08 - Thinking Global - What the UK Can Learn from Kids’ Activity Providers Across Europe with Zooza

Want to grow overseas? Would Eastern Europe be the first place you’d think about master franchising? For many UK kids' activity providers, the answer is no. But maybe this episode will change that.

We’re joined by Michal Dodok and Martin Rapavy, co-founders of Zooza, a smart admin and growth platform for children’s activity providers that’s thriving across Eastern Europe and now entering the UK. We dive into cultural differences, pricing models, how English is prized more than at home (meaning you might not even need to translate your materials), and what UK brands can learn from their European cousins.

You'll hear why parents in countries like Romania and Slovakia are paying more for kids' activities than UK parents, while providers operate with lower costs. We talk about the deep relationships between families and educators, what makes a brand stand out abroad, and how UK businesses are admired for their branding and simplicity.

So… what do you need to do to expand into these markets? And is your next big move local or global?

Edited by Mike at Making Digital Real

Transcript

What if the best ideas for growing your kids' activity business are not in your own backyard? And what if the secret to working smarter, scaling faster or even launching in a new country is already happening somewhere else, just under the radar? In this episode, we're joined by Michal and Martin, co-founders of Zooza, which is a smart platform for activity providers that's making waves across Eastern Europe. And now they're stepping into the UK market. We're going to explore the cultural differences, the common challenges and what UK brands could learn from Slovakia, Hungary and beyond and vice versa.

And the next big question is, is your next growth move local or global? Let's find out. Welcome to the Playbook for Success podcast, Michal and Martin. Good to see you both.

Hello, hi. Thank you very much. Thank you.

Michal and Martin, are you okay just to do a brief introduction and then just give us a bit of background on how you started, why you started and kind of where you are now? So we are co-founders of Zooza platform. It's a software for children activities and education. And the story began like 10 years ago when we found out that such a market exists.

And my son that back then attended such a beautiful class and I happened to be there a couple of times. And I found out that this market is beautiful, wonderful and make like major impact on families. But there are struggles like the difficulties with administration and growth.

And I started to discuss this topic with the founder of this beautiful brand. And we realized that you don't have to do it manually. There must be some software to help you with such a wonderful purpose you are doing.

And there was no such thing. And Martin had a similar story. So we started to develop the platform like it was a passion for eight years, I would say.

And now we are doing it like 10 years. And we are growing our software on European market now entering UK market. Also with a couple of contacts in Dubai, India.

And so we are eager to help these wonderful educators bring their solutions for education and for personal growth. Like where we can possibly could. Martin, you might briefly mentioned you in a few countries.

Do you want to say which countries you are in and how many providers you are working with? From Ireland to Cyprus. Through Slovakia, which is our home market. Czech Republic, Austria, Romania, Poland.

Many, many countries. And that's kind of our specialty because everybody speaks different language in Europe. So it's kind of hard to scale.

And that's basically our aim to be able to provide a single platform where you can basically grow to any country that you came up with in your mind. So that's why we are moving now to such exotic countries such as Dubai or India or even Kazakhstan or stuff like that. So really, really exotic countries.

So just tell me a bit more about them. Obviously, you know, your original strength is in kind of Eastern Europe. Tell us a bit more about the Eastern European kids activities provider market.

Because obviously, you know, most people that listen, we quite naive as we discussed previously. You know, we had a master franchise in Poland. So I know a little bit about it and some of the countries around there.

But for the uninitiated, what's the market like over there? It got some specialties, as Martin said, that there are different languages, there are smaller markets. So I would say that, and you know it from Poland, the parents are eager to invest money into education. And they're eager to help to bring the personal growth for children.

So the market is really rapidly growing here. And so they're spending a lot of money into these activities to say it like properly. Yeah, it has some specifics with the language, with the market size and so on.

Yeah, these markets are really growing rapidly in each country we are in. I would say that there is one thing that is common for most of the Europe, not just Eastern Europe. And that is that from very early age, every kid basically learns English, which is a little less barrier for English or UK based companies to enter.

