Karen Ong, of MyHappyPlanet and Language International was gracious enough to take time out from running two companies to chat. Her first startup, MyHappyPlanet, is a social networking site with a purpose—it helps its members learn languages by connecting them with native speakers. “An online community for people who are passionate about learning languages,” MyHappyPlanet users utilize video and chat functions to meet other members, learn languages, ask questions, and make friends worldwide. Language International is the logical offshoot of MyHappyPlanet. It’s a site that connects potential language students to hundreds of partner schools around the world (offering over 1,000 language courses), helping students find language schools and study abroad opportunities.
How has the recession impacted MyHappyPlanet?
The recession has certainly impacted us and we’re now focused on monetization versus building a nice community that has great benefits, but one we’re unsure of how to turn into a business that is profitable.
In light of the recent economic downturn we’ve also decided to shift our focus from building the community that My Happy Planet is into building a business that has serious monetization potential. What I mean by that, specifically, we’ve introduced a new website called LanguageInternational.com, which helps people find study abroad programs. What we’ve learned from our members at MyHappyPlanet is that a lot of them are learning languages on the site because eventually they want to go study abroad. Understanding the behavior and motivations of our users enabled us to spot this golden opportunity of actually helping them find study abroad programs and generating commission revenues from the schools each time we do send students.
Has the recession impacted how you plan to spend or raise capital?
At the time the economic recession hit, I didn’t want to raise money at that time. Instead of doing that, I did two things. One was pull back on our burn rate to extend our runway further, and we also switched our business model to focus on monetization.
Is the startup world’s focus on monetization a permanent shift? Or is this a temporary reaction to the recession?
We’ve seen cycles before. During the dotcom bubble of the 2000s, everyone was, “Oh, let’s do a startup! As long as it has ‘dot com’ at the end of its name, it’ll be fine and will be valued insanely high by the market even without a solid business model.”
But soon after that came the burst of the bubble, and we started seeing a shift again and investors said, “You have to prove your business model first.” Once the market started improving, somehow people started forgetting about that again. And with the rise of web 2.0 and all the social networking phenomena, suddenly everyone was into building a community… and worrying about monetizing later. Now, it’s shifting again back to monetization. Will it be permanent? There will be cycles certainly, but the question of how you’re going to make money always needs to be answered.
Do you feel like your business is in a position of strength to weather the recession because of your international focus?
I would say yes because we’re globally hedged. If the U.S. economy is extremely poor, that’s in fact great, because all of the English learners who want to come to the U.S. will find it a lot cheaper… But the problem we’re seeing now, though, is that it’s not just a U.S. recession but something that’s widespread globally. You see this even with my conversations with languages schools that we work with—they’re certainly seeing an impact this year. Their business is down this year as opposed to last year.
The good thing about down markets like this is that it definitely weeds out competition. A year-and-a- half ago when we started working on MyHappyPlanet (when the market was still good), we were seeing new language-related startups come up every few months. It was really crazy. Now that the market’s bad and it’s a lot tougher to raise financing, the bar to start a new company is a lot higher. I certainly expect competition to be a lot less fierce.
What do you hope to see in the future?
I hope that the economy certainly turns around for the benefit of everyone. Even in difficult times like this, there are still tons of opportunities. In some sense, I think it is good for the startup scene because it weeds out companies that probably shouldn’t even have been started in the first place. And, secondly, it really imposes more discipline for companies to start thinking about the economics of their business a lot earlier than they did in good times.
About Karen Ong
Her passion for languages and different cultures led her to start LanguageInternational.com, a site for finding and comparing language courses, and MyHappyPlanet.com, a social media site for language learning and cultural exchange.
LanguageInternational.com and MyHappyPlanet.com are a continuation of Karen's interest in building global businesses. Prior to MyHappyPlanet.com, Karen led the turnaround of Olay's skin care and Clairol's hair care businesses in Southeast Asia, Australasia, and India. She also worked in a family business, responsible for sales and product outsourcing to China.
Karen is a language and travel enthusiast, speaks 6 languages and has traveled to over 100 cities in 6 continents. She is a member of NAFSA: Association of International Educators, an organization promoting international education and providing professional development opportunities to the international education field.
She also holds an MBA degree from Harvard Business School where she received the prestigious Robert F. Jasse Award honoring the student with the most outstanding entrepreneurship and leadership skills.
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