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Rethinking the business of business education | Pratham Mittal @ Masters’ Union
315 Plays1 year ago
Masters' Union is a modern business school transforming education by opting for hands-on, real-world problem-solving. Pratham shares his incredible first principles thinking approach that has driven him on his mission to build a global top-tier B-school in India.
Read the text version of the episode.
Read more about Masters’ Union:-
1.We Want To Empower Creators With Practical Education: Pratham Mittal, Master’s Union
2.Technology’s role is to enhance work done by leaders: MU's Pratham Mittal
4.Can the experiential learning of Masters' Union be the Indian MBA alternative?
5.Top brains commit Rs 300 crore to build Masters’ Union School of Business
6.Masters’ Union Launches The World’s First Professional Education Programme For Content Creators
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Transcript
Introduction by Pratham Mittal
00:00:00
Speaker
I'm Pratham. I'm the founder of Masters Union. It's a new age business school in Gurgaon.
Disrupting Traditional Universities
00:00:16
Speaker
Some of the oldest institutions in the world are not business houses, but colleges and universities. And I call it university like Oxford has been around for more than 10 centuries. So imagine the courage and irreverence you need to disrupt traditional universities.
00:00:32
Speaker
Pratam Mittal is probably the founder most suited to actually attempt
Family Background and Startup Experience
00:00:36
Speaker
this. He is from a family that runs one of North India's largest universities and he has built and ran a bootstrapped startup in the US before returning to India. In this fascinating interview with Akshay Dutt, Pratam talks about what he is building at Master's Union and shares his incredible first principles thinking approach that has driven him on his mission to build a global top 10 B school in India.
00:00:59
Speaker
Stay tuned and subscribe to the Falnathisa's podcast and any audio streaming app to learn how to use first principles thinking to disrupt large traditional businesses.
00:01:16
Speaker
We come from a hardcore Marwadi Baniya family. My grandfather, in fact, used to run a small sweets shop, right? So he used to sell a lot to birth to all of them. This was in Jalandhar, in Punjab. And I remember my first childhood memories go back to the time when I used to go visit the sweet shop and actually sort of sit by the counter and accept receipts and make change payment, et cetera, all of that.
00:01:38
Speaker
The education system was ICSC for me. And that had a huge focus on sort of this rigor of learning, right? Everything was very hard. Syllabus was always more than you can chew. There were always exams. There was always tests. The school sort of believed in making sure that you work hard. And the rest, everything, they just sort of did not focus on too much. And I fell for that, right? I fell for that trap. And I had to be first or second. And if I'm second, then I hate the guy who comes first. All of those things used to happen.
00:02:07
Speaker
And I think, you know, these childhood experiences really do shape you. When you do grow up, I was fortunate enough to attend the Doon school, which is a boys boarding school in there. I think that's where I met students who are not just from Jalandhar or Punjab. I met kids who were from Bombay, Bangalore, Calcutta, Assam. When you're surrounded by diversity, that really opens your mind up quite a bit. And I think because of that, I was able to make a successful application to go abroad to University of Pennsylvania, which is a very competitive school to get into.
00:02:34
Speaker
I got extremely lucky that I was in the right place at the right time and got to attend UPenn. And of course, the American education system did what Doon School had done to me at a national level. Pended to me at a sort of global level, right? Again, friends from all over the world, professors from all over the world.
00:02:49
Speaker
for the first time I was studying religion studies and gender studies and archeology, but at the same time also studying finance and marketing and engineering. And so, you know, the diverse stuff that the American system exposes you do is really the strength of that system. So I don't think I had any set ambition, but I think like, as I mentioned earlier, right? Like business and doing business was something that was always understood, right? That's sort of the only lifestyle we are exposed to. Everything else is lesser.
00:03:16
Speaker
wealth creation can only happen through business. Dreams can only be achieved through business, trading, hustling, finding opportunities. And so me and one of my friends ended up sort of together in a class project. That class project became a product. The product became a business because we had a couple of clients here and there. And then one thing led to another. It wasn't that day we sat down and decided this is the business we are going to do. It sort of organically just became a business. It started off as a project. And I think that's all a lot of good ideas come from. They come from problem statements. They come from, they come organically.
00:03:45
Speaker
So I think that's how Outgrow happened, which was our first company where we make interactive content pieces for large publishers. So when you go to New York Times or a Wall Street Journal or a BuzzFeed, any interactive content like a quiz or an assessment or a grader or anything that captures your lead is more often than not powered by us.
00:04:02
Speaker
I want to know that story of finding product market fit. That's something which fascinates me. You must have struggled for a while before you discovered this is how we make money. I want to hear that journey. Yeah. So I think when your product is born out of a problem statement, then it's very hard for you not to get
00:04:24
Speaker
product market fit. But if your product is a solution first product, you're like sort of a solution in search for a problem, then you need product market fit, then you have to pursue product market fit. So for us, what happened was that a local newspaper came to one of our classes and said, Hey, listen, whenever we have to run political polls, we have to get developers and the developers have to create this poll and that poll has no analytics and all of that.
00:04:48
Speaker
So can you help us create a better widget? And we said, okay, we'll create it. It's not that complicated. So me and my business partner, we just sort of sat down one night and we hacked it up, right? It was a very basic product, but the next day, the next week we presented it to the guy who had come to a class and we said, hey, listen, he has a solution and he's like, oh, this is perfect. This is all, you know, what I wanted. Can you just add XYZ features to it? And I was like, okay, perfect. That's another couple of days of work, the security and add a login and a logout, all of that stuff, right? So we did all of that.
00:05:17
Speaker
And then we went back to him and said, hey, listen, here's it. There's the product. And he's like, oh, perfect. How much do you want? Like in compensation for it. And we're like, oh, we didn't know like that was a deal, right? We were just doing this because we were students. And then, but later we came back a couple of months at pass. We realized that, hey, listen, if you could solve this problem for this newspaper, maybe we can solve it for New York times as well. So one summer we were in New York.
