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Rethinking the business of business education | Masters' Union
Get ready for some fresh thinking in education!
In a world where centuries-old institutions dominate, Pratham Mittal is rewriting the rulebook with his audacious vision.
Think about universities like Oxford, which has stood strong for over a thousand years. Imagine the boldness it takes to disrupt such traditions.
Hailing from a family deeply rooted in education and running one of North India's largest universities, Pratham is the person most suited to take on this challenge.
With prior experience in launching a bootstrapped startup in the US, his mission now is to establish a globally renowned business school in India - Masters' Union.
Masters' Union is not your typical business school.
They're revolutionizing education with an innovative curriculum that breaks away from dull lectures and memorization, prioritizing practical, real-world problem-solving.
In our conversation, Pratham talks about the journey of building Masters’ Union and shares his incredible first principles thinking approach that fuels this transformative mission.
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Read the text version of the episode below:-
Pratham : I'm Pratham, I'm the founder of Masters' Union. It's a new age business school in Gurugram.
We come from a hardcore Marvadi Baniya family. My grandfather in fact used to run a small sweets shop. He used to sell ladoo, barfi, all of that.
Akshay: Where, which city?
Pratham : This was in Jalandhar, in Punjab. I remember my first childhood memories go back to the time when I used to go visit the sweets shop and actually sit by the counter and accept receipts and make change payments, et cetera, all of that.
The education system was ICSE for me, that had a huge focus on this rigor of learning. Everything was very hard. Syllabus was always more than you can chew. There were always exams, there were always tests. The school sort of believed in making sure that you work hard and the rest everything, they just did not focus on too much. I fell for that trap. I had to be first or second and if I'm second, then I hate the guy who comes first.
All of those things used to happen. I think these childhood experiences really shape you when you do grow up. I was fortunate enough to attend The Doon School which is an all boys boarding school in Dehradun. That's where I met students who were not just from Jalandhar or Punjab. I met kids who were from Bombay, Bangalore, Calcutta, Assam.
When you're surrounded by diversity, that really opens your mind up quite a bit. And I think because of that I was able to make a successful application to go abroad to University of Pennsylvania, which is a very competitive school to get into. I got extremely lucky that I was in the right place at the right time and got to attend UPenn. And of course the American Education System did what Doon School had done to me at a national level and bent it to me at a global level. Again, friends from all over the world, professors from all over the world. For the first time I was studying religion studies and gender studies and archeology but at the same time also studying finance and marketing and engineering.
The diverse stuff that the American system exposes you to is really the strength of that system. I don't think I had any set ambition. But as I mentioned earlier, business and doing business was something that was always understood. That's one of the only lifestyle we were exposed to, everything else is lesser. Wealth creation can only happen through business. Your dreams can only be achieved through business, trading, hustling, finding opportunities. So me and one of my friends ended up together in a class project. That class project became a product. The product became a business because we had a couple of clients here and there. Then one thing led to another. It wasn't that we sat down and decided this is a business we are going to do. It organically just became a business. It started off as a project. And I think that's how a lot of good ideas come from. They come from problem statements, they come organically. That's how Outgrow happened, which was our first company where we make interactive content pieces for large publishers. When you go to the New York Times or a Wall Street Journal or a BuzzFeed- any interactive content like a quiz or an assessment or a grader or anything that captures your lead, is more often than not, powered by us.
Akshay: I wanna know that story of finding product market fit. That's something which fascinates me. You must have struggled for a while before you discovered this is how we make money. I wanna hear that journey.
Pratham : When your product is born out of a problem statement, then it's very hard for you not to get product market fit.
But if your product is a solution first product, like a solution in search for a problem then you need product market fit, then you have to pursue product market fit. For us what happened was that a local newspaper came to one of our classes and said, 'Hey listen, whenever we have to run political polls, we have to get developers and the developers have to create this poll and that poll has no analytics and all of that. So can you help us create a better widget?'
And we said, 'okay, we'll create it. It's not that complicated'. So me and my business partner, we just sat down one night and we hacked it up. It was a very basic product, but the next week we presented it to the guy who had come to our class and we said, here's a solution.
He said this is perfect, this is all what I wanted. Can you just add x, y, z features to it? And I was like, okay, perfect. That's another couple of days of work. Just secure it, add a login, add a logout, all of that stuff. So we did all of that and then we went back to him and said, here's it, here's the product. He said perfect, how much do you want in compensation for it?
And we're like, oh, we didn't know that was a deal. We were just doing this because we were students. But later we came back, a couple of months had passed. We realized that if you could solve this problem for this newspaper, maybe we can solve it for the New York Times as well.
So one summer we were in New York, we went to the New York Times. We knocked on the door, literally knocked on the door, we didn't have any appointment. Met with the relevant person who used to take care of technology there, showed him the product. He said, perfect. Let's do a three year contract.
We said, what do you mean three year contract? We are just here to give you the widget and get some money. There's no contract or anything. He said no, it's New York Times- a large company, we have to have contracts. We were like okay, fine so let's do a contract. But the first thing they ask you in a contract is what is the name of your company?
