BYJU’s joined the fast-growing and much sought after Unicorn Club earlier this year after it touched the $1 billion valuation mark. It is the first EdTech company from India to reach this milestone and also enjoys the distinction of being the only member in the club from the Indian Edtech space as at date.
Business: Developing online learning solutions (K-12 segment) and competitive test preparation platforms in India.
Founder/CEO: Byju Raveendran
Co-founder: Divya Gokulnath
“The problem with our education system is that it gives more importance to breadth than depth. We tend to create many generalists and very few specialists. The focus is on working hard on your weaker areas. On the contrary, I believe you should focus more on building your strengths.”
– Byju Raveendran
- Early Days
- Launch of Idea
- Idea to First Set of Customers
- Demand Validation to Growth
- Growth to Expansion
- Distribution of Traffic
- Summary of Growth
- Founder Insights
Named after its founder, BYJU’s went from being a pioneering offline learning platform to a successful online learning medium that caters to the K-12 education system of India. It also provides prep solutions for professional courses such as GMAT, CAT, IAS, and JEE. What began as an offline coaching center is now a behemoth in the Indian education market. BYJU’s growth story is that of a startup which purely grew offline based on its founder’s brand to fit the needs of a market perfectly. BYJU’s, one of the largest EdTech companies in the world today, working towards revolutionizing education through technology. It is poised to address the challenges that plague schooling in India – lack of access to good teachers and undue emphasis on exams both of which lead to poor student outcomes.
BYJU’s has had an eventful entrepreneurial journey thus far. A timeline to help capture some key milestones.
During his childhood, Byju studied in a Malayalam-medium school in his hometown of Azhikode, Kerala, both inside and outside the classroom. Despite being born into a family of teachers (mother was a math teacher and father a physics teacher), Byju was accustomed to an unstructured environment which helped him choose between study and play at will. His parents and teachers never interfered in his learning or games which helped him immensely. They encouraged his interests in sports which led to him playing multiple sports at the University level.
After finishing his schooling he went onto pursue a degree in Mechanical Engineering from the local university which was acceptable by his parents. They wanted him to become either a doctor or an engineer (may sound familiar to most Indian children) and they were content with his decision. He graduated and went on to take up a job as a service engineer with Pan Ocean Shipping Ltd, a UK-based shipping firm. This job required him to be at sea for six months of the year. When he docked in 2003 for three months he went to Bangalore to meet his friends which is when Byju discovered his special ability for teaching complex and advanced concepts with relative ease.
Launch of Idea
In 2003 while on vacation in Bangalore, Byju offered to help his friends study for the CAT exam, the common entrance exam for the IIMs and other Indian business schools. He too wrote the exam for a lark. His friends did well and he ended up scoring in the 100th percentile. He did not want to pursue an MBA so he did not give the interview.
He took the exam yet again in 2005 and scored in the top 1 percentile. Got in again and attended the interview. Byju was clearly not interested in the destination but in the process. His approach to studying for an exam such as this was what he wanted to focus on and spread among friends.
Byju’s Approach to Learning
Due to his upbringing, Byju had a different approach to learning.
- Byju didn’t read a lot of books but picked up English by listening to commentaries.
- He focused on the underlying problem while trying to find solutions to questions.
- His efforts were directed towards digging deep and capitalizing on his strengths as opposed to knowing just the basics of everything.
- Byju did not give in to the general tendency of practicing to perform under pressure. He learned for the exams but learned enough so that the exams were a smooth ride. Like any other day.
Byju began sessions with 10 friends who in turn told their friends. The count grew to 15 and the sessions turned into informal workshops being conducted in coffee shops. It slowly grew to 30-40 people which is when they had to take it to a classroom. All these sessions were free. He helped people to understand the problem underpinning a question and break it down into something which was a lot easier to answer. According to Byju, “you learn the best when you start asking questions, not to teachers, not to parents, but to yourself.” The other aspect of his teaching involves getting students to take on the primary responsibility for their learning by taking the pressure off, making the concepts attractive, and getting them excited about learning.
Idea to First Set of Customers
The first signs of monetization came with wanting to conduct the sessions at a larger scale due to increased demand. Once there was a demand for more than 50 people Byju and his friends decided to find an auditorium. The auditorium rental was Rs. 100,000. They decided to charge Rs.1000 per student and gauge how many people actually signed up. The marketing was through word of mouth and references. The attendees were serious CAT aspirants and almost all were working professionals. On D-day the auditorium was filled with 100+ people and they more than met their costs.
This entire journey began with his halt at Bangalore for a vacation and he stayed on to do this with his friends during his 3-month break. He didn’t think of this as a business at the time.
Demand Validation to Growth
It was 2007 and by now BYJU had figured out who his customers were. Although the CAT had both verbal and math sections, a lot of his hacks and content focused solely on Math and Data Interpretation. The results were promising which led to word spreading about the sessions and students signing up before the exam.
During this phase, the approach started informally and only when the results began to show it became a lot more formal and organized when Byju realized that he was clearly not going back to his job at the shipping firm. The plan was to make the classes scalable as a program across cities in India.