Because what is typical is if there is a UK brand here, the parents somewhat assume that the course or program itself is in English. So the children already know some basic English, but they also are eager to learn more. So apart from just, for example, dancing or do any activities, what you typically do, you also take an opportunity to learn.

As Michael said, that parents are ready to invest. So typical monthly payment, for example, ranges from 45 to 55 euros for one month, which is four lessons typically. If we take a look at the individual markets, it can be even higher.

For example, in Romania, it's somewhere around 80 euros. So despite less economic power of these countries, the monthly payment for these activities is really comparable or higher than in the UK. What about costs? Is that a cost higher? Are they similar? Because like you said, that's typically higher than you'd pay in the UK, you know, currency averages and so on and so forth.

Yeah, I would say that cost-wise, the savings are in the wages. So the tutors are getting less money than in the UK. So apart from wages, other services like venues or materials are typically at the same price as in the UK.

We don't want to like invent the wheel. We understand that there are some methodologies that are already invented and we are eager or we are ready to bring it into our country. So typically it's not a problem to sell a franchise and run the franchise.

This could be very interesting for UK brands. And as Martin said, English is not a problem. So this could be also a good potential.

Yeah, that's more of an advantage. And I would say that typically as we as Eastern European countries, we take an inspiration from the Western part of the world, you know. So as we import like movies and music, we also like to import other brands.

So if you go to, for example, McDonald's somewhere in Eastern Europe, you will definitely see the difference between how we take these kinds of businesses. Apart from the UK, McDonald's in Slovakia is pretty much a restaurant. It's not a place where you can get quick food, you know.

Yes, it's just a slightly different interpretation. But yeah, I mean, as we discussed off air, that was one of the things that surprised me about going to Eastern Europe ourselves is they didn't want to translate. Lots of other countries wanted to translate all the materials into their languages.

But Poland especially, you know, the English was part of the sell because, you know, it's a highly prized skill. It's the language of business, isn't it? Yeah, definitely. What about kind of types of activities? Are they all fairly similar or do you have different types of activities over there that we might have over here or vice versa? Yeah, well, that's a very good question, actually.

And we can see some differences between countries. The sport is like the basic part. They usually want to invest into sports and basically everyone is taking classes or have some membership in some sport club.

So this is like the very, very natural need for parents. And besides that, as we already discussed, the language schools are very important, like the English, German and so on. So this is like the skill we as parents want to give to our children to be able to speak in multiple languages.

So this is like a very typical for Europe. And there are some differences. For example, in Romania, there is very popular like mental arithmetics.

So like the quick calculation of some sort. Or even robotics or such extracurricular activities are very important. So sometimes those methodologies, or I would say that in many times or majorities, they are more effective than that you could learn from typical educational system.

I will maybe add that a little bit different in the quantity, not in the quality, is the presence of specialized, as Michael mentioned, specialized activities. Like it's not just about having fun, but it's about actually learning something, some new skills. That's more prevalent, I would say.

Hence why maybe it's a premium investment, because the parents feel they're investing into a skill that will be useful when they're older. So how come the UK then, guys? Obviously, there's a lot of countries in between Eastern Europe and the UK, and you're in a few of them. And obviously, like you said, you've gone the other way into India and Dubai and stuff.

How come the UK market? Well, I would say that the UK market is already a mature market from most of the standpoints as you can look at it. It's pretty much standardized in a way how it operates, which is a huge thing because it's really, really different in every European country. For example, about how you pay, how often do you pay, how do you do makeup classes or stuff like that.

That's really a specialty of ours, that we can adjust the software for each specific country. So if I say that, well, for example, in the UK, you typically pay via card. Most of the payments in Europe happen via transfer, which is automated.

It's not a manual transfer, but it's not by card. And there are specialties because, for example, in Austria, they typically pay by direct debit. So that's why you need a tool that can support all of these different methods.