00:05:37
Speaker
We went to New York Times. We knocked on the door. Literally knocked on the door. We didn't have any appointment. Met with the relevant person who used to take care of technology that showed him the product. He said, okay, perfect. Let's do a three-year contract. We said, what do you mean three-year contract? We are just here to give you the widget and get some money. There's no contract already.
00:05:54
Speaker
No, no, no, no. You know, it's New York Times, a large company, we have to have contracts. They're like, okay, fine. So let's do a contract. But the first thing they ask you in a contract is what is the name of your company? We didn't have a company. We didn't have a company. So I remember Googling how to set up a company. And then there was this website called rocket lawyer.com. And you can go company like 24 hours. So we started the company and we signed the contract. And then of course we made all the mistakes, right? Like we, we didn't distribute equity properly. Yeah. Lots of issues happened that taxation year.
00:06:21
Speaker
But finally we got a check, we got a comparatively large check. And then once one, one domino falls, the other dominoes started falling, right? So New York Times happened, then Salesforce happened, then Tesla happened, then we got many other bigger clients. What was the product that helped me understand that?
00:06:36
Speaker
Sure. So have you used Google forms? Okay. So imagine like a Google forms plus right where you can change the design, where you can change the logic, where you can change the results, you can change where you can sort of do calculations. So if question number one asks you how many miles you drive and question number two asks you, what is the price of gas in your area? Then we can actually sort of do that calculation of the packet and you can just sort of drag and drop a calculation, like an Excel file and drop a result, which is super useful when you're doing ROI calculators or when you're doing
00:07:05
Speaker
which Disney princess are you kind of a quiz, right? And this is, yeah, right. Right. EMI calculation, then yeah, my calculators, scholarship, calculators, all of that. Right. So be our product just makes it incredibly easy for you to build these kinds of tools. Right.
00:07:20
Speaker
And these tools are incredibly useful when it comes to lead gen. Generally lead gen is expensive. So if you go to a lawyer's website and it says contact me, the click through rate on that would be maybe 3%. But if you go onto a lawyer's website and the call to action is, hey, check how much can I save you in legal fees?
00:07:38
Speaker
the click-through rate on that becomes 25%. And that means your ad spend becomes six, seven times more productive, more efficient. So that's what we do essentially. It's a very specific niche. And this is like, is it a hosted service? Do you host a widget and there is a call to it and it calls it up each time someone visits the site or how does that happen?
00:07:59
Speaker
To begin with, it used to be an iframe, of course, as you pointed out, right? But then we added a JavaScript enabler, then we added a hosted server. But now today there are two kinds of clients, a large client and small client. Small clients don't care if we host it, but they're large clients that have a lot of regulation behind them, right? So a lot of healthcare companies are heavily regulated.
00:08:17
Speaker
Right. So they need to host everything on secure servers, which are not shared servers, secure dedicated servers. So in that case, we give them a Docker instance and then they can sort of run their entire, their instance on their own Docker instance without interacting with anyone else's instance and any updates, etc. We keep pushing to those instances.
00:08:34
Speaker
This is highly technical. Almost 60% of our clients are okay with us hosting it. If we take care of basic GDPR compliances, and then we have 40% clients who are heavily regulated by them. So when you host it, then you're able to give them analytics. You're able to give them a dashboard where they can see how many leads got collected and who dropped off when and all of that. That happens with the private instance also.
00:08:56
Speaker
Because the only difference is that the server is different. Otherwise the services remain the same. So they still get all the same services. And the thing is that private instances are very expensive to maintain. One Docker instance costs like $900 a day sometimes, but those companies don't care to have that. And when you're hosting on our system, then of course you get like question by question funnel, how do you drop off in question one or drop in question two.
00:09:18
Speaker
You can engage with Google Analytics, you can engage in Google Ads, you can sort of loop in Google Ads. You can also do dynamic tracking and dynamic ad optimization. So, okay, you got New York Times, which could be like a one-off. How did you convert that one-off thing into a business and building that process of continuously getting more clients and
00:09:38
Speaker
Because you were kids, right? How did you go and get Salesforce as a client, for example, and all these large enterprises? And was that your strategy to change large enterprises? Or did you want it to be like a self-service platform? People come sign up with a freemium, like 15-day free, and then pay? Tell me about that growth strategy.
00:09:57
Speaker
Yeah. So it's, it's interesting, right? There is no strategy. It's like, whatever comes to your mind is your strategy, right? At that moment. So New York times happened because we were in New York. And then like, once you get one big client, then you can go to other clients and just say, Hey, listen, you know, they use us. Why don't you use us as well? So it's nothing deeper than that. Actually, it's just social proof. And number two in the US is a very interesting concept called boardroom events. So these are events where, you know, CEOs or CMOs or chief security officers or chief people officers.
00:10:24
Speaker
We'll come together in a room and you as a company can pitch to them and then you have to pay a certain amount of money to get entrance into that room. Right. So Google, Facebook, Amazon, they all pay to get become part of these boardrooms. Right. So you can sell. And this is like an agency has curated a set of CXOs in one room.
00:10:44
Speaker
This happens on the sidelines of trade shows, right? Like, so yeah, so we did that. That worked out really well. And then at the end of the day, I always feel like if you start with a problem statement and if your product is useful, then you don't have to sell it. The product will automatically be adopted. The only problem comes that there is competition, right? And then you have to prove to the customer that you're better than the competition. Now, in our case, in the early days, we had competition.
00:11:08
Speaker
But they were also as lost as we were. So, and the market is big enough that I don't think like one customer ever saw both of us in the first few years. And now we have to compete and now there is like a full, they have this service and this feature and we don't have all of that stuff. But the only days are simple. Who is your competition? Are you competing with like say survey monkey, which is also like Google forms plus like other, other like enterprise solutions, which I have not heard of.
00:11:34
Speaker
No, so you wouldn't have heard of these kinds of solutions. So SurveyMonkey is like $5 a month or something. Our product suite starts at like $600 a month. So it's a very different market altogether, different product offerings. So SurveyMonkey is only about collecting surveys. We are also about doing some calculations on the back end of the survey and then showing some results out, right? So SurveyMonkey is for surveys via for ads. So that's two very different things. So our competitor would be, for example, a company like Lead Quizzes, or a company like SnapApp, or a company like Iod Interactive.
