The entrepreneurial wave of generative AI is surging, with many entrants, but it is relatively rare for students to start their own businesses in AI applications and take the “number one position”.
Bill Wu, a student entrepreneur of Generation Z, founded XStudy AI, taking the first step in exploring AI education. In his product definition, XStudy AI is a comprehensive AI education application focused on all scenarios, dedicated to providing users with instant answers to all-disciplinary questions and solutions to pain points in multiple academic verticals. XStudy AI’s target user group is students in the K12 stage, and its current main market is in the United States. XStudy AI has also received phased recognition from users and investors in the market. Since its establishment, the company has completed two rounds of financing with a valuation of US$15 million. By 2025, the company expects revenue to reach US$10 million.
In Wu Chengze, we can see the growth path of the younger generation of Chinese elites: he received a solid basic education in China during his youth, went abroad to study when he was mentally mature, learned and embraced the diversity of cultures in many parts of the world, while not forgetting his “roots”; his entrepreneurial direction was based on cutting-edge technology, targeting the global market, and at the same time hoping to graft and apply China’s mature business model overseas.
He also has the youthfulness and vitality of young people. In July 2024, he won the CKOC Karting Open Shanghai Station One-Hour Endurance Race. In addition to entrepreneurship, he is experiencing the “speeding life” with the pleasure of adrenaline soaring.
Newly-born calf enters the new realm of AI education
Although Wu Chengze is still a student, he has many years of working experience. Before founding XStudy AI, he was the co-founder and editor-in-chief of Silicon Valley Business Review. Earlier, he worked at Waterdrop Inc., Singular Medical, and Lingjun Capital, and served as a Beta Scholar.
Wu Chengze has been interested in politics and business since he was a child. When reading business content, he felt a different kind of happiness from playing games. After completing his K12 studies, he felt many pain points, and the inspiration of entrepreneurs was touched, thus discovering business opportunities.
Wu Chengze finished junior high school in China and then went to the United States to study in high school. After personal experience, he found that the education systems of China and the United States are very different. Take textbooks as an example. The textbooks of China’s K12 education are relatively unified, and there are only a few standard versions across the country. However, the textbooks in the United States are very diverse, with hundreds of them, and many schools even have their own textbooks.
The difference in textbooks directly determines that Chinese and American entrepreneurs have different ideas for solving problems in the direction of education entrepreneurship. For example, because the textbooks and questions are relatively consistent, Chinese startups pay more attention to the direction of question banks and reference answers. As long as the question bank and the content uploaded by the user end are matched one by one, such as searching for questions by taking photos, users can get the answers for reference. The role of AI is limited, and the current market structure is relatively fixed.
In contrast, the diversity of American textbooks has led to the failure of the question bank model. There are many categories of courses, and the existing textbooks and learning tools cannot fully answer questions. Wu Chengze personally felt that when studying some niche courses such as Latin, some vertical academic pain points needed to be solved urgently.
Since 2022 , the rapid changes in the AI industry have allowed Wu Chengze to see the opportunity for AI to empower thousands of industries. Generative AGI represented by large AI models has made it possible to match the diversity of the education industry.
A survey report on artificial intelligence and education released by the Digital Education Council also supports his idea to a certain extent. The survey shows that 86% of students will use artificial intelligence in their studies. The students surveyed use an average of 2.1 AI tools in their courses. According to the analysis of nearly 40,000 English conversations in WildChat, more than 1/6 of the requests for tutoring on homework are the second most popular demand for people to use AI chatbots.
In Wu Chengze’s opinion, the current education industry lacks integrated artificial intelligence solutions, and few products truly understand user needs, are easy to use, and have structural answers. Wu Chengze’s student identity enables him to capture the pain points in the education field more carefully than other AI entrepreneurs, and he has a more urgent desire to solve these pain points. Therefore, XStudy AI became one of his entrepreneurial explorations in AI education.
Many senior people who have a “chemical reaction” with Wu Chengze gradually joined, such as Bai Fan, co-founder and CTO of XStudy AI. He has a master’s degree in robotics from Northwestern University and was the technical director of Turing AI. He has extensive experience in artificial intelligence, large language models (LLM) and robotics. During his tenure as the technical director of Turing AI, the company’s valuation has historically grown to nearly US$500 million.
