Exporting edtech solutions globally

Commercial (00:00): Facing unpredictable global markets. Export Development Canada's credit insurance can help you protect your sales access capital, and grow your business with confidence. Find out more at edc.ca/protechsales.

Bruce Croxon (00:19): Hi and welcome back to the Export Impact Podcast, brought to you by Export Development Canada. My name's Bruce Croxon and I'm the host of the Export Impact Podcast. And on today's episode, we're speaking with an inspiring entrepreneur who is transforming how children and youth from kindergarten to grade 12, how they learn and move through interactive technology in schools around the world. 

Vincent Routhier is the founder of Lu Interactive Playground, a Quebec-based company that turns gymnasiums and multipurpose rooms into immersive interactive spaces that make physical activity more engaging, inclusive, and educational. Since launching in 2017, Lu has expanded internationally, driven in part by a viral prototype installation that captured global attention. Vincent is also president of EdTech Quebec's Educational Technology Association, where he champions innovation and growth. Today we're gonna discuss Lu's export journey, how the company is navigating economic challenges and key markets, and how they balance purpose with ambition.

I’d like to begin today’s episode by acknowledging that we’re recording from my office in Toronto, which is on the traditional unceded territory of Many Nations, including the Missassaugas of the Credit, the Anishnabeg, the Chippewa, the Haudenosaunee, and the Wendat Peoples, and is now home to many diverse First Nations, Inuit and Metis. We value taking this moment to deepen the appreciation of our Indigenous communities, wherever we are, and to remind ourselves of our shared debt to Canada’s First Peoples.

Welcome to the show, Vincent, we're happy to have you join us today and we're very excited to hear about your journey with Lu.

Vincent Routhier (02:14): Thank you, Bruce. That's an amazing introduction. Very pleasure to be here.

Bruce Croxon (02:18): I thought I'd just start by, you know, I come from software too and I've been in this position more than once where you try and get an audio audience to sort of visualize, how a software product works and in your case in particular, an interactive, very immersive software product. So can you do your best on that, just to sort of bring the audience into your seat and explain how the system works and what it does?

Vincent Routhier (02:45): Absolutely. So basically when we say we turn elementary school gymnasium into immersive learning space, imagine just close your eyes. Imagine you shut down the lights of the gym, you turn on those theatrical lights. So we control the colors of the space by lights. We project on a wall that turn into a giant screen, but that screen is interactive and if you touch this screen or draw a ball or with an object or anything, that screen is interactive, but it's 20 feet wide, 11 feet high. So from the eye of a five, 6-year-old, that's very big. And we control the lights, the sound, and we turn that wall into an interactive experience by creating and putting on that wall basically educational apps or tools for the teachers to engage the kids in a different way, basically. 

So that can range from a guided meditation experience to a dance experience or something more close to literacy and numeracy, like a mathematic challenge between team A and team B with a split screen where you have like a questions of two times four and choices of answer.

Bruce Croxon (03:57): Do you create most of the software apps and experiences and then push them down the to your customers? 

Vincent Routhier (04:04): Yeah, so the general concept basically is we provide the console, the equipment, the hardware, so the video projector, the light, the speakers, the computer with all the enclosures you need to protect those fragile equipments in the gymnasium. And that comes as a big box in the gym. Installation happens, we install all of it in a few hours and then all the software that runs on that console is provided by us. So we have internal software developers that create the operating system, let's call it this way, and all the different apps based on what the teachers want to achieve with the system basically.

Bruce Croxon (04:39): Zeroing in on the business model. So really you sell the hardware and the real recurring revenue is subscribing to the software and the games on an ongoing basis. Okay. That's very compelling. Fantastic. Where did the name come from? What's the story behind that?

Vincent Routhier (04:56): We wanted a small quick, short name that feels like a person. So I wanna play with Lu, I want to play Lu, or I wanna, instead of having the name of a product or a company, it's kind of that small nickname. So the kids want to play Lu today or something like that. A little bit like the we. And we wanted that name to feel a bit Nordic, so that's why we added those two points on the U. In French we say Tema, like, it's like two dots on some of the vols basically that has that iconic Nordic feeling like you see in most of their product name from Ikea and things like that.

Bruce Croxon (05:30): Fantastic. Well, speaking of Nordic and outside of our borders, et cetera, Lu currently does extend well beyond Canada's borders. You're a great Canadian story where homegrown here, but the vast majority of the market is outside the country. Tell us a bit about your export journey, the impact you've had in global markets, how that came about, like what made you look outside the country. It looks like relatively early in the company's history.

Vincent Routhier (05:59): Day one.

Bruce Croxon (06:00): Day, was it day one?

