Breaking the paywall of high-skilled jobs | Masai School
Breaking the paywall of high-skilled jobs | Masai School
Imagine an institution that charges students only after they bag jobs- that’s the most innovative approach to solving the problem of affordable higher education in India!
Inspired by the teachings of the Maasai Mara tribe in Kenya, Masai School is helping Indian youth bridge the skill gap.
This Bengaluru-based startup is India’s leading pay-after-placement higher education institution, helping thousands kickstart their careers through the Income Sharing Agreement (ISA) model.
Prateek Shukla shares his rollercoaster journey as a founder, one that started soon after he graduated from IIT Kanpur!
Other Ways to Listen:
Apple Podcast | Amazon Music | Google Podcast
Additional readings:-
2.This IIT Kanpur alumnus built a coding school in Bangalore that enrols students for free
Read the text version of the episode below:-
Prateek: Hi everyone. This is Prateek. I'm the founder and CEO of Masai School. It's India's largest outcome based education institute.
In our country 95% of our engineers don't know how to write a single line of code. And at the same point of time, companies are struggling to basically find out real good engineers who can be job ready and who can contribute from day one. So Masai is basically solving that or narrowing that skill gap, which exists in our country because of poor education system. So we have raised roughly around 20 million dollars so far, across four rounds of capital.
And, currently we are on a rate at, the next financial, this financial year will close it at close 150 crores revenue. So that's where, we are on. But there is one very interesting thing which I wanted to basically speak about what Masai is actually solving. Is that, Masai, because as I said that we are an outcome-based education institute.
That means that we don't charge any upfront fees from students. Students enter into Masai school without paying any single penny, and once they graduate and start earning about 5 Lakhs per annum, then only they pay us fees. If they don't get a 5 LPA job, they don't pay us anything. So it's, in true sense, it's a completely outcome based education, where it's a win-win for everyone once the student graduates. So what happened was, I actually, when I entered into IIT Kanpur, I studied in a school where our English teacher used to speak or used to teach us in Hindi. Okay. So that level of, school, was there where I have studied. So when I enter into IIT kanpur, I saw table tennis for the first time in my life, and there are many new things that I've seen for the first time.
And it was like a very different world altogether. So that's where I have decided that I have studied all my life, and that's why I don't know anything. Now, this is the time to basically get more and more exposure. So I participated in anything and everything that happens in, college and I used, like, I won several elections. I was part of all the leadership teams, the, the Cultural Fest team, the, technical fest team and everything around that. So, because of that, I have built my resume, which was considered in my batch as one of the best resume from a position of responsibilities, perspective that you are managing a team of 500, 700 people.
So what happened was I became overconfident, okay. And I thought that now since I have the best CV, I am going to basically select the companies where I want to go rather than companies selecting me, during placement season. So, I shortlisted McKenzie, BCG, and, DV, so these are the three companies where I'm going to set and, if it is going to happen, if I'm going to get a job, then that's like it. Otherwise, there's no, like, I don't need to basically set any other company, surprisingly, McKenzie and BCG came that year. Like they backed out, on the last minute. So only DV was there and I was elected in the first round itself. So, and the unfortunate thing about, placement is that, around 70, 80% of the batch gets placed in the first seven days itself.
Okay! So you need to basically apply to the companies beforehand. I have not applied to any of the company, and then for seven days, all my batchmates are placed. And I was the only one who was sitting like this At home. Yeah. In the room, in college hostel. Yeah. I didn't have a job. Then I thought that, and I was like very, very, like, that was the most, disturbing phase of my life where, everyone was continuously calling me at
Like, I somehow, went to, all by myself. For the very first time in my life I was traveling by myself. I went there for 15 days during the time when placement is happening because I have not applied in any company, so I'm not going to get any job. So, went there and, and then came back with a plan with a very, very, powerful plan. So, I thought that I am. I have never followed, or I have never followed this hard mentality in life. Okay. Why am I don't know whether McKenzie is a best company for me. I don't know whether consulting is something which I want to do all my life. I still don't know many. There are many unknowns in life.
Okay! So what I'll do is what I love from Warrior experience, that is something which I'll shortlist, the areas. And then, I'll go to those specific companies and see if I like those companies, then I'll build probably my career in that. So I shortlisted four areas. During those 15 days I was reading this book called Banker to the Poor by, Muhammad Yunus. So, I was fascinated by this microfinance, the boom in economy, in Bangladesh, which is happening because of microfinance. So, so I first shortlisted, microfinance is where I want to explore. Second is advertising where I want to explore. Third is marketing where I want to explore. And I did my internship in teacher India.
So, probably NGO is the fourth thing where I want to basically explore. Fifth would be startup. And this is what I want. I'll do in the entire year, two, two months, or three, three months in each of them. And then, I'll figure out whether, what I want to pursue in life. So I cold email Mama Eunice, sir.
That I want an internship. I'm a fourth year undergrad in IIT Kanpur, and, I was not expecting any, reply, but I got a mail back from their team that we usually hire MBAs, for internship. But, because I quoted some of the things from his book in the mail, so that's why decided that we wanna give you a chance.