Here is how he and his team went about setting things up and how it panned out –
- It would be a 10-week program but students could also join between Week 1 & Week 10.
- The program would have a rolling format with multiple ongoing batches.
- There would be weekday and weekend batches.
- People would need to pay upfront for the 10-week program.
- The initial price point was set just to break even
- There was an initial free session followed by the 10-week session.
Competition (at the time)
- TIME, Career Launcher, PT Education.
- Organizations, not individuals.
- The team zeroed in on a few select colleges through the respective alumni.
- All the marketing efforts were student-led. 2 to 3 enterprising and active students in each college served as evangelists who helped promote a free quant workshop which was then followed up with signing up for the program.
- They did everything from booking the auditorium to getting close to 200 to 300 students to attend by leveraging the alumni connection and building a brand with the use of student power.
- This was done online through social groups, mailers, and virtual bulletins.
- They also used offline media such as print flyers, ads and of course, word of mouth to spread the word.
- The pitch used to help draw in the students was “Classes by a CAT topper. Backed by strong content.”
Until 2007, close to 2500 students in Bangalore had already graduated from the program.
- The program was conceptual and motivational.
- It was divided into intense 4-hour workshops which called for extreme focus. If you blinked you would end up missing something.
- It was unstructured, unlike the conventional class format.
- The program offered a lot of hacks on how to beat the exam.
- It offered tons of conceptual clarity, making it easier for students to solve all kinds of questions.
- Students were able to see an immediate increase, with some moving from 97 percentile to 99.
- The format offered plug and play concepts with immediate results.
Growth to Expansion
This phase of growth saw robust efforts being made towards marketing, product development, and expansion activities. BYJU’s had the advantage of speed. The team was able to gauge the need, required aptitude and expand in the respective areas.
Newspaper Ads: Print Ads were placed in national and regional newspapers like The Hindu urging CAT aspirants to try out this “new kid on the block”. A lot of students registered because it was free. More often than not they would receive a call from Byju himself after they registered. A personal account of a student who got to know of BYJU’s through this route.
TV Ads: BYJU’s launched TV campaigns to encourage learning among students. These led to the total number of app downloads crossing 6 million. Despite not spending a great deal of money, BYJU’s managed to tap into serious users (almost 70%) that were present in the non-metros.
Large Scale Workshops: The team began organizing workshops on a larger scale with close to 5000-10,000 people in attendance. BYJU’s moved the venue from auditoriums which could no longer house such numbers to stadiums. The app was thus downloaded in large numbers by the attendees.
Google AdWords: This form of online marketing was deployed under BYJU’s parent company, Think & Learn Pvt. Ltd.
Word of Mouth: The local student representatives in each city helped spread the word through verbal and virtual bulletins.
Books with Notes: In addition to the classes BYJU’s also sold books which provided simple notes for every topic that facilitated the learning process.
Tab + Preloaded Educational content: It partnered with Samsung to sell a pre-loaded tablet which contained UPSC content. Until the time of the exam the tablet could only be used to study from content related to the exam, but after that, it became a general all-purpose tablet.
Subscription Model: BYJU’s used the subscription model to generate revenues. It charged a yearly subscription of Rs.12000 which was its main income generator. The SD card sold as part of the subscription could be used on a mobile phone or tablet.
Courses: Classes taken as part of the courses were a huge draw and contributed significantly to the revenue stream.
Apps: These provided a range of services and ways of engagement-
Mentoring: It was used to provide mentoring sessions that cost Rs. 1000 for a 45-minute one-on-one session.
- The user could create the session
- Choose the individual subject/topic
Quiz: Students could invite friends and challenge other students across diverse subjects. The App provides a Quiz Up like interface for the same which helps improve engagement.
Tests: There were free tests the users could take to increase learning and improve their knowledge.
YouTube Content: With 139,000 subscribers, BYJU’s monetized through ads on YouTube.
BYJU’s The Learning App
The app mainly targeted children from Grade 4- Grade 12
- The app had a freemium model (free and premium) right from the beginning.
- There was a 7-day free trial @ Rs 299
- The full course could be downloaded @ Rs 9,900
- Average price was Rs 10,000
- It had categories of content
- No discounts were made available. The logic being the price was pegged at Rs. 1000 a month. This price was maintained from the beginning. Only government schools and those who could not afford it were not charged. However, there was a large market that could afford it. It was a more expensive option when compared to a textbook, but a lot cheaper than a tuition center.
Format of Content
- Free videos
- Free tests
- Unlock complete course and content at a price
- It took 4 years to fully develop this interactive product through multiple explorations and product focus involving formats and options.
- The product combined Tech + Media + Content. According to Byju “Most Edtech companies across the globe, ones who actually create content do it in two ways. One is by simply capturing what is being said and the second one is by using 2D animation, 3D animation and characters to teach. What we have done is, we’ve mixed real teachers with animation, making it a seamless experience. It took us so much time and so much effort to bring out the energy through the videos.”