After months of development and testing, the current XStudy AI is not limited to a single subject, but can provide comprehensive and high-quality services in up to fifty scenarios in eight subjects. In particular, for vertical pain points in academia, such as vocabulary analysis and article resource search, XStudy AI can provide specialized tools to help students solve difficult problems. In the future, users can use XStudy AI through mobile phones, computers, tablets, educational lightweight terminals, and AR glasses.
Wu Chengze said: “XStudy AI is based on multi-dimensional innovation: from the most basic but also the most important prompt engineering to user data analysis, plus a rich question bank and large language model, a multi-faceted loop is formed to provide users with the best AI Tutor experience.”
In Wu Chengze’s entrepreneurial pace, it is not realistic for an AI startup to immediately invest huge amounts of money to develop its own large models. He believes that it is more important to provide a good experience at the moment and gradually transition from an experience-driven to a technology-driven model in the future. XStudy AI’s internal data shows that during the internal testing phase, the user praise rate of the product reached 98%, and in blind tests with other similar products, the praise rate was also far ahead.
At present, XStudy AI can provide three different levels of answer output to meet user needs: one is a quick and simple answer, which is more suitable for completing homework; the second is relatively balanced, with a moderately difficult solution that can handle more difficult homework; the third is an advanced answer with in-depth explanations, which is more suitable for more detailed research. Wu Chengze explained: “Providing users with tailored answers through the three output levels of simple, medium and advanced can not only help students advance their daily homework progress, but also provide more in-depth learning guidance.”
Day One Commercialization and Market Expansion
Although Wu Chengze does not have much entrepreneurial experience, XStudy AI has a professional team to support it. Cheetah Mobile founder and CEO Fu Sheng, English Liulishuo founder and CEO Wang Yi, and Lingsheng Technology former CEO Xiao Xiaomao are all co-chief consultants of XStudy AI, and they also provide XStudy AI with many product and business suggestions.
While continuously improving the product experience, Wu Chengze began to consider commercialization from Day One. At present, the main goal of XStudy AI is to take root in the US market. After achieving scaled revenue in the US in the future, it will continue to expand into markets in Europe, Southeast Asia, Latin America and other regions.
At the software level, the subscription model that is more common in the United States is used. It should be pointed out that the subscription model of XStudy AI is different from the conventional practices in the market, especially in terms of pricing strategy. Wu Chengze analyzed that the traditional subscription model tends to be cheaper for long-term subscriptions and higher for short-term subscriptions. However, for K12 student users, there are two difficulties to consider: first, most students have limited spending power, and short-term subscription fees will be a greater burden, and the decision-making cost of choosing long-term subscriptions is very high; second, the student group’s trust in AI technology is still in the process of building, and many students hope to first test the waters in a short-term, low-cost way to determine whether the product meets their needs, and then consider short-term or long-term subscriptions.
To this end, XStudy AI has designed a model that balances short-term and long-term subscriptions. Currently, there are three tiers to choose from: $6.99/month, $29.99/quarter, and $119.99/year. The short-term subscription price is relatively competitive. The fee of $6.99/month allows student users to experience AI answer services for all subjects at a lower threshold, thereby increasing their trust in AI education and the frequency of use; the pricing of long-term subscriptions of $29.99/quarter and $119.99/year is also relatively reasonable. While providing more advanced services, it can also provide heavy users with more cost-effective options to ensure the long-term value of the service.
In addition to commercialization at the software level, Wu Chengze is considering launching lightweight educational terminals at the hardware level in the future. He hopes to use data to optimize the educational experience and combine hardware innovation to promote changes in the education industry. Educational hardware itself has a considerable market size and has been verified by many companies. With the addition of AI, the future prospects of the hardware market are even more promising. According to a report released by iResearch this year, the market size of educational hardware in 2023 will be 51.2 billion, and the contribution rate of AI will be about 11%. The embedding of AI technology will further bring about an increase in sales of educational hardware. It is estimated that by 2027, the AI contribution rate of educational hardware will rise to 37%.
XStudy AI ‘s hardware strategy is aimed at the blue ocean market of cost-effective AI education terminals. In terms of pricing range, XStudy AI focuses on customizing lightweight AI education terminals in the range of US$20-50; in terms of product definition, Wu Chengze hopes to achieve “lightweight” at the content layer, chip layer and terminal itself. For example, he will focus on 4G/5G RedCap low-cost communication, lightweight system, etc. Different from AI hardware products such as dictionary pens on the market, the function of lightweight education terminals is not only to provide tutoring, but also may be combined with functions such as communication and chat similar to children’s watches in the future.