But at the standpoint of why UK is definitely because it's the biggest and best market for us, basically. We see the possibility of UK brands coming over across the channel. Yeah, I mean, obviously, it's like 15 or more years since we were master franchising in other countries, but that was one of the big challenges that our kind of UK system that was fairly rudimentary wasn't relevant for the other countries because there were so many variations that it couldn't adapt to, that they had to kind of let them find their own systems and try and figure it out themselves, which wasn't ideal, but had to be a workaround.

So that's interesting that it can adapt to all those different markets and there's a vast difference to what we found all those years ago. What would you say are the strengths of the UK market, then, in terms of kids' activities providers? What are we good at? Definitely branding. That's something that you are masters of.

I mean, even before you have first customer, you definitely have the branding figure out, which doesn't mean that you have only the logo or stuff like that, but you typically have also a vision, how to sell, how to grow, what to do with the brand. And typically how it happens in Europe is the other way around. So you first start small and start to grow from there, and then when you have plenty of customers, only then you start to think like, okay, should I just open new venues and hire more stuff, or should I expand through franchising, which is really not that common in this region.

So definitely branding. And what have you learned from speaking to UK brands and working with them that you've then kind of taken back to your other providers in different countries and so on and so forth? Simplicity. Apart from the branding, obviously, that's the first advice that we give, but the simplicity of the offer, because it's typically very, very simple offer in terms of the programs or what are your options.

So you typically just only search for the postcode, and that's it. Other stuff is decided by the age of the children, which is a little bit different in here because many, many times, and basically this may be happening in UK as well, that there is like multi-brand companies, which in single venue accommodate like multiple types of education. But what typically is happening in Europe is that a single brand is offering like variety of courses or programs.

So you as a parent have a lot more decisions to do, which is sometimes good, sometimes it's bad, because you can obviously cross-sell to that customer easier. You can sell them more. But again, on the other hand, the drawback is that it's a little bit complicated.

Conversely, what kind of advice could you give to UK-based brands that you've learned from dealing in all these different countries? What could we learn? Because sometimes being Brits, we're a little bit arrogant and don't think we can learn anything from anyone overseas because we used to have an empire and stuff like that. But the good ones realize that you can learn loads from overseas. So what advice can you give to them, or what learning could they get from other countries that might be useful for them? Yeah, I would say that it's not unheard of that you have 500 or 1,000 customers at one venue, so one single provider, and you know all of them by name.

I don't know if this is different in UK, but typically the relationship and the depth of the relationship between teacher or tutor and parent is really deep. And that's something I think is good, and it brings value because the parents tend to stay longer and, again, spend more money. What I'd say is also different, but I just said a couple of minutes back that the UK offer is typically simpler, but the individual aspect of treating each customer individually is something that parents are thankful for, but it brings the complexity.

And if you are able to manage the complexity well, if you are able to do it well, then it can be a huge advantage because you can offer individual pricings and individual programs. For example, we have a customer who has a regular program where there are 10 children at the same time, but when the teacher finds out that there is somebody who needs a little more to catch up the group, they will typically offer them separate individual classes. So this is the way that complicates the system, but if you can do it well, if you have tools for it and management skills, then it can be an advantage.

What Martin is suggesting is that the lifetime value of a customer could really grow when you use these additional activities like AppSell and CrowSell and maybe spread a little bit this duration from the perspective of age, these programs, but also not giving back the money, but suggest to buy something different, maybe some merch, some e-books, or even some attendance into different programs just to know that it could be interesting also to attend something new, for example. So these AppSells and CrowSells are probably something that in Europe we are better at, I would say, from what I know. Yeah, I would say that we are better at not refunding.

Yeah, because you need to work a little bit harder with the database you already got, and it's much cheaper to focus your time on the database you have other than just buy it from social media, like paid media. Hey everyone, we're just taking a quick pause while I pop in here with a little reminder for you. If you're listening to this and thinking I'd love to start a podcast of my own, whether that's a public one like this or even a private podcast just for your clients or community, then I can help.