00:12:03
Speaker
Right? So these are large, largest, medium to largest, old American, large companies where they are 80% services, 20% product. We are almost on the other side where we are 80% product, 20% services.
00:12:18
Speaker
Okay. Okay. Okay. You're essentially trying to make it as self-service as possible, but you would have like a client success manager who would be helping out companies. Yeah. So it's all about training. It's not even about that. We run your campaigns. It's about we train your people so that you guys can run your campaigns yourself. And that's the hardest thing to do because nobody wants to learn new things. So yeah, that's what's been happening. It's super easy nowadays because we have the game figured out, but back in the day, it used to be very hard.
00:12:45
Speaker
So all your sales is basically through a salesperson. It's not like that typical SaaS, which is low priced, like with a freemium kind of a sales, like say water survey, that's not really how you would be selling. No, so think about it this way, right? So if you have an American salesperson whose salary, let's say 100k, to justify his commission, his salary, he'll have to make at least a million dollars in revenue. Now to make a million dollars in revenue, you can only realistically speak to a hundred customers.
00:13:12
Speaker
That means from each customer, you need $10,000. So the thing is that this becomes very hard. You can do this in India because the cost of salespeople is lower. But in the US, you just cannot do this because to close a hundred clients at $10,000 in a year, it's impossible. It's just like incredibly hard. So basically this entire sales that strategy is not something you can do.
00:13:31
Speaker
What you have to do is you have to make your product not super expensive that it's $10,000, $20,000, $30,000 in which case it's always in a salesperson but also not too cheap that it can just survive on marketing. You have to find out that sweet spot and we found out that sweet spot was at around $5,000 to $6,000 per year because at $5,000 to $6,000 per year, your customer does not have to take approval of their bosses. So it does not move up the value chain and they don't have to wait for approvals and the time to close or tat is like less than a month. Otherwise it can be up to six months, seven months.
00:14:00
Speaker
And if it's only taking a month, then one salesperson who's sitting in India remotely or a client success person can close that deal and manage maybe a thousand customers. So you like, you built out a sales customer success team in India. You came back to India to build it up because you started in the US, right? No, we used to run it from the US. We had a couple of people in the beginning. That's all we needed. And the bigger thing was a tech team, which we built out in India as well.
00:14:25
Speaker
And so a lot of our developers were like good communicators. In the first customer success manager, we probably hired it like four years after founding the company, maybe five years after. So first four years, it was like the two of you going out and presenting and pitching and getting deals. That was how you were selling.
00:14:43
Speaker
Yeah. But like eventually the machine finally got figured out. What is the sales machine going to look like? It's going to be pre-sales, sales, post-sales, the website. Tell me about that machinery. Like how does your sales machinery work? Like starting from like the identifying a lead and like all the way till deal closer. Yeah. Think of it like a funnel, right? Top the funnel, middle of the funnel, and then bottom of the funnel.
00:15:04
Speaker
So at top of the funnel, you have to generate leads. And so we come up with a target for ourselves that, hey, listen, we know that 1% people actually convert. So if you want to convert 1,000 customers, we need 100,000 leads. Each lead on Google costs, let's say $1, $2, $3 or whatever. So we know that this month we have to spend $100,000 on marketing. So we spend $100,000 on marketing. We put it on Google, we put $20,000 on Google, $20,000 on Facebook, $20,000 on Reddit, $20,000 on ATL, BTL stuff, $20,000 on
00:15:31
Speaker
maybe referrals, agents, all of that, right? So we distribute that $100,000 bill. And your digital marketing pitch would be that generate high quality leads and like improve your conversion rates. It's different for different clients, right? So we have clients who can be in finance, they'll have like a different set of
00:15:48
Speaker
USB that they are sort of being targeted with. Healthcare will be different. Startups will be different. SaaS business will be different. And then each ad has different AV tests running. Each ad has three, four different versions of the ad. So in total at any one point in time, maybe 40 ads are running, not more than that. So that's how the top of the funnel gets built. Then once the leads come, let's say a hundred thousand leads have come, only 10,000 will actually engage with you in any meaningful way. They will ask a question. They will log in on the platform. They would leave an email query or they will leave their phone number or
00:16:17
Speaker
or something like that, or they will build a frequent or a free calculator. So that's middle of the fun. These are people who are engaging with the platform. You keep trying to engage them in different ways. Now we have events. We have various different things to engage them. Events is something we do. Freebies is something that we do. Just sort of keep them there. Hook them. And then once they're engaged, 10% of that number will actually pay you for the product.
00:16:43
Speaker
And so that again, we keep trying to increase that 10% to 15% 20%. Today, we are probably at 18, 20% there, but we started, you know, very low percent. So overall, from top of the funnel to bottom of the funnel, conversion rate is like one to 2%. And you would find that to be true for most businesses. And how big is your sales and marketing machinery, like in terms of headcount? So the thing is that what we are trying to do is not increase our headcount. So we have not increased our headcount in four years. But can you get more work done from the same number of people through technology?
00:17:12
Speaker
Right. So if you go to our website today, and if you ask any question, probably the first 10 touch points or the first 10 responses are all robotic. Right. And you, so that saves up the sales back guys team that time. And only then does it start getting, you know, more, more sort of customized. And I'm guessing your way to nurture leads, engage leads, all of that must be running on autopilot as well.
00:17:34
Speaker
Not everything. So there are two kinds of initiatives. One is an initiative that we took five years ago and now it's well drafted and well implemented in the system. And so that runs like a machine. But then there are new initiatives. What is that? So like, let's say that as soon as we get a lead, you know, we'll figure out what that location is. We'll figure out what that address is. What is that company? And automatically we'll send them a physical gift. Like, so anyone who signs up on outgrow and is from the US automatically will get like a bouquet of flowers delivered to them in the office.
