I Invested 8 Million Tenge Saved for an Apartment": Almaty Resident Forsakes Profitable Businesses for IT Startup
Ablai Yusupov embarked on entrepreneurship while studying marketing at Almaty Management University. Initially, he and his friends created the wine project Queex (producing short funny videos), then moved on to developing a language center. After graduating, he founded Upgrade School, a school for marketing, management, and SMM training. Over time, it transformed into an IT startup, Upgrade Business – an online platform offering access to 70+ educational courses across various fields. The service's main advantage is its short lessons, each lasting 5-10 minutes. In an interview with the joint project Digital Business and Astana Hub "100 Startup Stories of Kazakhstan," Ablai discussed his transition from traditional business to IT, how he managed to create a mobile application for zero tenge, and why he decided to develop his product following the Netflix model.
"Creativity Helps Create Cool Things Without Much Money"
- Ablai, why did you choose the education sector for your business?
- It's an interesting story. Back in school, while preparing for the Unified National Testing, I couldn't find a portal with all the cheat sheets. So, I decided to create one myself. I built a website using a constructor, uploaded all the materials I and my classmates had, and launched it. Within a couple of months, without any advertising, I attracted 20,000 users. That's when I first realized the potential interest in digitizing education.
However, I somewhat neglected this field in university. I immersed myself in marketing, volunteering in the marketing department of Almaty Management University, working part-time in advertising agencies, attending various conferences, and listening to expert speakers. Plus, I tried launching and promoting projects myself. In 2014, my friends and I created Queex: we recorded funny short clips and released them online. Within a year, we managed to gain 500,000 subscribers.
Then I reconnected with education: I became a partner in a language center. There, in 9 months, we increased revenue from a few hundred thousand tenge to almost 10 million.
- When did the idea for Upgrade School come about?
- I've always been an active person with a wide social circle. As my experience grew, more people sought marketing and product development consultations. I thought, since there's a demand, I should create a supply. Right after university, I opened a school for marketing, entrepreneurship basics, and SMM.
- Where did a recent graduate find the money to start his own school?
- I didn't have any. At university, I acquired a very useful skill – creativity. It helps create cool things without a lot of money. I spent only 50,000 tenge: on banners and a designer's work.
The university provided a space for classes free of charge. I convinced the management that they would benefit from it by creating additional traffic from people, some of whom might become students at Almaty Management University.
The teachers were me and my friends who agreed to work voluntarily at first. Enactus, an organization promoting student entrepreneurship, helped attract students. We agreed on 40 masterclasses at different universities in Kazakhstan, where they ensured attendance. There, I talked about my experience with Queex, and the guys shared their case studies.
Gradually, we progressed and made our first profit. Then we started conducting intensives, off-site seminars, as we had branches in Astana and Shymkent. Soon, large companies like Kaspi Bank and Air Astana became our clients, sending their employees for training. In general, the business developed well. Over time, 15,000 people passed through us. However, in 2019, I decided to close Upgrade School.
- I realized that I had created not a school, but a training center named after myself. Ablai Yusupov could sell without problems: many people came. But it wasn't the same with other speakers. As a result, a huge workload fell on me. Sometimes I gave up to 100 presentations a year in different parts of the country. It was exhausting.
"We Did Well with the First Sale, But Everything Was Terrible with the Second"
- What did you do after closing Upgrade School?
- I went into consulting. But I didn't really like it. In fact, the three clients I worked with became my bosses. That was frustrating.
I started thinking about what to do next. At that time, I had just subscribed to Netflix. I was amazed that it provided access to all movies and series. It felt like seeing a buffet for the first time. I thought, why hasn't anyone done this with educational courses?
In October 2019, I decided to develop a platform. For this, I withdrew the money
I had been saving for an apartment – about 8 million tenge. We recorded 10 courses on marketing and management with the guys, and in February 2020, I launched Upgrade Plus. Then the coronavirus happened, quarantine was introduced, and sales skyrocketed. By April, I had recouped the invested money.
- As I understand, the project was able to quickly pay off and immediately bring good profits?
- Right. However, about a year later, I noticed an unpleasant trend. We did well with the first sale, but everything was terrible with the second. The retention rate was about 3%. And I didn't understand how to fix it. Over time, I realized that in the long term, Upgrade Plus would not be successful. At some point, it would become difficult to attract customers, as people would start saying, "I bought a subscription, but I didn't really study." And that's true because people don't have the habit of studying continuously. At best, a couple of weeks a year.
When analyzing the data, I noticed one positive aspect. Companies that also bought subscriptions had a much higher retention rate. They consistently sent their employees for training once a month. Then I decided to pivot and shift the focus from B2C to B2B. That's how Upgrade Business was born.
- How much did you have to transform Upgrade Plus to make it a more viable product?
- The most significant change was launching a mobile application. We decided to compile everything necessary in it: video lessons, various tests, useful files. So that the user could enter and not need to switch to other platforms. Plus, it has convenient navigation. For example, you click on the IELTS course and immediately see the expert, the number of lessons, their duration, and the entire program.
- How much did you spend on improving the service?
