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Arjun Nair's journey from bootstrapping to a $600mn exit to Byju's 🤯
239 Plays1 year ago
Arjun Nair, co-founded Great Learning, an ed-tech company by bootstrapping it and took it to a $600m acquisition by Byju’s. He speaks to Akshay Datt about:
- Creating effective cohort based courses (using ‘flip classrooms’!)
- Bootstrapping with a maniacal focus on profitability
- Why they sold to Byju’s and the way forward
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Transcript
Introductions and Background
00:00:01
Speaker
Hi, everyone. Great to be here. I'm Arjun Nair. I'm the co-founder at Great Learning. Hi, I'm Akshay Dutt, and this is the founder thesis podcast.
00:00:23
Speaker
We've all heard stories of founders building unicorns, but what you need to keep in mind is that the $1 billion valuation of a unicorn is essentially a paper valuation. It's not money in the bank, which is what makes this conversation unique. I'm speaking to Arjun Nair, who's the founder of Great Learning, and Great Learning is unique among Indian startups in two very special ways.
00:00:49
Speaker
The first one is that Great Learning did not raise any external capital. And the second one is that in just seven years after they started, Great Learning was acquired by Bijus for $600 million. So this is an actual cash exit, which I'm talking about. And Great Learning is simply unique in the sense that Indian startups which get this kind of exit are extremely rare.
00:01:11
Speaker
So stay tuned as I dive deeper into Arjun's journey of building and scaling great learning. And we also talk about what's the way forward for great learning.
Arjun's Path to Entrepreneurship
00:01:27
Speaker
Cool. So Arjun, tell me your origin story. How did Arjun become a founder?
00:01:38
Speaker
Okay, cool. I don't think I had that as my idea from, let's say 20 years, when I finished college. I don't think the idea was to become a founder. Yeah, parents were like a regular nine to five kind of a job or what, like,
00:01:57
Speaker
Yeah. Yeah. My mother's a homemaker. She never worked. And my dad was in the government. So he used to work for the, it was an IS officer. Oh, wow. Was that an aspiration to like give the entrance exams? No.
00:02:16
Speaker
No, no, never. Also, you know, he passed away when I was really young. So and I think even before that, there was enough sort of indoctrination thing that, you know, don't go into I don't think I don't think anybody wanted us to be in the government. I think you have to be cut out in a different way.
00:02:38
Speaker
So we didn't come from a business family. But what did happen though is, you know, I guess after my father passed away, my mother, since she didn't have a professional education, I think she had to figure out his businesses to keep us going. So it was non-scalable.
00:03:00
Speaker
not very big, but I don't know what she did, but she did a bunch of things to pay for our college and pay for our education and pay for a house and put on the table. So I guess the idea of
00:03:14
Speaker
figuring out how to make things work. Maybe I learned from her, if not necessarily scalable, grand things, but I was never worried about surviving. I always knew that regardless of wherever I would, I would survive. So to your original question as to the idea of business that I guess never came to me until once later,
00:03:43
Speaker
So my aspiration was at that time, and this was early 2000s, was to go abroad, go do a good master's, get a good job in the US, and settle down there. So that was always the plan in college. And I took the GRE. I was working toward that.
00:04:04
Speaker
And that's exactly what I did. I went abroad, I went to Duke, did my Masters in Biomedical Engineering, got a job at Siemens. Very traditional part that I guess hundreds and thousands of Indians follow, particularly 20 years back. I'm not sure if that's still the mainstream today, but then definitely that was what most people would do and that's what I did.
00:04:29
Speaker
A couple of stories there, though, one being that while at Duke, I figured out a bunch of odd jobs. Again, this idea of surviving, I never liked it. I never wanted to be answerable to anyone. And so one of the things I did do was I did a lot of odd jobs at Duke. I was ready to do whatever. I started as an RA, a research associate, but then I tried other things. So I taught campus to kids.
00:04:59
Speaker
And then finally I took a job as a bartender because that paid the most. So I used to do lab work in the morning at night. I used to go bartend and make money. And so when I did finish Duke, I had no loan and I had no debt.
00:05:18
Speaker
which was really cool and that gave me again this idea that you know you you can be scrappy you can do when I was ready to do whatever it takes to make things work.
00:05:29
Speaker
So that's one. The second thought is I did meet a couple of entrepreneurs or these, I went to a few docs at Duke by chance. And though I was in the engineering school, I did go to docs in the business school Fuqua and listened to entrepreneurs talk. And that was really fascinating.
00:05:50
Speaker
So that idea of business and doing things seemed very different from an engineering point of view, particularly the engineering that I was doing, which was research. It was not even engineering, it was just to work in a monkey lab.
00:06:06
Speaker
on implanting electrodes into market brains and trying to figure out what they were thinking. So very hardcore engineering and the products that we would have created, outcome of that research was like 15, 20 years out. So the stuff that we were working on was not at all applicable in the real world for another five, 10, 15 years.
00:06:29
Speaker
And even after my Duke masters, when I went to Siemens, that's particularly, and again, for a good reason in engineering for medical devices and in medicine, you have a very long product roadmap from engineering to actually being in the market.
00:06:47
Speaker
And I was really frustrated by that, the idea that, you know, it takes five years, 10 years, decades. But I think that it is good, right? Because obviously you don't want anything half destined or incorrect to be in the market because you're talking about life and stay. So I'm glad.
00:07:02
Speaker
That's how it is, but it was not for me. For me, I wanted to bring things to market faster, see the impact, interact with consumers, iterate fast, build things, move forward. So these sort of experiences got me interested in the idea of business and entrepreneurship and product and moving away from engineering.
Transition to Business and Great Learning's Founding
00:07:26
Speaker
And by the time I spent a couple of years at Siemens, I was pretty clear that I wanted to get into business. And when I went to business school at Sloan at MIT, then I wrote a business plan to come to India and then send out a business, also because there was a scholarship, a fellowship.
00:07:48
Speaker
at MIT called the Nagatan Fellowship for Entrepreneurs in Emerging Markets. Again, it was this idea that I want to get out of school without it and in business school, it's very hard. So I was trying to see what I can do, who can give me a scholarship. And I didn't want to be at the end of the day tied to some company giving me a job because I wanted this idea. So it was all by chance in that sense that I wrote this business plan for
00:08:17
Speaker
getting that scholarship, which finally I did get. And then so again, I met a lot of entrepreneurs, people who build businesses and emerging markets, a very different way of thinking. And over a period of time, even though that idea that I wrote for a business plan was really bad and it didn't work, but that guidance that I got, the people that I met,
00:08:39
Speaker
So when I did finish Sloan, I was sort of convinced to come back to India. And it was also a good time because 2010, 2011, again, 12 years back, 13 years back, is when I would say when you look back, was actually a pretty cool age of Indian startups coming to age. So I actually came back to join a company in India called Zip Town.
00:09:06
Speaker
which I eventually got acquired by Twitter. But I ended that process also. I did a bunch of things just trying to learn even before Zikdai and why not slow and after slow and after Zikdai. So long, very short, it was just that sort of the evolution of how it ended up being in entrepreneurship, in business, in
00:09:32
Speaker
in trying to figure out a way to make things work, not from this grand scheme of building a $100 million business, but from the point of view of saying that, hey, one, I need to make sure that I survive. And two, I didn't want to be working for anybody. I wanted to have an impact pretty quickly. I wanted to see products and services coming to market pretty fast and interacting with the consumers.
00:10:02
Speaker
all of this came together under the umbrella of, let's say, business and entrepreneurship. So that's sort of how we ended up there. So once Ziptile was acquired, did you move on? How did great learning come about?
00:10:20
Speaker
I actually left Siptile even before the acquisition. The role that I joined for was not really the direction that the company wanted to go in anymore. So then I left and it was basically there was no role for me. And the company went in a different direction. So about a year before the acquisition, I left.
00:10:45
Speaker
And then again, did a bunch of things, worked on a healthcare idea, worked on manufacturing business. So, you know, it was just hard work, right? So, for example, I was living in, in Gurgaon and I'd like pretty much again, you know, no money, but
00:11:08
Speaker
I used to work with a friend of a friend, or actually a friend from Sloan introduced me to somebody else who had a manufacturing business. So I worked on launching. So he made a manufacturing business that he made a microphone. And so I worked on a campaign. I did one of the first Kickstarter campaigns, I think in India. We did a Kickstarter campaign, launched a microphone in the US. It was very interesting. So I got into marketing and sales that way.
