Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
The first principle path to employability | Ashish Munjal @ Sunstone
327 Plays2 years ago
Sunstone—an educational disruptor that’s solving India’s unemployability problem with first principle thinking. Ashish is a serial founder and he shares his lessons of finding product market fit, building pricing power, and growth hacking to reach scale.
Additional links:-
1.This edtech startup is focusing on employability to help students in tier II, III cities
Recommended
Transcript
Introduction to Ashish Munja and Principles Thinking
00:00:00
Speaker
Hi, everyone. I'm Ashish Munja. I'm co-founder and CEO of Sunstone Education.
Addressing Unemployable Graduates in India
00:00:16
Speaker
The best founders in the world are known for their principles thinking, which basically means that you don't get distracted by symptoms, but rather you dig deeper to attack the root cause of the problem. It is well known that a large majority of college graduates in India are unemployable, and the way this problem has been tackled so far is by offering short duration boot camps. But if you apply first principles thinking to this platform, then the best approach would be to improve the quality of education of already established institutes to make their students employable.
Sunstone's Innovative Education Model
00:00:46
Speaker
This is the approach taken by Sunstone. Think of it as an asset-like college. It utilises the infrastructure of existing institutions to offer the same bachelor's or master's degree but with a deep focus on building skills to make the students employable. This approach has got the VC vote of approval and Sunstone has raised more than $60 million in just the last two years.
00:01:05
Speaker
In this episode of the Founder Thesis Podcast, your host Akshay Dutt talks with Ashish Munjan, the founder of Sunstone. Ashish is a serial founder and shares his lessons on finding product-market fit, building pricing power and growth hacking to read scale. Stay tuned and subscribe to the Founder Thesis Podcast on any audio streaming platform to learn about using first principles thinking to solve problems.
Ashish's Background and Career Journey
00:01:35
Speaker
So I come from a very small town near a city named Merritt. My father was in government job. He used to work with like Corporation of India and my mother was a teacher. We have three siblings. I'm the youngest one. So I have an elder brother and an elder sister. And my family chain, they used to be the traders.
00:01:51
Speaker
It was my dad who was first to move out of that kind of business and eventually all of my uncles also moved out. I studied in Kankar Khera. The kind of school that I went through, we used to make joke of people who used to even try to speak in English. My engineering also happened from Merritt. So I just went to the same college that my brother went to in Merritt.
00:02:12
Speaker
to do my engineering. And brother graduated when I entered second year. And then when he joined in first season, he went to Kune, that's when he just got the shock of his life. And that's when he started pushing me, boss, Jeevan S and H and Newala. And that's when he started pushing me that you start preparing for Kat and his motivation was primarily so that I can improve on my English if you start preparing for Kat. But when I started then, then I picked up the habit of reading.
00:02:37
Speaker
And that's something that I realized that, okay, this is something which has been missing in my life altogether. How was the IMT experience? I've heard like it's a lot of fun studying for IMT. IMT was a lot of fun. So when I joined IMT, that's when I realized, okay, what's a holistic education? What we say that, okay, learning happens more outside the classroom. That sort of thing came to me during the IMT days. Okay. And what did you opt for in terms of careers?
00:03:07
Speaker
The number one priority for me was not to do an MBA. The number one priority for me was to do finance. So I realized this during my engineering days and I did some certifications and everything during TCSAs as well. That I love finance.
Transition from Finance to Startups
00:03:20
Speaker
I did double majors in finance. I did my CFA charter and everything. I was like one of those junkies, keep still financing.
00:03:27
Speaker
So like in terms of your replacements, where did you go? Like, did you choose a finance job? After MBA, the basic cutoff for good finance companies like investment banks and everything was eight CTP. I could not get shortlisted. The first company that shortlisted me on day zero was Deloitte consulting. I cracked that interview and I joined Deloitte.
00:03:46
Speaker
So after two or three months, I realized, I can't do this because the position of Deloitte was based out of US. So I started just looking for finance option left, right and center. And I got a job with Bank of America in the investment banking team. So I just moved out and joined investment banking in Bank of America. Deloitte role was more of like handling clients, making presentations, stuff like that. It was not like core finance.
00:04:08
Speaker
It was not co-finance. It was not when Niklei was more on the consulting side. Basically, I was in the SAP practice. I was a FICO consultant. I used to work with again, Florida, the department of revenue skill. I used to work and we were implementing a very large SAP system for them. For my job was to ensure that everything was implemented and we give them the right solution and everything. And what was your role at Bank of America? Bank of America was a very typical investment banking role.
00:04:33
Speaker
So I started my journey with this new team that we were creating, a dual coverage team, which is essentially a middle market team. So the deals which are not very high, the companies are not very highly valued. So middle market team, but I was there for one year, then I moved to DMT, which is technology media and telecom. And that's from there, when I started tracking all these big tech companies, that's when my first love for tech sort of started taking internet companies.
00:04:57
Speaker
What led to the nonarity stint?
Exploring Consumer Engagement at Crownit
00:04:59
Speaker
So, I think, and that's probably the most hypocritical thing that has happened ever in my life, that I realized that I was not made for finance. Pure finance is ultimately not what I would enjoy. I enjoy meeting people, I enjoy driving change, I enjoy creating impact at large scale, working with people and everything.