We didn't have a company. I remember googling how to set up a company and then there was this website called rocketlawyer.com and you can go and set up a company in like 24 hours. So we started the company and we signed the contract. And then of course, we made all the mistakes. Like we didn't distribute equity properly, lots of issues happened, then taxation. But finally we got a check. We got a comparatively large check and once one domino falls, the other domino started falling. So the New York Times happened then Salesforce happened, then Tesla happened and we got many other bigger clients.
Akshay: What was the product? Just help me understand that.
Pratham : Have you used Google Forms? So imagine like a Google Forms plus where you can change the design, where you can change the logic, where you can change the results, where you can do calculations. So if question number one asks you how many miles you drive and question number two asks you what is the price of gas in your area. Then we can actually do that calculation at the backend and you can just drag and drop a calculation like an Excel file and throw up a result, which is super useful when you're doing ROI calculators or when you're doing which Disney Princess are you quiz.
Akshay: EMI calculation and stuff like that.
Pratham : EMI calculators, scholarship calculators, all of that. Our product just makes it incredibly easy for you to build these kinds of tools and these tools are incredibly useful when it comes to lead gen. Generally lead gen is expensive.
If you go to a lawyer's website and it says 'contact me'. The click-through rate on that would be maybe 3%. But if you go onto a lawyer's website and the call to action is, 'Hey check how much can I save you in legal fees'. The click-through rate on that becomes 25%. That means your ad spend becomes 6-7 times more productive, more efficient. So that's what we do, essentially. It's a very specific niche.
Akshay: Is it a hosted service? Do you host the visit and there is a call to it and it calls it up each time someone visits the site? Or how does that happen?
Akshay: When you host it then you're able to give them analytics, you're able to give them a dashboard where they can see how many leads got collected and who dropped off when and of that?
Pratham : That happens with the private instance also because the only difference is that the server is different, otherwise the services remain the same. So they still get all the same services. The thing is that private instances are very expensive to maintain. One Docker instance costs like $900 a day sometimes.
But those companies don't care, they have that. And when we are hosting on our system then, of course you get like question by question funnel, how many people dropped off in question one, how many people dropped in question two. You can engage with Google Analytics, you can engage with Google Ads, you can loop in Google Ads. You can also do dynamic tracking and dynamic ad optimization.
Akshay: So you got the New York Times, which could be like a one off. How did you convert that one off thing into a business and building that process of continuously getting more clients because you were kids.
How did you go and get Salesforce as a client and all these large enterprises? Was that your strategy to chase large enterprises or did you want it to be like a self-service platform, people come sign up with a freemium, like 15 day free and then pay? Tell me about that growth strategy.
Pratham : It's interesting, right? There is no strategy. It's like whatever comes to your mind is your strategy right at that moment. The New York Times happened because we were in New York and then like once you get one big client, then you can go to other clients and just say, they use us ,why don't you use us as well? So it's nothing deeper than that actually. It's just social proof.
Number two; in the U.S. there is a very interesting concept called boardroom events. These are events where CEOs or CMOs or chief security officers or chief people officers will come together in a room and you as a company can pitch to them. You have to pay a certain amount of money to get entrance into that room. So Google, Facebook, Amazon, they all pay to become part of these boardrooms.
Akshay: It's like an agency has curated a set of CXOs in one room.
Pratham : This happens on the sidelines of trade shows. So we did that. That worked out really well. Then at the end of the day, I always feel like if you start with a problem statement and if your product is useful, then you don't have to sell it. The product will automatically be adopted. The only problem comes when there is competition and then you have to prove to the customer that you're better than the competition.
Now in our case, in the early days we had competition, but they were also as lost as we were and the market is big enough that I don't think one customer ever saw both of us in the first few years. And now we have to compete and there is like a full- they have this service and this feature and we don't have all of that stuff. But in the early days, it was simple.
Akshay: Who is your competition? Are you competing with say a SurveyMonkey, which is also like a Google Forms Plus? Or are there other enterprise solutions which I have not heard of?
Pratham : No. You wouldn't have heard of these kinds of solutions. SurveyMonkey is like $5 a month or something. Our product suite starts at $600 a month. So it's a very different market altogether, different product offering. SurveyMonkey is only about collecting surveys. We are also about doing some calculations on the backend of the survey and then showing some results out. So SurveyMonkey is for surveys, we are for ads. These are two very different things.
Our competitor would be, for example, a company like LeadQuizzes or a company like SnapApp or a company like Ion Interactive. So these are medium to large-ish, old American large companies where they are sort of 80% services, 20% product. We are almost on the other side where we are 80% product, 20% services.
Akshay: You're essentially trying to make it as self-service as possible but you would have a client success manager who would be helping out companies.
Pratham : It's all about training. It's not even about that we run your campaigns. It's about we train your people so that you guys can run your campaigns yourself. And that's the hardest thing to do because nobody wants to learn new things. That's what's been happening. It's super easy nowadays because we have the game figured out, but back in the days it used to be very hard.
Akshay: So all your sales is basically through a salesperson. It's not like that typical SaaS which is low price, like with a freemium kind of a sales. Say what a SurveyMonkey would be doing, that's not really how you would be selling.