00:11:40
Speaker
And then, you know, I was taking the Delhi Metro going all the way from Gurgaon to Naida to work in the factory and then come back.
00:11:48
Speaker
So just really, you know, really, really the hard, hard nine yards, right? So on the ground, working with whatever it is, whoever it is to try and see what works, right? And like that, how great learning happened was, you know, you know, Hari, Hari and I went to college together in undergrad, we were friends then, and we stayed in touch throughout. So then Hari asked me about, at that point, Hari and
00:12:17
Speaker
one were at Great Lakes and they were contemplating what just about launched our first online or they were not online and at that point it was a blended course outside of Great Lakes.
00:12:30
Speaker
So that had just started and they needed somebody to help at that point, ops and product. So I came on board and build a product in ops. And then of course, then, yeah, then, then it really took off. We did a bunch of things and many of the things that we did actually worked out really well. The timing was perfect. And then now it's that NPL. So, so, so it's like, it was,
00:12:57
Speaker
It was not an intentional direction into education and great learning, but I was working with, you know, it's like before you get married, you have to date a bunch of people. I was doing exactly that. I was dating, you know, co-founders and I work with like five, six different people, seven, eight people on many, many different ideas.
00:13:22
Speaker
and took it to a point where we gave up on it. And that all happened in like two, three years. So in a two, three year period. So I really like this analogy of dating because I think that's sort of how it is because you are going to go for a long-term relationship and you do want to make sure that whoever you...
00:13:42
Speaker
decide to get into that long-term relationship. You're aligned on values and goals and honestly, complementary skills and all that. So it's hard to know that you can't sit across a table and then discuss that. So in retrospect, I think that my approach
00:14:00
Speaker
was pretty cool. But I wouldn't say at that point it was very deliberate. But in retrospect, now if somebody asks me, how do I find football founders? How do I find somebody? My answer is always the same. You just got to put yourself out there, particularly when you're young and easier, because then you just work with different people on ideas and see what actually gets people going.
00:14:25
Speaker
So a little bit of context. Great Lakes is like a legacy B-school in Chennai, which Mohan had acquired. And so great learning was to be the online education arm of Great Lakes. So was that the backstory?
00:14:44
Speaker
Yeah, that's sort of what it is. So actually there's a lot more in there. So break lakes. So Mohan used to be a VC or he used to be a driver global. And this was many, many years back, 15 years back, 14 years back. And then while he was an investor, he used to focus on the education in the education space. And as part of that,
00:15:10
Speaker
looked at Great Lakes Chennai and then Great Lakes Chennai was set up by his visionary Dr. Bana unfortunately passed away I think last year recently. But and then there was an opportunity but Mohan was looking at other businesses also even before Great Lakes was set up where Hari was working in Gurgaon called IEMR Institute of Energy
00:15:38
Speaker
management and research or something like that. So they were working, that ended up being a business fool. So they already had a business fool. So this is before the Great Lakes acquisition or around the same time. I was listening before I came on, which I don't know the exact details there, but really, but that's how it came around, right? So Ari and Mohan and Mohan's brother, they were working at this,
00:16:07
Speaker
business school in Gurgaon and Mohan at the same time had the opportunity to acquire or literally before that or around that had the opportunity to acquire with other partners Great Lakes. And he also tried other other educational institutions and then later merged Great Lakes Chennai with this Gurgaon Institute and then the Gurgaon Institute became a campus.
00:16:35
Speaker
So that's what was, this all happened before I joined. And then they were working on, Mohan and Hari were working on this idea of executive education.
00:16:47
Speaker
I think they started looking at online education first, but online education was probably not fully ready. So I was actually brought on to build the online education arm and launch programs under that. But it was still too early, I think in 2013, 2012. Many of these things were that we now can see and
00:17:15
Speaker
Yeah, whether it's online payment or people being comfortable with big ticket items online, just the availability of data and bandwidth for streaming. Many of these things were just not there. So we were still, then we launched this blended offering, which worked out, which is what we scaled in the first four or five years. And so I was doing ops and product and running say marketing, academic and partnerships and aspects.
00:17:46
Speaker
And that's what we schemed for the first four or five years. So we started in Gurgaon, went to Chennai, then to Bangalore, then to India, Hyderabad and Mumbai and so on. So we went to city after city and then created this blended offering.
00:18:04
Speaker
And much later, I believe probably 2016, if I'm not mistaken, is when we started working on online programs. So this would be a cohort of students who join a course and they have like a weekend class or something like that. And then they submit their assignments online and something like that. That's what you originally launched.
00:18:27
Speaker
For the blended, yeah, that's basically what it is. So they would come to our center once in a month for two or three days. And then the remaining part of it, there was no recorded videos in there. But they will actually add a partnership at that point with another company.
00:18:42
Speaker
So there's some record, but that was not the central aspect. The central aspect was you come to class, you learn life from a faculty in one of these centers in a group of 50, 60 people. So you learn that and then you would do your assignments remotely. So every week there would be a quiz or a project that you do online.
00:19:02
Speaker
And then you will get feedback remotely. So by the time you come back to your next session, you've not lost touch. So it's almost an innovation on the executive education model, as opposed to a disruptive new model. But then we were able to scale this in the sense that we would
00:19:20
Speaker
We started in Gurgaon, then we launched in Chennai, in the Chennai campus, but later we moved to Bangalore where they had no campus. And then we used to run it in Haudenos in Pune and Hyderabad in Mumbai, and later we had a classroom in Hyderabad also. So this set up.
00:19:40
Speaker
started working where we would go into where the student is. The students don't have to come to Chennai or Nepal, but we were going there. We meaning we'd pop up a class in our hotel when a faculty is coming there. We'd set up the system for recording. We had lab, a system for projects. There's networking, there's lunch, there's group work and projects and discussions. All of the stuff that you'd find in a classroom, we'd pack that into three weeks. And then all the group projects, group assignments, all of that will happen.
00:20:10
Speaker
remotely. And so we built technology to scale this. We had optimization algorithms to make sure that the faculty pool that is limited, we were able to send them across to all these centers in India. So there's a very different set of innovations that we had done back then to scale that model. That was a very profitable model, not infinitely scalable, but definitely to thousands of students.
00:20:40
Speaker
very high quality faculty were teaching them and I was nothing like that experience. We had faculty from Great Lakes of course but also from IAM and IITs and you know the really good institutes in India would come and then teach students who you know never had a chance to run at these institutions.
00:20:56
Speaker
So I would think that even in that morning, it was, and all of this made sense because faculty were making money for coming. We would take their expenses for the flights and stay and students would be a cost, which is a fraction of what would it be in a traditional MBA program.
00:21:14
Speaker
or even an executive management program at NIM or so on. So there was value being created across the board and we were profitable, very profitable at that point. So that was actually a really cool model that was going on for several years. Can you break down the unit economics? How much did the student pay? What did it cost you to run a batch?
00:21:39
Speaker
Yeah, I don't remember the exact numbers, but those days when we launched, it was four, four and a half lakhs was what the student would pay to come for a six month, for a one year program. It was a one year postgraduate program. They would pay four, four and a half lakhs. And then there was some acquisition costs and there was a partnership cost and all of that was there, but we had really good margins at the end of the day, probably after 40% margin.
00:22:09
Speaker
Right. So, you know, which, uh, which we would use, you know, after acquisition costs and after all the, all the delivery costs, right? Because at the end of the day, you know, 60 people are paying four lags and, uh, you know, per faculty, you don't need to pay a whole lot. Uh, if they come to class, even if you're being them really well,
00:22:30
Speaker
10,000 rupees per hour. Even then, there is enough margin to do this. But today, that model doesn't work anymore. This is a model that worked 10 years back. But today, it can't… Why is that?
00:22:49
Speaker
I think particularly the audience that we're talking about, which is people
Shift to Online Learning and Growth
00:22:53
Speaker
with five, six, seven, eight years of work experience, they no longer want to go to a class. They are quite happy with online learning.
