What Silicon Valley could learn from China’s Q&A platform Zhihu

China’s largest question and answer platform Zhihu began trading in New York at $9.5 per share at the lower end of its IPO range, valuing the company at about $5.3 billion.

The aggregate offering size of Zhihu’s IPO and the concurrent private placements is $772.5 million, assuming the underwriters do not exercise their option to purchase additional ADSs. With Zhihu’s sizable flotation, some Silicon Valley executives and investors may start to pay more attention to this ten-year-old company from China that was once simply regarded as the “Quora of China.”

Q&A remains at the core of Zhihu, which means “do you know” in classical Chinese, but the service has become much more than the American counterpart that was founded two years before it.

“I think Quora is a good product, but I think Quora today still equals Quora ten years ago,” said Kai-Fu Lee, whose investment firm Sinovation Ventures is a seed investor in Zhihu and is the company’s largest outside shareholder with a 13% stake.

“Zhihu has already grown up and is on the path to becoming a multifaceted super app centered around knowledge, while Quora is still a question and answer website with an app,” added Lee, an AI expert and an avid Zhihu contributor himself.

Asides from facilitating Q&As, Zhihu has also dabbled in premium content, live videos and audio, online education, among other forms that it believes are ripe for sharing knowledge.

Today, Zhihu generates about 70-80% of its revenues from advertising, according to its prospectus, though other businesses like membership and e-commerce are growing financial contributors, a sign that it’s working to diversify monetization streams.

The willingness of Chinese startups to “reinvent themselves and cannibalize their own success” is what differentiates them from American companies, Lee observed.

“Because they know if they don’t do that, their challenger will, and they are ambitious towards building the super app as a dream. I think American entrepreneurs tend to build something really good and light, partner with other companies and stay in their comfort zone,” said the investor who was the president of Google China in the late 2000s.

“I really think that Silicon Valley and U.S. entrepreneurs should look to China for ideas or inspirations of doing things differently.”

Conflict of interest

From 2019 to 2020, Zhihu’s monthly active users grew from 48 million to 68.5 million, an indication that the platform has thrived beyond the small clientele of Chinese tech elites, investors and academics whom it first attracted. A new mother could be on Zhihu asking for postnatal tips and a Foxconn worker may be on the site sharing her factory stories.

Zhihu’s revenue increased from 670.5 million yuan ($102 million) in 2019 to 1.4 billion yuan in 2020, while its net loss shrank from 1 billion yuan to 517.6 million yuan. It may seem at first that commercialization is at odds with Zhihu’s principle rooted in open user collaboration. Oftentimes, answerers are not economically incentivized but simply participating for leisure. But Zhihu is for-profit from day one and needs income after all.

It’s a always delicate matter to balance a product’s commercial and user interests. The bottom line is to be vigilant and deliberate about the kind of ads or sponsored content allowed on the platform. Restrain could mean smaller advertising revenue, but a medical ad scandal that hit Chinese search giant Baidu back in 2016 showed how easily user trust could be lost. Well-placed and responsible ads, on the other hand, could bring greater returns for both advertisers and the platform.

On the innovative side, not all users have appreciated Zhihu’s new features. Zhihu has recently upped its ante on short videos, which have become the default medium through which many Chinese users receive information, thanks to more affordable connectivity and industry forerunners like Douyin and Kuaishou. But some users argue that short videos by nature verge on entertainment and are obtrusive for the more serious, text-focused Zhihu.

Zhihu has other interests to balance. Its shareholders include Tencent, Baidu and Kuaishou, which are “super apps” themselves for their extensive functionalities. They all have traffic deals with Zhihu. For example, Zhihu content is surfaced in the search results on WeChat, which has its own search engine.

While joining hands with giants could drive user growth for a smaller player, dependence on outsiders could also handcuff a startup, forcing it to give away significant shares too early and joggle the interests of multiple allies, who could be rivals themselves.

Lee declined to comment on Zhihu’s relationship with any specific partner, but he did indicate that Zhihu doesn’t currently have an “overreliance” on partners and that the firm keeps “natural working business relationships with them.”

“That also speaks to the purity and the ambition of the Zhihu team that it hopes to maintain more independence by making more friends,” said Lee.