00:18:04
Speaker
automatically, like no questions asked. And that that entire thing happens automatically, because we get the location of the IP address in the US, it's very easy to get that address after that. So you get the address, you throw an API, you send that address to a service like a flower or dot com type service. And then they will automatically fulfill that order. And they'll bill you at the end of the month. There's another one, which is that if the person logs in from their company account, then you figure out who they are on LinkedIn, and we automatically send them a LinkedIn invite.
00:18:33
Speaker
All of that be as in one of the founders, one of the sales people.
Innovative Lead Engagement with AI
00:18:37
Speaker
And the message is already pre drafted. So again, that happens to the LinkedIn API. I think the LinkedIn people shut this API recently. So you can't do this anymore, but we used to do this back in the day. Then there's another one, a new, very interesting thing. So as soon as you give your name, we automatically do this AI generated video where, you know, one of the sales people is saying, oh, hey, Akshay,
00:19:00
Speaker
And we saw that you came to the website 15 minutes ago and you clicked on this thing. And I just wanted to know if you have any questions. And so again, all of these things happen automatically. Amazing. So this is, this is so that you're that 10% which is relevant out of that, another 10% gets converted. So that bottom 10% you want to increase that number. So these initiatives help with that. You want to increase it. Exactly.
00:19:23
Speaker
If you don't do these things, you won't even get 0%. You'll be negative. You have to do these things. And every company does it today. And that's what differentiates successful companies from not successful. Like this for personalized automated outreaches. What are some of the other new initiatives that you've been taking on this? This is a fascinating area.
00:19:43
Speaker
Events, as I said, is something very interesting. So we do, we participate in other trade shows and we also throw our own trade shows. And then we used to actually run like American football games, where we would have like, we would take maybe a set of 10 companies and versus 10 companies that you'd organize like a American football game.
00:20:00
Speaker
So there's like an offline thing that you would set up for. Yeah. Offline. All and also we would do like these YouTube sessions where we would bring like a big CEO and we would say, hey, listen, you talk to our customers. So stuff like that. Again, like you can't sell. You have to just answer their questions and you have to ask them questions. Selling will happen automatically. All the other things, which is like so many cool things we used to do. I remember that just to say that every month we only take 10 premium customers. And by the way, only two are left. Two spots are left.
00:20:28
Speaker
And then that's a great way to get people to close before the end of the month. Otherwise people will keep pushing it. So is the outro like on autopilot more? It doesn't need your time much. And that's why you're diversifying into other stuff or like? No, I ran it for 10 years with my business partner and now he runs most of it. And I decided to move back to India before COVID. How much was the revenue at when you came back? Like when it plateaued, like what was your? We are 2019, 2020, like low double jaded millionaire. Maybe high single digit.
00:20:58
Speaker
Millionaire labor in that way. Somewhere between 9 to 15, 18 something in that range. Okay. Yeah. Less, less than that. On the lower side of that. So you're just there maintaining that. And but the thing is that a software businesses are all about gross margin, net margin, right? So there is no cost. Like there is no, I don't have to pay rent. I don't have to pay
00:21:20
Speaker
My only cost is by salaries and some marketing costs. So it's incredibly easy. And you had that India arbitrage where most of this delivery was happening from India, the US, that cost or arbitrage would have come in. No. So it's the arbitrage, first of all, doesn't exist anymore. Indian developers are not expensive as American developers.
00:21:39
Speaker
Number two, if you're a services business, then there is a cost arbitrage. If you're a product business, then there is no cost arbitrage because we are not selling services. We're not selling that time. We're selling a product. And my software team is still 28 people only. So I'm more than like, it's that body shopping model only happens with companies like Infosys, TCS, HCL, where they're literally selling you man hours. You're not selling man hours, right? So that, that arbitrage opportunity goes away. But.
00:22:06
Speaker
What is easier to do in India than the US is a few things. First is that it's easier to hire in India. Hiring in the US is an incredible pain because you have to sponsor visas, you have to do all of that stuff. The taxes are super high even for the employer. Second is that nobody works on Saturdays in the US and that's a big problem. In India, people are more flexible. So did you get an exit when you left or you still have a computer? So we are not a funded business so it's just me and my business partner. So no point exiting here.
00:22:35
Speaker
Okay. Okay. Okay. Got it. Got it. Okay. So then what next? Like, what did you do next? So my parents used to be in education and which was super inspiring to me because I used to see how satisfied education makes them when students would graduate, when students would move on to the next phase of their life.
00:22:51
Speaker
My parents, I would just see them so proud and so happy. And I was like, okay, I'm too young to start a college, but let's explore. Let's see what we can do. So what I realized in India was that there are some calculations that in India, you have two kinds of colleges, business colleges and engineering colleges. Right. Now let's talk about engineering college and engineering colleges. You have very good undergrad engineering colleges, right? You have the IITs, you have BITS, you have BID, you have so many of them.
00:23:17
Speaker
And at the post-grad level, also you have good colleges because most of these colleges also offer post-grad programs, right? So, engineering, there is good excellence in India. You can always ask for more and you can say that it's worse than the US or whatever, sure. But still, there is something. In business also, at the post-grad level, you have IMs, so there is something. You have ISP, there is something. But what we realized was at the undergraduate level, there are no business schools in India. Like, you will not be able to name me even one.
00:23:43
Speaker
barring maybe an SRCC or maybe some Narsi Munji or something. And if you look at the metrics there, the average pay package of those students graduating from these top colleges in the country is not even 4-5 lakhs. It's not even 4-5 lakhs, right? And that is the salary that like a clerk gets probably in a business. So that's when we thought that I think there's an opportunity to create a very strong impact by building an undergraduate business school.
00:24:15
Speaker
Now, interestingly, I guess in India, the undergrad market is either you do science, in which case you are employable straight after undergrad, or if you're not in science, if you're in arts or commerce, then you have to do a subsequent post-graduation to get that level of employability. So you wanted to fix that, like people don't necessarily, non-science students don't necessarily need to do a post-graduation to be employable. They should be employable straight after graduation.
00:24:33
Speaker
When you build a business school, it has to be undergrad, post-grad.
00:24:42
Speaker
Absolutely. I mean, why not three years? This is a long time in your life. And now let me ask you a question.