I was on Cloud9. I was like, he, I cold emailed and I got a response and I got an internship. I called my mom. He, I got an internship, internship job, and then I said that, it is in Bangladesh, imagine like someone from a lower middle class, they usually think somone is going Bangladesh, refused.
There are flirts and there is malaria, there is everything over there and you can't go,what is the point of going? So she diffused and she's, I'm not going speak to you if you'll go over there. So, but then I was thinking about my second internship. Let's try advertising in times of India. So I was called emailing them. During that time, one of my batch mate who started entrepreneurship sell in IIT Kanpur.
So prior to us, there were no seniors also, those who have initiated startup concept and campus. There are many seniors of mine, those who are like well-known founders, like Urban Company, Abhiraj is my senior, no broker guys are my senior. So all of them were my senior, but they have not started startup from college itself. So in college, there was no concept of, startup. And that's why we, one of my friends started he said, and his idea was that he started a startup in third year and he, his goal was that in fourth year, I'll come for placements and I'll hire my batchmates. And that is what has happened. So he hired me as co-founder and, before that I had no idea about venture capitalist and anything. But they had race capital while they were in, while we were in our fourth year.
Akshay: And what was the, space they were operating in?
Prateek: It was, customized merchandise. So Myntra at that point of time was, also in customized merchandise. So if you want anything like t-shirt, key chains, t-shirt, could, could we customization here? That is something which you can do. So that is what the idea was. And they had raised like 10 Lakhs rupees and they asked me to basically become their co-founder. Fourth year, finally, I worked on that startup. By that time I graduated, I was working over there.
And then I thought that this is what I want to do all my life. This is what I love doing. I, I am a workaholic person. I love working. I love doing hard work. And at the same time, I love solving problems, in a creative way. And I think probably this is my calling. So, that's how I started, like fresh out of college. I started Graphos, when I graduated. So yeah, that's the journey. That's how it has happened.
Akshay: Like you left that co-founder role, to start grab house. What was the trigger there? Like, was it that Grab house was an idea which you had to pursue? Or was it that you were not finding satisfaction in that co-founder role or like.
Prateek: No. So actually the thing was that customized merchandise has their own issues around copyright. Okay. And I was telling my co-founder that was abhi to bada ore. Lekin This is something which you need to, we need to find out a way around because it is not scalable. Okay! As soon as you basically start putting Ironman over there, someday we are going to be sued by, someone, from Marvel.
So, you can't do that. So, and this is what, like, so this guy wanted to basically build it irrespective of anything yeah. Versus me who was thinking he Agar India Mein padta fursuits me who was singing Ki yeh koi business acha lag raha tha starting Mein chota tha.
But now if you want to scale it up, you need to basically think of something else. So disagreement. There's no point in actually, working on this, when we know that that startup. After I quit, in one year, within one year it was shut down because of copyright issue. Ah, so that is something which you could, you were telling them, huh?
There's no other way. Was, was something which I wanted to do something in real estate because I knew from whoever has, actually my batchmates joined this bigger cities. So we had a WhatsApp group, at that point of time. Facebook groups. So, it was 20 12, 20 13. Everyone used to basically crib.
We are, and all those things. So, and roommate finding roommates and other things was a challenge. So I knew that this is something which is a space that I, where I want to operate in. So it was also, quite a unique concept and then no, no broker started after us. Which was, Like, we'll connect the owner with the potential renters, without involving middlemen, through the platform itself.
So that was the idea. And we raised like around 15 million dollars over there as well from Sequoia Calari and all the other, folks have participated.
Akshay: Amazing. How, how did you raise so much money just one year out of college? Take, take me through a bit of the journey of building Grab House.
Prateek: So, interesting. And, one of the first investor for one of the first believer, was India Quotient.
Okay. And they are, also one of the first investor in Masai. Okay. So incidentally, in 2013, India Quotient was started, and India Quotient started with a bootcamp model. Okay. So they wanted to basically bring in all the companies. They were not taking any stakes or anything. They were just providing office space.
Akshay: Like an incubator?
Prateek: Incubator. Yes. So they had started that, that was the first, incubator. Incubator, which they have started. And they did it for like two batches and then they shut it down. Cause that was not something which was making any sense. Yeah. But, we want, we were selected in the first batch. Okay.
Akshay: The we meeting. You had a co-founder?
Prateek: Yeah, I had a co-founder. And there was another, friend of mine who was working with me. So we were three folks. Those who,
Akshay: Were, like your IIT friends?
Prateek: One of them was my IIT Friends, so he was from IIT Delhi, but he was my school friend. Other one was, I met her, during, teach for India.
So we were three folks, who started it. And then what happened was,
Akshay: And, and you pitched The Grabhouse idea to them, or you, joined the incubator thinking that we'll formalize an idea as we go along.
Prateek: No, no. We pitched, we pitched Grabhouse idea and there was one more real estate setup up over there. So, if you find it, conflicting, like if you, if you think that there is a conflict, then you can basically, you should not join without ke conflict early stage. So we joined them, it was in PayTM office, in Mumbai. That's it, which was, next to airport. Okay. Beautiful office. Okay. So Vijay Shekhar provided the space to India Quotient and they started a boot camp over there. And we were fascinated because we have not worked in a job before. Correct? We have not, seen a corporate office, Okay!