Vincent Routhier (06:01): Born international? Yeah. So as you said in the introduction, we went viral with this concept in 2017. When I saw that video, that gif that went viral from Reddit to other platforms, created a small landing page and added that link to the video that was viral to collect emails basically. So if you want to learn more, just drop your email here, we'll contact you. So I collected thousands of email over that first weekend and people who wanted more information or thought this was a product and it wasn't at that time were from all over the world basically. 

So starting to ask questions and finding those really, really interested people that wanted to buy something we didn't even created yet, had us create a product in the first six months and then ship those first, let's call them prototype product, to all the first who just wired the money for us to deliver a product to them. So basically 11 months later there were 25 Lu systems in 10 countries. So that was year one.

Bruce Croxon (07:04): You know, like so many of the companies that I speak with and I've had experience with, it's a very strategic process, what markets make the most sense and you do a demographic study, rely on the EDC to kick in what they know about local markets. This one is like put it out there and see who comes back. So what would be fascinating to me is if you picked up any sort of psychographic trends or qualities I guess of different markets that would be, hey, this area of the world is more interested in learning in this fashion. Like I find the whole concept very creative and we can have a whole discussion about how much creativity in Canada comes out of the province of Quebec, relatively speaking. But II've always found an incredibly creative province and segment of our great country. 

Did you learn anything about different cultures and how they learn based on the response that you got to this pretty unique way of teaching?

Vincent Routhier (08:08): I would say year one, it's a lot about people more than markets and countries. So who's excited with the product and excited enough to convince people to put money on a project that is, let's call it, really risky because it's something new. It was a lot about people. So those early adopters, but early, early, early adopters when we call about the adaption curves and things like that, like those were the people on year one and on year two, I think this is where we saw trends. 

So when we shipped like over 100 unit on year two, this is where we saw like more trends or who's able to pay for something like that. Where do we have a good product market fit? And the European countries are the early adopters beside others that might wait a little bit longer to make sure it's safe to buy the product. 

And so we saw those trend, I would say more on YouTube, but what was very exciting as well is was every time we installed the first unit somewhere, let's say Belgium was one of them, the national television talked about it, the mayor made it a promise for the other schools because it was so innovative; like this early innovation attract a lot of media attention as well that kind of fueled the viral effect we had with our product. 

Our videos went viral like multiple times, and every time there was a new video viral that went viral, we saw the leads on the website like going super high. And then we had to find the source of that new hype. It was, we had those hypes like every two, three weeks for like a year. And it was interesting, maybe not answering specifically your question, I think it's a lot about people more than markets, but in some markets over time we saw trends. But I think it's more about the fit with the market slash budget and space. In our case, you need a big space to install a product like that. It doesn't feed the basement of your church or your home..

Bruce Croxon (10:00): Or out or outdoors necessarily in some countries. Right. 

Vincent Routhier (10:04): Yeah. And nothing outdoor works. And so that drove the type of interest we had, I think.

Bruce Croxon (10:10): Were there any markets in particular that you found difficult to enter versus others? Were there any roadblocks or?

Vincent Routhier (10:18): I would say the most developed the market is, or close to our laws and regulation the easiest it was. So going to the US was pretty straightforward. Going in the Philippines was kind of a little bit shaky and weird type of experiences. And I would say the difficult stories we had were in market where laws are depends on how much you pay, right? And places like that was kind of hard and it didn't fit our culture and values and so we were really uncomfortable going down those patents market.

Bruce Croxon (10:53): Well given that a large chunk of your market is in the United States, have the recent sort of educational budget cuts or the way that education has come under fire or the economic uncertainty with this latest administration, is that impacting you yet at all or do you anticipate it impacting you?

Vincent Routhier (11:16): It's a giant mess right now. 

Bruce Croxon (11:19): It's just a mess of uncertainty, right?

Vincent Routhier (11:22): Mess of uncertainty. It's complicated to get budget allocated and as they cut budget, first places budget will go with people like staff. And because they're lacking staff and even food in the morning for the kids, technology don't come first in those conditions. So big drop in sales in the US like close to a 30% drop compared to last year, even if the market is super big and there's potential for growth for us big time there. And from my understanding, any educational technology company is in the same situation right now. 

So it's a hard time tariffs and it's more operational challenges. You're always planning for A, B, C, D scenarios. It feels a little bit like COVID, like you don't know so you plan for everything and then it doesn't happen and then something new comes and now so you lose track of your long-term strategic planning and you're all kind of always reacting and that's very exhausting for everybody. So I think that's a general vibe about the US which is 85% of our sales right now. So that's a challenge for us. So we had to adapt and plan for different scenarios and play safe with the investment and the money and I think that trickled down to the whole chain basically. So we are affected by other school district decisions and we affect other like in the supply chain, that's kind of the big picture, right?