00:23:05
Speaker
they would, they would have to, let's say, you know, if you have a class in Gurgaon, they have to travel from Loida or Gurgaon, right? Or in Bangalore, which is worse, you know, you have to travel from one part of Bhagavat to the other, which will take two hours. And so, and those days, we found it very hard to move people from the
00:23:26
Speaker
classroom based programs online. But today, nobody wants to do the classroom based, particularly the older, older students, because they realize that they're having similar outcomes in terms of learning from the faculty, networking with each other, having conversations and so on, that they can do it in the class. And then if you can avoid the
00:23:48
Speaker
classroom, the commute, that's a big point. The second point there is also, you know, when we did it in class, to optimize the time for faculty and for everyone, we'd have to do it in the entirety. So class would start at 839 in the morning, go all the way to 536 in the evening, on Saturday and Sunday and some Fridays.
00:24:09
Speaker
But today when we do it, we can spread that over every weekend, two to four hours, which is honestly a much better system of learning. So you would rather spend two to four hours every weekend of the month, as opposed to
00:24:25
Speaker
16 to 24 hours, one weekend of the month. So intuitively, from a learning point of view, from a convenience point of view, there's more flexibility. I don't have to be in Bangalore every weekend. Well, I don't have to be Bangalore. I can take this course if I'm in Mysore, if I'm outside of this, because we have students coming to Delhi Park Center from Jaipur, from
00:24:52
Speaker
a partner and somebody even from like Kolkata and so on right now. All of them don't have to come here. They can do it online. So, so the whole commute flexibility, you know, and of course pricing, when you do it online, we were doing it at half the cost.
00:25:07
Speaker
So every aspect of this became better. And though we probably have better margins in the class, I think that market sort of shifted. And today it doesn't look like consumers want to, at least in our segment, they want to come to class. And that's a clear change that we've seen in India. We've seen that around the world as well, where online learning has definitely become mainstream.
00:25:34
Speaker
We have definitely figured out how to create outcomes online and consumers are now believing that. So it also took them a time to see that and then now they see that when outcomes are the same. So, you know, whether you did an online course or a classroom course, companies are going to evaluate whether you can go data slide. You know the AI algorithms. They're not going to, they're not asking you whether you did it in class or online. Can you do the stuff? And if you can do the stuff, then that's all they care about.
00:26:03
Speaker
from a recruitment and outcome point of view and you know they're able to learn and the other one was networking and personal interaction and that also we figured out ways to do that online.
00:26:14
Speaker
Today, people are comfortable with that also online. Did you lead that pivot from hybrid to online? Yeah, very much. As a product manager, what were the things that you saw were happening offline which you wanted to replicate online?
00:26:34
Speaker
build a product which people found compelling enough to, in a way, cannibalize your hybrid course. Like the online course, cannibalize the hybrid course. So how do you do that? Yeah, that's a very interesting story. So what we first launched was what we thought
00:26:55
Speaker
were global benchmarks. So we saw Coursera, we saw Udemy, we saw Udacity at that point in time. And so these were recorded lectures that somebody put out there at a low price.
00:27:12
Speaker
People were subscribing to it. So our first thing that we launched was actually just put content out there. In fact, this is one of the first things I was involved in back in 2015, 2016. We launched a course and we put it out there.
00:27:29
Speaker
But, of course, we had the philosophy and that's where the alignment of values in our leadership, we all wanted to make money. So, we were not looking at this, we were not going to take external
00:27:44
Speaker
external investment to do this and Coursera and Udemy all of these guys have raised hundreds of billions of dollars and we were not going to raise that or neither either we cannot raise it or we didn't want to whatever it is but the money was not coming which meant that we had to make this profitable so we were not going to give it off at what Udemy gave it off and ten dollars or like seven hundred rupees or Coursera would be like thirty forty dollars a month subscription we charged fifty thousand rupees fifty five thousand rupees
00:28:11
Speaker
Because at that point, only we can cover the cost. And we managed to enroll a bunch of people, but they were pissed off. Our first batch of online learners were completely pissed off. Because we were also really trying to learn how to do this, right? So it's not like any of us had experience. And this, again, in backing, doesn't look like that many years back. But seven, eight years back, there weren't enough people who knew how to create online courses in India.
00:28:40
Speaker
So, you know, I had a friend who was a movie maker. So we brought him into the company. But even before that, before we got the movie maker guy to the company, you know,
00:28:53
Speaker
We tried to record our own, we tried to record a faculty and then we edited it. So, you know, I got a wedding photographer to come and record. And so it was actually as crazy as that. I mean, who are the guys who can record faculty, right? Who can record anybody?
00:29:11
Speaker
So the big industry at that point was actually, you know, these wedding photographers and wedding videographers. So we got one of those guys to record our faculty. And then I was learning how to do online courses. And then we looked at how to edit it, got the software for that. All of that was like, you know, tremendous amount of learning, trying to see how to even launch a core.
00:29:34
Speaker
But basically it was so bad that, you know, students started complaining a lot because they, because we very quickly realized that students are going to compare our quality with international, right? Because when it comes to online, whether do you do it in great learning in India or you do it in Korsra in the US, they're having access to both. And here we're charging 50,000 rupees and there they're charging 500 rupees. Now you have a problem. So the standards are so high.
00:30:02
Speaker
So then I ended up having to talk to 50, 60, 100 PISTOC customers. But the thing that we were very clear on was we assured them that we will give them the quality.
00:30:18
Speaker
of the learning experience and outcomes that we promised them. So we did a very quick pivot, and then we got some of our faculty members to teach life and then have these sessions. And personally, individually, for each student, we solve for it. And we learned many, many, many things of what it takes to actually deliver a high-quality cold talk by, particularly if you have to charge a premium for it.
00:30:48
Speaker
if you have to charge, which is what we do right now, one or two or three or five lakh. So number one is that you need to have higher production value in terms of the quality of the recording and the content and so on. So that's where I got like a friend of ours to come in. And we also got some more knowledge in how to create these courses. So production value improved. Secondly, this idea of... I guess Baju's original innovation was this only, right? Production values.
00:31:18
Speaker
Yeah. So I think, yes, they definitely by use it, figured it out. It is what they call this entertainment or as they call it, right? So that has to be, it's not just dry educational videos, but you do need to have better
00:31:34
Speaker
So that is there, how the animations appear. In our case, it's not so much about animation, but how do you put text? Where do you put text? Giving people a good sense of where is the scores going, right? Because you have to take it in different ways. You have to keep the student engaged and interested and all that. That is one aspect of just still.
00:31:54
Speaker
production of the courses, but online courses is a lot more to it. How is content organized, which is a big aspect of giving students visibility and control over their learning journey. And if they don't have control online, they're going to lose motivation and trust, and then they're going to drop off. The second thing that we learned is around this idea of cohort-based learning, right? And that's where the differentiation is from Coursera or Udemy. And to this day, that is it.
00:32:24
Speaker
which is that in our case, we create a cohort of 20 or 25 learners, so you are studying in a small group. And that way you get to interact with each other. There is structure in the court to start on a specific day. The entire three months, six months, one year, two year, whatever is the duration of the course that you signed up for is visible for you when it's starting, when the quizzes are going to be, when the life
00:32:51
Speaker
classes are going to be when you need to do the assignments. So all of this is so the technology aspect of giving this visibility and planning all of that in advance. So the students know exactly what they're going to go through. And this has better outcomes, right? Because all of these, the problem is that, you know, you start and then later you drop off, right? Very hard to sustain motivation and complete.
00:33:15
Speaker
So we know how to keep you motivated to sustain that because it's all cohort based and those are the best aspects of the campus based stuff that you might write because you know in when you come to campus you come on a certain date there is a certain amount of learning that you have to do during that time and there's fear pressure also right your classmates are together they're doing the same thing so so this peer interaction is a super critical part of it.
00:33:39
Speaker
But this is sort of the second and third, right, which is the aspect of cohort-based learning, the aspect of having structure and visibility. And the third or fourth is really around live learning. So we realize that that is, again, a unique aspect of what we can do and which is important. And every weekend, you know that there is a Live Plus.
00:34:00
Speaker
So we follow this flipped classroom approach where we have high quality lectures which are recorded by the faculty and whether it's in the faculty from an IT, IAM, and later MIT, and Stanford, and so on. So over the weekend then, coming into this live lecture, having an interaction with the mentors who are industry experts in these areas to review the concepts that the faculty taught in the lecture videos over the week gives us unique
00:34:30
Speaker
a mix of industry expertise plus faculty remains from high quality faculty and also this aspect of flexibility to consume the recorded videos whenever they want and being able to come to the live lectures from the industry experts during a certain schedule. So there is that schedule and that is forcing function that by the time you come for this live lecture, you need to have reviewed the material that the faculty had recorded over the week
00:34:59
Speaker
And so the flipped classroom approaches, again, very much needed to create outcomes. So this is another innovation that we created. The flipped classroom was essentially, instead of a lecture, it was just like a bunch of people asking questions and the professor answering some of them or other people in like the peers answering some of them, something like that, like that kind of a highly interactive session.