And we had a office which has internet, which has coffee, and that is available 24/7. So we literally made that, our home. So me and one of my friend who was from IIT Delhi, we literally stayed in that place for 49 days without taking a bath. Okay! We have slept there. We have tried to remove the security guard because we told him that let's share salary.
We'll also basically manage the phone at night, like literally we like one incident. I'll tell you what happened. And and that is something which triggered, Vijay also, okay, so, PayTM meeting was supposed to happen. Nine o'clock was the time and it was a boardroom. Okay! So, the AC was like, it was like 16, 17 80 degrees Celsius.
So, we used to, basically, we had no blankets or anything, so we used to feel cold. So what we used to do is we used to basically sleep inside, like beneath the board, the, the table, the boardroom table, the big table. So we used to basically sleep over there. So I woke up at seven, but one of like, my friend was sleeping there. It was at nine o'clock when everyone assembled in the room Vijay Shekhar was also there. So away and 9 to 9:30.the meeting chaliye. Guys making so much noise in the morning and, this is why Incubator second batch were company which got funded through incubation. The reason for that, to basically spray this room freshener in every two hours because we were thinking like crazy, but no money yar. So what should we do? So we were just, working from there and we eventually launched our product while we were there in that 49 days, put like, incubation, incubator. So we launched it and we got funded.
That's how the funding journey started. So yeah, quite an interesting ride in the first.
Akshay: So you would've lost like a classified site where, property owners can list their properties and, people who want to rent can, like contact the owner or something like that.
Prateek: Yeah, yeah, yeah. That's how it was. But basically we were majorly focusing on roommates. So what we were doing is, let's say if you have opened up your house, and if someone is looking for a roommate, that is also a potential owner, and they can also pose their property. So there's a compatibility engine which was there. So like for example, I can live with, let's say, I don't mind someone who is living with me who smokes, who drinks, but there are some people, those who have, issues with that.
So we basically saw that compatibility piece as well. So it's more focused around roommates to start it. And then we started entering into the independent houses as well.
Akshay: Okay. So roommates means then the owner of the property itself would not be listing, but someone who already had a room identified would list it and, yeah, but there's not a monetizable audience. Why? Why? I mean, I don't imagine these people would be willing to pay anything to the platform.
Prateek: They were paying. So what we were saying is, so we build that recommendation engine, Okay! Mm. We know your requirement, we know what are the properties which are available, Okay! So you don't need to basically go through 10 company, 10, properties, and you need to call the people, those who are living over there.
What we'll do is there is an assistance service, where we'll give you three quality leads, outta the three. You'll close one of them, Okay! So in order to get those three leads, you are going to pay us 2,500 rupees and people were paying for that convenience well piece. And that is the model, business model of, no broker now, that's how it started.
Akshay: Okay. Interesting. But there's not a very, big time nah people who are looking for a shared flat. Like a shared group.
Prateek: Yes, yes. That's why we entered into the independent houses, the normal, like peop when families were looking for basically taking the entire house. So we started with that because we did a growth hack over there.
Like there was several growth hacks in Grabhouse. So the first one was, basically we used to, we acquired one Facebook, group. And that was the first segmentation which we did. We paid 50,000 and that group was acquired, so Wow. It has like close to, 25,000 members. And they were constantly posting it over there. So we basically,
Akshay: And there's like a property search or a roommate search group. Okay. Amazing.
Prateek: So we acquired one group and then we formed like 15, 16 groups. At that point of time, Facebook APIs were open as well. So as soon as someone posted on, Facebook that, I'm looking for a flat minute.
You immediately get a inbox message from us that, why don't you post it immediately on, Grabhouse and you'll get a roommate. So that's how our engine was working. And then, when we moved to the independent houses, there's one interesting thing in Bangalore, and Delhi as well, where people used to put Tolet boards outside their houses.
So what we used to do is, we used to basically, we deployed an army of college grads. Okay. We created a small app over there that when you see a Tolet board, you just need to click a, a pick and we'll give you 50 rupees, McDonald's coupon. And that was, that was something which actually made us, or we, we accumulated on a single day, like close a thousand listings.
Akshay: Wow. Wow.
Prateek: So there are multiple hacks like this that we do.
Akshay: Amazing. Amazing. Okay. Okay. So, and your, for that, like, did you also burn money for customer acquisition, like marketing performance marketing?
Prateek: We don't basically spend money on customer equation, because in Bravos it doesn't make sense to basically, bringing customers, if you can't basically channelize the existing source. So you need to basically create a viral engine on the top of Facebook first. Okay. And once you do that, then it makes us, it makes a lot of sense to basically, acquire customers.
The problem with the entire model over there is, it's a very slow process, as you rightly mentioned, that it's a slow process because. For 11 months or for, next 22 months, the house is not going to be available.
Akshay: Ok. The repeat value of the customer is very low basically.. Will
Prateek: Very low. Yes. And Second important problem over there is that there are four different, zones in which we ha we used to categorize the city. So there are hot zones there, there are warm zones, hot zone property. So, even if you'll get the property, by the time you basically start looking out for people, it is already filled. Okay. And that's the same thing with Zone
Akshay: Like Metro Station and like those kind of..
