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Find here the China paradigm episode 16. Learn more about Matthew Spriegel’s story in China and find all the details and additional links below.

Full transcript below:

Matthieu David: Hello, everyone. I am Matthew David, the founder of Daxue consulting and this China podcast, China Paradigm, and today I’m very happy to welcome on this new episode of this China marketing podcast, Matthew Spriegel.

You are the founder, co-founder of an app called Atiom. It’s a mobile-based app focused on employee training in China, communication, and team building. You founded this company two years ago, with your two co-founders, if I’m correct. You have been in China for a while now, and you have been overseas for more than eight years. That’s what you’re profile is saying, but maybe it’s not recently updated.

You are going to tell me if I’m right. You have recently entered the very famous start-up incubator in China, China accelerator, which is for those who don’t know, a bit of the combinator for overseas entrepreneurs in China and again, I’d be happy to know if you agree with this introduction of China accelerator. So, Atiom is providing employee training in China, communications, and team building, and I discovered your solution through a trip we made together with EO, entrepreneur organization. At that time, we were about; I think you’re still part. I don’t know; you’re going to tell us about that or the other accelerator. I used to be part of it, and I really have a very good memory of this trip to Malaysia, and also all the training we got. That would be part of my question and what you got us as training from you as well. Thanks for being with us Matthew today and happy to know is there anything you want to correct as of the intro?

Mathew Spriegel: That’s it.

Matthieu David: Okay, good, thanks. So the first question is about you, your solution, Atiom. When did your website, we went online to know more about what you do? I’m trying to understand. Your solution is providing the software, and then your clients are inputting the training. Could you tell us more about your solution?

Mathew Spriegel:            Yeah, that’s a very good question, Matthieu. The platform is our core business, so it’s a B2B, and our B2B2B, license business model. Originally we’re intended to be a pure Sas. Right now it’s very difficult when you’re just starting to become pure SAS model. So we have incorporated some more professional services, including content. I would work with a number of different partners that help us deliver face to face employee training in China and depending on the needs of the client, whether it be service standards for hospitality or perhaps financial services for a company like Porsche, we’ll bring in the experts or work with consultants to help us develop that content to make sure that we’re delivering the best quality for the end user, particular to that.

Matthieu David:               I’d like to go back afterward, understanding a bit more about the size of the company later. We know we always begin with this question to give an understanding of where you are at now in terms of development. You can tell us about a number of clients, sizes of teams, revenues in 2018.

Mathew Spriegel:            Half of the team is in the development side, and then we have other team members focusing on sales. We have someone that’s particularly focused on data too. We’re really collecting a lot of good data. We’re trying to make sense of it all. That’s a new, a new hire for us. In terms of clientele, we were really lucky in the early stages. We got two big hotel brands when we first started within about six weeks of coding. So we kind of just skipped the Beta stage and went right into selling the product. It wasn’t a perfect product, but it worked well for them, and that gave us some, some early traction in the hospitality space. Since then we’ve been able to bring on. Currently, we have 11 paying clients in retail, in hospitality, automotive, and also a big company in facility management.

Matthieu David:               I see. Talking about what you were saying first is that providing a solution itself wasn’t sufficient, so you added recently providing the training itself, the service of actually designing the training. Could you tell us more about the change you promoted and how you have acquired this change if I understood correctly about the channeling itself? Because it seems to be very different to provide the content of the training, than just providing the platform.

Mathew Spriegel:            True, so as I said, to provide the platform was quite difficult at the beginning because we realized that clients weren’t necessarily equipped to build up the content necessary or to implement the platform themselves, in order to deliver a good experience for their end users or their trainees in this case. So what we started noticing with the clients is yeah, they were producing content, but the format was quite sloppy or poorly formulated. So we proactively went to the clients, said hey, we think we can improve your end-user experience by taking your raw training materials and helping you convert them into the platform. Although we’ve just, it’s a low tech platform and although we’ve designed it so that anybody can, on the teams, can drag and drop files or create questions and answers or present, what have you. We decided that it was, for someone of the clients that have a low headcount and not enough resources to upload content and create it for themselves. We help assist with that.