- The app contains popular videos, free concept videos, guides.
- It also contains a Live Chat feature.
- The biggest challenge is the notion that students need spoon feeding.
- Without the freemium model, it was difficult to demonstrate the potential for the same.
- Getting students to use a tablet has been a hassle, but the next generation will learn only from tablets.
- Establishing a pan India brand in the offline model is difficult.
Summary of Growth
|Launch of Idea
(2003 – 2006)
|Idea to First Set of Customers
(2006 – 2007)
|Demand Validation to Growth
(2007 – 2009)
|Growth to Expansion
(2009 – 2016)
Distribution of Traffic
SimilarWeb, a data collection tool was used to gather statistics related to online visitors.
Close to 81% of the traffic is from search due to its high Domain Authority in India which increases the probability of its content showing up on organic results for users in India where it is majorly used. It is also indicative of BYJU’s optimized content. BYJU’s ad budget is mainly taken up by Google’s Display Ads which get featured on sites globally, followed by some local sites and paid referrals.
The social traffic is mainly through YouTube where BYJU’s hosts its training videos. It also receives significant mobile traffic through its diverse and free learning apps which are a roaring success.
As at April 2018, BYJU’s had 15 million users, close to 900K paid annual subscriptions and a high annual renewal rate of 90%.
The funding history with specific milestones appears in the Timeline above.
However, there was significant learning before and after the fundraising events that Byju speaks of.
Why Raise Funds
- Byju did not need funds for operations in India. He needed them because he aspired to make BYJU’s a global brand.
- He did not copy the US or China when it came to product development. BYJU’s products stand at the intersection of Content, Media, and Technology which cannot be fully automated. The funds are required to propel a brand which clearly goes beyond education. It is an amalgamation of the aforementioned pillars of communication.
- India is a particularly difficult market in which to get students to learn from a device (mobile/tablet). However other English-speaking countries are a lot more advanced and are already onto this. However, the products in use are below par thus Byju wants to expand and create products for these international markets.
- It wants to use a significant portion of the bandwidth available from funding to create interactive videos and games.
- 100% of the revenue earned is retained within BYJU’s. Everything is done in-house. Right down to the background voiceover and music. Byju wants to keep it that way.
- He has and will continue to use the funding to acquire interesting products that can help the brand gain a competitive edge.
- Byju selected investors who actually love Edtech, liked the initiative and were not interested in investing only because it is hot.
- The company saw early and continued interest and support from Aarin Capital, followed by Lightspeed India Partners, Sequoia India and Sofina.
- BYJU’s was the first Asian company to be selected by the Chan Zuckerberg Initiative for investment towards creating a social impact.
Use of Funds
- Accelerate product development.
- Launch new disciplines and a tech piece for students.
- Hire more people.
- In 2015 the BYJU’s The Learning App was launched.
- The app was developed into a highly personalized platform with a very strong tech team.
- Learn on your own: When you learn on your own, you are making questions. Byju’s learning methods predominantly hinged on visualizing techniques to understand concepts.
- Take up a Team Sport: Playing outdoor sports from a very young age gave Byju a lot of the social skills and confidence that have taken him far in his business ventures. The balanced focus between study and play helped him both in class and outside too. “That’s how you develop your skills on how to work in a team, lead a team, how to inspire. The killer instinct and controlled aggression, it’s all from what you learn in class and a great deal from outside,” Byju adds.
- Play with Numbers: Math should be treated as a shorter language and not a subject. A language comprising words, variables, and numbers. Byju structured his learning so as to consistently play with numbers on a daily basis. This also led to a very unconventional way of teaching because of his understanding of the language. Still speaking about Math.
- Build a Personal Brand: The efficiency of the product/service should be synonymous with your brand’s persona to reinforce customer confidence and brand recall.
- Create Offline Communities: The offline model is a lot more crucial at the outset for personalized service and to help spread the word through references. This may be overlooked due to easier access through the online model.
- Maintain a Lean Operation: BYJU’s clearly had a lot of funding very early on but it took a keenly followed lean model that led to reaching the much-awaited Rs. 100 crore revenue milestone earlier this year.
- Make it Goal Oriented: Attaining short-term goals consistently while keeping your eye on the prize helps build momentum and keep things moving.
- Creating more Byjus: According to him “If you ask me where I have been successful, it’s in recreating a lot more Byjus or better than the original Byju. I have been able to sell my vision of making an impact in terms of how the students are learning and why that is important. Coming from my kind of background, I know that education is the reason for what I am today and education is the only way to make it big or the best way to make it big, depending on which section (of society) you belong to.”
- Building a special culture: For Byju the line between office and family is thin. Friends and family are at work. Every day is a Sunday when you do things that you love with everyone aligned to the same vision.
On Personal Growth
- Compete with yourself day in and day out: Your competition is not with others, it is with yourself. Especially when you are creating something which people have not done before, the competition has to be with yourself.
- Increase your aspirational level as much as possible: Even if it means losing, maintain a benchmark that is par excellence.