Behind the fall of the edtech sector is a string of factors, like drop in demand due to reopening of offline classes, failure of start-up founders to adapt to the post-Covid market requirements, mounting losses, etc. In fact, the fall of edtech unicorn Byju’s from grace happened during this period. Arjun Mohan, who has worked extensively in the edtech sector, fears that all the negative narrative around it might affect the perception about online education, one reason why he decided to write a book about the sector

Why did you choose to get into a mentorship role post upGrad?

I got the opportunity to work with more prominent edtech start-ups, including Byju’s and Vedantu, which needed help as, currently, things are not great for the sector. It basically started as a project for profit and loss optimisation.

For instance, I worked with Byju’s on ways to make its many subsidiaries’ cash flow positive and independent. However, I got a lot more involved because there was a leadership gap in the company.

Since you were trying to keep the subsidiaries in the black, were you the one who gave the idea of putting Great Learning and Epic on the block?

I am obviously helping Byju Raveendran in many of these things, but the idea is finally his. I will not claim ownership of any of these, but it is a self-evident thing for him to do because Byju’s had lots of liabilities that could not be paid out with the cash flow it was generating.

In fact, many companies have now moved into the positive territory of cash flow, but paying so much money is not possible for these companies in a short period. So, it was a foregone conclusion that Raveendran would have to sell a few of these.

While Byju’s had accumulated much debt and financial liabilities, Vedantu had to balance its expansion plans to avoid getting into the same dilemma as Byju’s. How did you modulate your learnings and apply them to these edtech companies?

Firstly, I do not think there is a standardised or cookie-cutter approach for this. You must understand the problem statement, the ambition and the objective of each of these companies.

For instance, I am mentoring Lakshya, a coaching centre focusing on commerce courses predominantly in Kerala. I found that the founder had been running it as a bootstrapped start-up for 12 years. That shows how good he is from an operations perspective. I wanted to expand his company pan-India.

We started by deep-diving into the audience; he already had one fixed set: college students. At the same time, there was a new audience comprising working professionals who wanted to do courses like CA (Chartered Accountancy) and ACCA (Association of Certified Chartered Accountants) and preferred an online mechanism.

So, we used the features of his offline courses to create online products and started expansion in selected cities like Bangalore, Chennai and Dubai. In the first phase, we decided to launch these products on a hybrid model, sell them and scale it so that once the market knows the brand, we would open centres. That strategy really worked, and Lakshya has grown 3x in the past year.  

Byju’s problem is different; Raveendran built out a cost structure expecting $3 billion in revenue, while he could actually do less than $1 billion. He must first accept that it is what it is, work on the cost structure and be more product-focused than sales-focused. With Vedantu, it is more about the mode in which they are expanding. As a predominantly test prep company, they get 70% of their leads in problem-solving tuitions but cannot convert these since they do not have a product.

So, each of these scenarios is different, and you can arrive at a solution only after you deep-dive into every company’s competency, which can be used on scaling up.

Where did you get the idea to write the book Educating a Billion?

The idea germinated early in 2023, when I saw that edtech suddenly became everyone’s favourite whipping child. This was a very stark change from when it was seen as a messiah during Covid-19.

If this narrative continued, we would start bashing edtech so much that people would stop taking online education seriously.

I wanted to give an alternative narrative since I have seen the genesis of this sector. I wanted to share stories about productisation, the research edtech founders undertook to build the right kind of content and how this appealed to investors and students.

Do you think edtech has become this whipping child because of the instances of aggressive selling, and sometimes mis-selling, and other lapses? Will your book get people to understand how it reached this stage?

Yes, I think it takes one guy to start a movement in that way. One reason I am doing this (writing the book) is that I am involved so deeply with many edtech companies, and it is my deep belief that it is essential for this country. We need more money for so many universities or quality teachers. There must be solutions that can be done at scale at low cost and affordable to more people.

So, during January and February 2023, I would literally write and rewrite for three hours. Also, I am aware of more books coming out on the edtech industry from outsiders and journalists, which I do not expect to be positive. I wanted the first book on edtech to be positive so that there is a balanced narrative out there.

Did edtech companies lose user stickiness since they capitalised on the educational need by concentrating more on fancy gadgets and eye-catching graphics than engaging content?

That is right. You cannot build this in the first iteration, as every industry takes a long time to grow. The issue was that, without doing all this, there was a lot of success and money coming in, because of which nobody bothered.

Now, if these companies were finding it hard to expand, what could they have done? They could have looked closely at the product to see if the customer was getting the right outcome and then built a good product. The black swan event (the Covid-19 pandemic) delayed it, but we see them working towards it.

How is edtech 2.0 getting set to deal with the curveballs thrown by large language models and ChatGPT?

When OpenAI launched ChatGPT, most kids used it to copy-paste their homework, seek answers for assignments, etc. An edtech called Chegg had a subscription-based business model to provide this service, but they lost all their subscribers and their valuation fell when ChatGPT was introduced. You are not helping the student by using ChatGPT; you are only helping them cheat by getting the answers.

Coming to Byju’s, we have used ChatGPT4 to create a similar AI-driven chatbot that does not answer directly to a query but questions students on how to answer this question. In this process, the student goes through all the steps to get the answer. That is a powerful use case because the students will return to the edtech platform when they need help with homework or a tutorial.

Are edtechs too not facing the challenge of getting kids to complete the course they enrolled for because students might sign up for the wrong one without understanding the course, lose motivation or have other technical issues?

Coursera’s course completion percentage is 2%. The issues you mentioned are true, but the biggest issue is that education is not entertainment. There are times when it gets boring, which you can solve to an extent by making interesting and entertaining videos.

Hence, a mentor or teacher must constantly track students and tell them if they are moving away from the process. This is how I got the completion percentage to 85% on upGrad.

I am trying to bring this model into Byju’s to give good service to parents and children. Changing this perception will take months, though.

This means Byju’s must be realistic about delivering what it promises.

100%. Also, I do not think that all the things that were made up about Byju’s are true. Yes, some wrong promises were made, or wrong things probably happened, but these are easy to change. It is basically about governance issues and right control. I see that the founder is trying to do that, and I am confident this narrative will change.