ambiguous which AI gives answers to?

Yeah. I mean or Twitter or whatever, right? Like so it's not just a it's AI scrapes scrapes whatever is out there and gives you a whatever, right? So then you have to understand how to assess it and and I think unlike other sources it's actually easier if you know how to use the tool well easier to assess and verify it in some in some ways right like it's not like give me the sources let me see it right so it's more about the habit and usage really understanding what this is about there is a group that does quite good work on that around leading schools around AI policy. Mhm. I can we can leave it in the in the chat, but they do they do good work. This is really cool. I will personally believe that banning anything isn't a good idea because when these kids grow up the world is built on technology.

We cannot exist without it anymore. The society would just collapse without Tik Tok. well to be honest I think like there's a tendency when people cannot understand something they prefers they prefer to to control it to to ban it other than like make the guide guide trails for such a big handicap for kids not to learn how to use it properly and I think what what you said is really important is that being able to assess the the answers being able to understand how it works exactly what it gives you is just such a big moat for children that are taught to use these tools because it's not AI who is replacing jobs, it's other people with AI who are but to be honest I am jealous because like in u our childhood we always live in the world when like there is one truth is our like workbook like the one two kinds of opinions teachers opinion teachers opinion and the correct once.

Yes. And that like we used to have only one truth and which is not right because it didn't give us an opportunity to actually understand that information is something that you have to verify. You have to work with different sources and you have to compare it and this is something that that is not like given on the lesson. You have to work with that. It's actually I mean you see that in many aspects of education which is like what towards so because when we think about building any educational system the idea is towards what and we have to come up with really good answers to that right we education is always towards how do we imagine what does great outcome look like what what is the need there right and then we can walk back from that and so I think if a great outcome is someone that takes information and like a moves on, right?

That which is it might be a great outcome for some education systems, right? Then that's a good way to go there. I don't know. I Yeah. let's talk a little bit about Bida as a business. Yes. so this is a beautiful concept where you basically take a large percentage of people that are looking for a better option for their kids whether they don't have something in their region or they're traveling a lot or they just prefer it to be online and you know benefit from all of the virtual experiences and and you know being inside an octopi. Let's say it's like five years from now. What is Bina like? How big is it? And can we start with where the Bina is now? Can we mention any numbers like I know that you operate in 35 countries and can we mention the revenue? Yeah. Yeah, of course.

so we are in right now we are in we have 158 students today. they live in 35 countries or they are in 35 countries right now. They're a lot of them are moving which is pretty cool. we are at almost 1.5 in terms of ARR. we are 40 people in the team. Most of us are educators. what else? Do you have engineers? Do we have engineers? Yeah. we have one right now and this next round is as I mentioned before. So we've done a lot of ground work in both in terms of understanding that there is the methodology is proof and we got internationally accredited which is very very important for us. We're actually going to do some more. We're talking to Cambridge and the IB international baloria right now. and you have very fancy advisors. Yes, we have very fancy advisors. It's true. So we're hoping to really ensure that it's incredibly smooth to move out of US to any international school in the world.

It's already the case, but we want it to be or in the US it's so much smoother now with you know this new legislation that allows to like education savings account you're not a lot of people know know about that. Yeah. So I can tell you a little bit about it. but education savings account is a $71.4 billion bill. that basically in some states, it's not available in all the states, but in some states the the states hand vouchers to families to pay for education for their kids. The average and and quite a serious variation amongst the the states, but the average is 7K a year, which is significant. Oh yeah. and which allows us also to serve families that would not be able to be able to support this quality in in any other way. They have more options than just public schools around them.

Exactly. So if they're not putting their kids into public school, they can get a voucher for it and give it to you. Yeah. And and come to Bina. That's that's that's super nice. So what has been in five years then? So so in five years we will be at 10 10k students which is not new or novel by the way in the world of international schools. we won't be the first. Yeah. 10k students is 116 arr which is nice but I wake up in the morning to educate millions. So so the we would be a 24-hour school which means amazing flexibility to found. How many engineers would you have? How many engineers will I have? I think they should be a team of maybe almost 40. Okay. 40 engineers and AI and yes I would say like and and much more many more AI agents.

Yeah. Many many many more AI agents. So, but I do want to answer your question before. So, that I I built this business like a girl, meaning first I know that the education is great. Then I know that people are going to pay for it, then I can build all the fancy stuff and actually but I know that you spent a lot of like years before starting that just researching market. I sat in a lot of schools in the world. So, basically I sold my first company when I was 26 and started living nomadically. I was really really interested in this massive industry because I don't know if you know but private primary education is a $2.5 trillion industry which is a big one. but when you look at the business models of schools you go wait what? Because resource allocation is just so bewildering.

