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MAKETPLACE: Andres Moreno's Open English Finds Key to Learning English Online in Human Element

First Posted: Jun 24, 2015 05:00 AM EDT
Andres Moreno, Founder & CEO of Open English

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"Marketplace" is a Latin Post feature profile series about Latino entrepreneurs who have successfully turned their ideas into thriving enterprises. From unsung startups to prominent businesses, we spotlight the dynamic men and women who founded them. 

Andres Moreno -- teacher, entrepreneur, and founder and CEO of the burgeoning online English language-learning startup, Open English -- is disrupting how Latin Americans learn English. He's also something of an accidental viral star in Latin America.

"You'll see that our advertising campaign has changed a lot over time," noted Moreno when he spoke with Latin Post about his career and work disrupting the way Latin Americans -- and now through its headquarters in Miami, Latinos in the U.S. -- learn English. Moreno's company, and his personal fame, took off after his first simple but funny TV ads caught fire. "Now they're much more elaborate."

Elaborate isn't the right word to describe Open English. From the company's site and learning platform, to its course structure and core mission of teaching fluency in spoken English, straightforward is the first word that comes to mind.

Similarly, straightforward is the key to the digital teaching platform's consistent track record of students successfully reaching English fluency: include the human element. Along with the digital language learning tools, Open English includes a heavy dose of live interaction with certified ESL teachers online (typically in small groups of three to five students) along with study advisers who follow each student's progress and work one-on-one to keep them on track.

That, and Moreno's ability to communicate his startup's advantages over traditional ESL schools -- both to potential investors and to the Latin American public through its hit commercials -- is what has led Open English over the past several years to acquire its 100,000-and-counting students, a 2,000 person staff, and venture capital funding recently giving the startup a valuation of about $350 million.

The Founder and The Face of Open English

In the early days, Moreno didn't have a lot of resources to produce the company's first TV spots, which were originally broadcast in his native Venezuela. So, he starred in the quirky commercials himself.

"The first ones were these very simple ads. White background, two characters; One character was very proud to be at a traditional school, but always suffering as a result," said Moreno. "And the other character is proudly studying at Open English, and so he's always at home with a piña colada in his hand in a beanbag chair... super comfy."

The concept is not unlike Apple's early 2000's "I'm a Mac and I'm a PC" spots -- except if Steve Jobs personally portrayed the smart slacker.

"I played the character that went to Open English at the time, because we had no money and we needed an actor that was bilingual," said Moreno, noting that he hadn't planned to be the face of his brand. Or for the ad spots to be such a hit.

But that's what happened, and Moreno (on the right, in the beanbag chair) quickly became the subject of the Internet meme machine in Latin America. "That became very much a part of the pop culture in many LatAm countries," remarked Moreno on his viral fame, before quickly turning the subject back to business.

"Fast forward to more recent times... the company was able to raise a lot of money and grow the business through the entire region," said Moreno, speaking in a habitual fast-paced manner that exudes a balance of zeal and pragmatism -- undoubtedly refined during his early days in Silicon Valley, raising funds from hesitant investors, one check at a time.

The Drive to Teach English...

Moreno, now in his early 30s and running the largest online English school in Latin America, was originally born in Venezuela -- but he grew up seemingly everywhere.

"I lived in nine different countries," ranging from Slovenia to Chile before he was college aged, "and traveled to about 20 or so," in his youth, Moreno said, because his father worked for an international organization and the family traveled with him.

Moreno became fluent in English after living in Maryland for a few years, starting around elementary school age. By the time he was ready for college, he decided to go back and live in Venezuela full time (for the first time) and was accepted to a government-sponsored program, training people to work in the oil industry. As such, he studied engineering.

But growing up in so many different countries, language had always been a passion of his. So on a break in his last year at school to visit his parents, he ended up following his passion -- and entrepreneurial instinct -- and started a company called Optimal English.

"It was a precursor to Open English," noted Moreno on the first company he founded, which brought college graduates from the U.S. to Latin America to live and teach English to Latin American executives at Fortune 500 companies.

Optimal English was based on the traditional in-person method of teaching, though, which Moreno quickly discovered was inefficient and expensive.

"It was a model that was hard to scale," he said. "Imagine, you had to go out and hire a number of recently graduated Ivy League university students in the U.S., and take them down to LatAm every time you had a new contract."

Not to mention the high cost of moving the students-turned-instructors to another hemisphere, providing room and board, and supervising those newly minted expats -- all twentysomething kids who just finished college and now find themselves living an adventure on the other side of the world.

"They weren't very efficient with their time," as Moreno diplomatically put it.

... And To Transform How It Is Taught 

Frustrated with the logistics of running Optimal English, inspiration struck Moreno in the early 2000s, and it came in the form of an app we all take for granted these days.

"When I used Skype for the first time, I remember thinking: Wow! Voice over IP is really going to change things," said Moreno. "If we apply this to education, all of a sudden you can get that amazing teacher that's a native English speaker living in the U.S., and you have can a class with that person anywhere in the world.

"Wouldn't it be neat if we could connect that need with that teacher and build a real school around it?" he said. Besides being scalable and much easier than herding a group of 20-year-olds around, it would be a godsend from the student perspective.

"In Latin America, you'll have to pay two to three thousand dollars a year for a brick-and-mortar school," mentioned Moreno. And of course you have to attend in person, which for working adults means regularly hoofing it to class on your off hours. As he would so effectively portray in his commercials later, Moreno saw a way to provide the same in-person benefits at a fraction of the cost, to students anywhere the Internet could reach -- especially sitting at home in a beanbag chair.

It was the perfect time to build an online English school: Broadband Internet was advancing throughout South America, VoIP was taking off, an aspiring middle-class was emerging, and globalization was quickly making fluency in English a real, practical career asset to an increasingly wide range of Latin American -- beyond the boardrooms that Optimal English had catered to.

Once Off the Ground, Open English Takes Flight

Moreno had the idea, the market opportunity, and the entrepreneurial drive, but he didn't have the money. And at the time in Latin America, venture capital wasn't a common investment practice.

In his first attempt at building Open English, said Moreno, "I ended up with 22 developers working out of my small apartment in Venezuela. We did that for seven months." Then he ran out of money, and moved to Silicon Valley in 2007 seeking investors, who were then, as they often are now, reluctant to take a chance on a Latin American technology startup.

According to Moreno, most VCs thought his startup's subscription cost structure was too high and many didn't think advertising on TV would be effective for an online company.

 "I ended up raising the money, one $20,000 check at a time," said Moreno. It took him two years, but he ended up with a couple million dollars, which was enough to fund the platform's development.

And just enough to launch those TV spots, which arguably became the game-changer that led to Open English's recent years of success and expansion. And of course his viral fame, which took on such a life of its own, said Moreno, "that we couldn't change the character."

"Still to this day I'm in the ads, and it's been eight years," he half-groused.

Open English isn't the end point for Moreno, and even as its expanding to Latinos in the U.S. and raising tens of millions of dollars in funding, he's working on a new project called Next University.

Like Open English, Next University is based online, available 24/7, and includes live instructors. But it's focused on teaching a different language.

"It's the first online university in Latin America that's focusing on tech degrees and certification -- how to program, how to code, how to develop apps, etcetera," Moreno explained.

It's basically Open English for learning to speak with computers. And like Moreno's first hit company, Next University is launching in a time and place exploding with potential customers who increasingly realize the value of learning that language. But unlike Open English, Moreno probably won't have trouble finding funding this time.

Still, Moreno's inevitably going to be faced with a tough decision:

Will he star in Next University's commercials?

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