Prateek: Correct. Correct. And that's the same thing with Warm Zone as well. So, owner, so the entire premise of this model, and this is something with no broker solid beautifully, and they're like my seniors and I know them personally and they're also an investor in Masai, so Amit nevo beautifully. solvekara so he had patience. Okay. He said that pelithu property iki what we'll do is second time will aim to basically fill it faster than a broker, okay. And third time. So you need three cycles to basically convert an owner to be also giving you the lead that the properties available. Team It is not possible. Wow. So it takes three years to be for,
Akshay: It's like a real long-term gamer. Amazing.
Prateek: Correct, correct. And they have built it beautifully. Yeah.
Akshay: Right. Okay. If you didn't spend on performance marketing, then why did you need to raise so much money? Like 10, 15 million in that era is, is a lot of money. Yeah. Yeah.
Prateek: So we had actually pivoted because he is a slow problem problem and we were just 24, 25 years old. We thought something crazier and like, we need to be part of this growth story of, India. So then we pivoted to a model called fully furnished managed house rental business. Okay.
Akshay: Which is, which is, co-living.
Prateek: Co-living. Correct.
Akshay: Okay. You're saying business fundamentally Flouded, like,
Prateek: There's no one who can basically prove it that this, the, the model is going to work at scale. This model works in small pockets. Okay. Operational challenges. Let's say you have taken one house, you have fully furnished it. Okay! On one night you'll get a call. They have taken the washing machine away.
What will you do for that take the electric heater or electric heater that you have people used to basically rob like crazy, like it, it feels like you are. And it feels very, very complex. And worst part about this model is that you only make money on the last bed. Okay, so let's say if it is a 3 BHK and you have given it to six people. You have subed it to six people. You only make money on the last bed. Okay. Last bed to fill the subsidy are difficult to think you keep like a peloton 4th is difficult 5th is 5th. The person will take it 60. There is no other option. Okay! So that's the last way, which is the most difficult way to fill, and that is the only money, like the margins are there. Right rest. Everything is, is very..
Akshay: Disputing your operational cost.
Prateek: Correct.
Akshay: Okay. And there's very opex heavy as you, because you'll need to have like a cleaner, you'll need to have a supervisor, who's managing a couple of properties. And then, you need..
Prateek: To first have inspection, team inspection The owners will not tell you all the things. Okay. You'll realize key. This is not working. Property. Interesting property. So we have, we've taken a property which has, which had, on a eight 1 BHK case. Took that, the, the thing that we realized in the end was after we took the property, we have done everything.
And now people, how will people live over there? So bad property, cause of any reason. So properties, they'll go for a to, that's why it is a very difficult, very tricky business. It's, it's not something which can be scaled like crazy, but we did it. We realize that this is a big mistake.
Akshay: How, how much did you burn on that? Like how much did you spend in that business, invest in that business?
Prateek: We had like close to. 25, 30 crores, over a period of two years, was spent on that business. When we were acquired by like, when Quikr acquired us. At that point in time, we had like 22, 23 crores in our bank account. So yeah. So we had invested like majorly most of the pay capital over there because most of the things, most of the capitalists, is CapEx, CapEx first.
Akshay: You need to pay the advance to the landlord and you need to spend on landlord..
Prateek: That’s correct. Property will ruin everything. Yeah.That's what it is..
Akshay: So. You still had money in the bank when Quikr acquired you? Like could you see the writing on the wall? None of these are working out because, the initial businesses were like, slow growth, and probably you didn't see them becoming very big, in the short term. And then this business was not profitable. So like, was that why you decided to look for acquisition or like what triggered that acquisition?
Prateek: What happened was, we realized, look, I was 26 I think when we were like, when Quikr acquired us 25 or 26. So, I realized one thing, key operational business is something which is not my expertise.
Okay! I can't run a ops heavy business. Okay! All the Masai is also ops heavy. Either I need to change myself completely, but I can't run a ops heavy business. I can't run a business, which is, which requires a lot of patience. Again, Masai requires a lot of patience. And third important thing is that, I am more of a tech and product guy. Okay! So I want to basically, work on product play. And I'll probably be very good at it. And that is something, is something which is the DNA of the organization. So everyone, like, so I called like there were 21 IIT Kanpur people, those who were working in, they're like close to 40 IIT kanpur folks working in Masai.
So all my friends are also like that. Okay. So they are also more inclined towards tech and product. So we realized our, business that we were running, we were making like close to three, three and a halfs crores monthly. Okay. But, that is not the business that you feel really excited in the morning to basically work on challenges.
And I think the nail in the coffin was, for me, there was one incident which has happened. So, there was this guy who furnished all the information in, like they were all fake. Okay. The guy took,
Akshay: Like, one of the people who was, coming as a staying tenant.. Huh? Okay.
Prateek: One of the tenant in one of the property, he provided all the, all the documents and that were fake. Okay. And then what happened was, he was running a prostitution racket over there..