Challenges in Higher Education Employability
00:24:47
Speaker
How many people do you think enroll into higher education every year in India? Higher means like both bachelor's and master's. Yeah. Bachelor's and master's and PhD. No idea. Not even a vague idea. It's exactly one crore. 99 lakhs. So one crore students enter into higher education every year. Total number of students enrolled in colleges is around three and a half crores. And one crore.
00:25:10
Speaker
A lot of those people who enter into higher education every year, how many of you think are engineers? Around 12%. So 12 lakh engineers. Keep them aside. One lakh medicine students. One lakh fashion, design, law, all of that. And then two lakh are MBA. Which are again, high employability courses, like all these law and fashion and all, like jobs straight out of college.
00:25:32
Speaker
Correct. And then 2 lakh go into MBA. So that still leaves almost 80 lakhs of students. You know what they're studying? BA, BECOM, stuff like that. BA, BECOM, BBA. Now, out of these 80 lakhs students who study BECOM, BBA, BA, what percentage or what absolute number do you think actually get jobs of minimum salary 6 lakhs?
00:25:54
Speaker
Very, very few. Only if you're like in an SRCC can you expect a 6 lakh job after a week or otherwise most people would not be getting that. How much would you say? I don't know, like 5%. No, it's 12,000 out of 80 lakhs. It's 0.1%.
00:26:12
Speaker
So that's why I said, listen, this is a big problem. I've got to solve this problem. And let's just build a business school. It doesn't matter what my age is. It doesn't matter anything. This is too important of a problem not to solve. So then that's how we decided to build Master's Union.
00:26:24
Speaker
And the thing with education is that you have to build a brand. Education is all about building a brand. You go to IAM because it's a brand. You go to IIT because it's a brand. You go to Harvard because it's a brand. And most of the brands are built on top of placements.
Brand-Building Through Placements
00:26:38
Speaker
How good the placements are. You go to Harvard because after Harvard you get into McKinsey. You go to IIT because after IIT you get a Google job.
00:26:45
Speaker
It's all about placements. So we said we have to prove our placements. If you start with undergrad, that'll take us four years to prove our placements. So let's just start with a post-grad program where it will take us only one year to prove our placements. So we started our master's program first and now we're starting with an undergraduate program.
00:27:01
Speaker
And of course, now your product has to stand out. Your product cannot be the same product as everybody else's. And so we have differentiated our product on three counts. First count is that we don't have that old slow-moving and boring faculty. So all our faculty members are all industry professionals. So who better to teach content than Akshay?
00:27:26
Speaker
So we'll actually try to find an Akshay and try to bring Akshay on campus. It's a you teach content creation, right? Not some faculty, but some PhD had never himself or herself had ever done anything in content or marketing. So we have MDs, CEOs coming and teaching, right? In fact, our campus is located in the middle of Simon hub. So it's quite cool. Um, everyone's sort of working around us. They just come downstairs and teach students, go upstairs and do shadow programs or works out really well.
00:27:51
Speaker
Second uniqueness is that we don't have any exams, no lectures, no slides, no, you know, that old classes concept. Students come in and they do workshops and they run projects and they run businesses. So in term one, everyone will run a dropshipping e-commerce business. In term two, everyone will run a cloud kitchen. In term three, everyone will create a layer two blockchain protocol. In term four, everyone will run a YouTube page as a business. In term six, everyone will do a podcast. In term seven, they will do a mobile app. You know, whatever.
00:28:19
Speaker
So these zero to one sprint, zero to one journey students do, and they have workshops that help them do those sprints effectively. But essentially it's all about running businesses and running businesses to basically learn business. And so that's what we do here. And the third differentiator is just that all becomes all BAs are, they're all sort of removed from technology. There is no technology in there. So, and that's why the reason that students are not employable, because today without technology, you can't really be. So we almost 40% of all of our courses are like,
00:28:47
Speaker
actual programming app development courses. So that students actually learn that skill as well as part of the B Company. That's how we built our entire curriculum. It's quite cool. Education is a regulated space. And I think some of the criticism you have of like, say faculty being old and stuff like that is, part due to regulation, like AICT norms dictate, people should have like an M Ed or so on. And so like, tell me how
00:29:12
Speaker
Tell me that regulatory aspect around which and how you have solved some of those regulatory constraints.
Operating Outside Government Regulation
00:29:20
Speaker
How did you even set it up? Even to set up something, what is the regulatory requirement that you went through? Tell me that journey of actually launching your first cohort.
00:29:30
Speaker
So, two questions you asked, right? One is the regulatory thing and one is the journey of the first quad. And I know you meant them as a single question, but I'm going to divide them into two. So, you know, the regulatory thing we decided very early on that we will not be regulated, that we will not seek any government accreditation, that we will not seek any government approval, that we will not even knock on the doors of UGC and AICT. And we create an independent program, right?
00:29:53
Speaker
The only interpretation that we will seek will be from the industry. So at the end of the day, if Bain, BCG, Google, Facebook, if they are recruiting my students, how does it matter if the government puts their stamp on me or not? If I don't do a good job, students will not come to me and I will automatically die.
00:30:09
Speaker
So when you go to a restaurant, you just don't go to a restaurant because it's rated 5.5. Like they also have to like give you good food. And if you get good food one time, you'll go back to that restaurant, not because it was rated high, but because it had good food. So that's what we decided that we will stay outside regulation, because if we try to get regulated, then we can't do any of these things that you're doing.
00:30:30
Speaker
Okay. And so as such, like if you're not offering a degree per se, then you don't need any kind of regulation. Like I could start tuition classes in my home. Nobody cares. So like essentially that is, that's what it is. Like you're teaching kids and it is not a degree which you're offering them.
00:30:48
Speaker
100%. Yeah, so I don't say I don't use a word degree anywhere. I don't use a one MBA anywhere. I said this is a program for undergraduate students and a program for postgraduate students. After which this is the placement report, you can see my track record, you can see what to do discount how much salary they offer all of that. And if you think that's for you, then you come if you think that's not for you, that won't go and if you want a degree, then don't come.