Matthieu David:               I see. You started with F&B and hospitality. I feel that this industry, the employee training in China, may be more down to earth like how to serve a client, how to say hello and so on. Wasn’t your idea that this industry would be easier for them to use the platform by themselves because the training may not be as complicated to train someone on finance or on consulting or on something else. What was the idea initially?

Mathew Spriegel:            The idea for F&B and hospitality at first?

Matthieu David:               At first, yes.

Mathew Spriegel:            So to be completely upfront the platform, originally the idea came out of the health care industry, and so after we started to realize that to get some traction in the market, it would be very difficult to start with such a complex industry. We had a decent network within food and beverage, and hospitality and the business, the industry itself hospitality’s freaking is fragmented because of the different ownership and management structures through all the different big brands, it was quite easy to get them signed, and they could pay. We didn’t have things like compliance or the medical teams or big finance teams to navigate.

So it was much easier to get some traction to the industries. Also for the hotels that we were servicing, it was a very clear pain point for them to train on that platform because a lot of the employee training in China happens in the classroom and only in the classroom. As we all mostly know most things that are learned in the classroom by day two or by day three, almost everything’s forgotten. So with our platform, with the continuous training and the microlearning small chunks, it’s quite easy for them to absorb what they’re supposed to be learning, especially when it comes to the very black and white service standards for example.

Matthieu David:               The other one thing I wanted to dig in a bit better a bit more is how do you create those gamification patterns? How do you create a stickiness through your platform? Now maybe from the content, but initially I understand that the platform which should create stickiness and the gamification.

Mathew Spriegel:            Okay, that’s a good question. We’re actually a little bit more careful about how when we use gamification, because sometimes when people hear gamification, they think, shoot ’em up or these types of like real gamey and games and our gamification really are quite simple. It entails leaderboards. We have different team competitions. There’s a point system. So just like in China you have Wechat steps or in the West where they have like a Fitbit walking steps competition every day with your friends. We’ve incorporated some of those elements in the platform. You also have badges like virtual prizes you could earn. So really it’s just we just overlaid a points and team system over overlaid over daily activity and frequency for each of the individuals and teams and that really helps drive a lot of the daily activity.

Matthieu David:               Okay, I don’t know if you would like to use this word game, but which tool is doing best in terms of retention of employees training in China?

Mathew Spriegel:            Yeah, I would say it’s mostly around the leaderboards. It’s cool within a hotel to see let’s say the head of finance competing with the assistant housekeeping manager on the leader boards. You can see that they’re quite competitive throwers, maybe not number one, two or three and perhaps they’ve never trained before together or might not even know each other. But on our platform, they’re able to engage with one another, and it does help build some team camaraderie. We try to encourage healthy competition, make sure that they’re not getting too vicious or trying to cheat the system to gain more points. Within that as well, each of the teams that have a champion, which also helps, it really helps drive the engagement because then they had a chance to, during their daily huddles or their weekly meetings, they can help encourage their teams and their colleagues to use the platform to train a little bit more.

Matthieu David:               I see, and so on the initial stage, the content was created by value client, but now you are creating already the content?

Mathew Spriegel:            Currently, our new focus is actually helping them with the content creation when they start. So we’ll create enough content for their teams to train for, say, two or three months and then we try to take off the training wheels, and we give them the tools and what they need to develop their employee training in China by themselves. Then one of the reasons that we’ve … That’s not to say that for some clients we do continuously release new training workshops in China or module every month. It just depends on the need. But for the general client we try to give them the content they need to start so that they can focus on the team change, actually doing training on a new system because if they’re trying to build a new habit within the teams and they’re also trying to manage the content, and they’re also trying to implement it can be quite a challenge. It can be a stretch in terms of their focus because a lot of the people that we’re working with, they already have a full agenda of items every day. So we really try to make it as easy as possible for them to get started.

The turnaround time is quite, if the client has PPTs or different, like let’s say the employee handbook or HR handbook, if those types of things are already prepared, it’s very helpful in the turnaround time. We can usually convert all of those depending on the number of projects where we can usually convert the content in about a week, and get everything up and running as in within five to 10 working days. So it’s very quick.

Matthieu David:               So you have a team to convert the content that they provide to you within your Chinese training app?