Bruce Croxon (12:43): You mentioned COVID, how did you guys survive that? That would've been tough.

Vincent Routhier (12:48): Yeah, it was tough because our product was a social group experience of people sharing objects and instead of stopping and pivoting for something else, we took for granted that at some point human interaction would be so important that they would come back. It was kind of our bet. So we doubled down on product creation. So we created a new version of our hardware product and a new platform, online platform where teachers could, it's called new community. So share the content they create with each others and once we had one of those break between COVID waves, we launched those product that were really successful. 

So we took the capacity, like the working capacity on the product and working on stuff we control instead of trying to sell more when no sales were possible. And the support from governments at that time were super helpful and everybody were focused on, that's our mission for kids, we let's do it instead of doing what else.

Bruce Croxon (13:44): Got it. What role has Export Development Canada played in helping you scale globally?

Vincent Routhier (13:51): I would say, I was thinking about that, I think one word is facilitator because they are comfortable and even eager for exportation, but exportation means risk or more most of the traditional financial institutions. So having EDC as a partner made people more comfortable taking risk at some point. Having EDC warrant part of the credit margin, the credit lines with the financial institution was really helpful for us to get access to capital for inventory and payment terms for foreign companies. And we have a distribution relationship with Europe, so financing some of those elements while they are crossing sea. 

And so, I think EDC made very good introductions for potential upcoming partners within financial institution at some point that became very strong partners over time afterward. They've been very helpful over that whole process. They were very relevant when we were starting and they are very relevant right now. So I think that's another element that is interesting because in some cases there is kind of a lack of service or support in some growth phases but EDC, from my my point of view, we're the right partner at the right time.

Bruce Croxon (15:06): Are you focused back on growth now? Is that what you mean?

Vincent Routhier (15:10): We're planning for growth where we just launched a new product a few weeks ago. We're shipping that new product right now. It's obvious that growth is going back, but not just sure when, right now. So we're still planning for growth. Our vision is to impact 10% of the kid worldwide. So to do that we'll have to be in most of the countries, even the underdeveloped countries with new product more accessible, less expensive for smaller spaces. And so all of those elements are on the roadmap, like let's call it a five, 10 year roadmap. I think it's kind of a bump on the road right now with the sales being down; it's make it more complicated for us to keep investing as much as we wanted. We're still investing on the future.

Bruce Croxon (15:54): Well listen, to have such an ambitious mission goes without saying you must have a very high degree of confidence that the addition of this methodology has a net positive impact on how kids learn, right? Can you talk to us a little bit about that? Like what are you noticing, what are you able to measure? What do you see when kids get a chance to use this tool versus more conventional or other ways of learning?

Vincent Routhier (16:24): One good way to summarize it would be meet the kids where they are. Technology and screens and video games are part of their lives right now. And it's the devil for most of the educators. It's kind of the good and the bad. And I think if we can find ways to bring both and leverage the potential and the values of gamifying experiences and those immersive experiences to get those kids that might not be really inclined into physical activity or sports and remove that competition element that comes most of the time with sports to make it more enjoyable. And at some point forget that you're into a physical activity moment right now, but you're enjoying that moment, like creating this gap. I think those kids that we serve the best right now. 

So supporting the development of athletes to make them even more performing athletes is not what we do at Lu's. It's really this idea of like opening this enjoyable moments for physical activity and while you do that, you work on your VO2 max, your cardio and those skills you develop without even maybe not just understanding it or being like making it the first element. You develop the skills that you'll be able to transfer afterward outside of that immersive gym more. 

I think this have a potential for the future. And I think one of the two elements that are kind of critical in schools and lacking focus from school administration in general is mental health and physical health. And we really focus on degrees and math and language and this social emotional learning element, like how do I interact with other, how am I comforted about myself, the anxiety, I think physical education classes or moments are one of the best places to work on those skills for the kids. So if we can support those educators and those moments with tools to make it more enjoyable and powerful, I think that at some point will have a lot of impact. 

It's hard to measure in numbers, like with or without. We try to do it, we work with universities to do that, but it's really specific and narrow on things. So we're pretty confident we're the on the good track.

Bruce Croxon (18:36): Yeah, a good chunk of this is obvious to me. You know, I think about young boys in particular, that are really, we're not wired at the risk of generalizing, but there's been much written about how boys learn versus girls, you know, sitting in one place and trying to take it all in, when we'd all rather be up moving around. It sounds like you're combining the best of all worlds here. 

Listen, you guys are also a certified B corporation. For our listeners that don't know what that is, B-Corp stands for Beneficial corporation, which is a certification given out for companies that are balancing profit and performance. What does being a B-Corp mean to you and to Lu, give us some examples of how that plays out in how you run the business.