00:31:08
Speaker
However, however, for undergraduate programs, we do give a degree. So we have tied up with Delhi University. And so our undergraduate program students, they get a university degree. Okay. It's like a distance learning degree or like what like our university does not differentiate its degrees from distance or campus or whatever. Right.
00:31:25
Speaker
It's all about whether you can fulfill their examination system. So it's a BMS degree, a Bachelor in Management Studies degree that the University awards. And we have gone to them and we have convinced them that we are actually not too different, all of that. And so if our students clear their exams, then our students get the degree. But the classes are taught by me. But you're not subject to any kind of audits and stuff like that. Like no one will come visit your campus, check your faculty credentials on that. The only thing that DU will look at is they should clear the exam and they will award the degree. Absolutely.
00:31:55
Speaker
Absolutely. And today, I mean, even like, like when you're a CA, that's the same degree that you do, right? You don't have a degree when you're a CA. So you do a school of open learning. You just have to clear the exam. You just have to clear the exam. Yeah. Okay. Got it. Take it. Got it. Okay. So that's what you're doing on the bachelor side. And so, and then now tell me about launching your first cohort. Did you, you said your campus is in cyber hub. So is it like in a, like in an office space you have? Yeah.
00:32:23
Speaker
So there's a new building called Cyber Park. I don't know if you're going to go home, but Cyber Park is essentially, Cyber Park is the first building I would go on your right hand side. It has been, it has BCG, it has Bank of America, it has Gartner, it has Expedia, 20 other companies, Aviva, Samsung. So we share our campus with these companies and we are on the ground floor and everyone's like above us. And our hostel is close by, so students drive down to the campus. Some programs are mandatory residential, some are not.
00:32:51
Speaker
It's like a mandatory residential program. Yeah, first cohort was residential. So, you know what happens today, just to give you context, is that when you set up a college or a university, you have to buy a plant, you have to build a building. And that's a very expensive affair that takes hundreds of crores, if not thousands of crores. And I didn't want to spend that kind of money. So I just rented my space.
00:33:16
Speaker
So let's say like an IM or an ISB spend maybe 500 crores building the campus. My annual rent is some two or two and a half, three, four crores, right? So I don't have to do any CapEx. So that was the first quad became very easy to sort of host that sense. But in terms of reaching out to the first few students, obviously we did not exist. We didn't have a placement report. We had nothing to show for our work. So it was incredibly hard to.
00:33:39
Speaker
reach out to students and convince them that we are of some credibility. And so I remember back in the day, we used to do a lot of outreach, we used to do a lot of PR, we used to talk to students one-on-one. And thankfully, that was a COVID year. COVID was just starting. And because of that, a lot of students who had admits to Vorton, to ISB, to INSEAD, to Imperial, they weren't ready to go to those colleges because the classes were going to be online. So my offer to them was that, hey, listen, it's that year, forget about it.
00:34:06
Speaker
Why don't you just enroll into Master's Union and don't pay me any fees? Yeah, it didn't make sense to pay so much money for online. Why don't you just get enrolled and we'll figure out from here also. And if you have a good experience, see at the end of the day, after Wharton, you want a job in McKinsey, right? But if I'm able to give you that job through Master's Union, then don't go to Wharton the next year. And if I'm not able to give you a job, you weren't even going next year, so go. So you have nothing to lose. So that's how we got some 30, 40, 50 students.
00:34:33
Speaker
in a total batch of 60 who were ready to take that met on us. And so that's how we got our first cohort, right? And we used to basically just buy the GMAT list from the GMAT company. And we had people who all of them who had 700 plus GMAT score, we would reach out to them, call them, have this conversation with them.
00:34:50
Speaker
And that's how we got our first cohort. And then after the first cohort, you largely like sponsored the education for them because that's like your setup cost in a way. You are investing in like a Big Bang placement record. And therefore, the quality of people was more important than whether they are big or not.
00:35:06
Speaker
It's an investment. Yes. It's an investment in your brand, right? So it's not even like performance marketing, which you like spend one day and it's proof is gone. It's an investment in brand is an investment human beings and investment in people who swear by masters union today, who, if I call for any help, they would die for me. And so that's not a, that's a good investment to make always.
00:35:24
Speaker
And so the investment that you also started online because of COVID or like, how did you start it? We started offline. So because we were less than a hundred students. And at that time, by, if you remember by September, the government allowed congregations of less than a hundred people. So we could start classes on campus because we were less than a hundred people. Amazing. Okay. And where did your cohort start? You started September, 2020. Okay. Okay.
00:35:48
Speaker
So like 2020, early 2020, you landed in India, started figuring out what to do. And then you started the outreach, took you six months to get that first batch together. And September, you launched the program. And what about the curriculum, the teachers?
00:36:07
Speaker
How did you fix all of that? That was all research, right? I mean, so we spoke about the curriculum, you know, we set that up, looked at a lot of research that was done around how people learn. So took lessons from that. And that's how we designed the curriculum. And we had a team, three, four people, including me, we would set up the curriculum. And in terms of teachers, et cetera, we just, I mean, we just asked them on LinkedIn and nobody says no to teaching. So yeah, it was very easy. That wasn't the hard part. That was a simple basic outreach. But at the end of the day, just comes down to placements.
00:36:35
Speaker
if that placement report came. One year course or? Yeah, one year course. So like for this one year, September 2020 to 2021, you had only this one cohort, like this was your focus, like to get this one right and then scale. Yes, exactly. Okay. So tell me about the placement report. Like what did you do to make that happen? So first of all, we had picked up good kids. Second, we worked really hard on them. We worked really hard on them. You know, we focused on writing skills. We focused on communication, basic stuff, which nobody takes care of.
00:37:05
Speaker
You don't need them advanced finance, but he can't open a spreadsheet on the computer. So he focused on first principles. I mean, it's actually something like writing skills. And I mean, the only reason why in good B-schools, there's a lot of challenges because they are filtering. So, but then if you go beyond that 99 percentile cat scorers, writing skills is a problem across.