00:35:26
Speaker
Yeah, exactly. So because what we do is by the time you come for the live class over the weekend, every weekend there's a live class in a small group of 25 learners. So by the time you come to that live class,
00:35:39
Speaker
you would have watched the lecture video from the faculty. So let's say it's a topic in supervised learning, which is in a machine learning algorithm. So you watch the lecture video in supervised learning or static statistics or whatever it is. So you get your basics correct. So when you come for the live class, you're clearing your doubts in that. So all the students are asking doubts and clearing that. Secondly, the industry expert is walking them through a specific use case or an application or an example.
00:36:08
Speaker
And so you have that much more ability to now focus on the application and what can you do with it as opposed to now a bunch of people are trying to ask questions, you try and get the concepts right. The other advantage is when you're going through content, you may be learning the content much faster, you may be able to grasp it much faster than I can. So there is a situation where
00:36:33
Speaker
You know, you end up, you know, if the faculty is teaching in a live class, some students will go so fast, others will be behind. And so a great experience for everybody. Whereas the slip classroom approach, if you're unable to go through the content fast, you go through the content fast.
00:36:49
Speaker
Right? If you go through it slowly, you go through it slowly, but that you do it at your own pace. And then you come for the life class where now everybody's on the same page at the same level. And you can ask questions, learn from each other, get the examples and so on. So this, this again came to be a very unique aspect of what we do. And of course we can quizzes, weekly quizzes, feedback, doing that at scale. And so, you know, using technology to get scale and so on.
00:37:17
Speaker
So that's what we actually cracked. So when we, and this of course is an evolution over multiple months and years, and by the time we were able to do this, then in a couple of years we were able to create the same outcomes that we were doing in the classroom based programs online.
00:37:36
Speaker
people who are learning, they're very happy with the content and all the benefits that I spoke about, people started realizing, hey, I'm getting similar outcomes with the convenience and the fraction of the cost, with lots of flexibility, all the good things are happening. And so that's sort of what we actually did. And then we were able to rise it
00:37:58
Speaker
Hi, you know, we started as I said at 50,000 pushed into 1.25 lakhs. Today we offer these courses in India at 2.5 lakhs plus DSD and internationally in the market at much higher at $3,500 to $4,000.
00:38:12
Speaker
And people are actually very happy, even at those price points of the value that they're getting, because if you compare that with anything else, those are much more expensive. Okay, interesting. Just give me a year by year play, which year, like what was the revenue in that year and by when did you start shifting that revenue from a hybrid to an online and by when was it 100% online?
00:38:40
Speaker
even today we are not 100% online. So because there are certain for the younger audience, people who just finished college, we have a program which is for those students. Because for younger audience, we actually think it's good for you to come to class because they may not yet have the full discipline and they may not yet have all the things that are possible.
00:39:08
Speaker
Some of those things are still, especially if you've not gone to a great engineering school or an undergrad school in India, chances are that you've actually not yet in mind how to put in the effort, what is required to get to a certain benchmark. So we have programs which are for, let's say, zero, one, two, three years of learning periods that we still do in our classrooms, in all our centers.
00:39:34
Speaker
So that is still there. That is what we call bootcamps. So we still have bootcamps that are running. Now, going back to your question as to how does it go year by year. As I said, the first two, three, four years, it was primarily online. Which year, like 2015, it started, which was year one.
00:39:56
Speaker
2015-16 is when we started experimenting with online courses and the learning that I said with customers being really pissed off and all that, that probably happened in 2015 and 2016. And what was the revenue? How much were you closing each of these? How much did you close 15 or 16? Very rough estimate. I don't need an exact number.
00:40:26
Speaker
I don't know. I can't remember. Do you remember when you crossed 100 CR revenue? Which year was that? 100 CR would probably have been, I think, close to.
00:40:46
Speaker
Probably, you know, I would say that I was 17, 16, 17. So when both the engines were kind of kicking, like you had an online engine also kicking and offline was? Online was like, you could imagine at that point, online was like very small, practically nothing. It would be very, very little. Hardly anything at that point. You know, online came to really 15% of the revenue
00:41:15
Speaker
close to the COVID, so close to 2020. And then, of course, it became 100% off when COVID happened. So we were getting to that. And COVID is what really switched this thing, this behavior, fully going up to that point itself. We were positioned by the time COVID came.
00:41:43
Speaker
If you were not, then I think you would not have managed COVID so well. But by the time COVID happened, because from 2017, 2018 onwards, we got this thing connect. And I remember 2018 financial year closing is probably when we started rambling about online programs and 2019 and I think, you know,
00:42:13
Speaker
That financial year, I don't can't remember, but I would think around probably 20%, 25% would have been online. 2020 was when we went abroad. So we started offering our programs outside of India in that, I mean 2019 onwards, but in that financial year, then that became a certain, a decent portion of it. And COVID completely dipped it in that direction. Post COVID,
00:42:38
Speaker
You know, the whole classroom blended program kind of disappeared, right? Because that people don't want to do it anymore. Okay. Amazing. This, how much revenue were you at in 2020? Do you remember? You know, see at that point we were doubling every year, right? So you could imagine, you know, 10, 10, we would have been in the 400, something like that.
00:43:08
Speaker
No, no, no, I don't think you would have been anywhere near that. I think it will be like 200. From 100, it would have gone to 200. Roughly every year we've doubled or tripled our revenue throughout. So the post-COVID year would have been about 400, something like that.
00:43:28
Speaker
Yeah. COVID in that COVID year, there was a dip and then because the classroom based programs all shut down and classroom based programs, as I said, we were able to capture five year revenue. Uh, you know, those were at four lakhs, right? Four, four point five lakhs. And so that kind of went away. So the, um, you know, the article actually came down, uh, but the volume went down. So that one year, if you look at it, you wouldn't see a big function, but when you, when you want, you would see a big.
00:43:58
Speaker
Um, because then, you know, everything started kicking off online programs abroad, India, and so on. But sort of, we started getting that growth from 2019 or what, as I said, right? Once we launched the online programs, you know, that really grew. So we started moving quite rapidly from 2019, 2020 to 2020. Then it's been like rapid growth throughout.
00:44:23
Speaker
So the reason to go international was for better ARPU and ARPU for our listeners is average revenue per user. So that was the reason to go international. Because your high ARPU product of the offline classes kind of got eliminated. So you needed to find other ways to increase the ARPU. No, so you should show.
00:44:45
Speaker
You know, international was actually quite, again, it was, you know, we went into nothing because we could. Right. I think let's put it that way. Right. So we got, you know, we had this
00:45:01
Speaker
We didn't go to the US first. We didn't have permission. But we did first from India. Then we looked at adjacent markets like Southeast Asia, the Middle East, GCC, Africa. So we were there. I think in the soonest one or two years, we didn't even go to the US. We were actually building a business, a sizable business in these block.
00:45:26
Speaker
which is more to say that, well, we have an online program in India. So India, if you think of how we grow, it was to say that, well, we have programs in these cities, right? So, you know, and then to say that, well, now we have an online program in India. So people don't have to be just in these cities. They can be across India. So then we are like, okay, now people are in a cross in India. Now people can be outside of India.
00:45:54
Speaker
So it was just a way of growing, growing markets and, and saying, well, can you, and while we were processing, so the point is that no point we were trying to, uh, you know, grow rapidly, but to say, but to say, you know, can you expand these markets?
00:46:11
Speaker
And can you learn in marketing sales ops from India? And will these learners in these countries outside want to do their pro to our programs? What innovations do we need to make it accessible for them? So like payments, for example, in India, we do payments around, you know, we, there are lots of companies that provide loans and, and so on. So, so what do you need to do if you have to offer courses in Africa and how do you collect payment? Where do you collect it? So.