Oh yeah. and so and so I was like okay I guess I don't understand a lot of things. I'm going to go figure it out. And so I started sitting in schools and interviewing little humans and their adults to try and understand like what are the differences and the similarities between the student between the systems and if we can maybe start thinking about a system upgrade. and so I lived nomatically for six years and sat in schools. in the last year I spoke to mainly educational professors and developmental psychologists and people from the business and technologists to see whether the ideas that I was the stewardist of let's say are a possible and b positive which is how I also met Jim who is one of our adviserss and has been the minister of education of England for a while and it's he's one of the many amazing adviserss that we have right now so yeah I'm in luck with what you're doing because this is very hot industry like everything around is well doing so quickly but education like public schools and other stuff they are moving not that quickly not changing not updating their structures not updating their knowledge base and other stuff yeah I truly believe that education has to be changed and parents should know their rights that they are actually choosing education for their children not this is something they like go around and that's it yeah and you should have a lot of courage to just start like changing I don't know about courage because it's always like people are just diff afraid of different things so there basically there are two ways ways to think about systemic change, right?

One is from within and I think a lot of great work has been done in schools when educators do wonderful things. There's a lot of actually there's a lot of innovation and a lot of lot of research that has been done within the school settings. That's one way to go about it. There's another way to go about it which is to build a parallel system that is so compelling that the mainstream cannot not have it. Yeah. And so if you think about I don't know like sitting in the cars with maps on your lap and weird stuff like that you know we could have continued doing that and making even more beautiful maps or interactive maps or I don't know what but we have an alternative that is so compelling that you cannot not use it. Okay, you can rebuild it from first first principles first principles.

And so, you know, and you can see it in very small things. For example, people ask me, "How do you have the four-year-old sit all day?" And I'm like, "They're not sitting." Like, why? It's it doesn't really make sense for a four-year-old to do that. They're not sitting in the classroom as well. So, I mean, the fact that they're sitting in a classroom is a problem, right? And so, we can really think about every choice we make, we need to find a good reason to do it in research. and then move along, right? and so I mean like redesigning education from first principles is so exciting. so a lot of a lot of parents would, you know, like watching this and think is there a way to try this without, you know, committing without pulling their kids out of their school where they have friends, you know, and and and putting them in front of the screen, which sounds very scary.

I mean again it's always about what's in it. Yeah. But there are some ways. One is we teach year round and the structure of the school year is what we call biomes. So every month and a half the entire school moves from one biome to another which mean now they're underwater and everything they're learning is underwater. Their math and their history and their geography and so on and so I did the same when Sonia was two years old. and so you one can join us for one biome during the summer for example. Mhm. and see how it goes. So you have classes also during the summer. We have year round. We teach year round. and we have nine biomes a year or I don't know in the winter whatever whenever in the you can come for one biome which is six weeks. Mhm. an average of six four to six weeks depends on to which one there was a I know that there was a large discussion about summer vacation some summer some summer some summer breaks that they're too long so kids forget everything it's not a good idea two months of break is not a good idea like we kind of know that just they were trying to like or reduce it but of course like the whole system is built on that it's impossible to move like well it is possible but you have to build a parallel system for that.

so no we we don't believe in a two months break. We do have a in the in this summer we have a a we because between the b between the biomes the the every quarter the kids have a a slightly longer break or the families have a slightly longer break and the one the summer is a little bit longer because our families really wanted it and so we were like okay but but it's not two months. Two months is actually it's more than two months because it's two months breaks and then there's at least one month to to get to get them back and to somebody's still traveling. Somebody is just you know cannot get their head straight after two months. They they're doing tests and they forgot forget everything. They have to like redo a lot of stuff. Yeah, it's routine building also which is a big a big a big part.

So that's a good idea for like joining for one biome. Yeah. Any advice for parents what to how how they can learn about that and like maybe well first of all go on our website. All you need to do is write beta.school and you'll get there. and so what happens by the way is you meet us we our amazing team is going to explain and answer any questions you guys have. and then if you want to continue, your child will go on an adventure with one of our educators. It's also a really great way to have some reflection on where they are. we this adventure is very very fun and very very sweet and also an assessment. and so and so we try and understand what they need exactly where they are and what would be the best grouping for them. What is what are their what about languages?