00:05:21
Speaker
So, there's a roommate of mine who was with me in Bank of America and he moved to Nolarity. So, when I decided that I want to move out of Bank of America, I was very clear that I want to do something in the startup space but I only want to do education. And that's when I started looking out for auction and that way back in 2012-13, there were not many education startups per se.
00:05:41
Speaker
So after five, six months, then he convinced me that what you're trying to do is that you're trying to make two degrees of difference or two degrees of changes in your life from corporate to startup. And startup may be specifically your education. You're limiting your options, basically. Why don't you make one degree of change? You move to startup, and then the whole world is open for you whenever you think that at least you start getting the exposure of startup, working with startup, and then do education whenever you want to.
00:06:06
Speaker
So that's how a nolality sort of happened. And like after that, obviously ground it happened and then eventually sun's gone. So then what was the trigger to like quit your job, become an entrepreneur? I was not one of those person who was very clear that I want to start a company on my own. And in fact, Angkor, who is our co-founder here, he started Entrepreneurship Club in our college in Aamti, Ghazebak. And at that point in time, I did not plan that I will move out of nolality. It was just like 14, 15 months for me.
00:06:36
Speaker
But at this point in time, Samir moved out, I think, six, seven months ahead of me. He was working on an idea. So, two things happened, man. Like, when in Nolarity, the series B raised Karvayata because of the banking background again. So, I was the one who was driving the series B fundraise and everything. And fundraise is a very, like, high energy thing. If you ask after a field of fundraise, then you don't know what's going on.
00:07:00
Speaker
So I completed the fund raise process. June, I think I completed fund raise process. July, I was also slightly on a low and Amrit was also giving me the time care. He has really locked it out. So I was also like, I did not have anything to do at that point. At this point, Samir reached out here, I'm building this. So why don't you come and join me? Samir was heading product at Nullarity before he quit.
00:07:21
Speaker
Samir was adding product and hilarity. Samir Grover, he was adding product and hilarity. And he and Pallav sort of sold
Challenges and Adaptations at Crownit
00:07:27
Speaker
me this idea. Pallav used to be the other co-founder of hilarity. Pallav one day. Pallav moved out. Pallav also moved out 7-8 months ahead, like before I moved out. So Pallav was working with Samir but he was not in the executive role. He was just helping him thresh out the idea and everything. So I used to know Pallav and Samir well. So then Pallav actually was the one who really sold me that idea of Crownit and then I met Samir and everyone.
00:07:51
Speaker
What is the idea of Crownet? So, Crownet was basically trying to do online to offline. So, basically, it's a category. It's not just, the category was online to offline that you should be able to drive consumers who come to your app to the offline merchants.
00:08:11
Speaker
Now, those often merchants can be anti-category and can be food and beverages space. It can be beauty category. It can be experience category. But can you move like business? Can you help a local merchant increase its PNF? So let's say if there are 30 restaurants in sector 29 in Gurgaon, if out of 30, let's say 10 are some grounded partners. So can you increase their top line by 15, 20%?
00:08:38
Speaker
So that was the like the biggest philosophy that if you help them increase their top line, they will give you any revenue share on that. Was there an established model like in the West, some company which had done this? Like what, what made you feel that this will work?
00:08:55
Speaker
It was just the joy of building something in the consumer space. So I knew that I had a lot of education, but I also thought that I had a lot of B2B education. So I wanted to do something in the B2C space.
00:09:17
Speaker
It's not true. It's not true. Obviously, it's wisdom to retrospectively.
00:09:26
Speaker
In the US, the model was different. Group 1, we used to call it a loan shark model. The Group 1 model was different. In China, we actually had a company called Bhoja Chaga. It was a point in time. The name of the company was Metwa. Metwa was doing very well and there was another company, Diane Ping. So, these two companies were killing it in the online to offline space.
00:09:49
Speaker
So for us, whenever in 2014, was that happened? We never used to have a comp from US, but we used to have a comp from China, we are building a comp for India. And like, tell me that journey, like, of ground it must have gone through a journey to find product market fit, and so on, help me understand that, like, what was the version one of it, and then what were the pivots?
00:10:12
Speaker
So we actually did a lot of things in Crownit. So when we started with a very simple model that if you go to a restaurant and initially it was only restaurant, if you go to a restaurant through our app, you will get some rewards. And the whole model was built around that it should not be a transactional journey for you. So that you got the cash back and then you went away.
00:10:34
Speaker
So we created the product first approach that you get rewards and then it's a sort of reward journey continues in the app. So we used to call it crowns and that how the name crown it was there that whenever you do a check-in with us you get crowns. Now those crowns you can accumulate you can redeem if you continue to accumulate you get certain certain certain things.
00:10:53
Speaker
And we were the first ones to introduce a bill picture in the country, that if you're going anywhere, you just click a picture of your bill and basis the bill amount and everything, you get some rewards. Anywhere or with CloudNet partners. So again, that's part of the GTM first, that after I joined, I didn't know what to do. I didn't know what to do. I didn't know what to do. I didn't know what to do. I didn't know what to do. I didn't know what to do. I didn't know what to do. I didn't know what to do. I didn't know what to do. I didn't know what to do. I didn't know what to do. I didn't know what to do. I didn't know what to do.
