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The first principles path to employability | Sunstone
The best founders in the world are known for their first principle thinking - which basically means you don’t get distracted by symptoms but rather dig deeper to attack the root cause of the problem.
Ashish Munjal used first principle thinking to tackle the root cause of the unemployability problem faced by college graduates in India.
Sunstone is taking a unique approach to bridging the employability gap: they offer the same degrees but with a laser focus on building practical skills that make students highly employable.
Ashish speaks about building Sunstone, finding product market fit, building pricing power, and growth hacking to reach scale.
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[00:00:00] Ashish: Hi everyone. I'm Ashish Munjal, I'm co-founder and CEO of Sunstone Education.
[00:00:04] So I come from a very small town near a city named Meerut. My father was in government job. He used to work with like Corporation of India, and my mother was a teacher. We have three siblings. I'm the youngest one, so I have a elder brother and a elder sister. And my, family chain they used to be the traders. It was my dad who was first to move out of that kind of business.
[00:01:55] And eventually all of my uncles also moved out. I studied in Concorcera. The kind of school that I went through we used to make joke of people.
[00:02:03] We used to even try to speak in English. My engineering also happened from Meerut so I just went to the same college that my brother went to in Meerut to do my engineering and my brother graduated when I entered second year, and then when he joined in first season and he went to Pune and then he just got the shock of his life and that's when he started pushing me Boss.
[00:02:23] Jevan ehse ne chalne waalai And that's when he started pushing me that you start preparing for CAT. And his motivation was primarily so that I can improve on my English if you start preparing for CAT. But when I started that, then I picked up the habit of reading and that's something that I realized that, okay, this is something which has been missing in my life altogether.
[00:02:42] Akshay: How was the IMT experience? I've heard like it's a lot of fun studying from IMT.
[00:02:48] Ashish: IMT was a lot of fun. So when I joined IMT, that's when I realized, okay, what's a, like what's a holistic education? What we say that, okay, your learning happens more outside the [00:03:00] classroom. Uh, While I think that sort of thing, came to me during the IMT days.
[00:03:04] Akshay: . Okay. And what did you opt for in terms of uh, careers?
[00:03:07] Ashish: The number one priority for me was not to do an MBA. The number one priority for me was to do Finance. So I realized this during my engineering days and I did some certifications and everything during TCS as well, that I love Finance.
[00:03:19] I did double majors in Finance. I did my CFA charter and everything. I was like one of those junkies keeps say finance si karnai.
[00:03:26] Akshay: So like in terms of your replacements then where did you go? Like did you choose a finance job?
[00:03:32] Ashish: After MBA, the basic cutoff for good finance companies, like investment banks and everything was at ACGPA
[00:03:38] so I could not get shortlisted. the first company that shortlisted me on day zero was Deloitte Consulting. I cracked that interview and I joined Deloitte. So after two, three months, I realized,nahi yar, I can't do this. Because the position of Deloitte was based out of US. So I started just looking for finance option left, right, and center. And I got a job with Bank of America, the investment banking Team. So I just moved out and joined investment banking, bank of America.
[00:04:02] Akshay: Delight role was more of like, handling clients, making presentations, stuff like that. It was not like core finance?
[00:04:07] Ashish: It was not core finance. It was not handling clients was more on the consulting side. So basically I was in the SAP practice. I was a consultant, so I used to work with again Florida Department of Revenue, Scalia. I used to work and we were implementing a very large SAP system for them.
[00:04:23] For my job was to ensure that everything was implemented and we give them the right solution and everything.
[00:04:28] Akshay: And what was your role at
[00:04:30] Ashish: bank of America?
[00:04:30] Bank of America was a very typical investment banking role. So I started my journey with this new team that you are creating a coverage team, which is essentially a middle markets team.
[00:04:39] So the deals which are not very high, the company which are not very highly valued. So middle markets team, but I was there for one year. Then I moved to TMT, which is technology, media and telecom. And that's from there when I started tracking all these big tech companies, that's when my first love for tech sort of started tech and internet companies.
[00:04:56] What led to the Nolarity sents?
[00:04:59] So I think and that's probably the most hypocritical thing that has happened ever in my life that I realized that I was not made for finance. Pure finances are ultimately not what I would enjoy. I enjoy meeting people. I enjoy driving change. I enjoy like creating impact at large scale, working with people and everything.
[00:05:20] So there's a roommate of mine who was with me in Bank of America and he moved Nolarity. So when I decided that I want to move outta Bank of America, I was very clear that I want to do something in the startup space, but I only want to do education.
[00:05:33] and that's when I started looking out for option. And that way back in 2012, 13, there were not many education startups per se. So after five, six months, then he convinced me that yeah, what you're trying to do is that you're trying to make two degree of difference or two degree of changes in your life from corporate to startup and startup, maybe specifically your education.
[00:05:52] You're limiting your options, basically. So why don't you make one degree of change? You move to startup and then the whole world is open for [00:06:00] you whenever you think that at least you start getting the exposure of startup working with startup and then do education whenever you want to. So that's how uh, Nolarity sort of happen and like after that, obviously ground had happened and then eventually sunstone.
[00:06:13] Akshay: So then what was the trigger to like quit your job, become an entrepreneur?
[00:06:18] Ashish: I was not one of those person who was very clear that I want to start a company on my own. And in fact uncle who is our co-founder here, he started entrepreneurship club in our college in IMTRs Ahmedabad. And. At that point in time I did not plan that I will move outta Notarity. It was just like 14, 15 months for me. But whose point in time is Samir! So Samir moved out, I think six, seven months ahead of me. He was working on an idea.
