I Built A $456K/Year Donation-Based Online Course Platform

Maxim Pogulyaev
Founder, HYLS
$38K
revenue/mo
1
Founders
12
Employees
HYLS
from Moscow, Russia
started
$38,000
revenue/mo
1
Founders
12
Employees
4.84M
alexa rank
53K
followers
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I Built A $456K/Year Donation-Based Online Course Platform

Hello! Who are you and what business did you start?

My name is Max. I am the CEO of HYLS, a donation-based online course platform. We use the “pay what you want to model,” which means that you can pay any amount for HYLS online courses on topics on Productivity, Healthy lifestyle, Yoga, Meditation, Digital Detox, Minimalism, and more are coming soon.

Our customers are mainly representatives of the working population, but all ages are welcome to participate. Our average revenue is $40k per month. All in all, we attracted $1M+ of donations from 90K students.

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Our HYLS team

What's your backstory and how did you come up with the idea?

As a teenager, I dreamed of an online store where customers could set their prices. This idea lingered in my head for some time until 2018, when I found how to make it happen.

Make yourself realize with every inch of your body that to make mistakes, to fall, to have weaknesses is okay.

I had a company called POGUMAX (projection technologies) that had been giving me a steady income since 2014, so I had about $50k to bootstrap a new business. While working at POGUMAX and coming into the office every day, I thought I wanted to do something that made a difference in people's lives - by this time I was into meditation, yoga, and a healthy lifestyle.

At the end of 2017, I saw the announcement of yoga training in the Philippines. The training was led by a person with a familiar name - Dada Dharmavedananda, author of the book Travels with the Mystic Master, which I had read a year before. I was not interested in the program itself, as much as its instructor.

Therefore in 2018, my wife Anastasia and I visited Ananda Marga Yoga Wellness Center in the Philippines. The inspiration from communicating with the person from the book was beyond words. Full of excitement, I started writing posts about what was happening, which got 200-300 likes and dozens of reposts. I did not expect such a reaction and realized that my friends were also interested in what we learned about yoga in the Philippines.

So far, I have accumulated 3000+ hours of yoga and meditation. My posts received a lot of engagement, and some asked to make an online course out of it. I wanted as many people as possible to participate in an upcoming course, so I decided to use a donation-based model.

Was it the right decision to develop our platform or should we use other platforms? Now, we have the opportunity to become a marketplace for online courses on the donation model - if it works, it was not in vain.

Take us through the process of designing your first project.

When I described the idea of HYLS in 2018 in my social networks, I received an answer from a developer, who first volunteered for HYLS. In just a month, Alexander put together the first version of a personal diary. We agreed that if we could not make MVP by April 25, participants would use Google sheets. We made it!

i-built-a-456k-year-donation-based-online-course-platform

However, we went negative $15K, so I had to pay it from my pocket.

Then, as a developer Alexander was tweaking the personal diary, we added new requirements and more complicated functionality. There were enough bugs, of course. No bugs, no life!

As the number of participants grew, it became more of a challenge. We released Android / iOS apps on webview - developers on outsourcing helped us build them, but they were far from perfect. Apps were available to registered members, but not designed to attract traffic from the stores.

At the end of 2020, we parted ways with Alexander. Instead, our new CTO, Alexey joined the team and started reworking the backend and then the frontend - now we're in the testing and transition phase. The stability of the system has increased. We plan to develop mobile apps in Flutter or React Native. We will look for more developers to accomplish that.

i-built-a-456k-year-donation-based-online-course-platform
My wife Anastasia, Dada Dharmavedananda - our yoga mentor, me - Max

Describe the process of launching the business.

I made an announcement on my social networks and announced the search for employees to launch the startup - the team was formed of like-minded people, some of whom worked on a volunteer basis. One of our initial volunteers - Nikita now works as CPO of HYLS.

Initially, I made a landing page where I simply collected applications for participation and asked how much people would be willing to pay in the donation format. About 50% of applicants started to take part, and the average donation check was 2 times lower than the promises. The first stream on April 25, 2018, was attended by 100 people, most of whom were friends and acquaintances.

I announced the start date in advance so as not to delay the launch. We indeed worked as a startup with tight deadlines - often tasks and texts were created one day before the group received them. The materials were articles for 5-10 minutes of reading, some of which were accompanied by a video. We received great reviews from the first stream, and this motivated us to move on.

Some of the initial investments to get started:

  • Legal advice: $50

  • Buying a video camera and lighting to record video: $500

  • Advertising in social networking communities: $200

  • Domain, hosting, and landing page development: $300

  • Salaries: $1000

You need to embrace fearlessness. It is better to fail fast and keep going.