Pratham : No, think about it this way, if you have an American salesperson whose salary is let's say 100K. To justify his commission, his salary, he'll have to make at least a million dollars in revenue. Now to make a million dollars in revenue you can only realistically speak to a 100 customers. That is, from each customer you need $10,000. So the thing is that this becomes very hard.
You can do this in India because the cost of salespeople is lower. But in the U.S. you just cannot do this because to close a 100 clients at $10,000 in a year, it's impossible. It's just incredibly hard. So basically, this entire sales led strategy is not something you can do.
What you have to do is, you have to make your product not super expensive that it's $10,000, $20,000, $30,000, in which case it always need a salesperson but also not too cheap that it can just survive on marketing. You have to find out that sweet spot and we found that sweet spot was at around 5 to $6,000 per year because at 5 to $6,000 per year, your customer does not have to take approval of their bosses. So it does not go up the value chain and they don't have to wait for approvals at that time to close, or TAT is like less than a month. Otherwise it can be up to 6 months, 7 months. If it's only taking a month, then one salesperson who's sitting in India remotely or a client success person can close that deal and manage maybe a 1000 customers.
Akshay: So you built out a sales customer success team in India. You came back to India to build it up? Because you started in the US right?
Pratham : No, we used to run it from the U.S. We had a couple of people in the beginning. That's all we needed. The bigger thing was a tech team, which we built out in India as well. A lot of our developers were like good communicators, they only used to manage themselves. The first customer success manager, we probably hired 4 years after founding the company, maybe five years after that.
Akshay: So first four years, it was like the two of you going out and presenting and pitching and getting deals. That was how you were selling.
Pratham : Yeah, but eventually the machine finally got figured out. What's the sales machinery going to look like? Is it gonna be pre-sale sales, post-sales, the website.
Akshay: Tell me about that machinery. How does your sales machinery work? Starting from identifying a lead and all the way till deal closure.
Pratham : Think of it like a funnel. Top of the funnel, middle of the funnel and then bottom of the funnel. So at top of the funnel, you have to generate leads. We come up with a target for ourselves, and we are like- we know that 1% people actually convert so if you wanna convert 1000 customers, we need 100,000 leads.
Each lead on Google costs, let's say $1, $2, $3 or whatever. We know that this month we have to spend 100,000 dollars on my marketing. So we spend 100,000 dollars on marketing. We put 20k on Google, 20k on Facebook, 20k on Reddit, 20k on ATL-BTL stuff, 20k on maybe referrals, agents, all of that. So we distribute that $100,000 bill.
Akshay: Your digital marketing pitch would be that generate high quality leads and improve your conversion rates.
Pratham : It's different for different clients. We have clients who can be in finance, they'll have a different set of USP that they're targeted with. Healthcare will be different, startups will be different, SaaS business will be different. And then each ad has different AB tests running, each ad has 3,4 different versions of the ad.
So in total, at any one point in time maybe 40 ads are running, not more than that. That's how the top of the funnel gets built. Then once the leads come, let's say a 100,000 leads have come, only 10,000 will actually engage with you in any meaningful way.
They will ask a question. They will log in on the platform. They will leave an email query or they will leave their phone number or they will build a free quiz or a free calculator. So that's middle part of the funnel. These are people who are engaging with the platform. We keep trying to engage them in different ways.
Now we have events. We have various different things to engage them. Events is something we do, freebies is something that we do. Just keep them there, hook them. And then once they're engaged, 10% of that number will actually pay you for the product. We keep trying to increase that 10% to 15%, 20%.
Today we are probably at 18, 20% there. But we started at very low percent. Overall from top of the funnel to bottom of the funnel, conversion rate is like 1 to 2%. And you would find that to be true for most businesses.
Akshay: How big is your sales and marketing machinery in terms of headcount?
Pratham : The thing is that what we are trying to do is not increase our headcount. We have not increased our headcount in 4 years, but can you get more work done from the same number of people through technology. So if you go to Outgrow's website today and if you ask any question, probably the first 10 touch points or the first 10 responses are all robotic. That saves up the sales guys team, their time and only then does it start getting more customized
Akshay: I'm guessing your way to nurture leads, engage leads, all of that must be running on autopilot as well.
Pratham : Not everything. There are two kinds of initiatives. One is an initiative that we took five years ago and now it's well drafted and well implemented in the system so that runs like a machine. But then there are new initiatives. Let's say that as soon as we get a lead we'll figure out what that location is, we'll figure out what that address is, what is that company and automatically we'll send them like a physical gift. So anyone who signs up on Outgrow and is from the U.S will get like a bouquet of flowers delivered to them in the office automatically, like no questions asked. That entire thing happens automatically because we get the location of the IP address, in the U.S it's very easy to get that address after that.
So you get the address, through an API you send that address to a service, like a flower.com type service and then they'll automatically fulfill their order and they'll bill you at the end of the month. There's another one which is that if the person logs in from their company account then you figure out who they are on LinkedIn and we automatically send them a LinkedIn invite, all of that.
Akshay: We as in one of the founders, one of the salespeople.