Mathew Spriegel:            Yeah, we have people that focus solely on content, and it comes out if you could decide if you want it in English and Chinese. The system, 95% of our users are using it in a simplified Chinese. We also have traditional and English. It’s actually quite easy for the future when we want to grow the business. We will be able to add new languages and set up to add a new language in just a few days.

Matthieu David:               Talking about China and going overseas. You were studying in China, and as we know, China is very specific. When we talk about technologies, lot’s of We Chat, mobile first and mini app and mini program, progressive app. What’s your feedback on this? Because you develop an app in China, right? I don’t know if it’s IOS and Android and both. It may be both, but you develop an app. Do you already have a mini program for this?

Mathew Spriegel:            Good questions. Yeah, we have an IOS and Android Chinese training app. It’s developed simultaneously, and we do not have a mini program. There’s a couple of different reasons. The main one has been the limitations of the mini program. We are considering developing one in the future, specifically for China. But by developing our standard Chinese training app, you can also create something that’s much more secure for the client. As our platform is encrypted and you have things like name stash. If someone was to take a screenshot of sensitive information and the information would follow them.

Yeah, I think it comes down really to when people go to our Chinese training APP, we want them to be solely focused on the training. I think the big objection for me against We Chat; We Chat enabled training is that by the time that someone gets onto the program to learn about something with their job, they probably checked 15 different group chats. They’ve looked at moments, which is the social, as you notice the social media feed on We Chat and by the time that they’ve actually got to the training, they may have forgotten why they were actually on We Chat. So when they go into our Chinese training app, we want them to really be focused only on helping them improve themselves from a training capacity.

Matthieu David:               I totally believe an app for employee training in China makes a lot of sense. My first business was sitting kid boxes to actually explain sitting style, and I had to hire salespeople in my shop to sell the product. They were coming from sometimes provinces where they had never seen any French restaurant or gotten into a luxury car and so on. They didn’t know how to talk about that, and that was what we were selling. I felt that I wanted to have an app or something to actually feed the brain with what it is a French restaurant, what it is to drive a Ferrari for 15 minutes to experience it and so on. What are the first things, the first elements that your Chinese training app? App is solving for your clients? Is its presentation skills, is it understanding the values of the company and what the company’s doing? What are the first elements you are solving for a client?

Mathew Spriegel:            That’s a great question. I probably should mention where the idea actually came from. So I was in China working on the client side of a big multinational company, and I had to sit through, she’d say had to, there were some enjoyable elements, but a lot of it was very boring. It was 10 hours a day for 10 days in a row of sales training. After about one hour every day, I looked around the room, and no one was paying attention. The training manager looked completely exhausted from traveling all around the country conducting this employee training in China. He or she, there were two training managers, were just reading word for word off of the PPT slides. So I thought there must be a better way to do this. So the initial idea comes from sales training, and that was around product training, sales skills. It was around the key competitors. It was around pricing and understanding your clients. So yeah, for where the idea was born was around a lot of sales training. However, right now with hotels, we’re focused a lot on service standards, and with let’s say with retail, we can start as basic as an employee handbook. So just think that the things that are the most important for a company to know, like an employee handbook or people don’t notice.

So, we try to find content that applied to as many people within the organization as possible. So we do look at service standards or brand knowledge or again, an HR handbook. Because most of the time, people will receive an HR handbook or employee handbook. It’s extremely important for them to do their job in a compliant way, in the right way, and for them to help them understand how to apply for leave or what the gift policies are and things like that. But most people will receive the book, and then they put it in their desk drawer.

They might reference it two or three times over the course of their career, and that’s it. But actually, this is where a lot of the most important company information live, and it’s really important that it doesn’t … It’s really important that they learn it even if it does take two or three months. That’s the example I like to give in terms of where to start with a company.

It’s something like the HR handbook or the onboarding employee guide. So like the do’s and don’ts and the top 10 things or the top 10 people to know about your company. Things that are going to help people and not be learning by too many mistakes in the beginning. Of course, you’re going to make mistakes, but I think it’s better to let the teams feel comfortable to start work and also the managers to feel comfortable to let their new people start work. That’s the main goal.

Matthieu David:               Do you have a specific format, let’s say it’s five minutes, 10 minutes, 15 minutes, 20 minutes training every day, five days in a row? Do you have patterns of training people? Especially let’s take the example of the employee handbook, which is a very important document in China on top of the Labor contracts.