00:11:20
Speaker
Because it was an app-only product, so we could do very micro-marketing, hyper-local targeting. Even in Gurgaon, we did not start with the whole Gurgaon. We only started with MG Road. MG Road is a restaurant. Let's get those restaurants. MG Road is an office. Let's try to get consumers from that restaurant. Let's start the chain and everything. So we got the restaurant from MG Road. But because there was not bulk of consumers on the app,
00:11:48
Speaker
So the check-in frequency at these restaurants were very, like this was infrequent. We are not getting into the hyper growth sort of a model. That's when we sort of realized that we are not dependent on restaurants for check-ins.
00:12:07
Speaker
If I'm asking them to give me their bill, ultimately, we have to fund the amount,
Passion for Education and Joining Sunstone
00:12:13
Speaker
let's say the cash back or the reward that we are giving. But at least for a small time, till the time we get a lot of consumers on the platform, we can fund that reward. And it's not that at that point in time, we were venture funded. We were still angel funded. We only raised, I think, 1.3, 1.4 CR at that point in time.
00:12:28
Speaker
But we had, like, we were brave enough to still take that call. And we went, I don't know, I think September 1st week of 2014 is when we opened up whole of Gurgaon for the consumers. And then we used to have, like, all those things that there is a star outlet and non-star outlet. Star outlets where we were actually making money, non-star outlet where we were not making money. The star outlet, let me have more cash.
00:12:51
Speaker
More cashback and non-starmic cashback come in so that we are also not just burning through it. But at least consumers now have motivation to make more habit to it because consumer products are always about habit forming. So, what is habit forming? How do you make a bill check-in? How do you make a bill check-in? Crowns are redeemed. Consumers are earning crowns.
00:13:12
Speaker
So, we opened the online restaurant, but then we opened up offline as well. So, we opened the restaurant. And one restaurant is one rupee. Initially, it was one rupee. Then we changed the order. That one round is equal to one rupee.
00:13:31
Speaker
But that's when we realized, and this was not an early realization, it happened like one year later in 2015, that people were not worried about how many crowns I am getting. Like, when I was checking in, I was checking in, and in the crown, whenever you used to check in your bill, and your check-in used to get approved, there used to be like a sound of coins dropping. Nice.
00:13:54
Speaker
Actually, when we did our survey from the consumers, we realized that people have become habitual of that sound. So, we had to check the check-in, and we had to check the check-in, and we had to check the check-in, and we had to check the check-in, and we had to check the check-in, and we had to check the check-in, and we had to check the check-in, and we had to check the check-in, and we had to check the check-in, and we had to check the check-in, and we had to check the check-in, and we had to check the check-in, and we had to check the check-in, and we had to check the check-in, and we had to check the check-in, and we had to check the check-in, and we had to check the check-in, and we had to check the check-in, and we had to check the check-in, and we had to check the check-in, and
00:14:13
Speaker
That was purely gamified experience. So that was doing well. We sort of were reducing cash back in our non-paid outlet, increasing in the paid outlet. We started making gross margins as well. We raised venture funding from Excel, Helion in February, March of 2015. Then we opened up three, how much did you raise? We raised $5.5 million at that point in time. CDS was around $5.5 million.
00:14:36
Speaker
Ustimecase Upside was a good, good series. And then it opened up two or three more cities. We were going really, really aggressive on growth. In that one single year, we onboarded around 15,000 consumers on the platform. And that too, without spending single rupee on acquisition on the Facebook, Google channels.
00:14:55
Speaker
So, 91-92% users were organic. Out of that 64% user, we have a direct parent in the system. Not even word of mouth. Users used to refer each other and we used to know... There was a tree.
00:15:11
Speaker
And we used to track that. Okay. You had like a reward and incentivization to refer initially. Yes. But then there was some regulation around MLM. So initially it was like, Hey, if you refer someone and they refer someone still you get something, but then there was some MLM regulation. So we removed it. It was only one level of rewards, which are permitted. So we went ahead with that only, but we could.
00:15:33
Speaker
track in the system that how, let's say, I know that, okay, if Sairi is referring Ambrish and Ambrish is referring Pallav and Pallav is referring Sabir and Sabir is referring Ashish. So, we used to know, okay, Sairi and Ashish are connected in some way, but Sairi and Ashish will never know that. So, and then we used to know, because there was a feature of tagging, because people used to fight with each other.
00:16:02
Speaker
So, then we introduced a lot of fun features that you can tag your friends. Your crown used to get distributed. If you're checking and you're... And then, we also actually introduced one more feature. It took at least good while storm at that point in time. So, we introduced a weekly rush and that was primarily done to reduce our cash burn on our non-participating outlets.
00:16:26
Speaker
So, on the non-participating outlets, rather than giving you crowns, we started giving you a lottery ticket. We used to call it weekly rush. And that weekly rush used to happen on Friday for VM. So, if you are going to a participating outlet, a star outlet, you used to get a weekly rush ticket and some crowns. But if you go to a non-participating restaurant, you only get weekly rush tickets.
00:16:47
Speaker
And at 4 pm in Gurgaon, because our user base was very homogeneous. So let's say if EY user has downloaded, he will tell all other EY users and only have 10 minutes to claim your award. Let's say if I want to book my show up 500 rupees voucher, if I don't claim it by 4
Sunstone's Hybrid Learning Approach
00:17:06
Speaker
.10, then my friends don't want to refer to EY's direct childless system. I don't want to claim it.