00:46:40
Speaker
how you provide financing to people there. So there are innovations around. It's not just enough to put a course out there. You have to make it possible for people to connect. Then also innovations around people in, like when we offer these courses, when we call these mentor learning courses, someone in Africa or the Middle East and later in US, Europe, Latin America, they don't want to be taught by a mentor sitting in India. So they want people like them to be set.
00:47:10
Speaker
So being able to recruit mentors from these regions and having yet to standardize, but then whether you attend a mentor live classroom session from someone in Africa, Middle East or South America or the US or in India, they'd be the same thing.
00:47:26
Speaker
So that kind of standardization, so recruiting them, filtering them, preparing them, and standardizing the material so that the experience is the same wherever you come from. So we have to learn how to do that.
00:47:42
Speaker
I think that took us a few months. Once we got all of that figured, then we went to the US. US is where things really exploded because in all of these markets, I keep thinking about this, that in all of these markets,
00:48:03
Speaker
Price is a constraint, right? You know, people, two, three lakhs and all is expensive for people in India, but two, three lakhs is $2,000, $3,000 for somebody who is in the US, and $3,000 for our average customer is a fraction of their monthly income, and very easily they can afford it.
00:48:29
Speaker
particularly compared to things that they need to otherwise have paid for similar, similar value. If they had to do a similar program, it'll be 10 times the cost of what they would pay us. So, but it's not at all easy to deliver, right? So if you have to deliver to US, you know, it has to be world-class. It has to be very high, you know,
00:48:54
Speaker
Even small things will not work, right? When you talk to a US learner, especially if you're trying to deliver that from India, there cannot be any grammatical errors, there cannot be any... Even those things have an impact. A certain high level of proficiency and some high level of quality standards when you think of program delivery operations.
00:49:15
Speaker
mentors who are from the region and just operational excellence, which is so high to consistently get. So that's one of the things that we actually cracked to have very high operational excellence to be able to deliver to US learners.
International Expansion and Diversification
00:49:36
Speaker
And that, I think, is not trivial, not just US learners. So, of course, you have US learners. You've learned this from that time in South America.
00:49:46
Speaker
Africa everywhere. So how do you deliver to all of these learners and still have high quality and professional experience and operational excellence? And how do you do that from India? Because if you do it from India, you can have very low costs. And if you have those costs, then you can have high margins. And with those margins, you can again bring the costs down to your learner.
00:50:10
Speaker
And you are able to then delight the learner and yet turn in a profit, which is what we're doing today. Amazing. What kind of courses were being offered by the time COVID hit?
00:50:27
Speaker
So primarily it was in data science at that point. And I think we had maybe one or two courses in AI, maybe cloud computing. So not a very broad portfolio as we do. So these are courses for engineers to upgrade themselves, basically.
00:50:46
Speaker
Not fully. In India, by the way, that is true. In India, most of the people who enroll are engineers because they are coming out of engineering schools with very poor quality of education.
00:51:02
Speaker
very little hands-on practical experience. So they've not actually coded and they've not really gotten their hands dirty. They've had an academic experience in class and they're not job ready. So you go through one of our courses, you actually become job because we make you go through a lot of projects and exercises and
00:51:23
Speaker
uh, so on. So otherwise you could, you could claim that if you went to a good engineering school, you don't necessarily need to do our program, right? So if you, you know, if you actually went through an engineering, a good engineering school and the professors made you go do a lot of hands-on problems and you came out job ready and you yourself spend a lot of time and you're in an ecosystem where your peers are all working hard, you know, you've, which is what, by the way, happens in most, uh,
00:51:52
Speaker
A lot of American schools.
00:51:55
Speaker
And you could claim that that's what is happening in the IITs and a few of the NITs and maybe a few other engineering schools, but, you know, 90% of the engineering schools, that's not what is happening. The faculty are not, they themselves are not job ready, right? So, you know, if you ask them to go work in the industry, they may not be able to do a job, right? So then they don't know what exactly is to be taught and how to teach it and what are the latest, you know,
00:52:25
Speaker
technologies to teach and one of the platforms to use and so on, right? I'm not saying all of them, there are several faculty members who do a fantastic job, but there are, you know, majority of them don't. So, and the students are also, so the students themselves have not gone through a system that is rigorous. So they have to come through, come through us so that when they go to a company in the art job, right? So in India, that is the profile of it.
00:52:53
Speaker
In markets outside of India, what we see, particularly in more developed countries, we see that when they have gone through a rigorous undergrad, so they have the folks who end up coming to us are actually people who are not engineers.
00:53:07
Speaker
who have not had a technical education. And this is their first technical education. So they want to switch into a career into technology. So, you know, the single mother, like a nurse practitioner. So that's the majority, but you do find a lot of people who come like that. And of course there are people who are in
00:53:35
Speaker
tech companies, but not really in technology roles. So they not had the depth to be in technology roles. So they are working in professional companies and they are seeing what's happening. If you can get into a technology role, whether it's in software engineering or data science or AI or ML or cloud computing, cybersecurity, user experience, whatever it is, they see what's happening to people who are getting into technology roles. And so the career growth and outcomes that you can get from that.
00:54:04
Speaker
And they want to, you know, experience that and they've not had the foundation to do that maybe because they did a liberal arts course or they did ancillary course. So we get a lot of people like that in international markets where the idea is to switch into technology.
00:54:21
Speaker
How do you think about new course launches? Which course should you launch next? In 2020, you had largely data science, cloud computing courses. How did that portfolio expand today? What was the process you followed to decide what to launch next?
00:54:37
Speaker
See, we are always looking into the world to see where is the gap, what are companies looking for and what are people looking for? Aren't there providers of that? So we work backwards from jobs.
00:54:53
Speaker
So almost everything that we do comes from that insight to say, you know, where are the jobs? And every year we, not every year, all the time they're looking forward. So, so we, in fact, this last one year we've launched courses in generative AI.
00:55:15
Speaker
using open AI platforms and so on. And all of that happened because of chat GPD and open AI. So suddenly prompt engineering, generative AI, all of that became mainstream and we needed courses there. And so we launched courses in that way. The year before that we launched courses in the electric vehicle and so on, because there was a lot of interest there in India, companies were high.
00:55:45
Speaker
cybersecurity, a new portfolio that we've built in cybersecurity courses, because that was becoming a big deal, particularly post COVID. When companies have shifted online, a lot of their operations, the cybersecurity has become mainstream. So we launch courses in cybersecurity, right?
00:56:02
Speaker
So that's the beauty of what we do, because in this world of technology, something seems to be happening all the time. And that much we can count on. And most people will find it difficult to learn it on their own. So that is where we have expertise in, our faculty, our mentors, our internal academic staff.
00:56:26
Speaker
They're really good at picking up new things, learning things fast, talking to industry and figuring out what is the skill set that they're looking for. And we know how to teach.
00:56:39
Speaker
We put all of that together, we create a course and put it in the market. And I would say 70, 80% of the time, maybe even higher, we get it right. As to that is what people want and that's what the market needs and that's what companies want and put the course out and it just people in ruin.
00:56:56
Speaker
And a small percentage of the time, we get it wrong in the sense that something that we expected is not happening, as in... Devat didn't meet your expectations.
00:57:11
Speaker
Yeah, the demand is there, but sometimes what happens is, for example, data engineering and things like that. Well, there are plenty of jobs in data engineering, but in fact, there are more jobs in data engineering than science. But as a consumer, as a learner,
00:57:33
Speaker
average person in the market, they want to learn data science because that's more sexy than data engineering. So things like that where, you know, though the product is what the market needs, there is a consumer mindset that is preventing the consumer from taking a decision.
00:57:50
Speaker
to do the right thing for themselves. So it's not only enough to get that part of jobs and market demand right, but you also need to get this aspect of consumer desire and consumer intent also correct.
00:58:06
Speaker
Right. So both of those have to match. Yeah. Like nobody wants to learn sales. Everyone wants to learn marketing. Exactly. If they were offering sales as a specialization, no one would take it, even though that's what everyone ends up doing.
00:58:23
Speaker
Yeah, and there's, there's far more jobs in that. So, so, so yeah, I think that's a good, good analogy. And I think that's what, that's what you find when you design products that, you know, there is a, there is a reality and there is a perception that you need both to, uh, both of them, we need to get them to work together.
00:58:43
Speaker
How did you ensure consistency as you kept increasing the courses? What's the playbook to ensure a good outcome for the student? Probably the starting point is to design a lesson plan. What else is there? See, I would think there are two sides to it. One is the hard stuff, and we can talk about that. And the other is the softer stuff. I think the first point is the culture aspect.