[00:06:43] So, two things happened, mah. like series because of the banking again.
[00:06:50] So I was the one who was driving the series B fundraiser and everything. And fundraise is a very, like a high energy thing, kue ehse jatha feel so fundraise ji jathathen then you don't ki apke karnai . so I [00:07:00] completed the fundraise process. June, meh I think I completed fundraise process. I was also slightly on, was also giving it out. So I was also like, I did not have anything to do at that point.
[00:07:13] Samir reachout kya here, I'm building this. So why don't you come and join me.
[00:07:17] Akshay: Samir was heading product at Nolarity before he quit?
[00:07:20] Ashish: Samir was heading product at Nolarity Samir Grover. He was heading product at Nolarity and he and Pallav sort of sold me this idea. Pallav used to be the other co-founder of Nolarity, Pallav Panday.
[00:07:29] Pallav moved out Pallav, also moved out seven, eight months ahead like, before I moved out. So was working with Samir, but he was not in the executive role. He was just trying, helping him trash out the idea and everything. So I used to know, Pallav and Samir, well then Pallav, Pallav actually was the one who really sold me that idea of Crownit. And then I met Samir and
[00:07:50] Akshay: Everyone. And what was the idea of Crownit?
[00:07:52] Ashish: So Crownit was basically trying to do online to offline. So basically it's a category. It's not just, yeah, deal. Spacemaker, cashback, spacemaker. The category was online to offline that you should be able to drive consumers, who come to your app, to the offline merchants.
[00:08:10] Now those offline merchants can be an anti category and can be food and beverages space. It can be beauty category, it can be experience category. But can you move like business? Can you help a local merchant increase its PNL? So let's say if there are 30 restaurants in sector 29 in Gurugram, if out of 30 those, let's say 10 are our Crownnet partners, so can you increase their top line by 15, 20%?
[00:08:37] So that was the like the biggest philosophy that if you help them increase their top line, they will give you any revenue share on that.
[00:08:46] Akshay: Was there a established model like in the west, some company which had done this? Like what, what made you feel that this will work?
[00:08:54] Ashish: Jab me Samir se mila thatho it was just the joy of building something in the consumer space so nellai Mein Ek learning with Medicare B2B to have 4 main main koi nahi kar raha Hoon
[00:09:05] Consumer side is so I knew kya muhje education ki kabi karnai, but I also sort of B2B education, so I want to do something in the B2C space, the model was different group 1, we used to call it loneshock. The name of the company was Methwa. So Methwa was doing very well and there was another company,Dianping. So these two companies were killing it in the online to offline space. So for us whenever in 2014, 2014 was it happened, we never used to have a from us, but we used to have a, from China, we are building a for India. [00:10:00] And,
[00:10:00] Akshay: Like tell me that journey, like, of Crownit must have gone through a journey to find product, market fit and so on.
[00:10:06] Help me understand that. Like what was the version one of it and then what were the pivots? And
[00:10:11] Ashish: So we actually did lot of things in Crownit. So when we started with a very simple model that if you go to a restaurant, and initially it was , only restaurants. If you go to a restaurant through our app, you'll get some rewards. And the whole model was built around that it should not be a transactional journey for you.
[00:10:28] So that eh bar cash ne haep app, you got the cash back and then you went away. So we created the product first approach that you get rewards and then it's a sort of reward journey continues in the app. So we used to call it Crowns and that how the name Crownit, it was there that whenever you do a check-in with us, you get crowns.
[00:10:47] Now those crowns you can accumulate, you can re ready you, if you continue to accumulate, you get certain, certain, certain things. And we were the first ones to introduce a bill picture in the country that if you're going anywhere, you just click a picture of your bill and bases the bill amount and everything.
[00:11:02] You get, get some rewards uh,
[00:11:04] Akshay: Anywhere or with Crownit partners?
[00:11:06] Ashish: So, again, that's part of the GTM first that after I joined added mahiya where Samir Mein kya ban Gaya product ban Gaye but to
[00:11:15] consumer restaurant. So in any marketplace it's a chicken egg situation. So because it was a app only product, so we can do very micromarketing hyper local targeting. So even in Gurugram, we did not start with the whole . We only started with MG Road, MG road restaurant. Let's get those restaurants MG offices and let's try to get consumer from that restaurant consumer that's start the chain and everything.
[00:11:40] So we got the restaurant from MG Road are strong, but the. Because there was not bulk of consumers, on the app. So the check-in frequency at these restaurants were very, like this was infrequent. So then
[00:11:59] [00:12:00] we are not getting into the hyper growth sort of a model. So that's when we sort of realize that we are not dependent on restaurant for check-ins. Like if I'm asking them to give me their bill ultimately we have to fund the amount, let's say the cash back or the reward that we are giving. But at least for a small time till the time we get lot of consumers on the platform, we can fund that reward. se ap know cashback mil jahe hai.
[00:12:20] And it's not that at that point in time we were venture funded, we were still angel funded. We only raised I think 1.3, 1.4 Sierra at that point in time. But we had like, we were brave enough to still take that call and we went and I think September 1st week of 2014 is when we opened up whole of Gurugram for the consumers ke kahi
[00:12:40] Ashish: me jaho cashback milna jahe hai. And then we used to have like all those things that there is a star outlet and non star outlet. Star outlet where we were actually making money A non-star outlet where we were not making money.
[00:12:48] Akshay: The Star outlet meh more cash back.
[00:12:50] Ashish: More Cashback me and non cashback me cashback kame so that we are also not just burning through it and, but at least consumers now have motivation to like habit because consumer products are always about habit form eh!