00:17:12
Speaker
No matter if it's Jesse Charles or not, I will have the right to claim his award. And how would you claim the award by going to a restaurant and checking in? No, just in the air. Amazing. So actually in one of the weeks, somebody won an iPhone and he did not claim and one of his friends claimed. And that went viral on Facebook at that point in time. Okay, amazing. So how were you doing the merchant signups?
00:17:41
Speaker
So merchant titles were purely on the business that we will increase your business and everything. Through like sales calls, you have Fitan Street, you have Sim sales. Yeah, yeah, we Fitan Street. Fitan Street, because we don't have a restaurant, we don't have a commercial, we don't have a lifestyle spend.
00:17:58
Speaker
they're not a very large number you don't need like hundreds and hundreds of people on fleet i think at that point in time we calculated that there are only 7000 relevant restaurant in three cities Delhi Bombay Bangalore Delhi NCL Bombay and Bangalore the problem that we were encountered and that we were not able to solve is that we were like if i have to collect a hundred rupees from the smaller merchants
00:18:21
Speaker
Now, that was the problem because we were our consumer internet players. Our take rate after giving cash back was barely 5-6%. And that concludes both sides. If I am only collecting 80% because consumers are not worried about whether I am getting money from merchant or not, consumers thought I am giving the cash back.
00:18:39
Speaker
So essentially, gross margin was getting eroded. But why was that happening with 20%? Was it like 20% of establishments were not paying or was it that establishments were not paying 20% of the amount that they owed to you? So it was both. It was both. So let's say, let's go to a restaurant or a school. Let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let's say, let
00:19:14
Speaker
So, 5-7% from the merchants who were paying us, but that 10-12% merchant who were saying that they were paying us. At this bill, what percentage of bill were you charging the merchant? We were somewhere between 12-17%. So, we were giving around 9-12% to the consumers and 4-5% we were teaching for ourselves.
00:19:34
Speaker
I guess friction is that the merchant would probably say that the customer is going to pay for it. Just because he clicked a photo of a bill now, I have to pay for a customer that I anyway owned. Like that could be... So because we were a product first company, we did a lot of things. So what we did was that we had to go to a restaurant. So we had to go to a restaurant to activate the bill.
00:20:01
Speaker
So that I should know in advance, then I will not be able to sell restaurants and consumers. We again gamified it. We put a real sort of a feature in that.
Focus on Real-World Skills and Investor Interest
00:20:24
Speaker
If the wheel comes out, the percentage of people who are in the restaurant will be in the cash bag. If the customer is in the cash bag, the consumer will be in the cash bag. If the consumer is in the cash bag, the consumer will be in the cash bag. If the consumer is in the cash bag, the consumer will be in the cash bag. If the consumer is in the cash bag, the consumer will be in the cash bag. If the consumer is in the cash bag, the consumer will be in the cash bag. If the consumer is in the cash bag, the consumer will be in the cash bag. If the consumer is in the cash bag, the consumer will be in the cash bag. If the consumer is in the cash bag, the consumer will be in the cash bag. If the consumer is in the cash bag, the consumer will be in the cash bag. If the consumer is in the cash bag, the consumer will be in the cash bag. If the consumer is in the cash bag, the consumer will be in the cash bag. If the consumer is
00:21:04
Speaker
Actually, we were the first one to do a lot of such features in the industry. We were the first one to launch a dine-out, which is pay-through dine-out. We were the first one in 2015 to launch pay-through ground net, so that if I am controlling the money, if merchant is paying me or I am settling to merchant, the whole equation changes.
00:21:15
Speaker
So we can notify restaurant you can expect.
00:21:24
Speaker
Yeah, right, right, right. Then you're not chasing them to recover. If I am paying the merchant, I will cut my share and then pay it to them. My revenue is not at stake. What were your lessons from that crowded journey? Because I don't think it lived up to its potential, right? It did not, it did not. And then we, so we tried a lot of things. We tried doing affiliate model, the cash flow model. We tried doing a meal card, so we launched our own. What is that affiliate model?
00:21:48
Speaker
Affiliate is more like a model of online job shopping. We try doing that as well. You get crowns. Okay. One thing which was constant. You get two currencies in the system. You get these two currencies. Then we launch our own meal card. Then we launch our own credit card as well with RBL bank. What was that? Meal card?
00:22:34
Speaker
which would need a lot of B2B selling because then you have to go and sell to HR's of companies
00:22:43
Speaker
Yeah, so that was one. Then we launched our credit card. It was a very small quantity of round. It was used to get financed from the RBL bank. It was a very small quantity of round. It was used to get financed from the RBL bank. There was no RBL card reward system. There was no RBL card reward system.
00:23:08
Speaker
Then we launched our crowded vouchers. So that's when we sort of did one more experiment of starting doing some sort of market research reports and everything. And that's where we started getting good traction from brands like HULBNGB signed later, but we started getting some traction from smaller brands. So we did a lot of work for FNB, large dominoes and everything.
00:23:35
Speaker
first one. And that's when we started the pivot in 2016. So what is this platform now? Does it still have that crowns ecosystem or is it like a survey platform where you answer surveys? You do keep doing activities, you keep getting points, but now the monetization is not from the smaller merchants.
