LEAD School- Oyo for Education? 🏫📚🇮🇳
Started in 2013, LEAD School has taken its SAAS powered by curriculum offering to 2000+ schools across the country. An exciting consumer story lies ahead, let's find out how LEAD can capture it!
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One of the key expectations of booking a stay from a branded hotel chain platform, like Oyo is Standard Experience! While selecting a school for their little ones, parents have lot of trouble- seek references from peer parents, understand pedagogy, fee payment, etc. Imagine deciding on a school from a nationally recognized brand- where most of the above parameters are standard with little or no information asymmetry. Let’s find out how LEAD School is building a nationally recognized education brand!
India has over 1.4M schools with only 49.5% students accessing public education! 🎒
Pupil to Teacher ratio in India is almost double of China, indicating lower quality of education.
One of my favorite Ted Talks, explaining the importance of Education for economic growth.
Overall, ~$35B is spent on private schools tuition fees in India. ~80% students in private unaided schools attend low income private schools, also known as ‘Affordable Private Schools’. These schools usually cost below INR 20,000 or $273 annually, and sustain entirely on fees paid by parents.
Due to pandemic, online education has proven to be revolutionary but has also caused fatigue; students and parents have expressed strong desire to return to the offline mode. In steady state, I feel learning would be done in hybrid mode- online merged offline- best of both the worlds.
There seems to be a significant gap in public education infrastructure in India, hence private intervention is important.
Majority schools in India operate like SMBs with lack of learning resources and digitization. Management of schools on paper records or excel files with data sitting in silos- doesn’t provide for any intelligence but inefficiency.
‘Unqualified teachers’ is a common problem plagued by lack of standard curriculum, even though the government provides standards through NCERT.
Communication between parents, students and teachers happen across platforms like whatsapp, google classroom, emails etc. It’s difficult for parents to track the performance of their children.
Most importantly, while deciding on school admission, parents have to run around and seek references to validate the quality of school, teachers, learning environment, etc. which is a tiresome process coupled with information asymmetry.
“When you educate one person you can change a life, when you educate many you can change the world”- Shai Reshef
LEAD School: Admissions to Assessment 🖥️
LEAD School has built a SAAS platform offering system essential ERP for education, helping low income private schools manage ‘admissions to assessment’.
With LEAD's Nucleus Academic system, the school administration can easily allocate teachers, manage lectures, assessments, add/remove subjects and manage learning resources and access curriculum developed by experts.
LEAD builds curriculum for the schools in order to provide for a standardized pedagogy for teachers and a wholesome experience for students.
LEAD is solving a complex problem! 🤯
System essential SAAS becoming a consumer brand? 👪
LEAD’s TV Campaign- Inviting parents to join a LEAD Powered School
With the most recent campaigns of LEAD, it seems that apart from solving the infrastructure gap for schools, it also wants to solve for demand generation with LEAD’s branding. If LEAD powered schools are perceived to have a consistent and superior experience across, then it would ease decision making for parents- in terms of choosing between a LEAD powered school and a regular school.
If LEAD is able to build a branded chain of schools, remaining asset light, it could be a very promising business opportunity, since schools in India have high LTV, as students tend to spend several years in same school. It could also enable LEAD to move to a take rate business model rather than a fixed micro SAAS fees of $40 per student per year.
B2B2C Distribution Potential with data layer? 📈
LEAD has access to a large base of students and parents who are actively using the platform. It’s natural for the parents to seek for after tutoring support, in India. Moreover, LEAD has tons of data about the students and their performance across subjects, so it can contextually recommend courses which can help students strengthen their weak areas and so on. The key hypothesis here is incurring $0 CAC, unlike other B2C EdTech companies.
17ZuoYe from China tried to build $0 CAC B2B2C distribution but couldn’t get it right. Here are some learnings from their model.
Can BYJU’s do it? 😈
The NITI Aayog launched an initiative in partnership with EdTech giant BYJU’S, under which students of Classes 6-12 in government schools across 112 ‘Aspirational Districts’ will get free access to the company’s “premium learning resources”.
BYJU’s key motivation to build a LEAD School model:
High CAC for their existing business model can be reduced by distributing to schools
Availability of content and curriculum from existing business
Strong national brand in education
Risks/ concerns on the LEAD School Model 🧐
LEAD Schools targets schools which operate like SMBs and have tight cashflows. Hence, there is a need to ensure timely collection which could get tricky at times, especially Covid.
That said, if the school consistently misses payments, it could lose access to LEAD’s platform which would lead to lot of trouble due to high dependency on LEAD.
Due to B2B sales to school and a large feet on street team, the scale up is relatively gradual, unlike B2C platforms. It could take several weeks to convert a school to sign a 3 year contract with LEAD. Growth is not just a function of marketing but well managed sales efforts, operations and collections.
LEAD’s larger play seems to be the oyo-fication of the model, but that needs different kind of skills and mind set. Company needs to rope in leadership with deep experience of building consumer brands and inherit a consumer DNA.
LEAD School has been able to solve a very complex problem with an all-rounded solution and has clear potential to build a consumer brand- empowering education across the country.
Oldrope turns 1! 🕯️
This newsletter marks 1 year anniversary of Old Rope. Over the last year, I have been consistently writing my thoughts on EdTech, Consumer Tech China, SEA, etc. and it wouldn’t have been possible without constant support and feedback of my readers and well-wishers! Thank you 🙏
The power of Oyo comes because it is an internet business. The decision of "To stay at Oyo or not" is taken by the customer in the "internet world". Oyo is very similar in its dynamics to Uber in that sense.
In contrast the branded PG business is an offline business. The decision of the customer to stay in a PG happens in the "offline world". Oyo realised this the hard way in Oyo Life (their branded PG business which bombed)
IMHO, Lead School is an offline business which is more like Oyo PG than Oyo Hotels. Expect the business to become harder as they scale. The parents will not feel obligated to send their child in a particular Lead Branch which is not doing well - no leverage of scale really - every single school has to excel on its own merit.
Lead has a great mission, and is driven by passionate founders but its success will lie in operational excellence and not on harnessing the power of internet.
Thanks Rahul for writing about LEAD with depth and rigour. Would love to invite you over for a chat and share how we are thinking about transforming education in India via schools - Sumeet