Mathew Spriegel:            So it’s really important to note that we focus on five to 10 minutes of training every day. So the term is on microlearning, where you can just think of small chunks of content that are delivered to the trainee every day, and each trainee is going to receive different content depending on when they joined the company and how quickly they’re going to the content. It’s very much learned at your own pace. In terms of format, the platform supports video, picture, texts, and audio. But for something like the employee handbook, what we’d probably do is take, we’d break up each of the chapters into one or two different modules, and then they would absorb that through PDF reading and perhaps some multiple choice question quizzes. You can also attach supplementary resources. So if the employee wanted to dive deeper into a certain section, then they can maybe watch a video on that or read a case study that supports the learning in that part of the employee handbook or that chapter.

Matthieu David:               Okay, I’d like to understand more how you started, and you have two other co-founders. We looked at it a bit on LinkedIn. I understood that one is in Japan, and you and another co-founder are in Shanghai. Could you tell us more about the story behind it, how you started together, and what are the different roles you have?

Mathew Spriegel:            Sure, so yes, we have one co-founder in Tokyo. He joined us a little bit later, but my original co-founder, Devin Licastro, who’s our CTO. We met in south China almost 10 years ago. We were both teachings at a school there. We’d actually had a couple of other projects together. One was an English learning platform. We tried to start a T-shirt business. Also, I was doing some different quality control projects. There’s a lot of things that we were kind of experimented with and tried for quite some time. Then I went into the healthcare business for five years, and we obviously kept in touch. Devin became a very good friend and yeah, two and a half years ago after chatting about this idea a bit for a couple of years prior, I said, ‘hey I’m kind of getting sick of my job in the corporate world. Do you want to start this thing?’ The timing couldn’t be better. We’re just finishing up a little application project.

I think it was a personal project actually for just building a game. So we started coding, and everything was created a lot mostly through We Chat, ironically enough. Like voice messages and mockups and just very quick iterations on the product, reiterations I should say. That’s when we met. And then we brought on Holly about a year after we started. So just to go over the basics, I’m mostly responsible for business development, the finance partnerships. Holy is responsible for our marketing and our account. She’d say client solutions. So basically as soon as I sign a new client on, I’ll pass over to Holy who’ll take care of the implementation and any kind of followup services that are required to make sure that the client understands that the program works and implementation run smoothly. Then Devin of course, is responsible for managing the development team and he’s a full stack developer, but his main focus is on the front end and the app development, how to smartly develop an app in China.

Matthieu David:               I still have a question about China Accelerator. Why did you join a start up incubator in China and why China Accelerator? Secondly, what is the kind of deal that you have when you entered China Accelerator? I heard before that the kind of deal with the offer could be to offer some offices space for you to grow the business and also they would take some equity or give a loan that actually could be paid back when they find investors for you and own the right money for you. The last thing that they provide to you as I understand is introducing two new investors and supporting you to the next round.

Mathew Spriegel:            That’s a very good question. So we looked at a number of different accelerator programs, different start up incubators in China, and I actually opened up a previous business entity through another incubation space in China. Well, it wasn’t an incubator. It’s a shared office space that supports startups for multinationals that want to enter into the China market. So we’ve looked at a number of different programs and obviously also part of EO accelerator, which is very much like networking and then learning days and you have accountability groups. It’s a really nice community to be part of as well.

I think the difference with China accelerator is it’s not just the office space they provide. So they give you some money. You also have to give back a little bit in terms of the space that you use here and also the team that they provide. So here you have experts in residence, you have your own analysts. You have the managing partners. You have the weekly check-ins with. You have about one or 200 different mentors that you can tap into that are from the health care industry, they’re from branding, music, food, and beverage and many different industries and walks of life that you can tap into that are considered industry experts. They help you with financial services. They can help you with government relations. They can help you with … Yeah, we’ve brought on a couple of new members since we’ve been here. So they give you access to a number of industry experts or the mentors. As I said, there are things like HR services that help you with meeting some of your hiring needs, they help you with the accounting, and then, of course, you have an OKR system here where every week you have to review OKR’s with the managing partners, which really it puts a lot of pressure, good pressure on your business to hit weekly milestones. So often with the business and startup, you’re making some good deals, you are closing some new clients. It’s going to be very easy to think, okay, we’re growing, we’re on a good trajectory. But here they’re really forcing you to scale your business very quickly, and I think the other difference since we’ve joined the program is all the decisions that you make become data-driven.