[00:13:07] Akshay: Like crowns like crowns consumers were earning crowns?
[00:13:12] Ashish: Crowns online, but then we opened up offline as well. So our crowns Kai redeem kar sakte And one crown is one rupee So one shop shop me one rupee? Initially it was one rupee, then we changed. got with that one crown is going one rupee. But that's when we realized, and this was not a early realization, it happened like one year later in 2015 that people were not worried about how many crowns I am getting. Like, other Maine paanch sau rupaye ka bill check in kiya to mujhe pachas crown mil rahe Hain pyaar mil rahe Hain and ingrown
[00:13:44] and in Crownit whenever used to check in your bill and your check-in used to get approved, there used to be a, like a sound of coins dropping. Nice! But we actually, when we did our survey from the consumers, we let people have become habitual of that sound.
[00:14:07] so Agar wo awaz AA Gaye mere check in karne Ki awaaz aaye to theek hai Ki nahi kitne paise mil rahe Hain nahin was like sufficient for people.
[00:14:10] Akshay: Gamified experience ka basically.
[00:14:12] Ashish: Huh. That was purely gamified experience. So that was doing well. We sort of were reducing cash back in our non-paid outlet, increasing in the paid outlet. We started making gross margins as well. We raised venture funding from Excel.
[00:14:26] Helion in February, March of 2015. Then we opened up three.
[00:14:30] Akshay: How much did you raise?
[00:14:31] Ashish: We raised 5.5 million at that point in time series, eh, was around like 5.5 million uske apko se Offset se it was a good series, eh? and then we opened up two, three more cities. We were going really, really aggressive and growth in that one single year.
[00:14:46] We onboarded around 15 lakhs consumers on the platform and that too without spending single rupee on acquisition on the Facebook, Google channels. So 91 or 92% users were organic out of that 64% user. We have a direct variant in the system. Not even word of mouth. users used to refer each other and we used to know each is when they were, there was a tree and we used to track that. Okay.
[00:15:13] Akshay: You had like a reward, an incentivization to refer.
[00:15:17] Ashish: Initially, yes, but then there were some regulation around MLM. So initially it was like if you refer someone and they refer someone, still you get something. But then there was some MLM regulations, so we removed it. It was only one level of rewards which are permitted.
[00:15:30] So we went ahead with that only, but we could track in the system that how, let's say I know that, okay, if Saire is referring Ambrish and Abmbrish is referring Pallav and Pallav is referring, Samir and Samir is referring Ashish. So we used to know,okay Saire and Ashish are connected in some way, but Saire and Ashish will never know that. So, and then we used to know ki iske kon jare because there was a feature of tagging because people used to fight with each other. Carrier to main will check in karunga who
[00:16:01] So then we introduce lot of fun features that you can tag your friends, your crown used to distributed, if you're checking. And your proposal ground will leave it to sabko pachchis mill jayenge loman
[00:16:11] And then so we also actually introduced one more feature it took at least Gurugram by storm at that point in time. So we introduced a weekly rush that was primarily done to reduce our cash burn on our non participating outlets.
[00:16:25] So on the non participating outlets, rather than giving you crown, we started giving you a lottery ticket. We used to call it weekly rush. And that weekly rush used to happen on Friday, 4:00 PM So if you are going to a participating outlet, a star outlet, you used to get a weekly rush ticket and some crowns.
[00:16:43] But if you go to a non participating restaurant, you only get weekly rush tickets and at 4:00 PM in Gurugram, because our user base was very homogeneous. So let's say if EY user has downloaded, he will tell all other EY users and you only have 10 minutes to claim your award. Let's say if I won, book my show up 500 rupee ka voucher. If I don't claim it by 4:10, then my friends friends doing to me refer kiya hai jinka direct child is system Mein book claim kar sakte Hain mera award to log baithte Jessie charges hoga Agar mere friend ne award claim nahi kiya toh
[00:17:08] Friendly. I will have the right to claim his award.
[00:17:19] Akshay: And how do you claim the reward? By, by going to a restaurant and checking in?
[00:17:23] Ashish: No. Just in the app. In the app.
[00:17:25] Akshay: Uh, Amazing.
[00:17:26] Ashish: Yeah
[00:17:27] So actually in one of the weeks somebody won an iPhone and he did not claim and one of his friends claim and that went viral on Facebook at that point in time.
[00:17:37] Akshay: Okay. Amazing. So, how are you doing the merchant sign ups?
[00:17:41] Ashish: So merchant sign ups were purely on the business that we will increase your business and everything. Yeah.
[00:17:45] Akshay: Mathlab through like sales calls, you have fleet on street
[00:17:49] Ashish: Through sales. Yeah. Yeah. Fleet on Street. Fleet on street. Because ne restaurant bahut Jada or matlab ye Jo aise
[00:17:52] Merchants and apke lifestyle spend hore, they're not in very large number. You don't need like hundreds and hundreds of people on fleet. I think at that point in time we calculated that there are only 7,000 relevant restaurant in three cities. Delhi, Bombay, Bangalore. Delhi, NCR, Bombay and Bangalore, The problem that we were encountered and that we were not able to solve with that, we were like, if I have to collect hundred rupees from the smaller merchants,
[00:18:20] now that was the problem because we were a consumer internet player, so our take rate after giving cash back was barely 5, 6%. And that conclude the both side. So if I am only correcting 80%, because consumers are not worried about whether I'm getting money from merchant or not consumers tho, I'm giving the cash back.
[00:18:39] So essentially gross margin was getting eroded,
[00:18:43] Akshay: but why was that happening with 20%? Was it like 20% of establishments were not paying or was it that establishments were not paying 20% of the amount that they owed to you?