00:23:58
Speaker
We monetized from larger brands. From more B2C first company, now we were becoming a B2B or an enterprise company. So, late 16, early 17, we did this pivot. 2017 is when we raised some more money from fresh investors on the new model. And then both Pewish and me, actually I did not talk about Pewish so far. So, we worked together in our first job in TCS.
00:24:23
Speaker
And then we were together in IMT. And then he joined Crownit right after me as the founding team. So, we have been like the closest of friends since like 14-15 years now. So, Piyush and I, then we decided that, okay, this is not something that both of us will enjoy for a very long time. So, 2018, June is when I moved out.
00:24:48
Speaker
and 2018 October is not huge. But if you look at from the larger space perspective, apart from China, even today, Metwa is like a super act. Metwa also do ride booking. Metwa and Dianping now has merged. So they also do ride booking. They also do food delivery. They are the largest food delivery company in China.
00:25:11
Speaker
So, like Zomato would be the closest to cracking this, right? Like offline to online. They've acquired Blinkit also now. Pre-pandemic, but they tried to do Zomato Gold as well, which was doing well for them, but then they also almost shut it down. I think I don't see that in the app anymore, but it's...
00:25:27
Speaker
Right now, if you see, they are not doing anything on the rewards space, per se. Which is, if you really want to drive offline to online, it's more like a blanket kind of model. So, Magic Pin is actually also doing food delivery now, I think. And now,
00:25:45
Speaker
The matter is invested in magic pins, so they are together, sort of. Now, like any consumer product which helps you become more lazy, the trajectory is like your J-curve. Right? So, Blink, Zepto, they are actually helping me become more lazy, become more forgetful. I don't even need to plan like a milk basket. I don't even need to plan like a milk basket.
00:26:13
Speaker
This is true. This happens now. So as a consumer, they are telling us to be, it's okay to forget.
Future Plans and Expansion Strategies
00:26:23
Speaker
So this is making us more lazy. But if you look at online to offline, I am expecting you to see something online, but go offline and may get purchase offline.
00:26:38
Speaker
There's a lot of friction in that. True. So, from Grounded to Sandstone, tell me about that. Yeah. So, Grounded, I moved out in June 2018 and this time it was a much more, I will say, informed thing because the clarity to Grounded almost happened wherein Pallav Samir reached out and I sort of walked into it.
00:26:59
Speaker
But this time it was more like, okay, you have done corporate, you've worked with startup, you've started your startup. And now is the time that because then education thing was always at the back of my mind. So if you want to do anything in education, this is the time.
00:27:14
Speaker
So that was one of the thought process that if you really want like one serious, real try, real chance that you want to take, this is the right time. And in fact, in education space, I started something in 2012 as well, simultaneously while I was working with Bank of America, and I could not scale that up. So I shut that down within six months. And again, that's something that very few people know that I want to create some value for those people.
00:27:44
Speaker
And like which courses did you want to target? Like how did you want to bring in accountability? So see, ultimately when we talk about accountability, when we talk about courses, it's very simple that students who are opting for professional education, they are looking at, okay, by end of my program, I should be employable. I should get some employment opportunity.
00:28:08
Speaker
So what we tell students is that here we are plugging ourselves into the colleges. So Vahape, you not only go through their like credit program, you also go through Sunstone program. But if you complete Sunstone program successfully, the probability of you not being able to get a job is closer to 0%. First student is keeping his side of promise, then you should also give your side of promise.
00:28:33
Speaker
I have a boot camp, a financial school, some career readiness program, it can be anything. But ultimately the outcome should be this.
00:28:42
Speaker
Okay. So tell me the journey of, again, product market fit. Like how did you discover what was version one then? So this was sort of when I was moving out in 2018, I was just meeting everybody in the education space from every founder to VC fund to even people who are in the traditional education space as well. So I met Rajul Garg. He is the founder of Pine Labs and Global Logic and runs his VC fund now Leo Capital.
00:29:10
Speaker
So Rajul sort of started Sunstone in some form and shape in 2011 and then he moved out from the executive role in 2015 or 16. So when I was moving out I met Rajul as well because he used to sit on our board in Nolarity.
00:29:25
Speaker
So I gradually told me about this model. So I started some time with the people who were running it. I liked the model primarily. Because you are not asking students who are doing engineering, who are doing engineering, who are doing coding, who are doing coding, who are doing coding, who are doing the job.
00:29:44
Speaker
In a way, you are telling me that I have managed to work with Charles, that was just for a piece of paper. And nobody is trying to solve that. Everybody is creating a layer on top of your formal education, formal education, this, that, and the model that Sunstone was following at that point in time, that we will plug ourselves in your college itself, so that Sunstone has employability.
00:30:10
Speaker
By the time you complete your college and degree, you have a degree and you are employed. Now, this is something which is a winning proposition of education. This is what I call it.
00:30:26
Speaker
We are working with the colleges, we are helping them do everything, helping them create curriculum, helping them do everything. But there is also a top-up module which is outside of any regulation. So let's say if you talk about MBA, UGC says, if you don't have an MBA, you will have an MBA.