00:59:16
Speaker
create sort of a cult, right? And you need to explain to people, your staff, as to what quality standards is. What is a benchmark? What is acceptable? What is not? And you need to have a culture that is formed with the team where learner satisfaction is celebrated and anything less than a feedback of 4.7, 4.5, 1.5, NPSO, you know, 40, 50,
00:59:37
Speaker
You do need to...
00:59:44
Speaker
anything less than that, people get worried. So I think the first aspect is having a very high benchmark of what excellence is and what that culture is. So we do a lot around that, creating examples of what it means by quality, what it means if you're missing the mark, training, feedback. So there is one which is, as I said, ultimately you need to get your staff
01:00:12
Speaker
used to what excellence is. So you do this rewarding people who have created good stuff and like how do you make it real? Yeah, so one is of course, you know, those are there in their OKRs and when at the month, you know, at six months or one year, whenever their reviews are, those are the things that you're measuring them against.
01:00:38
Speaker
And so that's one. And then the other is, you know, there is weekly celebrations and, you know, public celebrations of folks who are attaining high NPS and feedback and so on. And there is private school, you know, I wouldn't say private messaging, let's say of folks who are not
01:01:01
Speaker
meeting those benchmarks. Do you have like an owner for each program, for each course? Yeah, for each cohort, we'll have an owner and multiple cohorts will make a program and multiple programs will lead up. This owner is separate from the faculty.
01:01:20
Speaker
Yeah, faculty, this is almost like each program manager, as we call them, is like an owner for the health of that batch. So faculty,
01:01:34
Speaker
is more like a horizontal resource that goes across all our programs, right? So they don't have a single, they don't have any ownership other than their course and their overall program academic quality, right? But as we've seen that kind of once you standardize at the beginning, the day-to-day delivery excellence comes down to the program owners.
01:02:00
Speaker
So one is this, then there's a lot of, as I said, standardization and review that goes around on them, which is more of the process excellence piece of things, where you have systems to connect feedback for each session, you have systems to connect feedback for content, and that gets reviewed and then improved and goes back in. So we connect feedback for every aspect. So there's a lot of process excellence pieces that are
01:02:24
Speaker
to talk for an hour on what process excellence metrics are. So I would think that's the second aspect and how you conduct reviews and how you capture what's happening to figure out the length of a batch, not just a batch at an individual level. Each student, how are you doing? And then using that as a mechanism
01:02:46
Speaker
to give personalized attention to it, not as a fraction or as a number that gets reported, but do you need to be paid attention to? And we do that. That's where the third aspect of this is, which is really building technology to be able to do that at scale. Ultimately, when today we have
01:03:11
Speaker
whatever, millions of learners on the platform, tens and thousands of live classes that happen daily. At that scale, you can't do this any longer with just a culture of excellence and precious excellence. You need to have technology that is able to automate most of it, highlight what holds attention.
01:03:34
Speaker
figure out how the learner experience can happen on its own and in those cases where something is breaking before it breaks, highlight it to the program owner as we spoke about and that person then going and doing an intervention.
01:03:49
Speaker
That sort of, you know, it's not, I wouldn't say it's a rocket science, but it's really paying attention to our business, our processes, our systems, and figuring out how you build all three, a culture of excellence, process capability, and technology to be able to have very high learner satisfaction outcomes.
01:04:12
Speaker
I would think that's really what we're nonstop iterating over and trying to improve on. So it sounds like the program manager role is pretty important in ensuring quality, like he's your point of contact for the students and he's empowered enough to figure out and save the batch if something is going wrong and so on.
01:04:33
Speaker
Yeah, I'd say I think in our business as it exists today, it is a very people-driven business. And that, by the way, is what enables us to differentiate from just purely product-led companies, be it Coursera or Udemy or Acity, right? So we are not trying to compete on
01:04:50
Speaker
the product automation side, right? They're trying to empower program managers. We're trying to empower our program advisors, which are our sales folks, because ultimately the customer or the learner wants to talk to somebody before making a decision that impacts their life. So the sales folks, we call them program advisors, they're also empowered to advise the right thing to the learner.
01:05:16
Speaker
and the mentors who come every weekend to directly engage with 25 learners and be responsible for them for the duration of the six months or year of the program. So all of these folks were the mentors, the program managers, and the program advisors from all the way from the same point of view then during the delivery
01:05:39
Speaker
And then one student is completing the program. So at all of those points, what we try to do is enable them to do their job and use some technology to enable that using AI now. So today, when a person comes in, when a learner comes in, our program advises,
01:06:01
Speaker
are able to figure out which is the best program for them, what have people like them done in the past, you know, if they need examples from an industry on how they have used AI or ML to create a certain outcome, they're able to provide that to them. So there's a lot of technology that we've built just to give visibility for each of them and how they can communicate better, right, with learners.
01:06:29
Speaker
So yeah, so that's sort of differentiation and the process equivalence, please. Okay, interesting. Is this the norm for this cohort-based edtechs, like say Upgrad, and there are probably a bunch of other companies that are competing with you? So is this how typically it happens? Or like, is this something unique to great learning?
01:06:55
Speaker
So a few things, I think first of all, I think it comes down to what is it that you're trying to achieve, right? So in a tech, that's what I've seen. There are companies like Emeritus, which focuses more on, let's say, business and management education compared to us. So when you're focusing more on business and management education, you don't need to do a lot of this.
01:07:17
Speaker
Because you don't need people to have hands-on exercise, personalized feedback. You don't need to do all that. So you may not need to build all. But if you need to get someone to learn AI, which takes six, seven months, eight months, and learn that in a hands-on practical manner so that you can be job ready, you cannot do it without doing this.
01:07:41
Speaker
So that's where you'll find that for this purpose, and we also focus on these kind of technologies and areas, because that's where our expertise is, to create outcomes in those areas.
01:08:00
Speaker
If you are looking at doing that, then I think you need to do this. And if you're not able to do this, then you will not get the outcomes. So that's the way I would think of it. I think Akrad has a different, some of it they also do, some of it they go down different route in terms of their focus on what they're trying to do.
01:08:22
Speaker
So I think ultimately companies have kind of figured out different areas of strength and it is for the learner to decide what is it that they want to achieve. So if they want to learn hands-on data science, AI, machine learning, then coming to us, I would think it's the best. But that would also mean that they have to do a lot of hard work over the nine months.
01:08:53
Speaker
And if you're not prepared to do that, then maybe it's not a good idea. So I think it comes down to that. But then you should have a different outcome that you're expecting at the end of the course. You can't have the outcome of getting a job and then getting into a lucrative career. But there are other outcomes to have had. There are other ways in which you can build your career also. So having that clarity helps.
01:09:16
Speaker
because these platforms are different in certain strengths and what they aim to achieve at the end of it. So as a learner, you do have a choice today and you will have very different outcomes if you do a course on Coursera or Udemy or you come to us and there are very different expectations and very different time commitments and what you actually need to do.
01:09:43
Speaker
And you'll have different outcomes. So that clarity helps. That's the way I would answer.
Acquisition and Post-Acquisition Strategy
01:09:50
Speaker
Tell me about the sale to buy juice. When did that happen? What made you decide to do that? What led up to it?
01:10:00
Speaker
So for us, um, we were actually in the market. So, you know, as we were talking about earlier, 2020 and so on, um, you know, we started really going rapidly, uh, 2020, 2021. Um, we, and some of our competitors too, the whole world woke up to it and the power of it. Um, so our business grew a lot and it was becoming very obvious to us that
01:10:27
Speaker
To continue growing in this direction, we will need capital and we will need capital to attract more people into the company to reward our own folks and also in expansion. There was a market opportunity that was getting built and if you're not expanding,
01:10:45
Speaker
And then, you know, we may not get to a certain size that we might become sidelined. So the idea of capital, you know, we build our company for eight years without capital in 2020 became clear that we do need capital
01:11:02
Speaker
So we were in the market to raise capital. And while we were having conversations to raise capital, then we got an offer from by Jews. And at that point, we thought that that is a good decision, of course. You know, can't see into the future what's going to happen, right? Two, three years later, but in 2020, 2021, by Jews was very. It was the hottest tech in the world. Like, I think.