[00:18:52] Ashish: So it was both. It was both. So let's say, say Agar Gurgaon restaurant has to say assi hazar rupay ka invoice asansol se aake Bola Jo hamara rating hoti hai do checkin mere nahi hai ye to mujhe Pata nahi consumer ka hai yeh mere nain so do check if sakhi
[00:18:55] to mujhe Pata nahi consumer ka hai yeh mere nain so do check if sakhi [00:19:00] let's say 77,000 ka hogaya so 5, 7% from the merchants who were paying, but 10, 12% merchant who were saying ink and.
[00:19:22] Akshay: At this bill, what percentage of bill were you charging for merchant?
[00:19:25] Ashish: We were somewhere between 12 to 17%. So I, we were giving around 9 to 12% to the consumers and 4 to 5% we were keeping for ourselves.
[00:19:34] Akshay: , I guess isme friction eh ke, the merchant would probably se ke just because he clicked a photo of a bill, now I have to pay for a customer that I anyway owned.
[00:19:46] Ashish: Like, that could be, so because we were a product first company, we did lot of things. So what we did was that Agar aapko kisi bhi restaurants gaane to aapko bill check in se aadhe ghante pahale restaurant activate kar dena maa bill aane ke baad ya aadha ghanta ghanta mujhe anubhav aisa kuch tha so that I should know in advance aisa nahi khana Kha liya Tera bill bhej do
[00:19:53] then I will not be able to tell restaurant near here consumers haan Maine leke aaya to aapne usako bhi aisa nahi kiya tha Ki aapne Jo section where we again gave me 5 days we put a wheel sort of a feature in that you up to up who will ghumate the app Mein aur uske baad aapko percentage Pata lagta tha us restaurant Mein kitna cashback milega to Agar AAP jaane se do ghante pahle kar dete ho to aapko cashback bhi jyada ho jata to consumer to matlab number
[00:20:36] slowly moving. them char ghante when you can do 3 4 wheel ghuma sakte hai ye teen ya char restaurant Mein se soch raha dekhe jaane Ki inmen se kahan jayega ye
[00:20:51] We can notify, re you can expect.[00:21:00] Actually, we were the first one to do lot of such features in the industry. We were the first one to launch just pay through Dineout. So we were the first one in 2015 to launch pay through Crownit.
[00:21:16] So that if I am controlling the money nah, if merchant is paying me or I am settling too merchant, the whole equation changes. Ah,
[00:21:24] Akshay: right, right, right. Then you're not chasing them to recover.
[00:21:26] Ashish: If I am paying the merchant, I will cut my share and then pay it
[00:21:30] Akshay: to them?
[00:21:30] Ashish: To my revenue is not at stake.
[00:21:32] Akshay: What were your lessons from that Crownit journey? Because I don't think it lived up to its potential, right? Like
[00:21:37] Ashish: Nahi, it did not. It did not. And then we, so we tried a lot of things.
[00:21:41] We tried doing affiliate model tho cashkaro wala model, like we tried doing a meal card Sodexo model. We launched our own
[00:21:46] Akshay: what is that affiliate model?
[00:21:48] Ashish: Is more like ke cashkaro model we online ki ap shopping. Tried doing that as karna hamare through I or [00:22:00] ferrous website chalaye to we tried doing that as well key theek hai theek you get crowds crowns milenge aapko one thing which was faster ko growth milenge aapko bhi leaders ka ticket milega these are the 2 currencies in the system you get these 2 let me launch our own meal card kiya yes bank ke saath apne meal card launch kiya then we launch Arun credit card as well with was that field card for like meal card woh
[00:22:02] Ashish: Jo aapka corporate
[00:22:11] Akshay: Which would need then a lot milate hai hazar rupay ke wo aapko rather than in Sodexo you will get in your grounded card to aapko nahi mil raha it was one of the initiative key paid through grounded ko Mor le Jane ke liye aapke paas hai hazar rupay teen hazar rupay mahina AA rahe Hain real spend through bank card. Of B2B selling, like, because then you have to go and sell to HR of soft companies and.
[00:22:17] Ashish: Yeah. So that was one then then we launched our credit card
[00:22:24] that was It was very small quantity ground used to get financed from RBL bank. It was very small quantity ground used to get financed from RBL bank There was no RBL ka reward system. It was aapka Sara rewards credit card ka Crownit bhi chalega
[00:22:42] then we launched our Crownit voucher voucher, ka voucher kharid loan se voucher kharidkar rakh lo Jo bheji spend kar Lena so that's when we sort of did one more experimental, starting doing some sort of market research reports and everything. And that's where we started getting good traction [00:23:00] from brands like actually PNG we signed later, but we started getting some traction from smaller brands.
[00:23:05] So we did a lot of work for FNB, like large Dominos and everything cooking. They were the first one and that's when we started the Pivot in 2016.
[00:23:13] Akshay: So what is this platform now? Does it still have that crowns ka system or is it like a survey platform where you answer surveys?
[00:23:21] Ashish: Crowns? We definitely here like, you do keep doing activities, you keep getting points. But now the monetization is not from the smaller merchants. We monetize from larger brands. From more B2C first company, now we were becoming a B2B or a enterprise company.
[00:23:39] So 2000, late 16, early 17, we did this pivot. 2017 is when we raised some more money from fresh investors on the new model. And then both Pew and me so I actually, I did not talk about Pew so far. So we worked together in our first job in TCS, and then we were together in IMT [00:24:00] and then he joined Crownit as right after me as the founding team.