In addition to low-cost AI education terminals, in the future XStudy AI will also expand the coverage of educational resources based on HTML5 cloud services, bringing convenience and inspiration to more students.
AI education is compatible with Chinese culture
Wu Chengze likes Chinese culture very much, and connecting China and the United States has always been his inner desire. After gradually understanding and accepting American education, he hopes more than ever to bring China’s superior business model to the American market, let it take root in the global market, and carry out business innovation.
Inspired by the strong correlation between AI education entrepreneurship and Chinese culture, Wu Chengze hopes to inherit China’s traditional education concepts in a modern way and make innovative applications.
In his opinion, Chinese culture has always attached great importance to education and emphasized “education for all”, and education should be equally available to everyone. China encourages students to “have a path through the mountain of books and hard work is the path, and have a boundless sea of learning and hard work is the boat”. It just so happens that the empowerment of AI technology in the field of education can provide more balanced educational opportunities for all students, especially those in disadvantaged groups, and can also narrow the gap in educational resources. Artificial intelligence can also help students learn more efficiently, acquire more knowledge with less resources and time, so that all students have the opportunity to approach or achieve their learning goals, and have more opportunities for progress and self-improvement.
With the belief of “education for all” and narrowing the education gap, XStudy AI is committed to promoting the public welfare process in addition to focusing on improving user experience and commercialization. In the past year, XStudy AI has cooperated with many non-profit organizations in the United States, and has gone deep into community centers, public welfare schools, after-school tutoring programs and other specific grassroots education scenarios. By directly contacting poor students, understanding their needs and challenges, and striving to take care of vulnerable student groups on the platform side.
When developing products, XStudy AI organized special seminars and workshops to help students familiarize themselves with the basic concepts of artificial intelligence technology, and invited them to actively participate in the product development process through beta testing and user feedback. Wu Chengze said that the development process of XStudy AI allows students and users to participate and provide feedback together to create learning tools that meet their needs, ensure that AI tutoring applications can solve their unique educational pain points, and provide students with valuable opportunities to practice science and technology projects. This is also highly consistent with the Chinese culture of “brainstorming” and emphasizing cooperation and win-win concepts. He hopes that no matter what everyone’s background is, as long as they have dreams and efforts, they can find their place in the wave of scientific and technological progress.
In its collaboration with Western Reserve Academy (WRA), Ohio’s top private high school, XStudy AI regularly meets with a large number of student beta testers in the school, allowing them to make suggestions for improvement, thereby experiencing firsthand how the latter’s feedback is transformed into actual product features. At the same time, XStudy has received support from a large number of faculty and staff of WRA, and received their product requirements and suggestions, and this collaboration has greatly promoted XStudy’s product development process.
In addition, in a cooperative project with Springfield Commonwealth Academy (SCA), a school in Massachusetts dedicated to providing education for all types of children, XStudy AI received strong support from the principal Angelene Huang, who provided the product to all students for centralized use to help students from different backgrounds, especially poor students and athletes, achieve their academic goals. In this process, XStudy AI guides students to use AI tools responsibly, and feedback from faculty and students also helps the company optimize the personalized functions of the problem-solving module. SCA has also introduced a variety of innovative courses such as investment courses, and Angelene Huang also hopes to use XStudy AI as an example to motivate students to participate in more creative work.
In fact, after Wu Chengze met Angelene Huang for the first time, the new educator, who was a Wall Street hedge fund executive, showed extraordinary interest in XStudy AI’s projects and development. Angelene Huang, who loves cutting-edge technology and innovative education, said at the time that actively supporting entrepreneurial projects like XStudy AI is also a goal she hopes to achieve in her educational career, especially to enhance the influence of Chinese and Asian Americans overseas. So Angelene Huang took the initiative to express her hope to serve as a consultant for XStudy AI to develop together with the company.
“Our long-term vision is to not only fill the gap in academic resources for poor students through such collaborative projects, but also inspire them to explore the world of science and technology, entrepreneurship and innovation through technological empowerment, and cultivate their creativity and curiosity,” said Wu Chengze.
(Written by the selection committee of “2024 Forbes China · Top 100 Most Influential Chinese Elites”)