In the first month, the startup earned $678 after deducting expenses. In the second month, revenue increased, but the costs, which also increased due to the growing team, could not be paid off. The warm audience of friends and acquaintances, interested in meditation and yoga, burned out quickly. So we started trying advertising to attract more people to the project.

Since launch, what has worked to attract and retain customers?

As soon as the audience got wider in 2018, the advertising ceased to pay off. No matter what it took, we wanted to keep the “pay what you want” model, so that everyone could participate, but the average check was low. Every month we went negative by $1300-2600 dollars, which I invested from my funds.

Until the end of December, we had a total of 3000 participants, but it was still impossible to gain profit at the time. Marketing and targeting experts were skeptical about our business model. They insisted on the standard way of launching info-products - free webinars or auto-webinars, after which a course is sold.

Despite that, in 2019, we continued to test different options of the “what you want model” and found a way to increase the average bill:

  • On the payment page, we began to indicate the guidelines for the amount of how much the project needs to grow - this removed a large number of questions about how much to pay.
  • We've bonuses to thank those who give generous payments - the check went up by 30%.

In general, people have a positive attitude towards this payment format, but some critics accuse us of luring people and selling courses that can be taken for free anyway.

How are you doing today and what does the future look like?

As we continued testing different hypotheses, we managed to increase the average check and learned how to target our audience on Facebook and Instagram – this became our main source of sales. Google and Youtube advertising also worked. We accumulated our base of 200k emails, which we now use to sell current and new courses. Our social network accounts also grew, especially Youtube (60K subscribers) and Instagram (50K).

You need to cut down all of your fears and shame, so you can live your life openly and make the most out of it.

Recent averages for different courses and audiences:

  • The conversion rate of landing pages to registrations – 20%.
  • Conversion from registration to payment – 40%.
  • Average check – 10 USD.
  • Repeated sales – about 10%.
  • 10% come from friends via an invitation link.

When a prospective instructor wants to join us with their audience, there is an exchange – our audience learns about the instructor and their course; the instructor’s audience learns about HYLS and can participate in other courses.

Now, we plan to dramatically increase the number of courses on our platform. We are attracting instructors for cooperation. We offer instructors a mirrored percentage depending on who attracts an audience — we create 2 web pages and measure the traffic separately. If the audience comes from the instructors, our partner gets 70 or 80%, and HYLS – 20 or 30%. And vice versa – if the audience comes from us, HYLS gets 70 or 80%, and the instructor – 20 or 30%.

Through starting the business, have you learned anything particularly helpful or advantageous?

Despite the skepticism of other people, we learned that the donation-based model can still be profitable. What’s more, we found out that the “pay what you want” model is 8-16 times more profitable than the usual “free webinar -> expensive course” way of attracting new customers. I was also surprised to learn that people are still willing to pay for courses to keep their motivation high despite being able to take a course at a low price or even for free.

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The guarantee of the effectiveness of such a donation-based system in our mobile education market is detuning from competitors. So far, “pay what you want” is not a very popular system of interaction with users, thanks to which we can quite easily get your piece of the market and form a pool of regular customers. If the price of an online yoga course on the market ranges between $100 and $2,000 and you offer a free price, you will most likely be chosen.

I believe the key to success for us is attracting a large number of instructors to the platform. This allows us to increase LTV (lifetime value) per user and make the economy stronger. The second important factor is to learn how to attract traffic so that the unit economy converges, that is, earnings per client get higher than the cost of attracting them. Learning such skills was indeed beneficial to keep positive unit economics.

What platform/tools do you use for your business?

Concerning tools, I use Notion for project management, Telegram for communication with the team, TickTick for personal management, Medium - article publishing, and Google Workspace: Google Docs, Sheets, Meet, but the last one may not be so fun to hear about:)

What have been the most influential books, podcasts, or other resources?

As for my favorite books and podcasts, I would recommend:

These pieces of work have influenced and shaped me as an individual and matured me as an entrepreneur.

Advice for other entrepreneurs who want to get started or are just starting out?

If you asked me about what kind of advice I would give to fellow entrepreneurs out there, I would mainly tell them to sell as soon as possible. You need to start making business fast. It is wise not to elongate the creation of MVP but to start selling your product in the first month of startup existence.

My second piece of advice for entrepreneurs is you need to embrace fearlessness. It is better to fail fast and keep going. Make yourself realize with every inch of your body that to make mistakes, to fall, to have weaknesses is okay. You need to cut down all of your fears and shame, so you can live your life openly and make the most out of it.

Are you looking to hire for certain positions right now?

We also would like to carry out tests in English, and we’re looking for instructors, who would be eager to launch online courses in English. If you are the one, you are welcome to join us!

Where can we go to learn more?

HYLS:

My social media:

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Maxim Pogulyaev   Founder of HYLS
Pat Walls,  Founder of Starter Story

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