[MUSIC] And at that point, did you have to raise a little bit of capital in order to bring in development talent? >> Yeah, so one thing that was great was schools do their budgets around April in each year. So what we worked out is actually if we could figure out a few schools that would buy into the product before we really built it in earnest. >> [LAUGH] >> They would actually sign a contract for the following year and pay us up front with cash. Now cash for schools is no problem because they already have their cash allocated in April. So paying us instead of August, September time was no problem. And I think we had something like 80, sort of, subscriptions that we managed to kind of sell ahead of time, and we were able to bring that money into the bank account, or most of it at least, ahead of that point. So that was a brilliant bonus for the company. >> And then you use that cash to fund new developers who built the product, that would then be delivered in September? >> Exactly, but we did find out at that point, we sort of researching the best way to fund it. We found out about SCIS funding, which is a brilliant UK tax incentive. Which basically means that people can fund your business with very, very little risk. And so we took the decision at that point to take our SCIS round of 150,000 Pounds that would essentially allow us to hire more teachers to go into more schools and basically get more customers on board. Up until that point, we only really had the three founding teachers, who were doing banging on doors as well. But this just meant we could go, you know, 150 times or, sorry, 150% quicker, in terms of customer acquisition. So we felt it was a worthwhile thing to do. The other nice thing, as well, was it gained, it was very good from a community standpoint. So we did, we raised that money through crowdfunding. And this was a great way to go out to our community of teachers, actually, who'd already signed up and said, hey, would you like to put ten Pounds into the pot and be a part of this? So we very much used it as a PR exercise and to get our name out there. And funnily enough, for the platform that we use, we actually had the most hits of pitch that year. So clearly the story of Pubble seem to appeal to people on a sort of feel good, sort of societal level anyway, so that was also great. >> Yeah, and then you took that money, developed the digital backbone of the company. You grew it some more, knocked on some more doors, did some more workshops, got some more kids writing online, and now you've decided to raise a slightly bigger round. >> Yeah. >> Why now? Well, what the, building the sort of next version of the platform allowed us to really understand how people were using Pubble, and what we found is that although people loved the fact that it shared writing and they could comment and interact with that work, what we found out is that people really wanted quite a lot more. If you think about the whole sort of literacy teaching cycle, there's a sort of lesson preparation part. Then, there's the kind of delivery of the lesson. And then, you might share that work and get feedback. And then, at the back end, there's the sort of assessment of that work. And that all kind of feeds into a literacy sort of teaching cycle. And what we've found was that there were a number of, although we were addressing that sort of third point of the sharing and the celebrating the work and getting feedback, customers were really underserved in the other areas of the product. And so when we started to break down the complexities and what it would take to actually build solutions for these areas, we realized that they were going to be a significant amount more work. Simple things like if you think about the stakeholders involved in a school, you've got sort of the head teacher who wants the dashboard to see who's using what how. You've got each of the teachers managing a class. Each of the children have their own login and there are a lot of safety and data protection issues around that. They also need to connect with the parents because parents are the ones that are actually wanting to see a lot of the work and engage and things like that. And so you can see very quickly that the back end of a tool that really goes into a lot more depth Is far more complicated. And so we took the decision at that point that it was time to raise more money in order to build out that platform and, again, accelerate growth. One thing that was interesting, though, was because we had hired these five additional teachers with our first round of funding, revenue actually increased quite significantly. We found that we were actually able to slowly begin to add really good developers to the team without having closed the second funding round. And so this was very interesting when we were having conversations with investors, because at the beginning they were a little bit skeptical saying, okay, it sounds good but it's a little bit risky here, you probably don't have the tech expertise to build what you have yet and we acknowledge that this funding is for that. However, maybe talk to me in a few months. Because we were able to make a really good start on building that platform before we ever even took that funding for the second round on board, we were in a much better position with investors to be able to say, hey, look at the milestones we've achieved. We've already got to here in the product rollback, and when we talked, a couple of months later came back and said, we've already hired a couple of people, based on customer revenues and this is what we've developed. And that made a really compelling case for investors who, I think if we hadn't been able to do that, it would've been far harder to close that round. >> Yeah, I can imagine. >> Yeah. >> So Pubble has now grown quite substantially. How many kids have their writing online today? >> So we have about 50,000 children that are engaged through the platform, based on the number of classes that we have that are sort of in paying subscriptions. So we've already shared so far, I mean, just this year over 34,000 pieces of writing. So it's literally growing by hundreds if not thousands every week. >> And do those pieces of writing appear in the kids' own handwriting? Is it a photo of the piece of paper? Is that what it is? >> Yeah, that's right. That's right, that's right. >> [CROSSTALK] So Grandma can take a look and say, that's my kid? >> Absolutely, and this is the point, right, so the people that are looking at the writing are a mixture of people such as parents, aunts, uncles, cousins, grandparents. They really love seeing what children are doing at school and engaging with that. But we also have the secondary people using it who are the teachers, who are, might search for a piece of writing to as an example in their lessons or maybe they would like to do some peer-to-peer assessment. This is really popular nowadays. They say that children really learn a lot from looking at other children's work and seeing what they did well and what they can do better, and so they'll be interested in leaving comments and engaging as well. >> Mm, very interesting. So you've brought the business this far, partly with customer money, partly with, sort of, angel money. What does it look like as you go forward? Do you think the customers, the schools that is, and your online platform can continue to provide material funding that will cover development costs in advance, or do you see that at some point you have to flip the switch and raise large amounts of external capital? >> It was interesting at the end of this school year because again, we had the scenario where all of the schools were renewing their subscriptions for next year. >> Same issue you'd faced before, right? >> Absolutely. And we were able to take in over a quarter of million Pounds in advance, sort of funding in cash, in order to pay for their subscriptions for this academic year. >> But you were able to do that before the previous year ended. >> Yeah, exactly, so we took some of that in July, a little bit in August and all the rest in September. So, that leads us to a very, very positive cash position for the company. So, even though we're raising that round of funding, and you could look at revenue and costs. When you actually look at cash flow and costs or cash out, that puts us in a very, very good position. >> Much better. >> Now, I think that if we want to go very, very large scale international expansion, there may be some larger additional costs in things like compliance and legal and setting up in other countries that might necessitate some additional financing. And we'll see, we'll cross that bridge when we come to it. >> Fantastic. Well, it's so inspiring to see an entrepreneur tackling a real social problem and doing it in such an innovative way and using digital technology to make it all work. So, John Smith, fantastic to have you with us. I really appreciate your coming, and I look forward to hearing some great updates in the future. >> Great, absolute pleasure, and thank you very much. >> Thank you. [MUSIC]