Pratham : Right and the message is already pre drafted. Again that happens with the LinkedIn API. I think the LinkedIn people shut this API recently, so you can't do this anymore. But we used to do this back in the day. Then there's another new very interesting thing. So as soon as you give your name, we automatically do this AI generated video where one of the salespeople is saying, " hey Akshay, we saw that you came to the website 15 minutes ago and you clicked on this thing, I just wanted to know if you have any questions". Again, all of these things happen automatically.
Akshay: This is so that your 10% which is relevant, out of that another 10% gets converted so that bottom 10%, you wanna increase that number. These initiatives help with them.
Pratham : Exactly. If you don't do these things, you won't even get 0%. You'll be negative. You have to do these things and every company does it today. That's what differentiates successful companies from not successful.
Akshay: What are some of the other new initiatives that you've been taking on this? This is a fascinating area.
Pratham : Events, as I said is something very interesting. We participate in other trade shows and we also throw our own trade shows. We used to actually run like American football games where we would take maybe set of 10 companies versus 10 companies then we would organize like an American football game.
Akshay: That's like an offline thing that you would set up for?
Pratham : Online also, we would do these YouTube sessions where we would bring a big CEO and we would say you talk to our customers. So stuff like that. Again, you can't sell, you have to just answer their questions and you have to ask them questions. Selling will happen automatically. Or the other things which is some very cool things we used to do. I remember that we used to say that every month we only take 10 premium customers. And by the way only two spots are left. That's a great way to get people to close before the end of the month. Otherwise people will keep pushing it.
Akshay: Is Outgrow on autopilot more? It doesn't need your time much and that's why you are diversifying into other stuff?
Pratham : No, I ran it for 10 years with my business partner. Now he runs most of it. And I decided to move back to India, before Covid.
Akshay: How much was the revenue at? when you came back when it plateaued?
Pratham : We are 2019-2020 low double digit million ARR. Maybe a high single digit million ARR. Let me put it that way.
Akshay: Somewhere between 9 to 15, 18 something in that range.
Pratham : On the lower side of that. We were just there and maintaining that. But the thing is that software businesses are all about gross margin, net margin. There is no cost, I don't have to pay rent. My only cost is my salaries and some marketing cost. So it's incredibly easy.
Akshay: And you had that India arbitrage where most of the delivery was happening from India. Net cost or arbitrage would've come in.
Pratham : The arbitrage first of all doesn't exist anymore. Indian developers are as expensive as American developers. That's number one. Number two; if you're a services business then there is a cost arbitrage. If you're a product business then there is no cost arbitrage. Because we're not selling services we're not selling their time. We're selling a product.
My software team is still 28 people only. That body shopping model only happens with companies like Infosys, TCS, HCL where they're literally selling you man hours. We're not selling man hours, so that arbitrage opportunity goes away.
But what is easier to do in India than the U.S is a few things. First is that it's easier to hire in India. Hiring in the U.S is incredible pain because you have to sponsor visas, you have to do all of that stuff. The taxes are super high even for the employer. Second is that nobody works on Saturdays in the U.S and that's a big problem. In India, people are more flexible.
Akshay: Did you get an exit when you left or you still have equity there?
Pratham : No. We are not a funded business, so it's just me and my business partner. No point exiting.
Akshay: Then what next? What did you wanted to do next?
Pratham : My parents used to be in education which was super inspiring to me because I used to see how satisfied education makes them. When students would graduate, when students would move on to the next phase of their life. My parents- I would just see them so proud and so happy and I was like, I'm too young to start a college but let's explore, let's see what we can do.
What I realized in India was, did some calculations that in India you have two kinds of colleges- business colleges and engineering colleges. Now let's talk about engineering college. In engineering colleges you have very good undergrad engineering colleges. You have the IITs, you have BITS, you have BIT, you have so many of them. And at the post-grad level also, you have good colleges because most of these colleges also offer post-grad programs. So engineering, there is good excellence in India. You can always ask for more and you can say that it's worse than the U.S or whatever, but still there is something. In business also at the post-grad level, you have IIMs so there is something, you have ISB there is something. But what we realized was at the undergraduate level there are no business schools in India, like you will not be able to name me even one, barring maybe SRCC or maybe some Narsee Monjee or something. And if you look at the metrics there, the average pay package of those students graduating from these top colleges in the country is not even 4,5 lakhs. And that is the salary that a clerk gets probably in a business.
That's when we thought that, I think there's an opportunity to create a very strong impact by building an undergraduate business school. When you build a business school, it has to be undergrad, post-grad. But we thought of building an undergraduate business school.
Akshay: I guess in India, the undergrad market is either you do science, in which case you are employable straight after undergrad or if you're not in science, if you're in arts or commerce then you have to do a subsequent post-graduation to get that level of employability.
So you wanted to fix that. Non-science students don't necessarily need to do a post-graduation to be employable. They should be employable straight after graduation.
Pratham : Absolutely, why not? 3 years is a long time in your life. And now let me ask you a question.
How many people do you think enroll into higher education every year in India?
Akshay: No idea. Not even a vague idea.