Ah great great question. So we teach in English the kids have there are some clubs in different languages but u we teach primarily in English. We take children that don't speak English. Mhm. We have some families that don't speak English at all. And this is another thing that is aided in gorgeous ways. Yeah, it is. Yeah, it's really cool. is there still a need to learn languages for kids? Definitely. And I'll tell you why. There is a really cool experiment where you show there's a picture of a purple cat with wings and I don't know what and you give it to a monolingual child and you tell them is this possible and the monolingual child goes no and you give it to a bilingual child and you say is this possible and the bilingual child goes maybe and you give it to a multilingual child and the multilingual He says, "Yeah, I guess so."

and it's kind of repeated in in multiple languages. It's a very cool one. So, languages are pers perspectives. Mhm. and the more you acquire, the more perspectives you have. I really I really think learning languages is very important. It's a lot of things. Problem solving. Yeah. It's it's there are interfaces with with the world. Yeah. It's I mean just as an example I have never seen multiple types of snow until I learned different languages. For me it was like there's a one thing that is snow and that's it. I mean I'm sure you guys know that. Oh yeah. There are many types of snows apparently but you don't see it. Your eye you don't perceive it right. I I I think I perceived them a little too much in my life. I mean, it's not that I need to encounter them, by the way, but but I do know about 15 different words for snow.

Exactly. Russian. And you there are different things for you, right? And so like it's a different lens and different grades are horrible. Yes, I'm with you on that one. I'm like not not a fan. But but yeah, I mean like it's it's it's good to to understand. I also can probably now explain the meteor dynamics that lead to precipitation that forms a different form kinds of snow. Yeah. But you would never assume that there are different kinds of snow if you would come from my language is what I'm trying to say. Yeah, that's your your language also doesn't have any vowels which is we have vowels, friend. Hey, not a written spell. They are written. We don't always write them, but they are. They're optional. They're optional. Exactly. It's just short. It's fast. Yeah. Effective. Really cool. Oh, yeah. Yeah, in in my book club when we discuss cell come books the new words I think it was the most discussed book because like all all parents are so frustrated about education in general some books for you I don't know do you need some book recommendations absolutely we definitely need yeah people don't know what to expect very gorgeous just now just literally the last month one beautiful book love to learn from Isabel how mhm M beautiful.

So gorgeous. and another amazing book called The Disengaged Teen. Yeah, that's what I love. Both both highly highly highly recommended. I think they're brilliant just for your book club just from the new ones. so entprepneurship I well I think it's what what what is interesting here is how like a school is a business but we kind of covered that a little bit. So so and I think this is the biggest insight is is that teachers just waste time. I think that it's not the only one actually there is another thing which is about edtech and it's very I would actually put it in. Mhm. A lot of people invested money in edtech and got super burnt. And the reason why they got super burnt is that they invested into fieldspecific solutions. Mhm. When you build field specific solutions in education, you cannot make money. And the reason why you cannot make money is when you try and sell to parents, the CAC always surpasses LTV.

Yeah. So you can sell to your friends. It's really nice. They'll pay $4, you know, multiplication app. Great. And then you need to start paying for CAC. Business model breaks, right? Yeah. Then you're like, ah, sell to schools multiplier, right? No. No one can sell to schools because they don't have money, resources, time or interest. Oh yeah. And so and so what happens with a lot of even great products is that they the business model cannot hold. There are only two types of businesses that really make big buck in education. Private schools and publishing houses. Yeah. And Beina is the future of both. so what about language schools? They they are pretty big or coding schools. No, but just the specific Yeah, you were talking about like educational kids. I mean, those are those tend to be vocational, right? those are and some they can make money just Yeah.

But how much money? Well, when well in this case like compared to schools. Yeah. I mean like schools are a sinkhole for the government money is the education is what number two or number three depends on category depends on in which country but yeah I mean yeah in US the biggest problem in here like ordinary schools they have different stakeholders and you when you're trying to like solve the problem you're solving the problem for like specific stakeholder who is not actually making decisions about money and other stuff and in coding schools and language schools is more clear pathway. Oh yeah. I mean like people can you know budget it better. Yeah. I mean that is that is a very very important insight that in mo which which is also why we're building the way we're building. So in many cases in education and in education products the stakeholder question ver the stakeholder versus user question is very very problematic because in some way your user is not your is not your buyer.

