You know you are disrupting a market when your competition tries to shut you down. For 24-year-old Kyle Dodds it’s a lesson he learnt in high school already. To earn extra pocket money, he sold sweets at school, undercutting its tuck shop. Soon the tuck shop, with the weight of the school behind it, brought its power to bear on Dodds’ little confectionery business.
His next moneymaking scheme was tutoring maths and science. Demand was much bigger than he ever could have imagined. Soon he had to rope in friends to tutor too.
“I was running a team of about 10 tutors at one stage, who were giving over 160 lessons a month,” he says.
He did this for five years, while studying civil engineering in Pretoria. But the administration of setting up all these lessons and making sure everyone had paid and been paid was a nightmare. “It was lots of admin. I couldn’t cope,” remembers Dodds. “I thought there must be a better way to do this.”
He finished studying in 2015 and soon began putting together the business plan for what would become Cognition.Online, an application that has been billed as the “Uber for tutors”.
The initial quote he received to have the app developed was about R2m. So he looked for programmers who would work for equity, and who wanted to own a part of the product.
Dodds and his partners have built the app in-house without any external funding and the company is completely debt-free. In August 2016, Dodds and his fellow founders Wihan Horn, Corneil Clasen and Waldo Boshoff launched Congnition.Online.
“We have always been thinking big. We wanted this product to be able to work anywhere in the world and to be able to scale up very quickly. We wanted to make sure that every part of the business was automated.”
Cognition.Online is currently entering its first funding round, hoping to sell off a 28% stake in the company for R6m, which would value the total company at over R21m.
“We don’t want to sell off a majority share,” explains Dodds. “A big corporate can’t manage a start-up. If you try and do things in a corporate way as a start-up, you are doomed to failure.”
How does it work?
Tutors register with Cognition. The app allows you to see all lessons available within a 150km radius of you, allowing you to pitch on lessons you want. If the lesson is within a 20km radius, the app will send you a push notification.
Students needing a tutor, or a parent of a student, set up a lesson by stipulating the subject, grade, duration, rate, time and address for the lesson and prospective tutors start bidding on your lesson. You pick the tutor you like and that’s that.
“We are not a tutoring company, we are a tutoring admin company,” Dodds points out. “Our drawcard is efficiency. Parents want their kids’ lessons to just happen.”
Cognition, which caters for students between grades 4 and 12, handles all the administration. He says a lot of tutoring companies can’t grow because of the administrative burden.
Cognition’s goal is to have 2 500 recurring students (those who have a regular tutor) on the platform by the end of 2018. That would amount to 10 000 lessons per month for the company. Cognition currently has 400 tutors registered on the app, assisting students in Pretoria, Johannesburg and Stellenbosch.
In a few months Dodds plans to launch Cognition version 2.0, adding Potchefstroom, Durban and Cape Town, and extending its services to university students requiring tutors too.
Cognition also wants to reach underprivileged students, involving sessions in which tutors will be assisting multiple students at a time, which has raised some corporate interest in terms of sponsorship.
The big difference between Cognition and the traditional tutoring booking process in South Africa, according to Dodds, is that tutors aren’t at the mercy of tutoring companies. They determine their own rates, what jobs they do and when. Tutors receive ratings from former students.
These ratings act as a constant form of vetting. “People will pay money for a quality tutor,” he says.
While tutoring companies usually take commission off the lesson fee, Cognition charges learners a small booking fee when a lesson is finalised.
One of Dodds’ main personal drivers is to help create jobs for the youth.
“When you are a student you have such limited options to make money. You can waiter, work in promotions or at a video store,” he explains.
“The other option is tutoring.” Once Cognition version 2.0 is fully launched in South Africa, the company will look at other African countries like Nigeria and Zambia, but they are still doing research on those markets. Europe and the US are also on the agenda.
Dodds says that he has looked at competing businesses internationally, but most still remain burdened by cumbersome administrative processes. Nobody has simplified the tutoring booking process like Cognition.Online has, he claims.
This article originally appeared in the 25 May edition of finweek. Buy and download the magazine here.