Late last year, while the rest of us were Christmas shopping and planning holidays, Jan Zawadzki and Tony Kong of Auckland-based Hapara put their names forward to US incubator Imagine K12 on a lark.
It was a long shot, they say, but as you read this they’re kicking it in Palo Alto, California, on a three-month stint at the only incubator for education startups of its kind.
“We don’t quite fit the profile of a typical startup,” laughs Zawadzki. “We’ve got a few too many grey hairs here and there.”
Hapara is one of just nine companies this intake, whittled down from a field of 300 applicants. But while most of their fellow incubatees are fresh graduates, Zawadzki has years of experience as CTO of various Silicon Valley ventures, and previously worked with Kong at KPMG, where they first met. The “grey startup” has one big advantage, however.
“They have the energy, but on the other hand, we have the contacts.”
The business is also a lot further down the track than many of its K12 peers; although less than two years old, it has five staff, nearly 100 clients and became profitable in late 2011.
It’s a Google Apps authorised reseller in the business of developing solutions that simplify the deployment and management of those apps. Clients range from NZ Post to Unitec, but its main focus is on education, not enterprise.
As Kong puts it, they aim to take the headache out of managing and controlling how users access apps. No teacher wants to spend hours creating, naming and sharing folders for every single student, for example. Hapara sets up basic structures and permissions to enable
Google syncing with school systems. A teacher dashboard displays class activity on a per-subject, per-child basis so they can see what students are working on, creating an exercise book that lives in the cloud.
“We don’t ask teachers to change how they teach, which a lot of educational tools do,” explains Zawadzki. “We say ‘here are the tools you’ve already chosen, we just make them easier to deal with’.
“We’re sort of the Advil for the schools. Initial setup for a school of 500 is immensely painful, for a school of 2,000, it’s impossible and for a school of 10,000 you wouldn’t even think about it. Those are the sort of ranges we’re operating on.”
Those tools were built while working with a number of teachers, notably from Point England School in Auckland. Hapara is a pillar of the Manaiakalani project, which aims to raise achievement among various schools in the low-decile Glen Innes/Panmure area by installing a community wifi network over four square kilometres (in the process of securing more funding – a pilot has already been established); equipping every student with personal netbooks on a lease-to-own basis; and the use of Google Apps as the underlying platform (complete with product extensions designed by Hapara).
Together, these elements mean students can work anywhere at any time, even if the power or internet at home gets cut off, or something happens to their device. As a result, says Zawadzki, Point England is seeing an improvement on standardised literacy tests of seven to 12 times the national average.
But the majority of customers are overseas. Hapara’s clients hail from all over the planet – India, Singapore, Thailand – with growth increasingly coming from the US, UK and EU.
“We’re at this nexus of two trends,” says Zawadzki. “Globally, education is getting less and less money – the ‘do more with less’ mantra. The second is the online space, and Google seems to be really well positioned there. Google is the fastest-growing software in education.
“Conversely, education is one of the fastest growing market segments for Google. We see massive growth and millions of students being added under the Google Apps umbrella.”
Because their products aren’t New Zealand-specific, the opportunities are massive.
“What we help schools to manage is the exercise book that lives in the cloud. Turns out the exercise book is the same whether you’re writing in English, German, Japanese. There’s not actually a language layer we introduce – it’s their own content just being presented in slightly different ways.”
The team is also starting to do things “a bit more analytical in nature”, moving into the realm of lesson planning and measuring student achievement.
But while the global education market may be trumped only by healthcare, Zawadzki says the mindset of local investors is in some ways behind the times.
“New Zealand hasn’t really given us any great leg up in the investment sense,” he says.
“The sort of feedback we got from New Zealand investors was ‘Oh, Google. Google’s just going to take over whatever you do’. The same argument could have been made of anybody who did anything on Microsoft 25 years ago and yet here’s an ecosystem.”
He reckons the support structures for new businesses could be better, too.
“As a country we should be encouraging the sorts of things we’re doing. My assumption was that I could call, say, the MED and say ‘Hey, new exporter doing IP globally, who can I ask this question’?”
On the other hand, the firms funding education startups in the US are top-tier VC companies – not specialists – entering an industry where they see growth potential. And funding is something Hapara will be chasing in order to drive growth and boost its sales and marketing efforts (to date it has blossomed solely on the back of word of mouth).
“These are contacts we just could not get in New Zealand. The availability of capital and contacts, just because you happen to be there, is vastly different.”
Wouldn’t it make sense for a business based around Google Apps to remain in Silicon Valley? Zawadzki says it’s likely they’ll establish an office in the US.
However, he’s adamant that Hapara (which means ‘daybreak’ in Maori) will remain a New Zealand company for both personal and pragmatic reasons.
Kong adds that the company’s home base has a lot going for it.
“The talent is in New Zealand. Our colleagues are really good at what they do – we can find the engineers and the salespeople here. It comes down to the fact that New Zealanders are ahead of the curve in education and in particular using technology. Schools all over the world see what we are doing with our tools and they are very enthusiastic.”