Akshay: Oh..
Prateek: And what happened was, the neighbors got an idea, obviously. And neighbors, called police. Okay. And police came and the guy obviously, ran away, but they caught some of the girls, those who were there. And, during that time I realized that boss, this is something which can't be done. Like I was sitting, police station I was thinking about this like this is something which I can't take on a different level together, different problem altogether, which can't be, how will you, like all the information that the person gave us were all fake.
Fake as like fake Aadhar card, fake driving license. Everything was fake. Like how can you verify those things? And, it's, it's, it's a nightmare, like operational nightmare. So probably someone who know how to basically build this business. And also at that point of time, Akshay, I think we have never seen scale.
We've never seen that kind of like you can make hundred crores, revenue. I'm talking about revenue. I'm not talking about GMV. So, but you can do that. And that is something which was, which we wanted to see as well. So that was also one motivation. And Quikr wanted to, Quikr had operational expertise.
Okay. And they wanted to basically scale it like crazy. Okay. So, they wanted, we were on like, 3000, 4,000 beds. When we got acquired in six months, they had a target that we want to basically reach 20,000 beds. Okay. 20,000 beds on rent. So they wanted to grow it like crazy. So we thought that this is the right time to basically do it.
And we were young, so, And 2016 was exactly the time, which was, which is going on right now. 2016 was the time when winter, winter everyone wants consolidate people. Yeah.
Akshay: Right, okay. So, did you get acquired for more than what you raised? Like you raised about 10, 15, $15 million dollars.
Prateek: So all our investors got stocks. We got some money, and we got stocks as well. It was like probably 1.2 or 1.4 times of, what was the, what is the capital we have raised, but we have not made much money. So it was not like a happy exit. And we were like, we were also okay with it, like, because I think, if the board is telling you something, you should not be basically, you need to basically listen to that advice.
I was very young, very young at that point of time. But yeah, I think there are a lot of lessons that we have learned from that entire, grabs equation and everything around that.
Akshay: What were the good lessons things, which you th thought that we did this well?
Prateek: We did like the Growth Acts, I'll tell you. Ah, right. We built the entire company, in the initial days on Growth Act. We were the first one I think, like I still remember, the day when, Amit came to our office. Amit is founder of No Broker. He came to our office and he was speaking to some of the Masai students and he said that, yeah, exists Because, because Grabhouse existing.
Akshay: Yeah. Ok.
Prateek: Yeah. Because we actually solved all the problems, which No broker take. Took it from us. And they actually, scaled it beautiful. Which we were not able to do it. So, problem solving . If we would've stayed with, Grabhouse till now, we would've made like it, unicorn, very easily. Just like
Idea that, understanding is something which you, you are able to get. So that's one of the good lesson that you have that quality, so you just need to apply it. I think good lesson, which I saw it in Quikr, is that you don't need to reinvent all the wheels. Okay. So, most of the wheels are not meant to be reinvented. Okay. You can basically, like you need to find the right people in the team and once you bring them on, they'll basically, do the work for whatever you want to do.
It's like you have capital, you have everything and you're the best solve problems.
Every age of Grabhouse team was around 24. So, then we realized this is not a right way, is notation, I think, Getting the right, board is also very, very important. And that is something which, I have identified, like I have learned from. It's a good lesson that you need to basically bring the right people to serve the right intent on where you want to basically go.
So if you don't have the right people on board to ask itsgoing to become your, like, it's going to make a life hell. So
Akshay: How is the board different from investors? Like, I'm assuming your board must have been the investors only, right?
Prateek: Investors, or, board those who have like 7% or, more equity in the, in the organization. So what our investors. We have like collectively around 50 odd investors.
Okay. Which includes, uh, Vijay Shekhar Sharma, Kunal Shah..
Akshay: No brokers, huh?
Prateek: Yeah. So there are 21 entrepreneurs is invested. Then, the, there are the investors as well. So not everyone gets a board seat. So board is something which is, getting the right board is something which is very, very important.
Akshay: Like, my point was isn't a board, decision not so much that you can influence it, if someone is investing money in you, then he gets to be in your board.
Prateek: Yeah. Correct? Correct. But you, you have a right to basically select the people. Correct. Okay. You have a Right. Those who are aligned to the vision that you have. Or either, you basically make sure that they are aligned to the vision when they're actually investing it. You tell them everything, anything and everything that is coming to your head.
But this is where I wanna basically take this. To and see if they're aligned or not, because, if they're not aligned, then it's going to become, like, it is not going to be a fruitful, experience for anyone who is going to be part of the board. Even your supporters are not going to enjoy, the board meetings to an extent where they want to basically give some advice.
Akshay: Okay. Okay. You, you should work hard to avoid a toxic board. Basically.
Prateek: It's not toxic, like everyone has a different, so it, it also depend like it's a 7 year or 10 year ride. Okay! So most of the funds, duration is 7 year or 10 years. Most of them have seven years. In India, the you need to basically have that sort of a camaraderie.
You can't basically get someone that you can't even spend, Like two hours or three hours in one go. And having them on board so it's not toxic. It's like basically it's also sort of matchmaking only. You need to find out that comfort and they also need to find out that comfort. And they also look for this thing, in any, any entrepreneur type, whether I have a comfort with that person or not.