Pratham : It's exactly 1 crore. So 1 crore students enter into higher education every year. Total number of students enrolled in colleges is around 3 and a half crores. Now out of this 1 crore people who enter into higher education every year. How many do you think are engineers? Around 12%.
So 12 lakh engineers, keep them aside. 1 lakh medicine students. 1 lakh fashion, design, law, all of that. And then 2 lakh are MBA.
Akshay: Which are again, high employability courses. All these law and fashion are all jobs straight out of college.
Pratham : Correct and then 2 lakh go into MBA. That still leaves almost 80 lakhs of students. You know what they're studying?
Akshay: BA, B.Com stuff like that.
Pratham : BA, B.Com, BBA. Now out of these 80 lakh students who study B.Com, BBA, BA, what percentage or what absolute number do you think actually get jobs of minimum salary 6 lakhs?
Akshay: Very few. Only if you're like a SRCC can you expect a 6 lakh job after a B.Com. Otherwise most people would not be getting that.
Pratham : How much would you say?
Akshay: I don't know, like 5%?
Pratham : No, it's 12,000 out of 80 Lakhs, that's 0.1%. That's why I said, this is a big problem. I gotta solve this problem and let's just build a business school. It doesn't matter what my age is, doesn't matter anything. This is too important of a problem not to solve. That's how we decided to build Masters' Union. The thing with education is that you have to build a brand.
Education is all about building a brand. You go to IIM because it's a brand, you go to IIT because it's a brand. You go to Harvard because it's a brand. And most of the brands are built on top of placements, how good the placements are. You go to Harvard because after Harvard you get into McKinsey.
You go to IIT because after IIT you got a Google job. It's all about placements. We said, we have to prove our placements. If we start with undergrad, that'll take us four years to prove our placements. So let's just start with a post-grad program where it'll take us only one year to prove our placements.
We started a master's program first and now we are starting with an undergraduate program. Of course now your product has to stand out. Your product cannot be the same product as everybody else is so we have differentiated our product on three counts.
First count is that we don't have that old slow moving and boring faculty. All our faculty members are all industry professionals. Who better to teach content than Akshay. So we'll actually try to find an Akshay and try to bring Akshay on campus and say you teach content creation. Not some faculty who did some PhD and never himself or herself had ever done anything in content or marketing. We have MDs, CEOs coming and teaching. In fact, our campus is located in the middle of a cyber hub. It's quite cool that everyone is working around us. They just come downstairs and teach students, go upstairs and do shadow programs or whatever. Works out really well.
Second uniqueness is that we don't have any exams, no lectures, no slides, no you know that old classes concept. Students come in and they do workshops, and they run projects and they run businesses. So in term 1, everyone will run a drop shipping e-commerce business. In term 2, everyone will run the cloud kitchen. In term 3, everyone will create a layer two blockchain protocol. In term 4, everyone will run a YouTube page as a business. In term 6, everyone will do a podcast. In term 7 they will do a mobile app.
So these zero to one sprints, zero to one journey students do and they have workshops that help them do those sprints effectively. But essentially it's all about running businesses to basically learn business.
That's what we do here. And the third differentiator is just that all B.Coms, all BAs- they're all removed from technology. There is no technology in there and that's part of the reason that students are not employable because today without technology you can't really be employable. Almost 40% of all of our courses are like actual programming, app development courses so that students actually learn that skill as well as part of the B.Com, BA.
That's how we built our entire curriculum, which is quite cool.
Akshay: Education is a regulated space and I think some of the criticism you have of say faculty being old and stuff like that is partly due to regulation like AICTE norms dictate people should have an M.Ed or so.
Tell me that regulatory aspect and how you have solved some of those regulatory constraints. How did you even set it up? Even to set up something, what is the regulatory requirement that you went through? Tell me that journey of actually launching your first cohort.
Pratham : Two questions you asked. One is the regulatory thing and one is the journey of the first cohort. The regulatory thing, we decided very early on that we will not be regulated, that we will not seek any government accreditation, that we will not seek any government approval, that we will not even knock on the doors of UGC and AICTE and we create an independent program. The only accreditation that we will seek will be from the industry.
At the end of the day, if Bain, BCG, Google, Facebook, if they're recruiting my students, how does it matter if the government puts their stamp on me or not. If I don't do a good job students will not come to me and I will automatically die. When you go to a restaurant, you just don't go to a restaurant because it's rated 5.5, they also have to give you good food and if you get good food one time you'll go back to that restaurant not because it was rated high, but because it had good food. That's what we decided that we will stay outside regulation because if we try to get regulated, then we can't do any of these things that we're doing.
Akshay: So as such if you're not offering a degree per se, then you don't need any kind of regulation. I could start tuition classes in my home. Nobody cares. So essentially that's what it is. You're teaching kids and it is not a degree, which you're offering them.
Pratham : 100%. I don't use the word degree anywhere, I don't use the word MBA anywhere. I say this is a program for undergraduate students and a program for postgraduate students after which this is the placement report. You can see my track record, you can see what recruiters come, how much salary they offer, all of that.
And if you think that's for you, then you come. If you think that's not for you, then don't come and if you want a degree, then don't come. However for undergraduate programs, we do give a degree. We have tied up with Delhi University and our undergraduate program students, they get a Delhi University degree.
