MediaVidea: 2021-08-08

Monday, August 09, 2021

Can We Make Online Tutoring To Go Non-profit In India?

The big news is that the State Council, which is China's highest governing body, has passed orders for after school tutoring companies to go non-profit, and also banning them from going public or raising foreign capital. No company can now invest in or buy online education startups involved in out-of-school teaching.

To reduce the cognitive burden on school kids, China's rulers have also put limits on tutoring hours during weekends and vacations

Three reasons have been cited for the new rules.

One, the Chinese government believes that high private tutoring fees are a huge burden on young families, who then are discouraged from having more kids, and China now wants to reverse the adverse effects of 'one child' rule.

Two, the Chinese government wants to put an end to the unethical practices of false advertising and VC capital-induced pricing wars by Edtech startups. For example, most Edtech startups heavily promote cheap trial classes. However, once the trial period is over, Chinese parents find they have signed for expensive courses, which they were not prepared for.

Three, and this is most important, Edtech is doing nothing to address underprivileged children. If anything, Edtech startups go all out to influence impressionable parents from lower income groups, pushing to sign up for courses that are supposed to be the answers to all problems in life. And, the Chinese government does not want an angry populace.

So, can we make online tutoring to go non-profit in India?

We should. But we won't. Read on.

One, while China boasts of multiple multi-billion dollar Edtech startups, Byju's in India is fast becoming a monopoly, using all the VC money to buy all other Edtech company. As of writing, Vedantu is next up for Byju's greedy kitty, and only UnAcademy seems left in the other corner. Monopoly in any business is undesirable. Monopoky in education, more so.

Two, there is something very objectionable about Byju's pricing.

I tried to look for Byju's pricing for its various products and most of time, Google showed me spammy websites or a web page on Byju's showing the Rs. 2000 first month trial offer.

Having found the product pages after exploring the Websites, and not relying on Google, I found the answer to 'How much does Byju's cost?'

Byju's pricing:

Class 1 - 3: Rs. 3,333.33/month

Class 5-10 Math & Science: Rs. 26,000.00 (Rs. 2166 / month)

Class 11, JEE 2023, English: Rs. 135,000.00

And so on. pricing for competitive exams is much, much higher.

And you thought the internet would make education affordable.

An average city - based parent is paying Rs. 2000 - 7000/ month as school fees already. Tack on the 3-4000/month cost of Byju's. Much has been written abut Covid-19 being good to Edtech companies. No one is writing about the burden on parents and how much benefit online learning can be to young students.

Three, the kind of dog-eat-dog work culture and revenues-at-all-cost business ethic at Byjus. This may or may not be the norm in many Indian startups today.

But first, you must understand what Byju's really is.

Byjus is a big VC-funded education marketing company, not an Edtech company.

Byju's the education marketing company depends on an army of 40000+ sales people.

The modus operandi is simple: Hire desperate graduates from India's interminable and numerous tech and business schools, promise them Rs. 7-10 lakh packages, train them the basics of sales and push them out into India's dusty streets, making shady deals with school teachers (who force student sin their class to do some quiz, and the Byju's starts to spam you) and guilt-tripping lower middle class Indian parents ('apka bachha bahut kamzor hai math mein') into signing up for EMIs on expensive / overpriced packages of ho-hum quality educational videos, far better quality versions of which are freely available on Youtube and Khan Academy.

If these poor new grads (who studied IT but are now doing sales) are not doing enough revenue, Byjus then uses highly paid sports and entertainment celebrities to influence gullible parents, who never pause to ask where Shah Rukh Khan sends his kids to study (pssst...it is 'phoren').

To get an idea of Byju's sales tactics, read this Reddit post titled 'BYJUs BDA feeling proud of putting a lower-middle-class family into an EMI trap'

From the thread:

True story: was approached by a sales guy in Big Bazaar while shopping. Saw my lil one toddling around and came upto me to discuss an awesome package for the kid. I looked at him and then at my kid. I told him the kid was a year and half old. He looked as if he couldn't comprehend this info as if why i wouldn't even listen to his scheme. He seemed disappointed.

But then i realised, the brief given to them is if you see a little kid, irrespective of the age just throw the bait, let the maa-baap bite.

Another relevant thread about Byju's: How is Byjus able to generate a revenue of $72m in a country where majority of its population is middle class, and of course a fair share below the poverty line?

This brings me again back to the question: Can we make online tutoring to go non-profit in India?

NO!

The government is on the side of business.

Farmers, students, jobs, migrants, and minorities do not matter.

The middle class matters much less.

What will the middle class do?

Revolt?

Ha!

I understand you got to make money.

But, in a post-Piketty, aware-of-the-1% world, it matters who makes the money and how the money is being made.

According to Crunchbase, Byjus' has received $2.7 billion in funding, which amounts to Rs. 20000 crores. This means, the rich are going to extract Rs. 20000 cr plus interest. All from selling over-priced, redundant videos.

Media companies, private equity, celebrities, search engines...everyone is making money from the Rs. 20000 cr+ gravy train! India's media will spin the China story as being good for India, which will now become a more attractive target for Edtech investments.

But, teachers are not going to become millionaires. Almost no one among the 40000-strong sales army will become a a crorepati. No one in the Byju's support center will win the 'Kaun Banega Crorepati' lottery either.

The extraction of value from India's already stressed middle class will continue unabated.

How much would it takes to create videos on every chapter in every subject across every grade?

Taking an average of 15 chapters for subject, it is about 1200 videos, 1200 chapter, and 1200 quizzes. Let's be generous to our content developers / Subject matter experts and say it will cost Rs. 100 crores. Add in some extra couple of crores for translation.

I am sure the figure will be less than 0.5% of what Byju's has received in funding.

What else? Oh yes. Establish a support center for students, answering problems, offering mentoring and so on. Is the 2-3000/ month that Byju's charges for support services? I am not so sure. At Rs. 3 lakh/ teacher per annum (Rs. 25000/month), an army of 1000 teachers would cost Rs. 30 crore/annum.

So, You can create a comprehensive online learning tool, we need Rs. 130 crore (Rs. 100 cr + Rs. 30 crore Annual cost).

Or, you can curate all the best videos on Youtube in one place and offer teacher support and tests only.

What else can we do?

A lot.

We can create and / or share free / very low cost educational resources

- in multiple languages and made available everywhere the students are.

After all this bhashan, what rashan am I bringing in the house?

Some of the work I have been involved in

1. Free directory of educational resources online.

For example:

Khan Academy Videos: Class 1 math (India)

Khan Academy Videos: Class 2 math (India)