Akshay: Okay. So, tell me now from Grabhouse to Masai.
Prateek: Yeah, so what happened was, I got a interesting call to basically work in real estate.
So there's a real estate group, built out of Chenna, SPR group. They were building India, second largest township in the center of the city. And this somehow wanted me to basically run that township, tell you the worth of that township. It was, at a base price level. It was roughly around 18,000 crores.1.5 times of Bruj Khalifa. Yeah.
Akshay: Wow. Okay.
Prateek: So it's, it's, it's a massive township. It's in, right in the center of the city in Chennai. I went there. It was an amazing ride over there. Like I worked there for two years, built entire team from scratch. And then, those were interesting concept.
Akshay: The construction also, or like, the more of the sales, marketing and..
Prateek: Yeah. So the promoters know construction, but they don't know any other things. So licensing and, construction is something which is their responsibility and everything else, is my responsibility is sales, marketing, business strategies and everything over there. But there was one, an interesting thing that they were, building over there, which got me excited, which was, market of India.
So Market of India is basically, they wanted to, organize the wholesale markets. Because if you go into any city in India, most of the city have those unorganized, wholesale markets, which are existing there for last hundred years, Okay! Hmm. The next generation of, wholesalers, they don't want to basically continue in the same buildings. Okay! So they are looking for a new place. This problem is beautifully solved in China, by the way, China have, INU, if you'll go there are, Alibaba Mall, Alibaba Mall. Okay! So Alibaba Mall is exactly wholesale market's, not a mall. But it's a wholesale market. Same if you go to UAE, there is a gold stock market.
Akshay: Okay. That's also wholesale.
Prateek: Yeah. And, Surat, surprisingly this is sold as well. So Diamond and, diamond and textile market in Surat, that is also exactly like this. So they were thinking that we wanted to basically build a market which is going to give a feel of a, a wholesale market, but at the same by the time it is something, which is organized.
So we, we have worked, I've spent some time in China, spent some time in UAE, Came back to Surat and then, finalized a concept. And that was something which was an amazing thing. And that was something which was, which, like by the time I was there, we did a first phase launch and we sold like 80% of the first phase shops, then and there itself.
So that was an interesting, piece that we did. And then at that point of time, once the team was settled, then I realized here again, because you are sitting over there and you are just optimizing revenue per squarefeet, Okay! So my role over there was konse property ke pricing strategy or, which was again, like, again, I was at my prime. I thought that 29 years came up. You can basically do something more meaningful. So that's when I quit. They like the promoters of that, real estate group are also invested in Masai. But, then, I quit and then I went to Tanzania. So I met, this Masai Mara tribe. The, the best tribe of.. Yes. So
I been there for like seven days. National Park. That and GorenGuru is the a crater and then I'll come back. I went there and then, I started loving the, like the people interaction and everything, which was happening over there. And then I extended my stay over there. I stayed with them and then I realized that they are so, like, obviously they, have a very strong cultural beliefs, but at the same point of time, they don't believe in form education at all.
They, are the, they have their own Masai schools for each and every skills. Okay. People enroll over there right from their childhood and they become expert in that. And that's something which was amazing and that's why they consider to be the strongest type of Africa. So people are, highly skilled in any aspect.
Like, the guide who was basically showing us around, he was like, So knowledgeable. Like the guy knew about each and every tree, each and every, animal, what is, what is happening, what is not happening. They, they like literally also bring in that perspective. If you're new to the city or if you're new to the place, how to basically keep you engaged.
There are some people, elephant, to dekha ho kya dekhna is very friend but then he basically tried to keep you engaged, by giving more and more facts and, explaining, more, Intricacies of, his, his work, which was amazing. And that's.. That,
Akshay: This is like the, age old apprenticeship system, you know, where teenagers, a as a teenager only you would go and apprentice with whatever field you wanted to make a career in. Like if you wanted to be a blacksmith, then you go apprentice with a blacksmith. There's something like that, I'm guessing.
Prateek: Correct. But they have a, like a full-fledged school for, this purpose. Okay. Okay. And, you can basically enroll your kids, when they're five year old, six year old, seven year old, depending on what they want.
And they can be part of one school, they can be part of two, three schools as well. So, okay. But you can basically learn those skill sets, and that's only from Masai Mara, right. So that's, that's quite an exciting thing. I was thinking about what next. So, I told you know that I did my internship and teach for India in my, college days. So, I saw the real impact can be created, at a grassroot level if right kind of people are involved. And that is something impactful angle cha beat for microfinance, beat for any other thing that is always there, that I want to do something in that particular space. And incidentally, Masai first round of, second round of funding that happened over, over this statement only.
So what, what happened was, . So Unites was our investor. So I went to Unites to pitch for Masai school. It was like VC level, impact focused.
Akshay: It's an impact focused VC.
