2013.11.26

Japanese startup Smart Education begins global expansion with a new app

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See the original article in Japanese

Education for kids is one of the hottest trends in Silicon Valley. Yet, there is no clear leading player in the global market. The situation is similar in Japan. But one standout app publisher is Smart Education, an educational smartphone app developer that creates applications for kids. The company reached the impressive milestone of five million downloads on 17th November.

After hitting 4.5 million downloads back on October 8th, they added half a million more in the next month as part of a rapid growth spurt. It took the company two years total to hit five million downloads since the its first app Rhythm Book was released in 2011.

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The next step for Smart Education is expansion to overseas markets. To that end they have launched a new app series called Gocco, with the goal of marketing their services abroad. On November 21st, they launched the first app in the series, Gocco Zoo. The app will be globally available on the App Store, but especially directed at the North American market.

To find our more we spoke with Daigo Ikeya, the president of Smart Education, and Kei Otagaki, producer in charge of Gocco. Otagaki previously worked at DeNA, and since 2011, he has been working as a producer and game design advisor at several overseas offices. In May of 2013, he joined Smart Education.

When Otagaki worked in San Francisco, he often visited the home of his coworkers, many of whom have kids. That experience made him start thinking about developing something for kids. Otagaki explained:

I was playing with the idea of developing apps for kids and considered different choices. But I decided to focus on developing something fast. I knew Ikeya and spoke with him about my idea. I realized that I could make what I want as part of Smart Education, so I decided to join the team.

Ikeya talked about that difference between the overseas and Japanese markets:

We hold the lion’s share of educational apps for kids in Japan, but the share by Japanese companies in the global market is only around 5%. We are just number one among this 5%. There are bigger players in the global market. […] We’ve been watching Swedish company, Toca Boca, who recently hit 50 million downloads. Their monthly sales is about 150 million to 200 million yen, about 10 times more than us. The difference of the market size reflects this gap. But this area has not been monopolized yet, and there’s still room to improve contents. We still have so much room to grow. In the Japanese market, we plan to provide a service with high-quality apps and a monthly subscription, building partnerships with powerful content-providers like NHK.

In order to expand globally, they need a competitive product, which they hope Gocco can be. Ootagaki says:

I’ve opened studios at different locations all over the world when I worked at DeNA. At the time, I realized that Japanese craftsmanship and attention to details is really high, and I thought it could be a competitive advantage globally. We’d like to present that through Gocco.

So why did they name the app Gocco? Ootagaki explained:

We had many name ideas, but in the end we decided to name it “Gocco“ after “Gocco-asobi”, meaning ”role-playing" in Japanese. We wanted something that sounds good and stays in people’s mind. When I got positive feedback from my friends in San Francisco, we decided on the name. We have already applied for the trademark in the US.

Their first app “Gocco Zoo” is a zoo- themed drawing app. Kids first select an animal which they can feed in the Care Room, after which the animal will change color. Kids can color the animal whatever color they want, and move to the next room and to color more animals.

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Kids can also take picture of the drawing they made. While there is no function to share on social media, pictures can be saved on the device so that kids or parents can show friends.

He wanted to make the app totally text free, adding:

I put a high importance on UI from the beginning. I carefully considered how kids can navigate the app without confusing them. During this process, I let kids play with the app and observed where they had issues. This really helped me improve the app.

He notes that once a kid-friendly interface is finalized, it doesn’t require much adaptation for overseas markets.

It’s a freemium app, and users can pay for additional animals or drawing tools. In order to keep kids from accidentally buy them, they made the payment process a little complicated, requiring the user has to push the purchase button for more than 3 seconds to process the order. Otagaki says:

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With iOS7, a kids category was added to the app store, and we applied in that category. Apple is currently improving this category, with specific points in their screening process, such as enforcing a clear statement on charging and privacy policies. We have cleared those conditions.

Smart Education has developed another app called Gocco Doodle, another drawing app. Pictures can be published on the internet for other kids to see, sort of like a kindergarten pin board.

Smart Education is planning to release Gocco for other subjects and themes like doctor or fireman. Ootagaki said:

We’d like to provide kids with virtual experiences in real society though playing with the app and expressing themselves creatively.

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They will focus on marketing Gocco in English-speaking countries, first seeing how customers in the US respond. They think that Gocco Zoo could have as many as a half million downloads monthly. Ikeya thinks this figure can even go higher, adding:

When we first released Rhythm Book in Japan, the number of downloads was higher than expected. If we continue to add new apps and make a synergistic effect, that number can go much higher. In Japan, we could increase the number of download this way without other promotions. Toca Boca uses a similar strategy to increase downloads, I think we can establish a similar eco-system.

If we are able to release new apps at constant pace, like twice a quarter or once a month, we can consider implementing a subscription system. Since Apple doesn’t allow game apps to charge users by subscription at present, we cannot implement such a system. But when Gocco builds a reputation, there may be more possibility of starting a subscription system.

Otagaki says that his plan of implementing a subscription system, which has been successful in Japanese market, is following the model of an online platform like Kodomo Mode, increase awareness and cross promotion among apps.

It will be interesting to see how Smart Education can challenge in this emerging educational app space.

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