Creator Economy meets EdTech- Physics Wallah!🎥📚
Creation & access of edu. content should be democratised & we are witnessing that with growth of creator economy & tech enablers. Here's how Physics Wallah is tapping on this massive opportunity!
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For an average person, education is a passport to a better future. There are several examples of individuals born into economically underprivileged families being able to raise their families into financial security upon receiving quality education. Unfortunately, in emerging markets like India, the access to education is skewed towards the privileged, leading to a vicious cycle of rich getting richer...
In the last few years, we have seen immense innovation in education across technology as well as business, but not as much on affordability.
Over 70% Indian Households survive on less than $8500 annually 🇮🇳
There are over ~300M households in India, with 1.4M schools and 250-300M K12 students. According to 2018 statistics, 76% households belong to lower and lower-middle class. For the students belonging to these households, it’s not an easy ride to reach the upper middle class income levels and onwards, given the extent of privatisation in education system.
There is cut-throat competition across different levels in Indian education system that has made after-school/ test-prep tutoring necessary for students to succeed in competitive exams.
Given the above, affordable and accessible means of education will be very important for the progression of the society and provide for a levelling field going forward.
EdTech companies are marketing machines!💰
EdTech companies have been blessed by venture capital, and especially the ones focusing on direct-to-parent/ student. A lot of this capital is ultimately used in acquiring the customer, and since the marketing budget from different companies is chasing the same user, the cost of acquiring a user is increasing rapidly.
Even after charging ~$500, EdTech platforms are finding it hard to make money because of increasing CAC.
Moreover, the tier 2-price conscious-user is often neglected by the platforms as they have not focused on localising for regional languages.
PS: India has over 22 official regional languages.
Decentralisation of EdTech- meet Physics Wallah (PW) 🪃
In 2014, Alakh Pandey started a YouTube channel teaching Physics and Chemistry to students and gained popularity overtime for test prep content for JEE and NEET (science entrance exams). After building traction over YouTube and credibility- PW launched a platform in 2020- providing recorded and live content to the students.
This is classic case of star teacher model where Alakh Pandey has built massive following on YouTube, expanded across subjects and then converted the free YouTube students for paid courses- offering notes, recorded lectures and 1:many live classes at the most affordable prices.
PW makes money while acquiring user whereas other EdTechs burn money!💰🔥
With the YouTube brand, PW has reduced its reliance on performance marketing, further reducing the cost of user acquisition- which is happening through youtube funnel.
On average- PW YouTube videos seem to get ~1M views of high intent learners [with high rate of conversion on PW platform]. Instead of investing money on user acquisition, PW is making ad revenue from YouTube.
Pricing → Most affordable test prep platform! 🏷️
My favourite thing about PW is pricing - it is the most affordable education platform pan-India. PW courses are naturally a better choice for the segment looking for affordable options.
Even after mass pricing, PW’s unit economics are very healthy, with over 95% gross margin and negligible CAC.
With this pricing, it has enabled masses to access quality education and at the same time PW operates as a profitable and capital efficient venture.
PW Ecosystem- Online Merged Offline (OMO) 💻👩🏫
With advent of Covid, learners have realised that learning will happen in a hybrid mode. With the offline centers, PW is also capitalising on the OMO approach which is gaining popularity among EdTech companies, and enabling the user to choose the preferred medium of learning.
Key man risk? Maybe 🤔
As the name suggests, Physics Wallah denotes Alakh Pandey, who is popular in students for teaching Physics. As the platform pursues diversification across courses, the users might not be as excited to learn from other instructors as Alakh Sir. Intuitively, an individual is not scalable...but the jury is out.
In fact, it has been seen in some institutes that when the star teacher moves out, the students also follow the teacher.
The star teacher model is not unique to India, but is proven globally!
Anecdotally, BYJU’s also started on Byju Raveendran’s credibility as a teacher and has become a household name across the world.
As I write this, PW is raising its first venture capital round of ~$100M at unicorn valuation.
There is a rage of EdTech Creators! 🔥
Infact, Entri.app- venture funded vernacular EdTech platform has acquired TS Madaan- YouTube channel for English learning.
There are other successful creators globally venturing into EdTech. Most of us have seen Nas Daily- channel started by Nuseir Yassin- creating general knowledge content across the world- with 7M subscribers on YouTube and 23M on Facebook.
In 2021, Nuseir announced the launch of his EdTech company- Nas Academy- a managed marketplace of courses by successful creators in their respective domains.
It’s the obvious next step in the journey of a popular creator focusing on education content, to monetize their knowledge, since the biggest challenge is distribution...which is solved by these creators.
Creator Economy can challenge the status quo of EdTech industry! 📽️
It’s really difficult to become an influencer, if the target is to become one. Unless one enjoys the journey of content creation, it’s not feasible to expect massive following and views as the the first leg of the journey is usually slow and sluggish. Individuals who enjoy the journey are able to maintain the consistency and cross the chasm and see results.
With platforms like Kajabi (Teachmore), anyone can start an EdTech business with a few clicks. This creates a massive opportunity for educators on YouTube to not just rely on ad revenue but also monetize their viewership by providing live classes, premium content, etc.
Distribution, distribution and distribution!
Relevance of creators imparting education online- on channels like YouTube, Telegram, etc. will always be there since they are solving for a painstaking problem of distribution/ customer acquisition cost- something which EdTech companies have been struggling with.
Early-stage VCs betting on creators?
Gaming studios bet on games, record labels bet on artists and so on- with a hit and miss approach. Should early stage VCs consider taking bets on creators before they have blossomed? Food for thought.
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