So before a lot of our business was built on the network that we had and also just hunches in the market. Assuming the client’s need certain tools, certain products, but now through the start-up incubator in China China Accelerator they really help you qualify a lot of those feelings or hunches that you have about your product and how it fits into the market. I think this is one of the most important elements that we’re getting out of China Accelerator.

Matthieu David:               How long does it last?

Mathew Spriegel:            So, there are a mandatory three months. Once we signed on, we didn’t join the program because it didn’t start until, officially, until last week. I was here a few weeks prior just using the office space, and then once the three months officially program is finished, you have three months optional, where you can still use the space and still plug into the resources. But what’s great is once you go through the program, you’re plugged into the network forever as long as the business lives.

I guess the other thing is you get a lot of different perks for the program as well and like discounts on AWS, on Github, I mean the list goes on for the different perks that we get either for free or at a very deep discount, which is helpful for a lot of the development CRM systems that we use.

Matthieu David:               I feel like companies from very different stages are joining start-up incubators in China and especially China accelerator, some at the beginning with not very secure and business model, not understanding already how to monetize and some have already made like 1 million dollars. I remember I interviewed Sebastian from the boys, you know as well, he enters China Accelerator after a couple of years, three years maybe and he has already raised people. Whereas I saw some entrepreneurs actually in AR or VR, I can’t remember exactly which format we’re using. Is that just started and joined start up incubators in China after a few months it started. Do you confirm the diversity?

Mathew Spriegel:            Yeah, I do. I think when they first started, there was a lot more early stage, but now it’s a blend of companies that have raised a million or several million dollars and all the way over across the board to very early stage, just creating an ideal product is just about finished. No pilot clients even yet., and I think there were probably along the lines of like maybe a little bit more later stage because we have over 10 clients already and we have a full product. For us, it’s more about scalability and getting into enterprise space. But yeah, it actually that kind of wide range of scope in terms of industry and how big the company is and how developed they are. It provides a lot of cross-learning between the organizations, whether it’s like sharing best practices or staying up to date on the latest technology. So, yeah, it’s a very interesting dynamic. They focus mainly on making sure that the companies have, you do buy into the culture here. The guys that, the companies, they bring on match the China accelerator culture.

So in terms of like running lean and not being very extravagant and making sure that there’s a certain kind of passion you had. Most startup founders have very strong, passionate. That’s an important aspect for them. But most of the time being a lean startup and just not burning through cash. I’d say as much as it’s cool to work at a place like we work, it’s very expensive so if you were working at other places, a really expensive office space that might be a little bit of a turnoff for, uh, someone like China Accelerator.

Matthieu David:               At the end of the program, what do you expect? Do you expect that you would have raised a new series of financing? Would you expect to reach a certain level of revenues? What’s your expectation?

Mathew Spriegel:            Yeah, that’s a good question. So the number one goal is to grow our revenue. So the fundraising aspect, although we probably plan to do, big round following this program or around the end of the program that we start the process, our main goal is to really scale the business and do a big revenue. Ideally, we’re in a position where we have enough revenue; we don’t need to raise money. Although it’s still very nice to know that’s a big possibility for us and also that there is a huge network of very qualified investors and VC’s that will know about our business after this program is finished. So at the very least, we’d expected to develop really key relationships within that space so that when the time is right, we can really do a big fundraiser.

Matthieu David:               So, your business is profitable, and I’d like to know more about your pricing model for the SAS, service as a software. How do you price? Is it per user? How is it?

Mathew Spriegel:            First per user and it’s tiered pricing. So usually our cut off for a business will be around 200 users, and then we’d go up to 10,000 users at the moment for different companies. Then obviously the more users they have, the price drops marginally for each of the different tiers. Then on top of the licensing fee, and we do service some clients around content and if they need extra training workshops in China and we also plug into a group of partners that we work with to offer other services like training workshops in China or brand activation, different team building, etc.