00:30:43
Speaker
Now we tell it's good for we created 600 hours of module that is purely focused on employability. But as a student, you will get 1500 hours of module, which is one 18 module for you. You have to study for these 1500 hours, you will get degree and you will get a job. If you complete this 1500 hours successfully, it will not happen and you will not get a job.
00:31:06
Speaker
So, Sunstone was basically working with B-schools for MBA courses and the student would opt-in voluntarily like in a batch of 100, only 50 could opt-in. Was that the way they were doing it? So, it starts from the very beginning because in the middle of the journey, you cannot tell the student that they are doing this structure. So, it starts from the very beginning. When a student is planning to take admission, we give him the option that this is Sunstone's preposition.
00:31:33
Speaker
You, let's say, right now we are partnering with around 48 colleges. So now you go into any 48 of these colleges, you will get the plain vanilla degree, which you anyways are getting from colleges. That's a very standardized degree works. It's the same MBA that you get from UGC. This is what you get in addition to your degree, which is Sunstone module.
00:31:55
Speaker
Now, when you're taking admission, you buy this, both the products simultaneously. We do not sell Sunstone modules separately. We plug it with your degree program itself. So you get your degree from college, you get your employability modules from Sunstone. And then by the time you graduate, you are employed, basically employed rather than only employed. So like in a college, there would be two sections. One section could be the Sunstone section, which is people who chose. And then the college would have its own direct enrollment, which would be a separate section.
00:32:25
Speaker
That is right. That is right. But we have also seen that in most of the colleges, the moment we plug ourselves, our enrollments over the years go through the roof and either they merge our program also with their program or they shut it down or in some cases they continue to run also.
00:32:42
Speaker
What is the price differential for a student like normal course versus? That's actually the interesting part. There is no price differential for student. Then how do you, like, how do you make money then? Let's say if a student was earlier paying 3.5 lakh rupees for an MBA. So what we try is that there should not be like meaningful difference. It can be 3.6, 3.7 or 3.4, but it should be the same ballpark for student.
00:33:07
Speaker
And I am moving students from other colleges to these colleges because Sunstone is partnered with this college. So, it's the Sunstone enrollment that I am able to drive from all the neighborhood in the same vicinity to the Sunstone partner college. So, on that additional business, obviously, we generate our revenue share with the college.
00:33:26
Speaker
Who pays for the extra 600 hours of Sunstone course? Everything is part of our revenue shares. So from student perspective, the fee is fixed and it is closer to the actual fee that otherwise he would have paid. The revenue share you take from the college, from that you fund the teacher because you would also need to deploy teachers at the college.
00:33:46
Speaker
Yeah, we need to deploy teachers, we need to do admissions, marketing, we need to develop curriculum, we need to have learning outcome staffing. And we also have a very large team of placement, like CRC members as well, who actually reaches out to corporate as well.
00:34:02
Speaker
Because that's also one thing that we realized that colleges per se do not do a very like a super hard work in that. But there is no skin in the game from their side. So that's not like one of the key things for them.
00:34:22
Speaker
From our perspective, there is a lot of energy bandwidth that goes primarily only on the outreach side as well. So there are two elements to employment. One is that you make students employable and then you create employment opportunities for them. So there is a lot of energy that goes from our side on creating those employment opportunities as well for students. You're not doing that. Income shares kind of an arrangement with students.
00:34:47
Speaker
We never did income share, but we used to do pay after placement when we started. So the model initially in the first two or three years was that you start your program, you pay me a very... Before you came in or like the income sales? Before I came in was also pay after placement and after we sort of took over and we also continued with pay after placement for initial two or three years.
00:35:11
Speaker
But there is no more pay after placement right now because there is enough data in the market that the Sunstone student, the placement percentage is closer to 100%. They're getting into good jobs and everything. So we don't have to carry the burden of pay after placement anymore. It was a good go-to-market strategy for me because in education, brand is the most critical thing. And suddenly, if I just start saying that, okay, Aseesh and Piyush have started a company and now you should come and study with us, obviously, who are we that students should trust and believe?
00:35:40
Speaker
So tell me that journey of building out these pieces. Like you said, you have curriculum, you deploy teachers, you have a placement, like a placement outreach support and all of this. Like how did you build out the various pieces of this? We did not have to build everything at day one. Like I did not have to worry about placement at day one because I knew student will be graduating two years later.
00:36:03
Speaker
So I can focus on placement after one year. The first three months were only focused on how do I get student, how do I get the distribution right. Admissions and marketing. Next six months were only focused around my curriculum, putting the right faculty, whether it will be a hybrid model.
00:36:23
Speaker
And then that sort of has continued that we have continued to iterate a lot on our pedagogy, our curriculum, how the model will evolve because we also don't want to be a completely offline kind of a model because they are the standardization and the delivery quality is something that you cannot control at like 30, 32 cities that we are right now presenting.
00:36:43
Speaker
So what we did is that we sort of evolved it into a more hybrid model, where it's a mix of offline and offline. So you will have somebody, it's not that we will just leave you completely without any human support in campus, but it's not that you will have 15 people from Charleston in every campus.
00:37:00
Speaker
So we will have some human support, one or two people in every campus, so that they are taking offline classes also. And they are helping students if they need any help and everything. And there are a lot of online teaching that happens through our studios. Now, central learning also. Now, the benefit of doing central learning is that, let's say, if I want to get an IM professor who teaches economics,
00:37:24
Speaker
Or if I want to get a person who is like OG in digital marketing, now that person will not go to 32 physical campuses.