Akshay: Like a distance learning degree or what?
Pratham : Delhi University does not differentiate its degrees from distance or campus. It's all about whether you can fulfill their examination system. It's a BMS degree- bachelor in management studies degree that Delhi University Awards.
We have gone to them and we have convinced them that we are actually not too different so if our students clear their exams, then our students get the degree, but the classes are taught by me.
Akshay: But you're not subject to any kind of audits and stuff like that. No one will come visit your campus, check your faculty credentials, all that. The only thing that DU will look at is- they should clear the exam and they will award the degree.
Pratham : Today, even when you're a CA that's the same degree that you do. You don't have a degree when you're a CA. You do a school of open learning. You just have to clear the exam.
Akshay: That's what you're doing on the bachelor's side.
Now tell me about launching your first cohort. You said your campus is in cyber hub, is it like in an office space you have?
Pratham : There's a new building called Cyber Park in Gurgaon. Cyber Park is the first building in Gurgaon on your right hand side. It has Bain, it has BCG, it has Bank of America, it has Gartner, it has Expedia, 20 other companies. We share our campus with these companies. We are on the ground floor and everyone is like above us and our hostel is close by so students drive down to the campus to the hostel. Some programs are mandatory residential, some are not.
Akshay: Oh, it's like mandatory residential program?
Pratham : Yeah, the first cohort was residential. Yeah. What happens today is that when you set up a college or a university, you have to buy a plant. You have to build a building and that's a very expensive affair that takes 100s of crores, if not 1000s of crores. And I didn't wanted to spend that kind of money. So I just rented my space. Let's say like an IIM or an ISB spend maybe 500 crores building their campus. My annual rent is some 3-4 crores.
So I didn't have to do any CapEx. The first cohort became very easy to host. But in terms of reaching out to the first few students, obviously we did not exist, we didn't had a placement report, we had nothing to show for our work. So it was incredibly hard to reach out to students and convince them that we are of some credibility.
I remember, back in the day, we used to do a lot of outreach, we used to a lot of PR. We used to talk to students one-on-one and thankfully that was a covid year. Covid was just starting and because of that, a lot of students who had admits to Wharton, to ISB, to NCAD, to Imperial, they weren't ready to go to those colleges because the classes were going to be online.
So my offer to them was that, "Hey, listen, it's that year. Forget about it. Why don't you just enroll into Masters' Union and don't pay me any fees".
Akshay: Yeah, it didn't make sense to pay so much money for online.
Pratham : Why don't you just get enrolled and we'll figure out from here on. And if you have a good experience at the end of the day after Wharton, you want a job in McKinsey. But if I'm able to give you that job through Masters' Union, then don't go to the Wharton next year. And if I'm not able to give you a job, you were anyways going next year so go. You have nothing to lose.
That's how we got some 30, 40, 50 students with a total batch of 60 who were ready to take that bet on us. That's how we got our first cohort and we used to basically just buy the GMAT list from the GMAT company. We had people who call all of them who had 700 plus GMAT score. We would reach out to them, call them, have this conversation with them and that's how we got our first cohort.
Akshay: First cohort, you largely sponsored the education for them because that's like your setup cost in a way. You are investing in like a big bank placement record and therefore the quality of people was more important than whether they're paying you or not.
Pratham : It's an investment in your brand. It's not even like performance marketing which you spend one day and it's gone. It's an investment and brand is an investment, human being is an investment in people who swear by Masters' Union today. Who if I call for any help, they would die for me. That's a good investment to make always.
Akshay: You also started online because of Covid? Or how did you start then?
Pratham : No, we started offline. Because we were less than 100 students and at that time by September, the government had allowed congregations of less than 100 people. So we could start classes on campus because we were less than 100 people.
Akshay: And when did your cohort start?
Pratham : We started September, 2020.
Akshay: So like early 2020 you landed in India, started figuring out what to do and then you started the outreach, took you 6 months to get that first batch together and September you launched the program.
What about the curriculum, the teachers? How did you fix all of that?
Pratham : That was all research. We spoke about the curriculum. We set that up, looked at a lot of research that was done around how people learn. Took lessons from that and that's how we designed the curriculum. We had a team- 3, 4 people including me. We would set up the curriculum and in terms of teachers, we just searched them on LinkedIn and nobody says no to teaching. It was very easy. That wasn't the hard part. That was a simple basic outreach. But at the end of the day, it just comes down to placements.
Akshay: One year course?
Pratham : Yeah, one year course.
Akshay: So for this one year, September 2020 to 21, you had only this one cohort. This was your focus, to get this one right and then scale.
Pratham : Yes, exactly.
Akshay: Tell me about the placement report. What did you do to make that happen?
Pratham : First of all, we had picked up good kids. Second, we worked really hard on them. We focused on writing skills, we focused on communication, basic stuff which nobody takes care of.
You will teach them advanced finance but he can't open a spreadsheet on the computer. So we focused on first principles.
Akshay: Especially something like writing skills. And the only reason why in good B schools there's lot of challenges because they're filtering. But then if you go beyond that 99 percentile CAT scorers, writing skills is a problem across.
