Yuval Kaminka was faced with a difficult choice. The Israeli entrepreneur had built a successful music learning app called JoyTunes, and he found that it was particularly beloved by professional music teachers. In the span of months, "we saw a vibrant community of teachers revolving around the apps," he says. All the metrics were growing: retention, engagement, number of student profiles per teacher, and so on. "All these figures really blew up. We saw it was really making a difference."
The accounts teachers were setting up for students—who use the app to gamify music learning—comprised a very significant part of JoyTunes’s revenue. Every time a teacher set up an account, either for themselves or their students, they paid either $10 a month or $60 per year. Power users wound up paying as much as $1,000 a month. Kaminka says that about 40% of his profits came from music teachers.
This might seem like the dream scenario: a core of users who love and pay for your service to support their professional aspirations. But as Kaminka began to talk to more teachers—not just his users, but the six teachers he employs on his own staff—he began to wonder about the wisdom of his pricing model. "Music teachers are the gatekeepers to everything that’s happening in music education," he says. "They’re a natural partner." And as wonderful as that revenue was, he wondered whether demanding payments from these natural partners was actually limiting the long-term potential of his business (even in the scenario that students were paying teachers for their access).
Fortunately, Kaminka lined up investors who agreed with his new vision for the company. Last week, JoyTunes announced a $5 million Series A round, along with the fact that it would no longer be charging registered teachers and their students for the use of the app. When he first told the news to one of his biggest users, "she burst into tears" with happiness, says Kaminka.
Sacrificing 40% of your profits? It’s certainly a leap of faith. But Kaminka—and his investors—feel that to do otherwise would be to miss out on a big opportunity. "This technological trend happening now in music education means for me that I can be dominant here. Someone will take over and be the standard, and that’s the opportunity for JoyTunes," says Kaminka. It’s not merely a question of grabbing the most market share, either, he suggests. He thinks that by making JoyTunes more broadly accessible, he can actually grow the market of digital music learning in its entirety.
"There’s a parallel in language learning," he says. "Many more people are learning Italian, more than there were before, because of things like Rosetta Stone and Duolingo." He admits that not all of these people will become fluent speakers. But if ever there were a category that welcomed more casual learners, it’s music education.
"It’s a ‘Let’s work with them’ approach," he says. "We want to remove anything that blocks adoption. Let’s become true partners with the teachers to introduce technology into music education."
Kaminka points out that he’s still charging other users, the ones who aren’t teachers or students, or former students who are now learning on their own. "My knees are still shaking from this," admits Kaminka of the decision to forgo all that money. But new possibilities await: "We'll understand our customers' needs better over time," he says, "and be able to deliver on the magic of turning everyday play into musical performances."