00:37:33
Speaker
Plus, it is not viable for me also. My unit economics will not work if I start sending these star faculties in all these campus physically. Now, they can come to our studios in Gurgaon and Bangalore and can teach from there. From a student perspective, a Guwahati student suddenly now has access to let's say a top digital marketing guy from one of the digital marketing agencies, which earlier was completely unavailable for him.
00:37:58
Speaker
small and this class they will be sitting in the campus only like there's not like they're sitting at home.
00:38:04
Speaker
they will be sitting in the campus. They will be sitting in the campus and that's why you have physical presence in the campus because you work with campus authorities to work out the schedule that, okay, this will be schedule of my students and everything. So that's why you have to be in campus. You cannot run these things completely digitally and you have to tell or maybe you will have somebody a TA or a campus manager or executive present in that class physically as well when that class is being delayed digitally.
00:38:31
Speaker
all those things has to happen but yeah ultimately the real beauty of the model comes in when you can get them access to best of the faculties best of the jobs and similar things happens in placements as well so let's say there is a student which is who is sitting in Guwahati now earlier that student will have access to job opportunities which are in an like around Guwahati and that is the reason there is lot of migration happens in education
00:38:56
Speaker
People want to go to Bombay, Bangalore, Delhi, Pune to study because they know that employment opportunities are in and around that city. Now what we tell students is that, let's say if there are 48 campuses in Sunstone, there will not be any single job opportunity which will be not for some specific campus. So suddenly there is one Sunstone, one community sort of approach, one platform that we follow, that suddenly a student who is based in Guwahati is at the same level of student who is based in Bangalore.
00:39:25
Speaker
I want to zoom in a bit on the curriculum. What is your thesis that this is missing from curriculum? I need to teach these skills. What are you covering first? What we very seriously believe is from the philosophy perspective, there are two big areas in which the curriculum needs to be worked on.
00:39:44
Speaker
The first is that if you look at the prescribed curriculum of any program, whether you look at BTEC, whether you look at MBA, this curriculum is created keeping in mind the top 10% students. Because at BTEC MBA we are teaching them portals, five forces, we are teaching them international business strategies, we are teaching all these things to the student. When we are talking about the student who are not in the top 10% segment,
00:40:13
Speaker
What are the kind of jobs they will be doing? Are they going to work in strategy consulting? Are they going to work in equity research, investment banking? Are they going to be hedge fund traders? They are not. These are the kind of jobs that will come to the top items. And there is no shying away from that. There is no hiding away from that, right? The kind of jobs that the next best will come to next best institutes like ours,
00:40:39
Speaker
will be jobs like IT, analytics, banks, etc. These are not the kind of things that are ever there in our curriculum. Nobody teaches you sales, even though sales is what most FBA's end up doing.
00:40:54
Speaker
Sales is 30, 40, 50% MBAs end up doing sales. Nobody teaches you sales. Nobody teaches you digital marketing. And in fact, let's say when you're teaching them those concepts, then you have to make them very relevant. Don't teach them 20 things, teach them five things, but make it much more real and relevant. That's where the irony is. When you're teaching them irrelevant thing and then you're expecting them to be employable. That's like, you can't have your cake and eat it.
00:41:20
Speaker
and have your cake and eat it. The second thing which is very strict to Sunstone is that we have a theory and we have a philosophy that there should not be any teaching or when I say teaching I mean that there should not be any broadcasting person.
00:41:36
Speaker
The person should not be that you and then he goes away and then you expect students to learn. This is not how learning happens. This is how broadcasting happens. So we have a very clear one of the pillars of our curriculum is that the broadcasting should not be for more than 20% of the overall classroom program.
00:41:56
Speaker
You cannot be speaking. You should not be speaking because more attention. So that is the another pillar. Your curriculum, your videos, your learning guides, your caselets, everything is created basis, this pillar of curriculum. MB is what you started with, right? Like what are the courses that you cover now?
00:42:17
Speaker
So we started with MBA, we've launched BA, BCA, BTEC, MCA last year. So again, it's not that we are doing BBA, but we have partnered with colleges for those programs. So, and the add-on, the Sunstone add-on would be different for each course, right? Because obviously a BBA and an MBA student will have different levels of understanding or the kind of jobs they get would be different.
00:42:39
Speaker
It will be different. So BBA, MBA, 25% overlap, but BBA or BCA overlap won't come.
00:42:50
Speaker
We will teach you software development.
00:43:11
Speaker
we will teach you full-stack, we will teach you wording. If you don't, as a mechanical engineer, if you don't want to be making a career in software development, then Sunstone is not the right place right now. What kind of jobs do EBS students get? So, typically, similar entry-level jobs, sales, customer account management, banking, BFSI, there are a lot of students which go in banking.
00:43:35
Speaker
Read it in the writing, then there are a lot of students which are nowadays going in the delivery and logistics as well. We are housing management. Do you also like fixed in English? I was assuming that would be a problem for a lot of kids, right? Especially getting good jobs with that English fluency.