Vincent Routhier (19:25): Well, there are five pillars on which we are evaluated to become a B-Corp certified company. And basically it's how well are you performing as a company, but what is the impact you have on those five pillars?

Bruce Croxon (19:37): What made you want to do it? Like why did you do this? Why did you wanna become a B-Corp?

Vincent Routhier (19:44): Have you heard about Yvon Chouinard  story with Patagonia? 

Bruce Croxon (19:47): For sure, man, he's one of my heroes. You kidding me? 1% for the planet.

Vincent Routhier (19:52): Yeah. So this guy turned a company into an impact philanthropy-type of force, I would say. And that's why I'm an entrepreneur right now. So I'm not here for the money it represent. I wanna leave something behind, I wanna make a difference. And I think doing it through entrepreneurship is the best way to do it for me. I can have an impact with my family and friends and things like that, but to have a bigger impact, I think using a company is a good way to do it. And I think B-Corp was kind of a blueprint on how to do it and measure it the best way. 

It was very complex to get that certification on year one and it gave us a lot of things to look up for to make sure as a company we were improving on all those elements. At some point I look up to becoming something as inspiring as Patagonia with our company, but instead of having an impact on environment, it's an impact on the kids' development and their education and their happiness at some point. And B-Corp was kind of a first step for us to document and prove to ourselves first that we were on the track to doing something like that. 

So it was so hard to get it. It bring for me a higher, even a higher much respect of all those other companies that are doing it. It's a very nice community and I think at some point customers and buyers will be looking for companies like that. And if you have to pick from a company that's there for profit and profit is is great, I'm not against profit, but profit done the right way versus the bad way, I think it could become one of the core element of making a decision in which product you can buy. So on the long term, I think this type of vision is going to be supporting the growth of the company for even having more impact at some time.

Bruce Croxon (21:36): Well listen, I certainly hope you're right. You know, it's tempting these days when you see what's going on in the world to get a little bit pessimistic that we're not heading that way. But if we use examples like Lu and certainly Patagonia leading the way, I draw some inspiration from that. 

Before I let you go, I did wanna double-click on one area. Because it's such a software-based business and you know, you've got a lot of different technologies to sort of choose from that you could use to augment the kids' experience, what do you see sort of four or five years out as we sort of get more entrenched into artificial intelligence and some of the tools that are available to you to, you know, put down the pipe, if you will, in game creation and immersive experiences and that kind of thing? Will the kids be having a much different experience on Lu say five years out?

Vincent Routhier (22:30): There is one design principle that I really care about within what we do is this human to human interaction in the same space, like the social moment that is happening. There is a connection here that is very important and I think we're kind of losing it with most of the technological experiences like me and my screen or me and you through screens or things like that. I think it's going to erode social relationships that are very important to me. 

So I think one of the challenges looking ahead for how to integrate technology in those experiences is how can you enhance that instead of replacing it. But I see a huge potential in making those spaces smarter for those moments to happen at even a stronger impact, I would say. So camera vision and sensing and like biometrics and all those elements, I think can be a source of information for a good algorithm to make those moment happen at the very strong potential and impact, but it's very dangerous at the same time. I'm an optimistic guy if you didn't understood that yet. So I think it can be leveraged in a very amazing way and we're working on it.

Bruce Croxon (23:43): Watch out for the smart kids in grade six that start sending in their avatars and replacement of themselves and convincing the teacher that they really are at school when they're not. There's gonna be all kinds of challenges and potential pitfalls. Listen, one last question for you. What advice would you give to fellow Canadian entrepreneurs that want to go global? Are there any strategies or resources that you can pass on to people? A good chunk of our audience, because it is EDC, you know, do have their ears open for how you get outside the country and become an international business like Lu. 

Vincent Routhier (24:18): Just do it. It's even simpler to become a success outside of our country than within our country at some point. So in French we have the saying of [French] like nobody is like trusted within its own country before being respected elsewhere. And I think doing business internationally, yes, have some challenges, but the market is so big. So follow the traction you find at some point. So go out there, present your product and surf the wave. It's not more complicated. Yeah.

Bruce Croxon (24:52): Yeah. Don't be afraid. Beautiful. Listen, thanks very much for being here today, Vincent. It's been a real pleasure hearing your insights and experience and in particular hearing how the B-Corp ties in an amazing job. Congrats on your success. We really appreciate you taking the time to join us here today.

Vincent Routhier (25:11): Thank you, Bruce.

Bruce Croxon (25:12): Okay, [French]

Vincent Routhier (25:14): Real pleasure. Thank you very much.

Bruce Croxon (25:15): Thanks for joining us today on the Export Impact Podcast. If you enjoyed today's episode, we'd love for you to subscribe, rate, and leave us a review on your favorite streaming platform. Until next time.