[00:24:05] So we have been like the closest of friends since like 14, 15 years now. So Pews and I, then we decided that, okay, this is not something that both of us will enjoy for a very long time. So 2018 June is when I moved out. And 2018 October is when Pews moved out.
[00:24:25] But if you look at from the larger space perspective, apart from China even today so Methwa is like a super app. Methwa also do ride booking. Methwa Methwa and Dianpe now has merged. So they also do ride booking, they also do food delivery. They're probably they're the largest food delivery company in China.
[00:24:45] Akshay: So, probably like Zomato would be the closest to cracking this. Right. Like offline to online. They've acquired blinket also now, which
[00:24:51] Ashish: Pre pandemic work.
[00:24:52] They tried to do no matter gold as. Which was doing well for them, but then they also almost shut it down. I think. I don't see that in the app [00:25:00] anymore, but it's, so right now, if you see, they are not doing anything on the rewards space per sale, which is if you really want to drive so offline to online is more like blinked, kind model offline me janah where online me samal order karno so Magicpin is actually also doing food delivery now, I think. And now the Zomato is invested in Magicpin, so they're together sort of now. Like any consumer product, which helps you become more lazy.
[00:25:26] Uska apka Trajectory is like your Jacob, right? So Blinket, Zepto, they are actually helping me become more lazy, become more forgetful. I don't even need to plan like milk basket chaar din Mein Ek bar to soch lete ghar Mein kya chahiye abhi kya hota hai Chai chulhe par Chadha diya Chai Patti nahi hai jab Tak pani Kam hota hai tab Tak Chai Patti kiss kiss true Rick
[00:25:50] this happens now. As consumers we are like we are, they are telling us to be, it's okay to forget. It's like whatever. That, so this is like making [00:26:00] us more lazy. But if you look at online to offline, I am expecting you to see something online, but go offline and make that purchase offline.
[00:26:10] Akshay: Uhhuh and then check in and look, there's a lot of friction in that. Yeah, yeah, yeah.
[00:26:14] That's true. so, from Crownit to Sanstone, like, tell me about that Journey.
[00:26:18] Ashish: Yeah. So, Crownit, I moved out June, 2018, and this time it was a much more I will say informed thing because of, Nalority to Crown. It almost happened where Pallav and Samir they reached out and I sort of bought into it, but this time it was more like, okay, you have done corporate, you have worked with startup.
[00:26:38] You've started your startup, and now is the time that, because that education thing was always at the back of my mind. So if you want to do anything in education, this is the time. So, that was one of the thought process that if you really want like one serious, real Try real chance that you want to take. This is the right time.
[00:26:58] And in fact, [00:27:00] in education space, I started something in 2012 as well, simultaneously while I was working with Bank of America. And I could not scale that up. So I shut that down within six months. And again, that's something that very few people know. that I want to create some value for those people.
[00:27:18] Akshay: And like, which courses did you wanna target? Like, how did you want to bring in accountability?
[00:27:24] Ashish: So see, ultimately when we talk about accountability, when we talk about courses, it's very simple that students who are opting for professional education, they are looking at, okay, by end of my program, I should be employable, I should get some employment opportunity.
[00:27:42] So what we tell student is that here, , we are plugging ourselves into the colleges tho avape. You not only go through their like credit program, you also go through sunstone program. But if If you complete Sunstone program successfully, the probability of you not being able to get a job is closer to 0%.
[00:28:02] If a student is keeping his side of promise, then you should also give your side of promise. Uski Methodology ko avume bootcamp, finishing school has some career readiness program.
[00:28:12] Ha. It can be anything, but ultimately the outcome should be this.
[00:28:16] Akshay: Okay. The, tell me that journey of, again, product market fit, like, how did you discover what was version one and..
[00:28:23] Ashish: So this was sort of when I was moving out in 2018, I was just meeting everybody in the education space from every founder to
[00:28:32] VC fund to even people who were in the traditional education space as well.
[00:28:36] So I met Rajul Gurg, he's the founder of Pine Labs and Global Logic and runs his VC fund now Leo Capital. So Rajul sort of started sunstone in some form and shape in 2011, and then he moved out from the executive role in 2015 or 16. So when I was moving out, I met Rajul as well because he used to sit on our board in Nolarity.
[00:28:59] So [00:29:00] I met Rajul, he told me about this model. So I starting some time with the people who were running it. I like the model primarily because you are not asking student ki jadi ap ke engineering, ki jaldi eh engineering
[00:29:19] telling that was just for a piece of paper and nobody is trying to solve that. Everybody is creating a layer on top of your formal education, formal education ki bootcamp karlo and this karlo that karlo, and the model that sandstone was following at that point in time that we will plug ourselves in your college itself.
[00:29:41] So that Sunstone se apko Employee building karti eh, by the time you complete your college and degree, you have a degree and you are employed. Now This is something which is a winning proposition of education Now, this is something which is a winning proposition of education. This is what I call it. Now aapko Jo bhi karna hai AAP college ke saath kaam kar rahe ho aisa nahi jate
[00:29:54] jate directly students kaise colleges ke [00:30:00] saath kaam kar rahe Hain. We're working with the colleges. We are helping them do everything, helping them create curriculum, helping them do everything. But there is also a top up module, which is outside of any regulation. So let's say if you talk about MBA uh, UGC se apko bante MBA se padanai..
[00:30:17] Now we tell iske uper we have created 600 hours of module that is purely focused on employability. But as a student, you will get 1500 hours of module, which is one integrated module for you.
[00:30:31] See you have to study for these 1500 hours, you will get degree and you will get a job. If you complete this 15 hours successfully, it'll not happen. And you will not get a job.