00:44:14
Speaker
Internally at Sunstone we focus a lot more on the communication that you should be good in communication irrespective of language. You should know how to articulate and express yourself but the mode of delivering Sunstone is English. So we get a lot of requests from students that can we have mode of delivery in our regional language. Till now we have not done that because we know that if you have to crack interview appo, we can do English.
00:44:21
Speaker
So India, I think only time you need English is in the interviews.
00:44:43
Speaker
In pay after placements, the college fees are also paid after placement because one component of payment is college. Okay. Yeah. So that was also which was hitting us hard because colleges were not someone who would agree that, okay, we will work with you on pay after placement. You were financing the college there. So we were getting some money from student upfront. So primarily, college's revenue share were going from that. And then we were not getting even a single penny till the time was too long.
00:45:11
Speaker
That was the same crowded problem. That was the same crowded problem. Merchants paying after you generated business for them. Right. How do you do student acquisition? So for that, we do everything. We are everywhere. We do like offline trade shows.
00:45:32
Speaker
Education fairs. We have a very, very robust and very thick school connect program. Not career fairs. So what we do in a school is that...
00:45:51
Speaker
So, we have a sort of a Sunstone Rise. We have a program. So, we don't want to be one of those. We have a program which we call Sunstone Rise. So, during that program, one of our, let's say, person goes, take them through our presentation, then a student has to go through a career discovery test.
00:46:16
Speaker
So basis that test student gets to know that what are his core skill set, what are the kind of jobs, what are the kind of courses that he should pursue and we don't do that. We gave them like list of 3-4 options that BCMA up to 80% probability that you will do good.
00:46:33
Speaker
These are the kind of jobs that you will do well. Then we have an app on which student can come and he can also take sort of a sampling experience as well. So we also run one week long UG programs and PG programs, one week BCA, one week BVA, one week MBA.
00:46:50
Speaker
Learn about those programs, what to expect in BCA, what kind of education will happen, what kind of jobs you can expect and all those in what will still you will build in BCA. So those kind of one week, these UG programs sort of work and that's basically our school connect program. In the last one year, I think you raised more than 60 million dollars, right?
00:47:08
Speaker
We have raised, I think, overall, you can say debt and equity combined in that range. What makes investors so excited about what Sanchon is doing? I mean, this is a very, very big amount of money you've raised in just a year. So I want to understand what is it that is making investors excited.
00:47:26
Speaker
Yeah, so I think it's primarily the segment we are going after and the approach that we are taking to solve the education problem. One is that I'm not creating a separate layer like all of those things. I'm trying to fix the problem within your college days itself.
00:47:46
Speaker
If I am able to fix this problem within college, there is no need for all these boot camps and everything. I have an advantage over others that, okay, I am starting early in a student life. I am capturing him early and I have a larger time with the student.
00:48:01
Speaker
I am not in rush. I have four years with me. So that is one. Secondly, the segment that we are going after, we are not going after the top 10% segment. We are going after the middle segment. Top 10% can create a next 20-30% color. And this is where the real India is sitting. And we have around 25% students who come from farming backgrounds.
00:48:28
Speaker
So, this is the segment which is becoming aware about education and this is the segment which can create large impact in the overall GDP and the economy of the country as well. So, I think this is something which is not only giving excitement to investors, this is something that keeps us driving also every single day.
00:48:50
Speaker
What's on the roadmap for you? One way could be that you become like a kid college operator, like where you take over the college and it becomes like a sandstone college. Is that something that you want to do? Like say what your rooms does with the townhouse where they are running it?
00:49:05
Speaker
That is not something that is on the pipeline or that's not something which is on the horizon because we are not in the business of like running physical assets. That's not something that we are good at. That's not something which comes naturally to us. Then that's because you ask how do you, like if you're keeping the same fee, how do you make money and how do you become profitable?
00:49:27
Speaker
So, for me to become profitable, I have to ensure that my customer acquisition cost is at lower so that I don't have to increase my fee. So, primarily the roadmap is that we have launched UG courses last year, we have launched tech courses last year and we now know that we have done well on the management side, we understand management.
00:49:44
Speaker
Now the focus is for next two years is only to do UG and only to focus on tech side of courses. So it's a learning that we build. It's not that key. First year we decided now we will do UG, now we will do tech and from six months later, we will become like perfected that way.
00:50:02
Speaker
And what's your current ARR? I'll tell you some numbers. So on an average, our fees is around 3.5 lakh rupees overall. That includes college here and ours here. This year we have, we will be enrolling around 4,500 odd students. And then obviously our plan is to grow two weeks. So this was 4,500 was 2022. And for us the admission season sort of ends in September. We only started working on the 2023 sort of admission season.
00:50:28
Speaker
So for 2020 through we are targeting to do around 9000 overall enrollment. So grow 2x from here. So every year consistently we have been growing between 2.5x to 3x. This year is what we are keeping a slightly lesser target for ourselves. We are not targeting to grow 3x, we are targeting to grow 2x from here.
00:50:47
Speaker
And that brings us to the end of this conversation. I want to ask you for a favor now. Did you like listening to this show? I'd love to hear your feedback about it. Do you have your own startup ideas? I'd love to hear them. Do you have questions for any of the guests that you heard about in this show? I'd love to get your questions and pass them on to the guests. Write to me at adatthepodium.in. That's adatthepodium.in.