My name's Mike, the owner of Making Digital Real, and I edit and produce this podcast myself, and I work with others to bring their podcast ideas to life. So if you're not sure where to start or you're already drowning in tech, editing, or planning, don't worry, I've got you. And just a little nudge, a private podcast is actually an amazing lead magnet.

It's personal, it's easy to binge, and it builds trust fast. So if anything like this has been on your radar, now is the time, just drop me a message or go to vault.makingdigitalreal.co.uk or check my link in the show notes. Let's get your voice out there.

Okay, back to the episode. And would you say the other markets that you're in are as penetrated as the UK market? Because we know there's about 30,000 kids' activities providers in the UK, at least, 6,000 dance businesses, approximately. Some people would dispute various different figures, and there's no real accurate one, but we know there's fairly high penetration.

It's a fairly well-established market. Is it the same in other countries, or is there a lot more potential for growth in those other countries? The density of brands in the UK is definitely the highest. I wouldn't say that there is any place in the world that there are so many brands.

But in other countries, there are activities, and on average, there are like 70% of all children are attending at least two extracurricular activities. But what is different is that in Europe, in Eastern Europe particularly, is that there are institutional extracurricular activities, not private brands. They are still attending something, but not some specific brand that you in the UK have a lot of them.

I will add that, as I mentioned, we take a lot of inspiration from the West, so bringing a foreign brand here is in and of itself just an advantage, and the market from this perspective is not definitely saturated. There are many successful brands, mostly coming from Japan or Israel, not from the UK, which I would assume is the closest partner for us. But it doesn't happen that often.

So I would say that there is plenty of space. Because this is a real opportunity that we are eager to invite those brands and run the businesses. A typical suggestion of UK brands is to grow to Canada, to Commonwealth, not to Europe.

And it is very close, and we kind of value the brands from the UK. So maybe this could be something that we might change in time. Yeah, that was going to become our next question.

What would your advice be to UK franchisors or brands that want to expand? Because what would you say would be some good advice going over that part of the world where you are strong? In terms of opportunities, I definitely would say that it's a huge opportunity to go here. So you should just pick a country, just have a look on the map and pick any country. I would suggest picking the bigger ones, so for example Poland or Romania or even Hungary.

You can obviously pick up France or Germany, but the thirst for education from this perspective is higher in these countries. The more on the east you go. And I would not be afraid of... Well, despite that we all speak different languages, what is great is that we have Europe, which is helpful a lot.

We have a single bank system, so you can rely on bank data really easily. You can have payment processing via global tools such as Stripe. It's basically the operation itself is more like you have at home.

That is not really like you don't work with papers or you don't exchange money in cash. That's not the thing. So you don't have to worry about that.

And I would say that out of these countries, basically everyone you speak to will speak to you in English. So you don't have to be afraid about the language barrier as well. It's interesting really because I think a lot of UK-based brands, it might not be the first area they were looking at.

They might be looking at GCC countries, Middle East sort of thing. Looking kind of Far East or something like that. Looking Canada, Australia and so on and so forth.

But in terms of... You changed a few of my perceptions in terms of the price that parents are willing to pay. And obviously there's demand for our brands. And I'm biased here, but I think the UK is one of the best, if not the best, kids' activities in the world.

And it's one of the few things that I think we are the best in the world. Now even better than the Yanks, although they won't like to hear that. What about the other way? Would you advise any kind of European brands or Eastern European brands or providers to come to the UK? Would you say there's an opportunity here? Or they've got anything different that they could add? Just solely on the precipice of offering something that is not present on the UK market, I would say that yes.

There are some methodologies that are unique, that are really complex and prepare small kids to be ready to tackle the technical challenges of this world that are not really present in that much quantity in the UK. Probably the UK market will grow this way as well, because it's a need for having this kind of education from an early age. So I would say that companies that offer this kind of methodologies can really be successful in the UK.