00:37:28
Speaker
Even the top one is actually the worst. I'm not even kidding because they are so robotic. They are so, so robotic. Anyways, so it worked out that the placements, I mean, so we were able to pitch to all the top companies and then we reached out to them said, Hey, listen, why don't you come to our campus? Our students are like this. Average GMAT is so high. And we will, we will make it very easy for you to come and recruit. We will make it.
00:37:49
Speaker
immediate joining, you don't have to wait six months. So we tried to solve for all the problems that exist in the current B-School hiding system. So again, we reached out to 1000 top of each other. Sir, that immediate joining, you could promise because you were approaching them at the time of the course ending.
00:38:06
Speaker
That also plus because I'm not UGC, I said the accredited. I told, I had, I had a, and my campus is completely like tech enabled. So I said that, hey, listen, if the student wants to join in term six, there are total eight terms. If you want to join in terms, say, please take the student and the student can continue learning online on weekends. The first six terms are on campus. This last two terms, students have the option to do them online.
00:38:29
Speaker
Okay. Got it. Got it. Okay. So it gives you a two month placement window then instead of like going for just like a one week high pressure situation. Exactly. Exactly. So that works out really well in our favor. So Madam, you have to play these kinds of strategies, right? Only then do things work out for you. And then, so we were able to bring in Cisco, Microsoft, Bain, PCG, McKinsey, Zeroth, Azerfaye.
00:38:53
Speaker
But we reached out to like a thousand companies by the way, like 60 came. So that was a challenge, but now it's done. Now our relationships are set. Next week, we're actually releasing our, by the time this goes out, this episode goes out, we would have released our second basement report, which is even stronger than our first one.
Successful Placement Strategies at Masters Union
00:39:09
Speaker
We again beat all the IMs in terms of average package.
00:39:12
Speaker
What kind of average salary did the first batch get and what is this batch getting? First batch was 29.12 lakhs and this batch is around 32.97 lakhs. Wow, amazing. And like for the second batch, you monetize it and what was the way to get go because now you have that track record of placements so you can
00:39:34
Speaker
So second batch, so first batch, our average collections was like maybe 20%. So 80% in scholarships and 20% in actual fees. Second batch, it was 50-50. And third batch, it was like 90-10, right? Which is like 90%. You paid 10% scholarship. Wow. Okay. Okay. Okay. And your outreach method says the same, or how do you get leads now? Tell me about, I mean, you're an expert in lead gen, sales, conversion. You must have used all your past knowledge for this.
00:40:00
Speaker
It's not that hard actually, because once your brand is known now, see there are only two lakh people who take the cat in India and only 44,000 who take the GMAT. So I just have to be known in those people. I don't care about anybody else. So those two lakh people are very easy to market to because they all hang out in the same places. They watch the same YouTube videos. They watch the same cat channels. They go to the same consultants. So we have five or six channels and we just like hit them. And yeah, that's it. We don't do any marketing.
00:40:30
Speaker
Okay. Okay. Okay. But probably you would be doing like some influencer marketing and stuff. Like I'm sure there would be some influencers in this space for people who are seeking knowledge on how to get through and all that. Absolutely. Yeah. That's 50% of our expenditure goes into just influencers. Like also like content, right? We create a lot of content. We also have our own podcast. We just hosted Ashneer and then we hosted Garza Lalag, then we hosted Rajas, whose head's a Koya in India.
00:40:56
Speaker
Tomorrow we have the Ease My Trip founder coming. The week after that we have Zepto founders coming. The week after that we have Vedanta, Zaneela, Garva. So, you know, so that also brings us traffic. Right. And so these are like talks on campus in front of the students and they get uploaded as a YouTube video. Wow. Amazing. Amazing.
00:41:15
Speaker
What is your monetization journey looking like? This year, what kind of top line would you do by the end of this financial year? What's the plan here? How much will be the contribution from the various courses that you're running? How much for postgraduate? How much for undergraduate? Yes, it's very interesting actually. Most branded colleges in the world, they only make 30-40% of their revenue from their anchor programs.
00:41:40
Speaker
majority of their revenue comes from their ancillary executive education, online programs. So the idea is to build that brand and not really spend too much money or price our main anchor program very highly. We don't intend to make any money from our anchor programs, right? How much is it priced at your anchor program? 30 lakhs, 30, 40 lakhs. So here we don't make any money. No combination is separate.
00:42:07
Speaker
And it includes a competition. And then you make money and you monetize your brand through the online programs.
00:42:17
Speaker
Just to give you context, Harvard makes 1.4 billion in revenue out of which only 200, 300 million comes from their MBA program. The rest of it all comes from the exact education online, this and that. So we haven't, we have only started one program online and that's doing well. We have a thousand students there. And then in our main campus, we have 200 students in our main. And that's a post graduate program online. Okay.
00:42:40
Speaker
And so in total, we have around 200, 250 students in our campus. We have another 1,000, 1,500 students online. So this is our second year. Hopefully, we'll touch three figures in terms of crows. So hopefully, we should touch 100 crows. Amazing. OK.
00:42:58
Speaker
I'm just wondering how scalable is this approach and for both these parts of online and offline. In offline, my concern is that it is offline. I mean, that's because every time you want to add another 100 students, you need to invest in the distance space or whatever.
00:43:18
Speaker
And like every time you want to go beyond one city, then for each city you need to set up space, set up teachers and have that consistency and high quality teachers on each and every campus. And so it just sounds hard to scale offline. In online, my concern is that there are extremely well-funded unicorns offering the same thing.
00:43:37
Speaker
Absolutely. Great question. And I have a very passionate answer to this, right? First, let's talk about the scalability of offline programs. If you look at India, or if you look at the US, the top 50 most scaled up education businesses in terms of revenue are all offline campuses. But they take decades. Like if you look at say Akash, which got sold for a billion, it took decades to reach there, no? No, no. LBU was built in three years from zero to 30,000 students. A lovely professional university. Okay.
00:44:06
Speaker
Gitaan was built to 20,000 students, less than two, three years. You need to give good quality. If you give good quality, you will be able to fit. There are hundreds of examples in the US, Christian University of Phoenix. There are lots of universities that are part of the global university systems. That's a company.