- The development of the application cost 0 tenge. I have a cool network, friends with many awesome guys. Among them were programmers who agreed to help me for free. In return, I promised to consult them on marketing if necessary.
If we talk about content, recording 3-4 full courses costs about 150-200 thousand tenge. The main expense is production work.
Experts help for free thanks to the good relationships we've formed. Among them are popular bloggers - Alisher Elikbayev, guys from Microsoft, inDrive, Choco, and other international and Kazakhstani companies. They are ready to share their knowledge and experience that can be immediately applied in practice.
"In Kazakhstan, Speaking of SMEs, There Are Not Many Companies Interested in Developing Their Own Employees"
- Who is the main client of Upgrade Business now?
- These are SMEs. Large companies are not particularly interested in us. They usually ask for customized courses for their needs, as many of them have corporate universities. But for organizations with a staff of 100-500 people, we are ideal. Plus, we recently decided to work with freelancers who need to improve their skills in sales and promoting their services.
Currently, we have 700+ paying clients, of which 200+ are SME representatives. These include travel agencies, advertising agencies, educational centers, and even a kindergarten. The rest are freelancers.
We offer two types of subscriptions – for business and freelancers with rates for a month, quarter, or year. Their difference is that "freelance" can only be used by one person, and "business" - by 5. But the quota can be expanded by paying extra for each employee.
- What if the manager simply distributes the purchased course to the entire team?
- The application has protection. The system tracks suspicious activities and blocks the subscription if they are detected.
For example, if a person starts a video lesson and does a screencast, it immediately stops and doesn't turn back on. However, considering that we are at an early stage, we are turning a blind eye to this for now, so that more people learn about our product. Moreover, our users don't abuse such tricks too much.
- Were you able to improve retention compared to Upgrade Plus?
- It's unclear yet, as we've been fully operational for less than a year, and most take an annual subscription. However, one problem is already evident.
In Kazakhstan, speaking of SMEs, there are not many companies interested in developing their own employees. Most business owners, when I offer them the product, ask one question: "Why should I train them if they are going to leave sooner or later?". This speaks to an underdeveloped corporate culture.
- Can this problem be solved?
- We try to convey to the leaders: if an employee wants to leave – they will resign anyway. And the subscription remains and can be transferred to another person. This will improve their loyalty to the company and will create a positive image of the employer in the market. But these are all local initiatives.
We also have several strategies. The first is business events where we'll invite 3-4 top speakers that everyone wants to hear. Concurrently, we'll present our platform and talk about its capabilities to potential clients. For example, how it facilitates development without taking time away from work and doesn't require much time. However, this approach ties us heavily to offline formats.
The second strategy is to create content on personal and business development: reels, podcasts, extensive interviews, which will help change people's mindsets. But this is not a quick process. It will take at least 1-2 years.
The third is a pivot. Perhaps, we will create a service similar to Trello, where courses will be a bonus.
- Are you already profitable?
- Considering our costs, yes. The average bill from a single client is 300-350 thousand Tenge. It's not much. But it's important to understand that we are the only ones in Kazakhstan, and perhaps even in all of Central Asia, who are doing B2B education in the EdTech format.
Given all the problems I mentioned above, it's still difficult to sell the solution. Sometimes I catch myself thinking about making a marketplace and selling individual courses, especially since there is demand. But then I immediately ask myself: 'What would then be our competitive advantage?'
We don't teach from scratch, but help to improve qualifications. We can be compared to vitamins that don't cure diseases but strengthen the body. Thanks to this, we don't compete with various big players in the market, but rather complement them. So, I don't plan to deviate from this concept.
'I have a dream - to open my own kindergarten, school, college, and university'
- How easy is it to scale such a product? For example, to Kyrgyzstan and Uzbekistan.
- I don't see any difficulties. If we talk about trends in marketing, sales, management, they all first come to Almaty and then spread throughout Central Asia. So, attracting clients from Bishkek or Tashkent, if we find a sales model, shouldn't be a problem. Perhaps we'll need to add languages. Otherwise, the markets and patterns there are similar to Kazakhstan.
- What about other regions: the Caucasus, Southeast Asia, Europe?
- I have thoughts about these regions. We are best at recording courses. And speaking of Europe, we could negotiate with Kazakhstanis from London or Paris, who live and work in various international companies, to prepare courses. Rent a large apartment or house, bring our production, shoot 60 courses in French and English in a couple of months, and launch them in the app.
But again, we bump into sales. So for now, these are just considerations. As soon as we figure it out, we can think about scaling.
- Maybe it's worth attracting investments to accelerate this process?
- I don't see the point yet. I want to go through this quest independently and influence the product's development without looking back at investors.
The main goal is to boost education. I'm from a small town – Ekibastuz. I didn't have cool opportunities or rich parents. However, my mom and dad always invested in my education. And I'm convinced that the key to solving problems with crime and poverty is education and comprehensive development. I want to make it accessible.
Perhaps, in the future, I will wind up the IT startup. I have a dream - to open my own kindergarten, school, college, and university to create a network of all educational institutions."
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