Absolutely. Oh yeah. And that dichotomy is very problematic to hold. in which is why for example we are focused on selling to families. and why a huge part of our product is for the parents as well right? so yeah like just just making parents happy about their kids academic process. I think it's what is lost in the public school process at all. like private schools do listen a little bit, but it's about really building relationships and being like someone's on someone's team. Like how are we on like, you know, Lee's team? How does that look like when we work together and we really there's a real support system? It's possible and it's cool. Sure. Yeah. Good. Thank you so much. I think it was very insightful not only for founders but for for the parents which is u I don't know I'm thinking about trying yeah but for like for love I think he would love it yeah give me love for a for a month and a half yeah I think he actually he loves sitting in front of the computer studying from home makes sense I also like you know all the 7 a.m.

and like the bad meals and the you know not necessary. Yeah. Driving we're lucky that driving is is very close. but yeah and also I mean you guys live in a best school district even even student but it's true is not that bad. Yeah, it's it's we're uniquely positioned to offer quality education to your kids and actually like that's it's 0000001% right. So there are like very very few people and as we discussed Nick is is in position when he's he's not movable. So we are not planning to move. Yeah. I mean, unless you want to Well, it's unless you want to not spend more than 180 days anywhere. Well, I made peace with the tax system. I feel it's a subscription for the good weather. So, I'm only unhappy when it's cold. I was like, I'm wasting money. So, I like your approach because now we tax season.

We have to work on our taxes and every time like this is the worst time because Nick is almost crying. Why? Why? It's not not fair. Yeah. It's like me and our daughter both cry about taxes. We made her she made a few hundred bucks of money voicing over ads. 12 what 10? I don't remember but she was I basically gave the people who paid her I gave them our bank information and I had to pay tax on that. So I substructed the tax from her pay and she was like that is so unfair. I already spent that money. Yeah. In my mind. Yeah. Yeah. Yeah. It is pretty unfair. I mean I don't know it it it is it is actually fair but but if we take I mean like if out of the every tax dollar that we pay that goes towards schools we can actually control it and we can actually get accountable you know education something that makes sense not just pays because if you look at the way the US government spending on education structured is is a bit weird so it's Most of the school funding comes from community budgets from like you know yeah local cities and and towns and counties.

a little bit comes from the state and then special programs and charter schools. They're they're from from the government. But the biggest part of the government spending on the federal level is supporting the pension funds that have guaranteed return for teacher pensions. Was so was was supporting. Yeah. Was supporting. Yes. Now now they're closed. But I you know a lot of things kind of don't make sense. I think this was one of one of the crazy ones because if you're a fund man if you are a hedge fund manager or you know a fund of funds manager and just a money manager and you have you manage pension funds for teacher union like for teachers you have guaranteed returns you can mess up as bad as you want the government will just compensate the teachers that is so unfair in so many ways in fact so unfair in so many ways is I think I mean it just like it I mean like yes I understand that teachers want good pensions so do firefighters so do police officers but it's just pro and we by the way we as society want them to have it yes 100% like this is very important very important are you know public servants and teachers are very very important but it just promotes horrible behavior by fund managers where they just take risks I mean that's that's true in in in multiple players in the fund in the in in actually in pension funds.

Yeah. Like there are a lot of oh my god stories about pension funds right that's pretty pretty crazy. So well you know with all of the change that is happening now it's so volatile and unpredictable you know like yesterday we woke up to new tariffs. Yeah. which are calculated in a very funny way. I you heard right? Yeah. I didn't only hear like you look at this and you're like I mean okay but the numbers they Yes they did we're cutting this right this is yeah this is off off record so it's just it's just funny like once I realized that it's just trade I was like this is vibe coding at its finest like people ask charged it across the board and then they basically to list the countries talk about having the skills to use the tool. Oh yeah. Oh yeah. This is this is what happens when that legislators don't really know how to prompt chat GPT.

Oh god. I mean well their their opinions that is just a starting point to put everybody at the negotiation table to renegotiate stuff. I mean but still like just have your numbers like just have your ducks in a row. How hard is that? Yeah. It's it's it's funny. Yeah. I mean like you could you can one can have radical opinions and actions and like do bold things maybe. Yeah. But at least have your numbers straight like really thank you so much for that. Super fun. Welcome to the Deconstructed VC podcast where Marina and Nick Davidov are talking to founders trying to deconstruct their businesses so we can understand the way they work better and you can maybe learn something new and we also help our portfolio founders promote their products and also you know help them with hiring if you guys want to join. so ah yes Yeah.