“Pay Want You Want” Model Got Us $1M Donations for Online Courses by@pogulyaev

“Pay Want You Want” Model Got Us $1M Donations for Online Courses

Max is the CEO of HYLS - a donation-based online self-development course platform. He explains how the platform uses a “pay what you want” model. 90K+ participants have been paying what they want since 2018. Max is looking for seed funding, and the pitch deck is at the end of this post. The pitch deck includes a pitch deck for HYLS, which is published in the next week. The company is looking to raise $1M in funding.
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HYLS

We are a donation-based online course platform that has already attracted $1M of donations from 90K users.

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Here, I will tell you about HYLS – online self-development courses, for which 90K+ participants have been paying what they want since 2018.


My name is Max, I’m a founder of two startups – POGUMAX (software for indoor projection video shows; in 2021, I hired a CEO) and HYLS – I’m the CEO now.


I’ll tell you about HYLS in detail. Now we are looking for seed funding, and the pitch deck is at the end of this post.

HYLS — what is it and how does it work?


We have created our own platform for online courses using a “pay what you want” model – at the beginning we ask to pay any sum of money (which will motivate the result), and we give free access for those who have financial difficulties.


Some of the courses are ours, the rest have been created in collaboration with various instructors.


The duration of such courses is from 21 to 60 days.


After registration and payment of any amount, a participant receives access to a personal account. There they can find materials and practices. Training is usually divided into several sprints or modules.


The material is an article, on average 5–10 minutes of reading. Many materials have videos. Under materials, participants can leave comments on the topic.


Assignments for materials can be one-time or on a regular basis – like a habit tracker. Practices can be set up with desired frequency.


There is support – curators answer questions and comments of participants. Earlier, we created general chats, a community for participants. We also experimented with masterminds for groups of students. Sometimes course instructors do live broadcasts.


Courses start every day – you can start participating any time.

“Pay what you want” Philosophy


Since the launch, we’ve been letting users determine their own pricing.


  • This gives an opportunity for everyone to participate regardless of income level. When we launched the very first healthy yoga lifestyle course, we wanted to share the benefits of practices and implementation of healthy habits with as many people as possible.
  • Wider bottom of the funnel – significantly more people start learning and practicing as opposed to standard sales funnel models, in which people attend free webinars first and then buy the main course.
  • Detachment from competitors and attention-grabbing marketing. It’s unusual to pay any amount for a course. Such courses usually sell from 70 to 700 USD.


As a teenager, I dreamed of an online store where customers could set their own prices. Why do prices have to be fixed? Maybe no one has tried to build a business on “pay what you want” pricing?


We are trying to accomplish that at HYLS. Maybe it won’t be possible to go against the established rules for a long time, and we’ll have to use fixed prices and standard sales funnels too (I hope we won’t). Who knows? But it will be cool if we manage to scale the donation model.

How much do participants pay?


Throughout our courses, the average checks for our courses have been from 7 to 14 USD.


Often, there are bigger payments, but rarely more than 140 USD. A lot comes in 7 or 1 USD each. Sometimes, participants thank us and pay more during the course.


One participant began to participate by paying 14 USD. After about a month, he supported us with 522 USD. And after some time he bought a friend a certificate for participation, giving us another 536 USD. But this is an exception.


One day, there was a payment of 1400 USD. We were thrilled! It turned out that the person wanted to pay 14 USD and made a mistake by adding zeros, so we returned the rest. 😂


There is a correlation between the amount of payment and completion of the course. We’ve recently collected statistics like follows:


Correlation between sum and course completion

Correlation between sum and course completion

Traffic


In the beginning, we only had friends and acquaintances as participants. In the first year, we did tests with traffic, but we couldn’t reach a stable positive ROI.


Then, we managed to increase the average check and learned how to target our target audience on Facebook and Instagram – this became our main source of sales. Google, Youtube, Yandex advertising also worked.


We accumulated our own base of 200K emails, which we use to sell current and new courses. Social network accounts also grew, especially Youtube (60K subscribers) and Instagram (50K).