Prateek: So I went there to pitch Masai school. So I asked them that I want to pitch, can you gimme wifi password? And they said that, wifi password is profit and impact. And I told them instantly, I told them that, if you really want to create an impact, your password should be impact and profit because other impact the profit. And that line was the reason why. So they, they told me like afterwards, it was the reason I was not thinking about anything just came naturally from how I was thinking. So yeah, I think impact ki kam sartha that is something which was decided. And so the reason why I don't like to operate in K-12 spaces, is because the impact of the outcomes that you are thinking about it is something which is going to happen. Like after a long period of time.
Akshay: Yeah. You're not directly involved in the, eventual outcome.
Prateek: Exactly. And whatever metric you are chasing, the vanity metrics. So someone who got 65 in, in class, there's something which is a vanity metric, correct?
So there's no real outcome which you can measure. And that's why I always wanted to do something in higher education. Yes. And that's how me and Rupel Yogesh started Masai school, in June 2019.
Akshay: Yeah. Who are Rupel and Yogesh?
Prateek: Rupel is my senior from IIT, yeah. They're my co-founders, Rupel is my senior from IIT Kanpur. Yogesh I met through my wife.
So what happened was, I was, earlier Masai school was, not about programming, it was about, teaching someone soft skills. Soft ki focus karne.
Akshay: For sales jobs and stuff like that. Like?
Prateek: Correct. But then, I was talking to my wife and then she suggested you should meet this guy. This guy is into sales performance training and he used to train, like meet to senior level folks in Swiggy, Uber. You should meet him. He is an amazing guy.
So I met Yogesh and the guy Yogesh has worked in corporate all his life, like for, he's now 45 or 46 I think so he has worked like for 20, 25 years in corporate. Okay. And I told him to basically quit corporates and come to startup, and join me as co-founder and he joined. So, so I,
But Rupel was there, so then I, again, my love for programming was, was also there. So we thought that this is what we want to basically do. And, for next 10 years we belong to programming. And, that's where we should be basically focusing on. That's how the school started.
Akshay: So, was the format like a short duration course, like two, three month bootcamp kind, and then you, that's it. Okay.
Prateek: So it's a nine, eight and a half month, long course.
Akshay: Why, like, help me understand your thought process to choose this because the longer the course is, the more time it takes for you to start monetizing!
Prateek: The kind of audience that comes to Masai. 65% of them are, have not done programming in the past.
Okay. Around 75% percent of them comes from non-computer science background, so, they have not studied computer science. They wanted to make their career in programming. It's a pure zero to one school. So people, those who don't know programming, they need that much time to basically become, programmers who can contribute into, into, tech jobs. So this is our full-time program. There is a program which we have for finally year college students and working professional. That's part-time. It is also, eight, eight and a half months long. But the duration over there is only two and a half to three hours per day. You need a lot of first principle thinking.
Akshay: Fascinating. So, tell me about your funnel. The top of the funnel would be like, say the leads generated, and the bottom would be people who complete the, eight month course. Yeah. And in between you have these drop off points, like after unit one is a drop off one probably from leads to conversions. Also there would be some drop. So just talk me through that.
Prateek: So, what happens is basically like we don't have CAT in Masai, so, around 70 to 80% of our students come from referral and 20% of them comes organically. Every person have more unemployed friends than employed friends correctly.
So, experience rather that's how the referral kicks in. So what happens is, like, let's say a hundred people, or I'll start with, so a hundred people give or test, 30 people unclear the admission test in Masai. Okay. Out of 30 people,
Akshay: So, those test is from math and English?
Prateek: Basic math, basic, English, seventh, eighth grade level maths and logical reasoning. So, from hundred 30 of them clears, out of 30 like, since we don't have any fees, the people drop off, at any given point of time. Around 15 of them basically completes the, unit one, and signs the pay after placement.
Akshay: So, replacement is signed after unit one?
Prateek: Only after unit one only.
Akshay: Okay. Okay.
Prateek: So we select the students to sign pay after placement. So from 30, it reduced to 15. 15. Those who are there is hardly any drop. So there's less than 5% drop during the course. Or either we ask them to leave if they are caught in plagiarism. Okay. But, people those who are moving it forward, they keep on moving forward.
And then, all of them graduate. So in our case, unlike the, the mooks are, any of the online courses the completion rate is as soon as someone signs pay placement, it's like around 90%.
Akshay: Okay. Do you have some sort of, capacity or can your, like, say unit one be like a 500 students together? Can your cohort be a 500 students? Or like, do you need to have more teachers? If you're increasing the cohort size, I've tried to understand, you know, how much of it is like a pure product where if it's 10 or if it's a hundred, it doesn't matter.
Prateek: So we, in every batch we have around thousand odd students, those who are there in unit fund. Okay. And, it is not teacher dependent, so That's Right. So you don't need to basically like when you're scaling the students, you don't need to scale the teachers. That's the beauty of this model. What we do is we have..
Akshay: From thousand can even do 10,000 in some future days.
Prateek: Correct. So what we do is, we have something called this Instructional Associates in Masai Instructional Associates are basically the ones, those who are, they are deployed, in a way that they handle around 50 students.
So 1:50 the issue. And they basically are with the students throughout the day. So in IWY in the Y part, they're involved, throughout the day on doubt clearing on other things. They're involved. And, the beauty about instructional associates is, They were the topper of the badge, which has graduated.