01:11:37
Speaker
solid balance sheet, you know, marquee investors. So there was no risk. At least in that point, when you looked at it, in fact, that looked to be a far safer home than to go into the market and raise one round of funding from one investor. And then that kind of gives you a one year, two year runway or even lesser. And then again, go raise another round of funding and keep going.
01:11:57
Speaker
Yeah. What does it take in the world?
01:12:04
Speaker
So we didn't want to do that. We never wanted to just keep going into the market. We'd rather execute our business really well. And that was a thought. So it was to find a safe place to build a company. Also, we got to a certain size. And if we continue to grow bigger, what size, what kind of revenue did you do in 21? What was your ARR?
01:12:32
Speaker
I think it would have gotten close to that 80 million range. So at 2021 close, I think that's what we would have had. And how much was US or what was the split?
01:12:54
Speaker
See, at that point, US was probably still smaller. We were just still building, right? I would say 20, 25%. Okay. But the global revenue altogether would have been more than the domestic. No, no, no, no. Global revenue, you know, almost always has been smaller than the domestic. Oh, okay. Interesting. Right.
01:13:18
Speaker
Now it's gotten, you know, gotten, gotten the global, this is now has gotten quite big, but otherwise throughout it's been little, little less than that. I think you were valued at about 600 million or something like that. Yeah, that is, that is including all the, all the earnouts and, you know, the stock appreciation and some of the other things that were
01:13:46
Speaker
and then we're wise for these. Was it an outright purchase or you continued to hold equity? What happens typically in such a case? What do you mean by earn outs and you were talking wise? No, so that depends on how the deal gets structured. So there are companies that use differently.
01:14:09
Speaker
And ultimately, typically, all companies will look at it and say that, well, some portion of it, they'll give it in cash, some portion will be in stock, and some portion will be in some kind of a retention, because no company would want to acquire someone and then the founding team or the management or the leadership goes. So they will structure it in such a way that these are components that are there in most deeds.
01:14:34
Speaker
And what usually gets negotiated is what is the percentage for each of these things, right? So for us, that's also how it was, right? So there was some origin and cash in equity and some in earn-out. Can you just help me understand earn-out? What does it mean?
01:14:59
Speaker
So basically, you know, it would mean that, you know, you stay and then you have to hit your winestones, right? Because when the acquisition happened, you've told the company that you're going to hit certain winestones, right? So now this is the company, whoever is the acquirer coming back and saying that, well, hit those winestones and then you'll get paid. And I think that's a very fair way to do it, right? Because ultimately, especially in these, the difference to that setup would be if you are a completely product-driven company, right?
01:15:26
Speaker
And there is no, you know, but if you're, if you're acquiring a business where there is continuity of business needed, right? So then this would be how things would get structured. But if you're going to do like, you know, if you have built a product, I don't know that WhatsApp deal was to Facebook and things like that, right? Because if the product can run on its own, where the, you know, where the acquiring company is just buying technology,
01:15:53
Speaker
you know, whether it's algorithms or technology or systems or software or whatever, then I can imagine like an outright purchase also, right? Because then the value is not in the management of the leadership of the team. The value is in the technology. But in our business, that's not how it is. There is, of course, value in the technology.
01:16:13
Speaker
in the know-how, but there's also value in the people and the systems and so on. It's like a cash about that you get or you get more equity or what is. So that also depends on the, you know, on what you actually structure with the company, but yeah, it's a combination of cash. Okay. So Biju acquired a hundred percent of great learning or did you return? Okay. Okay. Okay. I mean,
01:16:43
Speaker
Yeah, didn't you like giving up 100% of your business? Was it like a hard call to take? Yeah, but I think see, I think the way we thought about it at that point, and what was told to us was also that you will get to operate it independently. Right. So, which is true, by the way, by use interfere very little with our business. And
01:17:12
Speaker
that you are getting to operate independently. I think the way we looked at it was not just from the point of view of immediate control, but we were looking at it from the point of view of what was going to be sustainable over the long term. Where can great learning be sustainable?
01:17:34
Speaker
not for the next one year, two year, three years, but for the next five years, 10 years, 15 years, 20 years, right? Let's say even if the founding team is not there, what is going to make the company sustainable?
01:17:45
Speaker
Right. And so, it's not that anyone or any of us want to go anywhere. In fact, nobody left and nobody has gone anywhere. Everybody's still together. So we are very clear on, you know, we like the business and we want to continue in the business. But the question always is, you know, where is a safe home? And we want to be part of whoever has got a lot of strength. Or you have to say that, well, you can build a company independently through IPO, through what?
01:18:15
Speaker
So that's a different route where you say that you're going to raise VC funding, you're going to raise X, and then you're going to do this.
01:18:24
Speaker
And that also, by the way, is not subject. That also doesn't say that you're going to be safe because you could raise VC funding and you have capital for one or two years and market conditions can change and it's not entirely clear that you'll be able to raise another round. So some of the companies that aren't there in the market today
01:18:46
Speaker
They went down that route and when capital was easy to raise, they were easy to raise capital, but today it's not easy to raise. So they're not having to pay debt. And which is super risky because if you pay debt, then any change. By using an example of the risk of debt, right?
01:19:05
Speaker
It's a great example of that, but any change in your, cause you are, you know, and this is again, my philosophy and part of the founding team, all of our philosophy is that, you know, we don't, we are experts in our area, but we're not going to be able to predict what the future is going to be a hundred percent of the time.
01:19:24
Speaker
So there are going to be business risks, there are going to be shocks and you want to take things which operate within a certain risk and you want to minimize your risk as much as possible. So, and you don't want to be exposed to, you know,
01:19:41
Speaker
things that you cannot control impacting the sustainability of your business. We never wanted to jeopardize our team, our partners, our learners, and we built it in that way.
01:19:57
Speaker
So that's sort of where it is, right? So, which is sort of when, at that point, when in 2020, 2021, when we look forward, that seemed to be the safest bet. And when we look pretty into the forward, you know, yeah, maybe that was not the safest bet, right? And you may need... Nobody could have predicted it. So, I mean, yeah.
01:20:19
Speaker
Nobody could predict how the world would work. So I think business at what ends up happening. And then depending on where you end up, what you can do is you can continue to build the best business. Because if you do build a great business, then you can take another shot.
01:20:35
Speaker
It's just sort of what we'll probably have to do now. How would you get a second chance at owning hypothetically? How would you get a second chance at owning great learning? Because as of now, you have no stake, right?
01:20:53
Speaker
I mean, would you... No, I'm not thinking about whether, you know, we are going to... I'm still not thinking about from an ownership point of view, right? Why are you still motivated? Because is it like you still have your earn outs? Why are you still motivated? Because you have no ownership now. It's a salary that you're getting, right?
01:21:17
Speaker
Yeah, I think for me, it's super, but there are several people, one, there are several people in my team who've got ESOPs and equity and so on. So, in fact, I still have ESOPs and so on. So, ESOPs are of great learning.
01:21:35
Speaker
Yeah, I mean, not ESOP shares. I have shares, but there are people in the company who have ESOPs of great learning, which they have not been able to capture yet. So they have ownership. So I mean, that's just the financial aspect, right? So I do feel ownership to some extent that people who trusted to join my team on this journey, I do feel ownership and a sense of responsibility that
01:22:04
Speaker
they have a certain outcome. But that is on the financial part. But even outside of the financial part, I think, you know, I spent 10 years on this and so did some of us in the public team and some of the others have spent even longer. And none of us did this from the point of view of, let's just get a return and exit and retire, right? I think we did it because we think it is meaningful and you're having an impact on society and the world.
01:22:32
Speaker
And it would be a shame that that doesn't continue. So as I said, when we did the sale to Baju, we thought that regardless of the founding team being there or not, the company is in a safe place. And that's important for us, right? That it continues, the legacy is there, the business is strong.
01:22:56
Speaker
And the business has to be strong for us to continue having the impact that we are having. And it's actually, if I think about it, if I reflect on the 10 year journey, it's actually quite magical what we've done. We are impacting learners, not just in India.
01:23:10
Speaker
hundreds and thousands and millions, but we are actually embarking on this from around the world. And, you know, in multiple continents, multiple languages, cultures, and, you know, an Indian company doing that and scale, and sharing real outcomes and helping people out, right?