Pratham : Even the top 1%, actually the worst. I'm not even kidding, because they're so robotic. Anyway it worked out. We were able to pitch to all the top companies and we reached out to them and said, why don't you come to our campus, our students are like this, average GMAT is so high and we'll make it very easy for you to come and recruit, we will make it immediate joining, you don't have to wait 6 months. So we tried to solve for all the problems that exist in the current B school hiring system. Again, we reached out to thousand companies and so.
Akshay: That immediate joining you could promise because you were approaching them at the time of the course ending.
Pratham : That also plus, because I'm not UGC, AICTE accredited and my campus is completely tech enabled. So I said that, there are total 8 terms, students want to join in term 6, please take the student and the student can continue learning online on weekends. The first six terms are on campus. The last two terms, students have the option to do them online.
Akshay: It gives you a 2 month placement window then instead of going for just a one week high pressure situation.
Pratham : Exactly. That works out really well in our favor. You have to play these kind of strategies, only then do things work out for you.
We were able to bring in Cisco, Microsoft, Bain, BCG, McKinsey, Razorpay . But we reached out to a 1000 companies and 60 came. So that was a challenge, but now it's done. Now our relationships are set. By the time this episode goes out, we would have released our second placement report. Which is even stronger than our first one. We again, beat all the IIMs in terms of average package.
Akshay: What kind of average salary did the first batch get and what is this batch getting?
Pratham : First batch was 29.12 lakhs and this badge is around 32.97 lakhs.
Akshay: And for the second batch you monetized it. What was the way to get go? Because now you have that track record of placements.
Pratham : First batch- our average collection was maybe 20%, so 80% in scholarships and 20% in actual fees.
Second batch- it was 50-50 and third batch, it was like 90-10. Which is 90% you paid, 10% scholarship.
Akshay: Your outreach method stays the same or how do you get leads now? You're an expert in lead gen, sales, conversion. You must have used all your past knowledge for this.
Pratham : It's not that hard actually. See there are only 2 lakh people who take the CAT in India and only 44,000 who take the GMAT. So I just have to be known in those people. I don't care about anybody else.
Those 2 lakh people are very easy to market to because they all hang out in the same places. They watch the same YouTube videos, they watch the same CAT channels, they go to the same consultants. We have 5 or 6 channels and we just hit them and that's it. We don't do any marketing.
Akshay: But probably you would be doing some influencer marketing and stuff. I'm sure there would be some influencers in this space for people who are seeking knowledge on how to get through all that.
Pratham : Absolutely. 50% of our expenditure goes into just influencers. Also like content. We create a lot of content. We also have our own podcast. We just hosted Ashneer, then we hosted Ghazal Alagh. Tomorrow we have the EaseMyTrip founder coming, then a week after that we have Zepto founders coming. The week after that we have Vedanta's Anil Agarwal. That also brings us traffic.
Akshay: These are like talks on campus in front of the students and they get uploaded as a YouTube video.
What is your monetization journey looking like? What kind of top line will you do by the end of this financial year and what's the plan here?
How much will be the contribution from the various courses that you're running? How much from postgraduate, how much from undergraduate?
Pratham : It's very interesting actually. Most branded colleges in the world, they only make 30, 40% of their revenue from their anchor programs.
Majority of their revenue comes from their ancillary executive education online programs. So the idea is to build our brand and not really spend too much money or price our main anchor program very highly. We don't intend to make any money from our anchor programs.
Akshay: How much is it priced at?
Pratham : Around 30, 40 lakhs. Here we don't make any money and accommodation is separate. It doesn't include accommodation. And then you make money and you monetize your brand through the online programs.
Just to give you context Harvard makes 1.4 billion in revenue, out of which only 200, 300 million comes from their MBA program. The rest of it all comes from education online, this and that. We have only started one program online and that's doing well. We have 1000 students there. Then in our main campus we have 200 students.
Akshay: That's again, post postgraduate program online.
Pratham : And so in total, we have around 200, 250 students in our campus. We have another 1000, 1500 students online. This is the second year. Hopefully we'll touch three figures in terms of crores.
Akshay: I'm just wondering how scalable is this approach for both these parts of online and offline. In offline my concern is that it is offline. Because every time you want to add another 100 students, you need to invest in additional space or whatever and every time you wanna go beyond one city then for each city you need to set up space, set up teachers and have that consistency and high quality teachers on each and every campus. It just sounds hard to scale offline.
In online my concern is that there are extremely well-funded unicorns offering the same thing.
Pratham : Great question and I have a very passionate answer to this. First let's talk about the scalability of offline programs. If you look at India or if you look at the U.S, the top 50 most scaled up education businesses in terms of revenue are all offline campuses.
Akshay: But they take decades. If you look at, say Aakash which got sold for a billion. It took decades to reach there.
Pratham : LPU was built in three years from zero to 30,000 students. GITAM was built to 20,000 students less than 2, 3 years. You need to give good quality. If you give good quality, you will be able to fit. There are hundreds of examples in the U.S.- Christian, University of Phoenix, there are lots of universities that are part of the global university systems. That's a holding company. These are all incredibly scaled up.