[00:30:40] Akshay: So, Sanstone was basically working with B schools like for MBA courses. And the student would opt in voluntarily, like in a batch of hundred, only 50 could opt in. Was that the way they were doing it or?
[00:30:51] Ashish: So, so it starts from the very beginning because in middle of the journey ap you cannot tell student. ki apko chesoganta op parnai ya apko fees [00:31:00] structure jioga so it starts from the very beginning. When a student is planning to take admission, we give him option that this is sunstone reposition you. Let's say if we have, right now we have partnered with around 48 colleges. So now you go into any 48 of these colleges, you will get the plain vanilla degree, which you anywhere are getting from colleges.
[00:31:18] That's a very standardized degree, works. It's the same MBA that you get from U G C. So vo ap kaise mile sakthe ho, so this is what you get in addition to your degree, which is sunstone module. Now when you're taking admission, you buy this, both the products simultaneously. We do not sell sunstone modules separately. We plug it with your degree program itself.
[00:31:40] So you get your degree from college, you get your employability modules from Sunstone, and then by the time you graduate, you are employable, basically employed rather than only employed.
[00:31:49] Akshay: So like in a college there would be two sections. One section could be the sunstone section, which is people who chose, and then the college would have its own direct enrollment, which would be a separate section.[00:32:00]
[00:32:00] Ashish: That is right. That is right. But we have also seen that in most of the colleges, the moment we plug ourselves, our enrollments over the years go through the roof and either they merge our program also with their program or they shut it down, or in some cases they continue to run. Also. What is the
[00:32:17] Akshay: price differential for a student like normal course versus?
[00:32:20] Ashish: That's actually the interesting part.
[00:32:22] There is no price differential for a student. Then
[00:32:25] Akshay: How do you, like, how do you make money then?
[00:32:27] Ashish: let's say if a student was earlier paying 3.5 lakhs rupees for an MBA. So what we try is that there should not be like meaningful difference. It can be 3.6, 3.7 or 3.4, but it should be the same ballpark for student.
[00:32:41] And I am moving students from other colleges to this colleges because Sunstone is partnered with this college. So it's the sunstone enrollment that I'm able to drive from all the neighborhood in the same vicinity to the Sanstone partner college. So on that additional business, obviously we generate a revenue share [00:33:00] with the college
[00:33:00] Akshay: who pays for that extra $600 of sanstone course?
[00:33:04] Ashish: Like everything, everything is part of our revenue share. So from student perspective, the fee is fixed and it is closer to the actual fee that otherwise he would've paid.
[00:33:14] Akshay: The revenue share you take from the college. From that you fund the teacher because you would also need to deploy teachers in the college, right?
[00:33:20] Ashish: Yeah, Yeah. We, We need to deploy teacher. We need to do admissions marketing, we need to develop curriculum, we need to have learning outcomes, staffing. And we also have a very, like a very large team of placement co, like CRC members as well, who actually reaches out to corporate as well.
[00:33:36] Because that's also one thing that we realize that colleges per se do not do a, a very, like a super hard work in that. Like, because
[00:33:49] good thing, but there is no skin in the game from their side. So that's not like one of the key things for them. From our perspective, there is lot of energy bandwidth that [00:34:00] goes primarily only on the outreach side as well. So there are two elements to employment. One is that you make students employable and then you create employment opportunities for them.
[00:34:09] So there is lot of energy that goes from our side on creating those employment opportunities. As, as well for students.
[00:34:16] You're not,
[00:34:17] Akshay: Doing that income shares kind of, uh, arrangement with students.
[00:34:21] Ashish: We never did income share, but we used to do pay after placement when we started. So the model initially in the first two, three years was that you start your program, you pay me a very.
[00:34:33] Akshay: Before you came in or like, the income session or
[00:34:35] Ashish: Before I came in was also pay after placement and after we sort of took over and we also continued with pay after placement for initial two, three years.
[00:34:45] But there is no more pay after placement right now because there is enough data in the market that OK sunstone, the placement percentage is closer two hundred percent. They getting into good jobs and everything. So we don't have to carry the burden of pay after placement anymore. It [00:35:00] was a good go-to market strategy for me because in education brand is the most critical thing and suddenly if I just start saying that, okay, Ashish and Pews started a company and now you should come and study with us, obviously who are we that students should trust and believe?
[00:35:14] Akshay: Okay. Good. So, tell me that journey of building out these pieces. Like you said, you have curriculum, you deployed teachers, you have a placement like a placement, outreach, support, and all of this.
[00:35:25] Like, like, how did you build out the various pieces of this?
[00:35:28] Ashish: We did not have to build everything at day one. Like, I did not have to worry about placement at day one because I knew student will be graduating two years later.
[00:35:37] So I, I can focus on placement after one year, the first year, every first three months were only focused on how do I get student, how do I get the distribution,
[00:35:46] Akshay: right. Ok. Okay. Admissions and marketing.
[00:35:49] Ashish: Admissions and marketing. Next six months, were only focused around my curriculum, putting the right faculty, whether it'll be a hybrid model, and then uh, that sort of has [00:36:00] continued that we have continued to itrate a lot on our pedagogy, our curriculum how the model will evolve because we also don't want to be a completely offline kind of a model because they're the.
[00:36:11] In the delivery quality, something that you cannot control at like 30, 32 cities that we're right now presenting. So what we did is that we sort of evolved it into a more hybrid model where it's a mix of offline and offline. So you'll have somebody, it's not that we will just leave you completely without any human support in campus, but it's not that you'll have 15 people from Sunstone in every campus.
