Learn to last: the ‘antifragile’ opportunity in India’s higher-education sector
We talk about building companies to last; can individuals “learn to last?? A new breed of entrepreneurs in India are working hard to help people exactly do that – to become antifragile – by reskilling themselves to take advantage of the upside of new technologies. They are filling a gap left by universities, which have failed to keep pace with changing demands of the industry.
Published November 27, 2018
The story of Detroit offers a stark lesson on the fragility of jobs in a world of accelerating change.
Once the capital of the world’s automotive industry, Detroit went from a buzzing city of over 1.9 million at its peak in 1950 to a relative ghost town of under 700,000 as the auto industry moved production to lower-cost locations like Mexico and China, taking 90% of the city’s manufacturing jobs along the way. An entire city was disrupted, impacting over a million people and their livelihoods, in just one generation.
If low-cost manufacturing created so much disruption, what impact should we expect from newer fields like robotics and AI? In a thought-provoking book called ‘Antifragile’, Nassim Taleb defines anything that has more upside than downside from random events, or certain shocks, as antifragile and the reverse as fragile. When you examine the potential impact these fast-changing technologies will have on almost every industry through this lens, it’s clear that many jobs are fragile – and that there are many more Detroits in the making.
We talk about building companies to last; can individuals “learn to last”?
A new breed of entrepreneurs in India are working hard to help people exactly do that – to become antifragile – by reskilling themselves to take advantage of the upside of new technologies. They are filling a gap left by universities, which have failed to keep pace with changing demands of the industry. In a country that employs millions in the knowledge industry (>4M in just IT and BPO alone), the massive challenge of reskilling in response to technology evolution is throwing open a multi-billion-dollar opportunity for education entrepreneurs.
It has been a winding journey for this sector, which we’ve watched evolve over the last 10 years. We believe we are in the third generation of this evolution – and it’s a generation that Sequoia India is very excited about.
When old institutions can’t keep pace with new markets
My dad was a math professor who retired after 36 loyal years at an institution which is over 180 years old. Such institutions today find it hard to attract and retain good talent. The best talent is going to consulting, investment banking or tech, where they get paid a lot more.
Part of the problem is that India has historically seen very little funding flow into universities for research. This stands in sharp contrast to the West, where there is significant investment from corporations into research in collaboration with universities. Lack of funding for research, and low pay, makes it harder for Indian universities to work on cutting-edge sectors, attract bright talent and hence build enough expertise to offer programs in these new ‘future ready’ areas.
That’s left India’s higher education industry ripe for disruption.
The attempts so far have focused on employment readiness for freshers. But there’s a huge opportunity in focusing on upskilling current employees in IT, financial services and many other sectors who want to be future proofed.
We have watched education companies evolve over the last 10 years, and it’s clear that a new generation of high quality startups is starting to emerge that is focused on this opportunity. These young companies are helping employees reskill themselves to adapt to the digital economy, and are using technology to bring cutting-edge, industry-ratified education programs to consumers at scale. This is a generation with real promise; with an eye on the real need in the market, delivery models that focus on learning outcomes and employment readiness and the right ethos of long-term institution building.
Evolution of online higher education in India
The first crop of higher education startups flourished due to a demand for affordable MBAs. India churns out over 200k MBAs a year. Many of these management graduates end up in fairly low-paying jobs like FMCG sales and pharma sales – neither of which are places to put your management learning to any real test. Nonetheless, Indians widely feel that MBA degrees still improve your chances to differentiate yourself, both in the job market and the marriage market!
The demand for MBAs led to the launch of the first generation of distance programs– some from IGNOU (India’s largest open university), which alone has 5 million students in its distant learning program – and many from other state open universities. The pedagogy relied on books that were mailed, with exams to weed out those that weren’t tracking. The wave of companies that won were those that had the ability to grant degrees and provide some offline support.
In the last decade, we have seen the second-generation of distance programs launched by entrepreneurs who were collaborating with open universities or sometime with a 3rd rung foreign university to build online versions of the distance MBA programs. Many of these players, however, were sales organizations who were peddling a cheap MBA online. There was little focus on academic excellence or long-term institution building. As expected, few of those survive today.
Today, there’s a third generation of online higher-education companies who bring a completely different approach, focus and level of quality to the table. Founded by entrepreneurs who care for the cause, companies like Eruditus, Great Learning and Upgrad started with the vision to really help bridge the gap in reskilling — and focused on working employees. The model is not to sell them a degree or promise them a job. The core aspiration is to build enduring education brands online, by genuinely helping students master cutting-edge concepts, including data sciences, fintech, cloud computing, ML and AI, to prepare for the jobs of the future.
Why this new crop is designed to win?
To understand why we are excited about these third-generation companies, we need to understand the backgrounds of these founders, the philosophy of their approach and the design choices they have made.
Right people: The new crop of founders are best-in-class entrepreneurs – most of whom have personally experienced the benefits of high quality education programs and are not coming at this problem with a “hammer looking for a nail” approach built on an online platform play. Instead, they’re starting with a customer-centric approach and a desire to help those customers achieve their aspirations. They have built teams who bring a strong mix of business (content, marketing, education) and technology (digital, platform buildout) expertise.
Right philosophy: The philosophy of most of these companies hinges on providing lifelong learning opportunities to their consumers – not on delivering just degrees. They are here to build enduring education brands that deliver real learning outcomes. By taking the focus away from accredited degrees, they are able to focus on what it really takes to win – which is to deliver superior learning.
Right decision choices: There are some thoughtful design choices these companies have made:
· Targeting mid to senior professionals with 3-15 years of work experience. This segment understands the value of continuous learning programs – and has the ability to pay.
· Offering long-term courses instead of short fixes, which ensures only a certain serious student will join the program as it requires strong motivation to do the hard work to get through longer programs. This self-selection combined with higher ticket sizes (usually $1500-$5000) ensures high completion rates (80-90% vs low <10% for MOOCs).
· Taking an online-led but omni-channel approach to learning delivery. This results in being able to combine the best of both worlds – asynchronous high-quality delivery through videos, augmented by offline classes at some frequency to enable doubt clearance and teamwork.
· Replicating the experience of being part of a class by forming cohorts of students and providing the opportunity to interact both online and offline to foster a sense of community and belonging, which encourages higher completion rates and richer outcomes.
· Providing high-touch mentoring support to help students keep pace with the program and ensuring enough motivation and guidance is provided for them to get through.
· Creating a platform-led approach for management of all work flows – from student acquisition to assessment, mentoring and career support – which allows them to scale to a large number of students without linear increase in operational staff. These systems are built to scale without sacrificing student experience.
These are online first education companies that take advantage of technology advancements available today and combine them with the key ingredients of what makes a traditional education institution successful.
Future of learning
India’s higher and continuous education industry is entering a phase of product maturity. We believe that the future of continuous learning will be a variant of the current approach which solves for access, scale and efficacy thoughtfully. But the market is just waking up to this opportunity and a set of entrepreneurs are emerging as leaders in this space.
These startups are determined to make careers antifragile by helping people master topics like data sciences or AI as they become more mainstream across industries. With the risk of career disruption being real, thousands of students are already flocking to these platforms and voting with their dollars. Byju’s, a Sequoia India-backed company that we’ve had the privilege to partner with since their early days, has gone on to put Indian K12 education on the global map. The higher-education industry may well produce the country’s next education unicorn. Sequoia India, for one, is doing a close read!