Let's answer this another way. In terms of online education businesses, which is the most scalable education business in the world?
Akshay: Are you talking of like at postgraduate level or like what kind of courses?
Pratham : No, any EdTech, postgrad, undergrad, K-12, anything EdTech.
Akshay: Let's say BYJU'S.
Pratham : What is the revenue? Some 400, 500 million and if you remove the products it is 160 million. In India, there are at least 100 universities, if not more, who's revenue is more than 200 million.
So even if you are a physical campus, you can teach 40, 50,000 students. That is more than Coursera, Udacity, Udemy, all of these companies even combined, your revenue is more. The scale of your impact from one campus can be huge. We should not say that to be successful and scalable in education, you have to be online.
Because guess what? In online, your cost of acquisition becomes incredibly high because it's non-essential degrees. Campus toh jana hi pady ga na mery ko, koi option hi nai hai. Literally in LPU there are 30 to 35,000 students, in VIT there are 45,000 students, in SRM there are probably 40,000 students. Amity University main campus, probably 40,000 students. These are all scaled up brands. How much more do you wanna scale? Udemy has not scaled this much, Udacity has not scaled this much, Coursera has not scaled this much. So I wanna stick to one campus. I don't wanna build any other campus in the country.
I'll build this one campus. Number two, I'm not chasing scale. Even if I can't chase scale because of the first reason I gave you, I don't wanna chase scale because I'm only trying to get to some 2,500 students in total. My chase is to get India into the top 10 global B School rankings.
My chase is not revenue. My chase is profitability and my chase is excellence. If I can get Masters' Union as a top 10 business school in the world right after Harvard, Wharton, Stanford, Stern, Sloan, LVS, INSEAD and if I can be this eighth, ninth college- that to me is a lot more important than touching 500 million in revenue.
Once I become top 10, I can get 2 billion dollars in revenue in one year. Think about it like that. Because you build a brand. So that's how we are thinking about it, which is keep very small, try to get the best placement, start with the best ranking and the rest will follow.
Akshay: That 2,500 Target you have is for offline?
Pratham : Yeah, offline.
Akshay: Which would mean that this current campus won't do, right?
Pratham : No, we can get more floors in the same building.
Akshay: But it doesn't seem like an educational institution if it doesn't have the gated walls where you are running into other people and there's a football ground where you're playing and stuff like that.
Pratham : The top 10 colleges that we mentioned, let's talk about all of them individually. Let's start with Wharton- does not have a campus. It's in the middle of the city. Let's go to Harvard. HBS is actually situated across the river from Harvard. It's not even the same campus and it's just three buildings. Stern, which is NYU's Business School again, it is three floors in one building. London Business School again, two buildings in the middle of the city. No football ground, nothing. Sloan, MIT again, four floors, I think including the Auditor Auditorium. INSEAD again, just a building.
So business schools are not like universities. Business schools- people are coming to learn and study business. It's important that they're next to the business and not next to some field. They're two different things altogether. That's number one.
Number two- a medical college is always situated next to a medical hospital. It does not matter if the medical college is situated next to a field. It's situated next to a medical hospital because you need to see real patients to learn, you need to have real doctors who come and teach you. That's what we are facilitating by being set up in cyber hub.
The expectations from a business school are very different from the expectations you have from an engineering college or from a regular BA program.
Akshay: So eventually your vision is to have that kind of extremely premium brand for both graduate and postgraduate. And eventually, if you wanna reach those rankings then you'll also have to go down that route of AICTE recognition and all that.
Pratham : No, the global rankings don't care whether you're AICTE approved or not. The global ranking person does not even know AICTE hota kya hai.
Akshay: But this does seem like a lifetime commitment to really see your vision come true. I think this is it for you.
Pratham : No, I think for me it's a 10 year horizon. See there's a ranking and I have to hit that ranking. If I go strategically on my goals, I can hit that ranking in five years.
Akshay: What is your way to do that?
Pratham : Look at the global ranking and see what is it that they're asking in terms of the data that you submit to them.
And if you look at FT ranking, which is a main business school ranking, it's very clear. They ask 80% is about placements, 10% is about research and 10% is about diversity. So just hit those targets. The thing is, universities abroad and even universities in India, business schools anyway, they're not entrepreneurially run. They don't hit these targets. They don't even know that these are the targets. So we just go and hit those targets. That's why our focus is on placements because 80% is placements.
Akshay: I was not aware placements had such an outsized role in rankings.
Pratham : It should. It's a business school. What else are you going to a business school for?
Akshay: What was stuff like white papers publishing and the faculty being?
Pratham : That's 10% and we will do all of that. We will have faculty, we will have research papers, we'll have index journals, all of that. We are already doing it. But that's only 10%, so I want to do it proportionately.
Akshay: I like how clearly you have identified the problem to solve. This clarity is amazing.
Pratham : It's as I said, in the beginning of your first question, I was born into this. My parents actually started India's first private university so because of that. It's called Lovely Professional University.
Akshay: Oh, man I didn't know that connection. So Lovely Professional University your parents own it.
Pratham : Yeah they co-founded it in 2005.
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