[00:36:34] So we'll have some human support, one or two people in every campus so that they are taking offline classes also, and they're helping student if they need any help in everything. And there are a lot of online teaching that happens through our studios. Now, central learning also. Now, the benefit of doing central learning is that, let's say if I want to get a, I am professor who teaches economics, or if I want to get [00:37:00] a person who is like OG in digital marketing, now that person will not go to 32 physical campuses, plus it is not viable for me.
[00:37:09] Also, my unit economics will not work if I start sending these star faculties in all these campaign physically. Now they can come to our studios in Gurugram and Bangalore and can teach from there. From a student perspective, a Guhati students suddenly now has access to let's say a top digital marketing guy from one of the digital marketing agencies, which earlier was completely unavailable for.
[00:37:33] Akshay: So these are small, and this class, they will be sitting in the campus only. Like there's not, like they're sitting at home,
[00:37:38] Ashish: they will be sitting in the campus. No. They will be sitting in the campus. And that's why you have physical presence in the campus because you work with campus of authorities to work out the schedule that okay, this will be schedule of my students and everything.
[00:37:50] So that's why you have to be in campus. You cannot run these things completely digitally and you have to tell,
[00:37:56] or maybe you'll have somebody, a TA or a campus [00:38:00] manager or executive present in that class physically as well when that class is being relayed digitally. So all those things has to happen. But yeah, ultimately the real beauty of the model comes in when you can get them access to best of the faculty is best of the jobs.
[00:38:15] And similar things happens in placements as well. So let's say there is a student, which is who's sitting in Guhati now earlier, that student will have access to job opportunities, which are in an like around Gohati. And that is the reason there is lot of migration happens in education. People want to go to Bombay, Bangalore, Delhi, Pune to study because they know that employment opportunities are in and around that city.
[00:38:37] Now what we tell student is that let's say if there are 48 campuses in Sunstone, there will not be any single job opportunity, which will be not for some specific campus. So suddenly there is one sunstone, one community sort of approach, one platform that we follow that suddenly a student who is based in Gughati is at the same level who was student is based in Bangalore.
[00:38:59] Akshay: I wanna zoom in a bit on the curriculum. What is your thesis that this is missing from curriculum? I need to teach these skills? Like what are you covering for,
[00:39:08] Ashish: like, what We very seriously believe from the philosophy perspective, there are two big areas in which the curriculum needs to be worked on.
[00:39:18] The first is that if you look at the prescribed curriculum of any program, whether you look at beta, Btech whether you look at mba, mba this curriculum is created, keeping in mind the top 10% students. Because se aplog we are teaching all these things to the student. N we are talking about the student who are not in the top 10% segment, what are the kind of jobs they will be doing? Are they going to work in strategy consulting? Are they going to work in equity research, investment banking? Are they going to be hedge fund traders?
[00:39:58] They're not. These are the kind of jobs [00:40:00] that will come to the top clients, and there is no shying away from that. There is no hiding away from that. Right? The kind of jobs that the next best in will come to next best institutes like us will be jobs like IT These are not the kind of things that are ever there in our curriculum.
[00:40:24] Akshay: Yeah. Like nobody teaches you sales. Even though sales is what most MBAs end up doing.
[00:40:28] Ashish: Sales is 30, 40, 50%. MBAs end up doing sales. Nobody teaches you sales, nobody teaches you digital marketing. And in fact, let's say when you're teaching them those concepts as well, you have to make them very relevant.
[00:40:41] Don't teach them 20 things, teach them five things, but make it much more real and relevant. That's where the irony is when you're teaching them irrelevant thing and then you're expecting them to be employable. That's. That's. The second thing, which is very specific to [00:41:00] Sunstone, is that we have a theory and we have a philosophy that there should not be any teaching.
[00:41:06] Or when I say teaching, I mean that there should not be any broadcasting first person as an unit. The pedagogy should not be that you,
[00:41:13] and then he goes away, and then you expect students to learn. This is not how learning happens. This is how broadcasting happens. So we have a very clear, one of the pillars of our curriculum is there, the broadcasting should not be for more than 20% of the overall classroom program. You cannot be speaking. You should not be speaking because more retention.
[00:41:34] So that is the another pillar. Your curriculum, your videos, your learning guides, your case lists, everything is created basis. This pillar of curriculum. So we started with BA, BCA, B Tech, MCA last year.[00:42:00]
[00:42:02] Akshay: So, and the add-on, the sunston
[00:42:16] Ashish: 25% ko overlap ko, but BBA,
[00:42:27] Akshay: BTech in computer science or like other streams Also? Again,
[00:42:32] Ashish: from our perspective what we are saying is that Ki, we have the jobs jobs are primarily in computer science. So you can do BTech from mechanical, completely fine. You get the Btech mechanical degree. We'll teach you software development, we'll teach you full stack, we'll teach you coding. if you don't as a mechanical engineer, if you don't want to be making your career as software development, then Sunstone is not the right place right now. What kind of
[00:42:56] Akshay: jobs do BBA students get? Like,
[00:42:58] Ashish: So [00:43:00] typically similar entry level jobs as sales have customer account management, have banking, uh, BFS eh lot of which go in banking uh, casa credit underwriting.
[00:43:10] Have then there are a lot of student which are nowadays going in the delivery and logistics as well. Warehousing management. of hub Cubs dusre Mein saman dekhna hai retail Mein bhi coffee niche jaate Hain do
[00:43:23] Akshay: You also like fix their English? I'm assuming that would be a problem for a lot of kids. Right. Especially getting good jobs that English fluency for.