00:44:22
Speaker
These are all incredibly scaled up. Okay. Let's answer this another way. In terms of online education businesses, which is the most scaled up education business in the world. So are you talking of like at postgraduate level or like what kind of courses? No.
00:44:37
Speaker
I think any tech, post-grad, undergrad, K-12, anything. Let's buy Jews, not like that. Yeah, what is the revenue? Some 400-500 million, right? And if you remove the products, it's 160 million. In India, there are at least 100 universities, if not more, whose revenue is more than 200 million, right?
00:44:56
Speaker
So even if you are a physical campus, you can teach 40, 50,000 students that is more than Coursera, Udacity, Udemy, HVX, all of these companies even combined your revenues more. So, you know, the scale of your impact from one campus can be huge. We should not say that to be successful and scalable in education, you have to be online, right?
00:45:16
Speaker
Because guess what? In online, your cost of acquisition becomes incredibly high because it's not essential. It's not essential degrees. So first of all, very clearly in online, I mean, literally in LPU, there are 30, 35,000 students, right?
00:45:34
Speaker
In VIT, there are 45,000 students. In SRM, there are probably 40,000 students. Amity University, main campus, probably 40,000 students. These are all scaled up brands. How much more do you want to scale? Udemy has not scaled this much. Udacity has not scaled this much. Coursera has not scaled this much. So I want to stick to one campus. I don't want to build any other campus in the country. I will build this one campus as a month. Number two, I'm not chasing scale, even if I can't chase scale.
00:46:00
Speaker
first reason I give you, I don't want to chase scale because I'm only trying to get to some 2500 students in total. My chase is to get India into the top 10 global B school rankings. My chase is not revenue. My chase is profitability and my chase is excellence, right? So if I can get master's union as a top 10 business school in the world right after
00:46:20
Speaker
Harvard, Wharton, Stanford, Stern, Sloan, LBS, NCI. And if I can be this eighth, ninth college, that to me is a lot more important than touching 500 million revenue. Once I become top 10, I can get $2 billion in revenue in my year. Like think about it like that, right? Because you build a brand. So that's how we are thinking about it, which is keep small, keep very small, try to get the best placements, try to get the best ranking, and the rest will follow. Okay. Yeah, I see. So this 2,500 target you have is for offline.
00:46:49
Speaker
Yeah, offline. Okay, so which would be that this current campus won't do, right? Like you would probably need to go that way. No, we can get more floors in the same building. But I mean, it doesn't seem like an education institution if it doesn't have the gated ones like where you are running into other people and there's a like there's a football ground where you're playing and stuff like that.
00:47:11
Speaker
So again, the top 10 colleges that we mentioned, right? So let's talk about all of them individually. Let's start with Wharton. It does not have a campus. It's the middle of the city. Let's go to Harvard. HBS is actually situated across the river from Harvard. It's not even the same campus. And it's just three buildings. Stern, which is NYU's business school. Again, it is three floors in one building. London Business School, again, two buildings in the middle of the city. No football ground, no nothing.
00:47:42
Speaker
Sloan, MIT, again, three floors, four floors, I think, including the auditorium. In Seattle, again, a building, just a building. So business schools are not like universities. Business schools, people are coming to learn and study business. It's important that they are next to the business.
00:48:00
Speaker
not next to some field. There are two different things altogether. Number two, a medical college is always situated next to a medical hospital. It does not matter if the medical college is situated next to a field.
00:48:15
Speaker
And it's situated next to a medical hospital because you need to see real patients to learn. You need to have real doctors who come and teach you. That's what we are facilitating by being set up in cyber hub. So the expectations of a business school are very different from the expectations you have from an engineering college.
00:48:32
Speaker
or from a regular BA program. Okay, fascinating. So eventually your vision is to have that kind of extremely premium brand for both graduate and postgraduate. And eventually, I guess if you want to reach those rankings, then you'll also have to go down that route of AICT recognition and all that. That is not okay. No, so the global rankings don't care whether you are AICT approved or not.
00:48:55
Speaker
the global ranking person does not know even the AICD. Okay. Cool. But this does seem like a lifetime commitment to really see your vision come true. Like I think this is it for you. No, I think it's, I think it's not, I think it's for me, it's a 10 year horizon, right? For me, it's basically that.
00:49:14
Speaker
See, there's a ranking and I have to hit that ranking. And if I go strategically on my goals, I can hit that ranking in five years. What is your way to do that? See, look at the global rankings and see what is in there. They're asking in terms of the data that you submit to them. And if you look at FT ranking, which is the main business school ranking, it's very clear, right? They ask 80% is about placements, 20, 10% is about research and 10% is about diversity. Just hit those targets.
00:49:38
Speaker
The thing is universities abroad and even universities in India, business schools, they are not entrepreneurially run. They don't hit these targets. They don't even know that these are the targets. So we just go and hit those targets. That's our focus on placements because 80% is placements. Okay, I was not aware placements has such an outsized role in rankings. It should, right? It's a business school. What else are you going to a business school for?
00:49:59
Speaker
What about stuff like white papers, publishing and the faculty being 10%? That's 10%. And we will do all of that.
Family Legacy with Lovely Professional University
00:50:08
Speaker
We will do all of that. We will have like faculty, we will have research papers, we will have index journals, all of that. We are only doing it, but that's only 10%. So I only do it proportionately.
00:50:17
Speaker
Wow. Amazing. Amazing. I like how clearly you have identified the problem to solve. I mean, this clarity is amazing. Yeah. I mean, as I said right in the beginning, your first question, I was born into this. My parents actually started India's first private university. And so because of that, yeah, back in the day.
00:50:34
Speaker
It's called Lovely Professional University. Oh shucks. Okay. Okay. Oh man. I didn't know that connection. Okay. So like Lovely Professional University, like your parents own it. Yeah. They co-founded it. Yes. In 2005. And that brings us to the end of this conversation.
00:50:51
Speaker
I want to ask you for a favor now. Did you like listening to the 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 the show? I'd love to get your questions and pass them on to the guests. Write to me at ad at the podium dot in. That's ad at t h e p o d i u m dot in.