Within a few months of launching the internet-based business ChinesePod, Ken Carroll and his colleagues knew they had a huge hit. As with so many of the best concepts, it was brilliantly simple: offer Putonghua language courses that could be downloaded onto iPods, allowing people to listen and learn even while jogging or driving. But while the basic premise is straightforward, only an organisation with language-teaching expertise, and staff able to fully understand the internet, would be nimble enough to successfully execute such a state-of-the-art enterprise. Enter Mr Carroll, 45, fellow language teacher Steve Williams, 30, and technical whiz Hank Horkoff, 32. Between them, they concocted a system of easily downloaded lessons that have proved to be immensely popular with users worldwide last year. To date, the owners calculate that about five million lessons have been downloaded from their site, Chinesepod.com, giving users a free Putonghua primer of a few simple phrases. ChinesePod's main source of revenue is through luring keener language students to become subscribers. For a payment of US$240, users can have a year's access to a learning centre stocked with transcripts of lessons, vocabulary builders and other language tools. The sales stream is further enhanced by add-ons, at a cost of between US$9 and US$30 a month. The co-founder is coy about the precise figures but does say that 70,000 people have signed up for the full week's free trial of the online programs. 'It is going up and up and up,' is all Mr Carroll would allow. 'In two to three years we could have tens of thousands, if not hundreds of thousands.' The operation is run from a rented US$4,000 a month nondescript warehouse in a Shanghai suburb, a few blocks and a world of affluence away from the trendy nightlife zone of Xintiandi. Inside, it is a bustling hive of activity, with a core team of translators and technicians beavering away to keep up with demand. Mr Carroll initially came to Asia in late 1988, to teach English in Taiwan. In 1994, he made the then-precarious, if ambitious, move across the Straits to Shanghai to found a language school with another English teacher. 'I was naive at the time,' he said. 'In the first seven years it was hand to mouth and day to day. China was hard to deal with 12 years ago. Now it is much easier but a lot of things still work against the entrepreneur.' One of the regulatory restrictions he cites as ridiculous is the ban on independent schools serving as intermediaries between mainland students and overseas colleges, which would otherwise spin lucrative recruitment commissions for institutions like his. Instead, all the dealing has to be done through a China state body. Still, the business has prospered to the extent that his Kaien language school turns over US$5 million a year, employs 90 foreign and 50 local staff, and has 3,000 students on the books at any one time. Although business was healthy, Mr Carroll concluded several years ago that any further major expansion would involve moving into another city, engendering all the hassle and hard work of beginning, effectively, from scratch. It was at that time that the seeds of Chinese Pod were sown. After all, why not try to use cutting-edge technology to reach a broader market, utilising the language teaching skill-pool in Shanghai and Mr Carroll's personal expertise? The person who could make that idea become reality was technology expert Hank Horkoff, who figured out the way to put together language podcasts, ready to be downloaded from the internet, and, more importantly, to make money from them. The site is considered viral, making it likely people will pass it on to their friends and colleagues, thereby giving ChinesePod a vast potential customer base. The novel business got under way with US$100,000 seed capital put in by Mr Carroll, who is from Ireland, Mr Horkoff, a Canadian, and Mr Williams, a Briton. It was an instant success. 'From an economic perspective it eviscerates a whole bunch of friction and cost - and you don't have to pay for advertising,' says Mr Carroll. 'The revenue is received directly.' Instead of spending money on advertising or other promotion, the company has a four-person team that is the de facto marketing department, monitoring the views of users, who are encouraged to send e-mails about service. The comments, which might be about the difficulty of lessons, or technical trouble with downloading, are passed on to the relevant people. It saves time and money - and ensures ChinesePod staff can respond instantly to the needs of students.