When an instructor wants to join us with their audience, there is an exchange – our audience learns about the instructor and their course; the instructor’s audience learns about HYLS and can participate in other courses.


Unit Economics


Recent averages for different courses and audiences:

  • Conversion rate of landing pages to registrations – 20%.

  • Conversion from registration to payment – 40%.

  • Average check – 10 USD. Repeated sales – about 10%.

  • 10% come from friends via invitation link.


I will tell more about growth hypotheses separately below.


Collaboration with instructors


Now, we plan to dramatically increase the number of courses on our platform. We are attracting instructors for cooperation.


We offer instructors a mirrored percentage depending on who attracts an audience — we create 2 web pages and measure the traffic separately. If the audience comes from the instructors, our partner gets 70 or 80%, and HYLS – 30 or 20%. And vice versa – if the audience comes from us, HYLS gets 70 or 80%, and the instructor – 20 or 30%.


The motivation for instructors is that a much larger audience will pay for their courses in comparison to the case of selling courses through the standard funnel of online schools with free webinars. More people can benefit from the “pay what you want” model.


It is also reputationally beneficial – the audience is loyal to such payment format.


For example, Maxim Dorofeev, the author of the books “Jedi Techniques” and “The Way of the Jedi” had about 35K subscribers on Youtube by the time the course was launched on HYLS. In less than a year, there were 20K+ subscribers to the course.


It takes about 3 months to launch a course – much depends on the instructor and their engagement. For our part, we help to create a program, we study demand, carry out user interviews, layout materials, help to do the production, adapt personal account and the logic of tasks depending on peculiarities of a course. Very often, we test a one-week MVP first, then we look at the results, gather feedback, make all the improvements and release the whole course.

In July 2021, we received 100+ applications from instructors who want to publish their courses on HYLS.


Developing


When I described the idea of the project in my social networks, I received an answer from a developer, who first volunteered for HYLS. In just a month, he put together the first version of a personal diary. We agreed that if we could not make it by a launch date, participants would use Google tables. We made it!


Then as he was tweaking the personal diary, new requirements and more complicated functionality appeared. There were enough bugs. As the number of participants grew, it became more of a challenge.


We released Android / iOS apps on webview – outsource helped us build them, but there were also problems with it. They were available to registered members, but not designed to attract traffic from the stores.


At the end of 2020, we parted ways with the first developer, and a Senior Full-stack developer joined and started reworking the backend and then the frontend – now we’re in the testing and transition phase. The stability of the system has increased.


Was it the right decision – to develop your own platform or should we use other platforms? Now, we have the opportunity to become a marketplace for courses on the donation model – if it works, it was not in vain.


HYLS team during discussions

HYLS team during discussions

Hypotheses


1. Marketing and improvement of unit economics


During the last year and a half, HYLS was not purposefully engaged in increasing conversions and the average check. Now, we’re more focused on these tests. In June, we managed to increase EPC (earn per click) by 50–100% in some courses, so we anticipate the mass launch of traffic. We continue tests to increase the efficiency rate.


There are ideas with a test subscription for donation. Some courses can be translated into the format of long programs that help a person maintain a lifestyle (good physical and mental health, work without burnout and procrastination).


Releasing apps would attract traffic from app stores (haven’t tried it yet).


2. The marketplace and expansion of the range.


The more courses, the higher the repeat sales, the higher the brand awareness, and the cheaper the customer acquisition.


We are on our way to automate the launch of new courses and attract new instructors.

We want to create a donation-based Udemy – an educational marketplace with thousands of instructors and millions of users.


3. International markets and attracting investments.

We started in Russian, but plan to go to international markets.


We are looking for investments, if you know EdTech VCs who would take an interest in HYLS, please refer them to us. If interested, I will leave our pitch deck here.


We also would like to carry out tests in English, and we’re looking for authors, who are eager to prepare courses in English. If you are one, you are welcome to join us!


Maxim Pogulyaev - CEO of HYLS

Maxim Pogulyaev - CEO of HYLS

Thanks! Feel free to get in touch with me: LinkedIn, Facebook, Telegram.

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