The methodological depth to how to do something really properly is quite high. And these brands in Europe started, I would say, later or in the last month or a couple of years. So they started later and they have some technological, maybe advanced advantage, because they started later.

So they are using the latest technology opportunities or the educational opportunities. So maybe this could be at least inspirational for the UK market, if not to just grow on the market. But yeah, the saturation is quite high, so it will be harder.

And not only that, also with this legal restriction on the insurance and everything around it, it might be challenging for newcomers, but definitely there is some quality there. Yeah, that's maybe one thing that we didn't mention, that the restrictions about the regulation is really lower, I think, here than in the UK. Especially in this segment.

Yeah. And if any kind of UK brands or franchisors have heard this and it's maybe piqued their interest about thinking Eastern Europe or markets that they weren't traditionally aiming at, apart from getting in touch with you guys, what other tips would you give them about coming over there? There are some entities, not that many as in the UK, that are starting to specialize in this activity. So, as Martin said, to pick a country and found out some expert or some entity who is running such an advisory or some other brand, and let's start.

I think that it will be much easier than expected. Yeah, there are plenty of franchise advisors that help to bring brands from abroad to Slovakia, Czech Republic, whatever country you think of. And these guys can be good openers as to what the market is.

Because they have the catalog of the brands, so if somebody comes to them and says, hey, I want to open a franchise, they typically decide between, again, McDonald's and activities. So, if there is a good incentive, a good deal with these guys, then they can definitely sell your brand easily. Yeah, so that's part of the thing, they need to get a misenfranchised broker or know the right people locally.

What I would say, especially in the UK, I would say that many, many, many persons from Poland, from this part of the country, Europe, are already in the UK doing some kind of business. So you probably have this guy that you can trust next door. Somebody from Poland or from Romania that maybe wants to get back and start a business.

Yeah, that would be my next point, if there's lots of people who have spent a few years in the UK, come over here to work and then have gone back home at some point, whether they'll take any brands with them. But it's been really interesting from my perspective because obviously we had a few franchises in Eastern Europe and Poland was one of our best countries worldwide, actually, out of all the 60-odd countries. But it's definitely opened my eyes a little bit and hopefully it should open up some other franchisors' eyes or some other brands to look a bit further afield or encourage some European brands to look into the UK if they've got something different.

So I really appreciate you guys coming on and trying to educate and inform us. Yes, thank you. Maybe my last thing that I would say would be that if you never spoke to somebody from this part of Europe, you will probably just be surprised how culturally close we are despite we have some past behind us.

But I think that really the culture is really, in terms of doing business, it's not that different than the business that was done in the UK. Maybe, Mark, you can confirm it if you spoke with those guys in Poland. Yes, I had a lot of preconceptions and other people will have their preconceptions.

Our media isn't always as nice as it should be to our European neighbours, especially our right-wing media, but that's a different subject. We won't get into that. But yes, a lot of my preconceptions were blown out of the water.

And that's also a thing I'd say to master franchisors, just be open. You learn a lot by just trusting the people over there and letting them explain the market. Absolutely.

If you have a good methodology, we can spread it out. Definitely in these countries, there are no such competition. It definitely sounds like there's opportunity, so hopefully some UK brands will look that way and maybe not somewhere else.

It's maybe harder to get into, like the States or somewhere else. Yes, definitely. I think that it's a matter of upcoming years.

We'll find a way. So thanks for your time, guys. Really appreciate it.

I know you guys are pretty busy, so thanks for fitting in. I really appreciate it. Thanks, Mike.

Really appreciate it as usual. No, I think it's been a great conversation. I think it's been a real behind-the-scenes look at what is possible when smart tech meets these real-world challenges.

I'm really looking forward to seeing what happens with ZUSA. I think it's going to make a huge shift in how this sector can run. So, yes, massive thank you to both of you for joining us today.

It's been a great conversation, so thank you so much. Thank you for having us. If you found this episode useful, please subscribe, leave a review, and share it with your network.

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