#asia, #china, #funding, #ipo, #quora, #tc, #zhihu

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Brainly raises $80M as its platform for crowdsourced homework help balloons to 350M users

The Covid-19 pandemic has led to a major upswing in virtual learning — where some schools have gone (and stayed) remote, and others have incorporated significantly stronger online components, in order to help communities maintain more social distancing. That has in turn led to a surge in the usage of tools to help home learners do their work better, and today, one of them is announcing a growth round that speaks to the opportunity in that market.

Brainly, a startup from Poland that has built a popular network for students and their parents to engage with each other for advice and help with homework questions, has raised $80 million, a series D that it will be using both to continue building out the tools that it offers to students as well as to hone in on expansion in some key emerging markets such as Indonesia and Brazil. The news comes on the heels of dramatic growth for the company, which has seen its user base grow from 150 million users in 2019 to 350 million today.

The funding is being led by previous backer Learn Capital, with past investors Prosus Ventures, Runa Capital, MantaRay, and General Catalyst Partners also participating. The company has now raised some $150 million and while it’s not disclosing valuation, CEO and co-founder Michał Borkowski confirmed it is “definitely” an upround for the company. For more context, Pitchbook estimates that the company was valued at $180 million in its last round, a Series C of $30 million in 2019.

That C round was raised specifically to help Brainly grow in the U.S. It currently has some 30 million users in that market, and it happens to be the only one in which Brainly is monetising users. Everywhere else, Brainly is currently free to use. (In the U.S. there are also some formidable competitors, like Chegg, which has strong traction in the market of helping students with homework.)

“Brainly has become one of the world’s largest learning communities, achieving significant organic growth in over 35 countries,” said Vinit Sukhija, Partner at Learn Capital, in a statement.

Even before the Covid-19 pandemic, Brainly was finding an audience with students — primarily those aged 13-19, said Borkowski — who were turning to the service to connect with people who could help them with homework when they found themselves at an impasse with, say, a math problem or getting to grips with the sequence of events that led to the revolutions of 1848. The platform is open-ended and is a little like a Quora for homework, in that people can find and answer questions they are interested in, as well as ask questions themselves.

That platform, however, took on a whole new dimension of importance with the shift to virtual learning, Borkowski said.

“In the western world, online education wasn’t a big investment area [pre-Covid] and that has changed a lot, with huge adoption by students, parents and teachers,” he said. “But that big transition, switching from offline to online, has left kids struggling because teachers have so much more to do, so they can’t engage in the same way.”

So with “homework” becoming “all work”, that has effectively led to needing more help than ever with home studies. And while many parents have tried to get more involved to make up the difference, “having parents as teachers has been hard,” he added. They may have been taught differently from how their kids are learning, or they don’t remember or know answers.

One thing that Brainly started to see, he said, was that with the pandemic more parents started using the app alongside students, either to work out answers together or to get the help themselves before helping their kids, with a number of these being from parents of kids younger than 13. He said that 15-20% of all new registrations currently are coming from parents.

Brainly up to now has been mainly focused on how to build out more tools for the students — and now parents — that use it, and has so far been about organic growth for those communities.

However, there is clearly scope to expand that to more educational stakeholders to better organise what kind of questions are answered and how. Borkowski said that the company has indeed been approached by educators, those building curriculums and others so that answers might tie in better with the kinds of questions that they are most likely to ask of students, although for now the company “wants to keep the focus on students and parents getting stuck.”

In terms of future products, Brainly is looking at ways of bringing in more tutoring, video and AI into the mix. The AI aspect is very interesting and will in fact tie in to wider curriculum coverage based on more localised needs. For example, if you ask for help with a particular kind of quadratic equation technique, you can then be served lots of same practice questions to help better learn and apply what you’ve just been learning, and you might even then get suggested related topics that will appear alongside that in a wider mathematics examination. And, you might be offered the chance to meet with a tutor for further help.

Tutoring, he said, is something that Brainly has already been quietly piloting and has run some 150,000 sessions to date. Having such a large user base, Borkowski said, helps the startup run services at scale while still effectively keeping them in test mode.

“It will be about looking at what students are studying and how to map that to the curriculum in the country, and what we can do to help with that.” Borkowski said. “But it will require a heavy lift and and machine learning to pinpoint students” for it to work properly, which is one reason it has yet to roll it out more comprehensively, he added.