Matthieu David:               Okay, so it’s adding up in terms of pricing. I mean this is consulting of tailor-made a budget.

Mathew Spriegel:            Professional services, yeah.

Matthieu David:               Oh yeah, what about the name Atiom. Where did it come from and what your Chinese name?

Mathew Spriegel:            So originally we came with the name ‘xlr train,’ and then the reason we used that name is because of accelerated learning training, and the domain was available. So we just took that as our first name. It was just like an active brainstorm within the office, and then we realized it was difficult for us to spell. Our clients were also struggling with the name like there are too many syllables. That was one of the reasons we changed the name, and then the other one was that we didn’t want to position ourselves only a training company because it’s not just employee training in China, it’s really focused on employee engagement, the team building, developing a learning culture, etc. So we did a very long name brainstorm, at least long in terms of the startup growth and we came to the name Atiom means the coming together of spirit and matter. That’s one of the meanings. We thought that this is like the coming together of the managers and their teams and developing more touch points between the different colleagues within an organization. The Chinese name is Atiom. It means love to solve problems. So, it’s a little bit of romantic transliteration, but it works. The feedback from the clients is quite nice so far.

Matthieu David:               Good, so what is the future development in China for you? What do you see as the future development for you and the industry speaking of the employee training in China?

Mathew Spriegel:            For us, we want to, I mean, we want to keep trying to develop more partnerships that can help enhance the service that we provide to the clients. Obviously, within the product we’re developing more events, learning modes where it’s easy, the content is more easily adaptable to the platform. There’s definitely not a one size fits all. We want to make that flexible for the client. So, it’s not about creating everything but giving them the feeling that they can use anything on our platform to deliver training workshops in China.

In terms of the industry, HR industry, think that we will never replace face to face training in especially in industries like hospitality that hands-on training and the development of your personalization is extremely important. We’re really just trying to enhance and scale up those different training initiatives and make it so that if you do have one or two days training time with different teams that it’s really used efficiently and it’s colorful, it’s fruitful for the training, and also the manager. We want to make sure that they’re focused on things like role play and as I said personalization, for sales guys will be objection handling. For the industry, I think that we are moving online. Over 95% of the world, and China, it’s even higher on smartphones every day and most of the day. So, we want to make sure that if they’re going to be on their phone, they’re at least doing the right things that can help them grow as individuals or teams on the phone. Yeah, I think we’ll see a lot more training companies and platforms popping up that have different tools, online tools.

For us, the main goal is for us to provide continuous training workshops in China. So, we don’t want them to be on the phone doing training all day. They need to go back to their jobs or go back to the face to face training. But it’s a tool to make things continuous. It’s really; I think these types of technologies are about creating more frequency of training and touch points more than the volume of the trainer.

Matthieu David:               I see. We are close to the end of the discussion. I wanted to share with you a bit of a surprise that you are not using some very fashionable words like chatbots, AI, deep learning. You’re telling, I believe basically that would be a fusion between technology and face to face or an app to remind the training, to remind the knowledge and the face to face training and to work together. Is it a belief you have that actually, or is it a decision you made not to communicate on those work like AI, chatbots, and not developing those tools?

Mathew Spriegel:            Yes, that’s a good question. The chatbots are not off our radar. AI is also not off our radar. It’s things that we’re always brainstorming, and it’s part of our development brainstorm and perhaps part of our roadmap. But for now, the guys that we’re doing it from the client’s side, you know, as soon as you start mentioning things like AI or deep learning it can be very intimidating for them.

So, we really want to be; our goal is to be an approachable technology platform to help scale existing employee training in China. So in the future, we’ll develop these tools as the clients demand that, but we really want to make this accessible for even an intern to use within their organization or an assistant manager to be able to create and push companies as well as learn.

Matthieu David:               Thank you very much, Matthew, the founder of Atiom, this app that helps Chinese employers to improve employee training in China. I hope you enjoyed this episode of China Paradigm, where we interview entrepreneurs in China.

Mathew Spriegel:            It was great. Thank you so much for having me in your China vlog.

China paradigm is a China business podcast sponsored by Daxue Consulting where we interview successful entrepreneurs about their businesses in China. You can access all available episodes from the China paradigm Youtube page.