[00:43:31] Ashish: So India me nah, I think only time you need English is in the interviews. project,
[00:43:48] So internally at Sandstone, we focus a lot more on the communication that you should be good in communication irrespective of language.
[00:43:57] You should know how to articulate and [00:44:00] express yourself, but the mode of delivery in sandstone is English. So we get lot of requests from student that can we have mode of delivery in our regional language? Till now, we have not done that because we know that if you have to crack interview opco uthna English ko kana chahi eh.
[00:44:17] Akshay: In pay after placements? The college fees also paid after placements because one component of payment is col.
[00:44:23] Ashish: Okay Yeah. So that was also, which was hitting us hard because colleges were not someone who would agree that, okay, we will work with you and pay after placement.
[00:44:31] Akshay: You were financing the college
[00:44:33] Ashish: then like, so we were getting some money from student of front. So primarily colleges revenue share. Were going from that. And then we were not getting even a single penny till the time a student
[00:44:44] Akshay: graduate that was the same Crownit problem. Like
[00:44:47] Ashish: That was the same Crownit problem merchants
[00:44:49] Akshay: paying after you generated business for them.
[00:44:52] Right? How do you do student acquisition?
[00:44:54] Ashish: So for that, we do everything.
[00:44:56] We are everywhere. We do like offline. . Trade, teacher education fair We have a very, very robust and very thick school connect program. Our school students educate, not career fair. So what we do in a school is that school options. So we have a sort of a sunstone rise. We have a program, so we don't want to be one of those data collect because that it's not a value add for anyone. So we have a program which we call Sandstone Rise. So in during that program as one of our, let's say person goes take them through our presentation, then a student has to go through a career discovery test. So basis, that test student gets to know that what are his core skill set, what are the kind of jobs, what are the kind of courses that he should pursue?
[00:45:58] And we don't do that Kia [00:46:00] BC I he karo, we give them like list of three, four options that BC eh me apki 80 percent probability that you'll do good, these are the kind of jobs that you will do well. Then we have a app on which student can come and he can also. Take sort of a sampling experience as well.
[00:46:16] So we also run one week long UG programs and PG program one week, BCA one week BBA, one week MBA where you learn about those programs, what to expect in BCA, what kind of education will happen, what kinda jobs you can expect, and all those things. What will skill you'll build in BCA so those kinda one week, these UG programs sort of work.
[00:46:36] And that's basically our school connect program. In
[00:46:38] Akshay: the last one year, I think you've raised more than 60 million dollars, right?
[00:46:41] Ashish: We have raised I think overall, yeah, you can say debt and equity combined in that range. Yeah. What is the,
[00:46:48] Akshay: I mean, what makes investors so excited about what Sunstone is doing?
[00:46:52] I mean, you know, this is a very, very big amount of money you've raised in just a year. So I wanna understand what is it that is making investors excited? Yeah.
[00:47:00] Ashish: So I think It's primarily the segment that we are going after. And the approach that we are taking to solve the education problem.
[00:47:10] One is that I'm not creating a separate layer, like
[00:47:14] all of those things. I'm trying to fix the problem within your college days itself. So if I'm able to fix this problem within college, there's, there is no need for all these boot camps and everything, I have a advantage over others that, okay, I am starting early in a student life. I am, capturing him early and I have a larger time with the student.
[00:47:35] I am not in rush. I have four years with me. So that is one. Secondly the segment that we are going after, we are not going after the top 10% segment. We are going after the middle segment, top 10% Kche, and I create a next 20, 30%. And this is where the real India is sitting. And like we have around [00:48:00] 25% students who come from farming backgrounds. So this is the segment which is becoming aware about education.
[00:48:07] And this is the segment which is, which can like, create large impact in the overall GDP and the economy of the country as well. So I think this is something which is not only giving excitement to investor, this is something that keeps us driving also every single day.
[00:48:23] Akshay: What's on the roadmap for you? One way it could be that you become like a complete college operator, like, where you take over the college and it becomes like a sandstone college. Is that something that you wanna do? Like say what all your rooms does with the townhouse, where they're running it?
[00:48:39] Ashish: So, no. So that is that is not something that is on the pipeline or that's not something which is on the horizon because we are not in the business of like running physical assets. That's not something that we are good at.
[00:48:52] That's not something which comes naturally to us. Then that's because you ask how do you, like if you're keeping the same fee, how do you make money and how do you become profitable?
[00:49:01] So for me to become profitable, I have to ensure that my customer acquisition cost is at lower so that I don't have to increase my fee. So primarily the roadmap is that we have launched UG courses last year. We have launched tech courses last year and we now know that we have done well on the management side.
[00:49:17] We understand management. Now, the focus is for next two years is only to do UG and only to focus on tech side of courses. So we have it's, see, it's a learning that we build. It's not that ki. First year we decided now we will do UG, now we will do tech, and from six months later we will become like perfect at that.
[00:49:35] Akshay: And what's your current ARR?
[00:49:37] Ashish: So I'll tell you some numbers.
[00:49:38] So on an average, our fees is around 3.5 lakhs rupees overall that includes college share and our share. This year we have, we will be enrolling around 4,500 our students. And then obviously our plan is to grow two weeks. So this was 4,500 was 2022. And for us, the admission season sort of ends in September. We all started working on the 2023 sort of admission season. So for that 23, we are targeting to do around 9,000 odd overall enrollment.
[00:50:07] So group 2x from AR. So every year consistently we have been growing between 2.5x to 3x this year is what we are kept keeping a slightly lesser target for ourself. We are not targeting to grow 3x, we are targeting to grow 2x from here.
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