Tutoring and more personalization are not the only areas where Brainly is actively testing out new services. The company is also creating more space for adding in video to demonstrate different techniques (which I suspect is especially good for something like mathematics, but equally helpful for, say, an art technique).

There are “thousands per week” being added already, but as with tutoring “that, for us, is a testing stage,” added Borkowski. There should be more coming in Q1 about new products, he said.

#articles, #artificial-intelligence, #brainly, #brazil, #e-commerce, #education, #europe, #funding, #gamification, #general-catalyst, #general-catalyst-partners, #homework, #indonesia, #machine-learning, #online-education, #poland, #prosus-ventures, #quora, #runa-capital, #subscription-services, #tc, #united-states

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How will coronavirus change the world? — Parlia launches to help you find out

Is Greta Thunberg a hypocrite?” Google that phrase and you will get thousands of results. It just goes to show that, to a large extent, the “Q&A” model is broken on the internet. Where once Yahoo Answers and Quora were considered the bright young things of Web 2.0’s “Read/Write Web”, today there is only the chaos of myriad search results. Let’s face it, many have tried to really crack Q&A (remember “Mahalo”?) but few ever got very far and most became zombie sites.

But look again and you will notice something. A site called Parlia sits at Number 3 on that search result for ‘Is Greta Thunberg a hypocrite’. But Parlia only launched (in stealth mode) in October last year.

So how can this be?

Well, this upstart in the Q&A space has now closed a Pre-seed round of funding from Bloomberg Beta, Tiny VC and others (amount undisclosed).

And as founder, and former journalist, Turi Monthe tells me, the idea here is Parlia will become an “encyclopedia of opinion.”

“We’re a wiki: mapping out all the perspectives on both the breaking stories and controversies of the day, as well as the big evergreen questions: does God exist? Is Messi really better than Ronaldo? The way we’re building is to also help fix today’s polarisation, outrage and information silo-ing,” he tells me.

While most Q&A sites are geared around X vs Y, and focused on rational debate, Parlia is trying to map ALL the opinions out there: flat earthers’ included. It’s aiming to be descriptive not prescriptive and is closer to a wiki, unlike Quora where the authors are often selling ‘something’ as well as themselves as experts.

The site is already on a tear. And also highly appropriate for this era.

Right now top subjects include “How to stay healthy during quarantine at home?” or “What are the effects of spending long periods in coronavirus isolation?” or “Will the coronavirus crisis bring society together?” The list goes on. Users see the arguments calmly, dispassionately laid out, alongside counter-arguments and all the other arguments and positions.

Says Munthe: “In 2016, I realized the age of political consensus was over. I watched as Britain spilt maybe a trillion words of argument in the build-up to the Brexit Referendum and thought: there are no more than a half-dozen reasons why people will vote either way.”

He realized that if there’s a finite number of arguments around something as huge and divisive as Brexit, then this would be true for everything. Thus, you could theoretically map the arguments around Gun Control, Abortion, responses to the Coronavirus, the threat of AI, and pretty much everything.

So why would anyone want to do that? It’s, of course, a good thing in itself and would help people understand what they think as well as help them understand how the rest of the world thinks.

Luckily, there is also a business model. It will potentially carry ads, sponsorships, membership, user donations. Another is data. If they get it right, they will have surfaced foundational information about the very ways we think.

Munthe thinks all the users will come through Search. “The media opportunity, we think, is 100M+ pageviews/month,” he says.

Munthe’s cofounder is J. Paul Neeley, former Professor of the Royal College of Art, and a Service Designer who’s worked with Unilever and the UK’s Cabinet Office. Munthe himself has been exploring the systemic issues of the media ecosystem for some time. From founding a small magazine in Lebanon, reporting in Iraq in 2003, then starting and exiting Demotix, to launching North Base Media (a media-focused VC).

The temptation, of course, is to allow bias to creep in return for commercial deals. But, says Menthe: “We will never work with political parties, and we will set up our own ethics advisory board. But that understanding should be of value to market researchers and institutions everywhere.”

So now you can find out how coronavirus will change the world?

#biology, #cofounder, #coronavirus, #demotix, #designer, #europe, #google, #iraq, #journalist, #lebanon, #linguistics, #messi, #quora, #tc, #unilever, #united-kingdom, #yahoo

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