So what we do is basically, let's say if this badge is graduating, we take the toppers that for the next eight months, you need to be basically become an instructional associate, and then you need to graduate with the badge that you are basically mentoring. So in that way,
Akshay: And can take the salaries, also right?
Prateek: They get salaries? Yes. Yeah.
Akshay: How much do you pay?
Prateek: We pay, they, they have a package of around 7 Lakhs per annum.
Akshay: Okay. Pretty good.
Prateek: So they work as IEA and then they graduate, with the batch that they were mentoring. And that's how the cycle runs.
Akshay: Amazing. Amazing. I love how, you have made it into such an organic community. Like, the fact that the previous batch is, there with them as mentors, yeah. Makes it so much more, I mean the experience is gonna be so much more consistent, because, it's like what, you know, in the College Fest and all, like, you have the seniors who pass on the role and the next year's community or the club is formed this is a pretty tough problem, right? Because. There, there's like this, eight month gap between the information and when you can act on it. Right? Like if you see the market picking up, it'll take you eight months to take advantage of that.
Prateek: Yeah. Yeah. That's why you can't be very conservative. You can't be very optimistic. You need to basically keep the fund going . But bigger. Currently the scale on which we are operating, we are actually bigger than, you can say like around four, five IIT is the, the number of placement that they do in a month. So we do like close to 250 to 300 placements in a month. So that's not that bigger number. 300 placements a month and we are probably the largest in terms of the placements. And we'll reach there. So I think till the time you are placing around 5,000. Students a month or like given 2000 students a month?
I don't think that macro condition has anything to do. The challenge, that we had was, most of the hiring partners, so like last year April, the scenario where we were honest is that we had more number of companies than we had students. Okay. Okay. Always that is the case. Okay. And that was consistently so we had like,
Akshay: These are like IT services companies, like TCS..
Prateek: Startups, IT services companies. Yes. So our students are working in over thousand companies now. That includes around 22 unicorns. That also includes around, all the major service giants. So our students are in like almost any community that you can think of right now working over there. And, so our initial customer base was startups majorly. April last year, we had one number of companies and we had, like, we graduated around 20 batches, which are a hundred percent placements. In right from 2020 to 2022 April. And then suddenly, because of this funding with startups are the biggest one. Those who are basically, those are hard.
So we need to find out a new way, to basically get more companies, because startup. If they were hiring like 80% of them was our audience base and then suddenly become zero, then needed to basically find out another way or another base, which is going to basically expand. So what we did was, now, right now around, 80% of our students are going into, mid to large service based companies and 20% of them are going to going into startups. So that change fundamentally that it, cause the large service risk companies have seen these cycles in a number of times, correct? Every four, five years they've seen this cycle. So they have already planned those things. Startups usually don't plan.
Akshay: Guess your goal would be to. Like convince these, large IT service companies because they typically send whoever they hire for a three month bootcamp anyways. So if you can replace that where, instead of that three month bootcamp, which they are paying for, they can hire someone who's productive faster, that could be a good value proposition for them.
Prateek: Yeah. Yeah. So we work with a lot of IT service giants, and we have actually signed a contract with some of them. Like for example, there's one big four, who have hired close to, close to hundred students in last three months from Masai school. And, there is like Infosys, for example, have signed a contract with us to basically hire hundred students every quarter. Accenture, Tech Mahindra, all of them are actually working on the similar lines.
Akshay: So just a thought, you know, the, the FinTech part of this, which is the lending, is also something where you're leaving margin on the table know. Like you could possibly, like, it's like a rule of thumb that cost of capital is 16% and, the NVFC are charging 22%. So there is that 6% extra margin for you there to take if you were to fund it yourself. Or is that like biting off more than you can chew?
Prateek: It is going to be like, I think eventually, and anyone who is going to be operating in this space is going to basically move towards that particular direction where they'll solve this FinTech play with, at least if you'll become that, that large as an education institute, like for example, in our case, I think, we can become a hundred million, revenue making company when 2000 students will start graduating from US high school every month.
Which means 24,000 students every year. So, from that scale perspective, it doesn't look like a big scale, but, 24,000 means, all the IITs and NITs put together, that's a number of students. Those are start was like, so, yeah. I think, there is margin that we know we are intentionally living on the table, but it has to be solved.
Through in a, more fundamental way, but I don't think that we have enough time bandwidth to basically, I think it leaving on the table is right now is a better option.
Akshay: And do you need to raise more funds to achieve this, or you already raise funds enough?
Prateek: So, we already have a, funds, and I think we have a. With the current fund, with the current burn, we have like a four years, almost four years, runway, wow. With the current set of funds. But at the same, by the time the idea is from June onwards, we are going to be cash deposit. So, this June, amazing. And so then you don't need to basically, raise any more capital. It's going to be from the capital that you raised. You can build a great business from here on.
Before you go……the analytics only tell me so much, I want to hear what you feel and think about the conversations.
Mail me at ad@thepodium.in with your comments & feedback or if you just want to hear my comments on your startup idea - I love getting your emails!
Until the next founder's thesis📕,
Your host, AD