Thread by @D_Brat

Let me make an unpopular comment - @BYJUS future is very threatened.

Here’s my reasoning:
1. ‘Avg revenue/user doesn’t stack up’ - As per this news it has 2.4 mill paying customers and a 2019 Revenue of $78 mill (from Wikipedia).

techcrunch.com/2020/05/01/ind…

The Revenue/User translates to ~Rs 2,500. This is strange given:
a. BYJUs success is largely school student led
b. They don’t have a single product priced below Rs 30,000

What’s the erosion from?

Let’s assume that it is 2019 Revenue figure and the Paid user base is 2020. Even then the story doesn’t add up. They are supposed to be growing at a 3 yr avg of 400%.

2. “The startup told TechCrunch last month that traffic on its app and website was up 150% in March and it added 6 million students to the platform during the month.” - This jump due to #COVID is easily a spike. In which case the ‘pre-spike’ traffic figures look strange.

Total registered users = 35 mill.
For ease assume per month registration as straight line = ~3 mill.
And as per news 150% addition in March = 6 mill.
With avg growth at 400% for over 4 years in a row. With schools shuttered the jump should have been 5x min?
Needs a relook.

Now let’s come to the sales strategy for a ‘digital product’. There’s this story the-ken.com/blog/byjus-and…

Clearly shows a large channel + field force led sales approach.

Now comes COVID crisis:
1. Everything has gone digital, even office work is at home
2. Every interaction is online and recorded
3. Even the least techsavvy speaker/teacher is now a producer of digital content by default
(Even I launched WorkLifeTV 😊)
4. Content tsunami is here

5. Content prices will crash
6. Subscriptions will get cheaper or be replaced with ad supported models
7. Discretionary & supplementary digital content will be a cognitive overload & shunned
8. Jobs, incomes and spending are all impacted

All of these are headwinds for BYJUs.

When everything goes digital then erstwhile competitive advantages don’t hold. Let me explain:
A. BYJUs is a tutor turned Edtech biz offering a substitute to bad teachers in schools
B. Good teachers were confined to the 4walls of good schools or to tution classes - brick & mortar

C. Reaching digital users is a competitive strength for BYJUs over brick & mortar competition. BYJUs isn’t great - TV Ads and field sales led reach for digital pdts is a ... get my drift
D. The digital pdt itself is just a format advantage - no new curriculum structures at all

Now? My favourite definition of ‘Innovation’ - Innovation is about breaking constraints.

1. The constraints of the 4 walls are gone. Nothing is brick & mortar.
2. Everyone is digital so ‘reach’ advantage is gone
3. There’s hardly a pdt (format)differentiation except quality

Imagine the unshackled brick & mortar teachers:
1. Zoom calls with students recorded, annotated and converted into explanations (almost zero cost as everything is a sunk cost)
2. Innovators find aggregation opportunities and approach these teachers

3. They use digital commerce tech like @instamojo to create new revenue streams for these individual teachers scattered across India (including the Salman Khans equivalents @khanacademy globally)
I recall @sampad tell me about a tutor in semiurban India who is a superhit.

Put all of these together with a #PostCovid world and the future points towards a ‘equilibrium in digital education content market’.
With all such ‘equilibrium’ the one most impacted is usually the dominant player. In this case BYJUs.

And if you think the BYJUs Founder is going to do a pivot and do a great 2.0? Listen to him on this TV discussion @rahulkanwal had last night. Let me know if see any innovative or pioneering ideas


(Pardon any errors)

And if you want to compare my viewpoint with credible thought leadership then check out Charles Handy’s The Elephant and the Flea g.co/kgs/DgJ1UC