01:23:27
Speaker
You know, I'm very proud of that. And why would you want to end that in any way, right? If there is something fundamentally wrong with it, then sure, you know, either you're not having an impact or you're having an impact, but it is unsustainable. But, you know, we are in this amazing place where we are having great impact. The business is sustainable. It is profitable. It's a question of how do we make sure that it continues to be
01:23:52
Speaker
sustainable and strong, not just for one or two years, but for the next 10, 15, 20, 30 years. So that's what we really need to solve for. And one solution, as I said, we thought that there was a solution two years back, which turned out was not...
01:24:11
Speaker
fully there, so we need to now think of another solution. But, you know, so as I said, the business is strong, I think there will be solutions. So to your question, what is motivating me to keep going? I think these two things, one is making sure that the legacy continues and two, you know, making sure that whoever is joined, the team has assured that the outcomes that, you know, is there in the business.
01:24:41
Speaker
Right? And of course, if you actually extend that thought, we also have tens and thousands and hundreds and thousands of learners and we want to make sure that their experience and we are able to honor the commitments that they have.
01:25:01
Speaker
All of those pieces are actually still exciting to me. And it's also, so that's just from, if you look at what has done in the past, and if you look forward into what we can do, there is still actually quite a lot of things that we can do. So it's not gotten, at least to me, and you know, it's not yet gotten to a point where I say they run out of ideas on,
01:25:25
Speaker
how to grow this business or how to create products and services that continue to change people's lives. The whole last year was super exciting with ChatteriPT.
01:25:40
Speaker
And in the international market, which is where I focus on, we launched cohorts in Portuguese and Brazil. We launched cohorts in Mexico and Spanish. So we have teams there. I visited Mexico and the team several times.
01:25:58
Speaker
So financial aspects and equity and ownership is one, but there are also other things that are quite satisfying and fulfilling, which sort of keeps me going. Essentially, the fact that Bijus was so hands-off and gave you full freedom is the reason why you're still here, because you're still running the business as a founder would.
01:26:22
Speaker
Yes, I think that way I would say they did keep whatever promises they made. So, how did the revenue trajectory change? Are you still doubling every year? Like you were at 80 million roughly when Baju's acquired.
01:26:42
Speaker
Yeah, so we are doubling our revenue every year. But now, immediately after the acquisition, the focus was on growth. Now, the focus is on growth and profitability.
01:26:58
Speaker
So, you know, we have shifted the growth projections more into, see, ultimately we can, we can, but then that'll come at, you know, in the past when we were doubling, we were making, you know, we were like making even, right? So whatever, whatever extra there was, we would put that back into the business. Now, I think the market is not
01:27:21
Speaker
Or at least that's not what we may need to do to build a sustainable business into the future. And it might be one of showing a certain profitability, which means that then you would not take it to the edge of growth. So you would balance growth with profitability.
01:27:47
Speaker
And we know that pretty well how to do. So we're not trying to grow, we're not trying to double this year, but rather we are going to try and do that with a healthy margin and prove that out for the next few years to say that, well, we can grow and grow at a good margin.
01:28:10
Speaker
Are you IPO ready in the sense that do you have the kind of typically IPO ready companies? I guess investors look for 20-25% margin, stable growth. Are you at that stage? No, not in this year, but I think we could do that from if you go to market today and then if you ask me, do we have the track record over the last two or three years, we don't.
01:28:35
Speaker
But the objective is to get there next year or the year after that and then have a track record. So in the next one to two years, we can actually show that track record. Your revenue must be like more than I guess 250 million plus kind of a number.
01:28:55
Speaker
Yeah, I mean, whatever is in the public market, right? So and revenue also, you know, it's a question of what is being test revenue and what is what can be realized. So they are these are two different metrics. But yeah, I mean, it's it's
01:29:11
Speaker
But yeah, it's actually, it's not the number that you said, but you can look it up. Okay. Okay. The booking versus realizes because there is a, like a EMI component. People are not paying the fees all upfront. That's why. No, not entirely because the services is over, over 12 months, right? Okay. So, so, you know, you can't,
01:29:39
Speaker
So that's why we actually are cashflow positive. We do get that money into our company, but we can't book all of that because we will be delivering that over a period of three months, six months, five times, even more.
01:29:57
Speaker
Okay, got it. Amazing.
Advice for Future Founders
01:30:00
Speaker
So, what are your top learnings in this journey of being a founder over the last decade plus? Things which you think other founders can benefit from?
01:30:16
Speaker
I think one is, you know, going back to when we started, right? The analogy of dating, right? I think that's a good thought, which is that, you know, you are in this for a long term. So I don't think it's a good idea to ever think of business or startups as a mechanism to just get in and make money and etc. I think then you are in for
01:30:42
Speaker
for failure and sadness. So that I would say, keep it aside. I never thought of this as a way to just do a quick turnaround. So I was prepared to do this for the next of my life. So it happened that we got an exit. We were not building the company for an exit at all. We were building, and even if the exit did not happen, I think all of us would have been quite happy working together.
01:31:07
Speaker
continuing to grow and continuing to have the impact that we were having. So I think that's number one. So who we are working with, you better be sure that you do want to work with them and you do want to work with them for a long time. So I and I have been truly blessed with that, who I've worked with and the relationships that I've built.
01:31:29
Speaker
the skills that I've got to build over a period of time and the impact that we've had. So I think that's one. So the second thing is I think having, which is sort of related to this, is having a longer term perspective, not just the people you want to work with, but which kind of
01:31:52
Speaker
comes down to what is your core value and what are you excited about and what do you want to do in life. So for me, as I said in the beginning, when you ask the question, what caught you into this, I think the idea of being in business, building a successful company in India,
01:32:14
Speaker
having an impact for hundreds and thousands and millions of people. That was very strong for me. I was willing to go through any kind of hardship for that. Even though in the first three, four years after business school, I made no money. And in fact, I had no salary, no income, no startup, no idea, no nothing. But I was just
01:32:38
Speaker
sort of drawing different things. And even after that, once great learning happened, some real material capital game after like six, seven, eight years, eight years.
01:32:51
Speaker
The fact that you don't do… So basically from 2009 when I went into business school till 2020-2021, which is like 12 years, I was underpaid by massive
01:33:09
Speaker
a massive amount and which was perfectly fine by me because I actually enjoyed that 12 years. So I find that people find that very hard to sustain. So you have to have something that enables you to sustain. It could be a passion in a certain industry or a sector or something that you want.
01:33:27
Speaker
whatever it is. Now, there is no guarantee that it would have happened in 12 years either. It would have happened in 15, it would have happened in 20 years and I was still prepared to go for 15 or 20 years. It did happen in 12 years and you're lucky some strange way it could happen in two or three years. But the reality is, you know, you can't predict when, you know, and maybe something will not even happen, but will you still keep going? And I was perfectly fine to keep going without the reputational benefit or without the capital benefit.
01:33:54
Speaker
So I would say that's the second thing that, you know, as an advice to others. And also, you know, I think that, so for me, kind of reinforce that value. And the third, I would think is, you know, really about this idea of, you know, what is your having a strength, having a sense of what is your strength? What is your defensible, you know, what is it that makes you
01:34:21
Speaker
different and valuable, right? And having an understanding of what are you bringing to the table, right? And maybe you don't have a whole lot to bring to the table on day one, but then what is it that you're going to eventually build up, you know, either it's on the technology side or on the marketing side or same side or ops side or product side or like whatever it is, right? So you need to know that. And maybe on day one, like I didn't know all the things that I eventually came to realize.
01:34:50
Speaker
Even when I joined rate learning, I joined as a product guy, but then, you know, build skills around ops and academics and eventually sales and marketing and international business and growth and so on. Right. So, um, so I think that sort of, uh, what I would say, uh, would be like three things if I were to, and you know, somebody to think about, like really focusing on what you are good at and
01:35:20
Speaker
show up with that every day for a very long period of time. Without expectation. Yeah, then good things. Wealth creation. Without. Yeah. Yeah. So you have to be pretty crazy to do this. Why would you do that? Right. So, so I think that's the end of it. You have to actually be pretty crazy to do something like that. But it's actually, you know, but it's very rewarding. And it's a lot of fun, particularly if you get to do it with people that you like.
01:35:49
Speaker
Thank you so much for your time, Arjun. It was an amazing chat. Thanks, Akshay.
01:35:58
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 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 adatthepodium.in. That's adatthepodium.in.