Latest / The Neon Show / The AI Moat Everyone is Ignoring | Phalgun Kompalli, Founder UpGrad and Bodhium Labs

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The AI Moat Everyone is Ignoring | Phalgun Kompalli, Founder UpGrad and Bodhium Labs · The Neon Show

0:00
SPEAKER_01: 50% of consumers, 90% of enterprises are moved well alive, especially in high research categories like education, travel, healthcare, software buying, the discovery, the decision making, the influence, and the transactions are going to move well alive.
0:13
SPEAKER_00: Everything entered in the market suddenly became very crowded.
0:16
SPEAKER_01: The biggest challenge was not competition.
0:18
SPEAKER_01: So let's say you got 100B, 1% joint.
0:21
SPEAKER_01: 98 of them dropped off.
0:22
SPEAKER_01: It's like somebody says we're losing to Netflix.
0:24
SPEAKER_01: Our competition is people wanting to do something else.
0:26
SPEAKER_01: So for us, it was an obsession about how can you create credible products that can drive engagement and outcomes for learners.
0:34
SPEAKER_00: What keeps you awake at night?
0:35
SPEAKER_00: Like most entrepreneurs fear that prod would itself replace them.
0:40
SPEAKER_01: We don't have that fear.
0:41
SPEAKER_00: Because hi, this is Dhatal Uwaliya.
0:47
SPEAKER_00: Welcome on the Neon Show.
0:48
SPEAKER_00: I'm your host and managing partner for Neon Fund, a fund that invests at seed stages in some of the best enterprise AI companies coming out of India for the world, including Atomic Works, PodDraft, CloudSec.
1:00
SPEAKER_00: Today I have with me Falgun Kumpalli, one of the co-founders of Upgrad.
1:04
SPEAKER_00: Falgun, welcome on the Neon show.
1:06
SPEAKER_01: Thank you.
1:07
SPEAKER_01: Pleasure to be here.
1:08
SPEAKER_00: Falgun have known you for a couple of years, right?
1:10
SPEAKER_00: Met you in 2023.
1:12
SPEAKER_00: Upgrad since then has evolved a lot, right?
1:15
SPEAKER_00: So first of all, let me start with your journey, right?
1:18
SPEAKER_00: How did the four of you start at Upgrad?
1:21
SPEAKER_00: How did you get Ronnie to be a co-founder and investor?
1:24
SPEAKER_01: Yeah, uh as I said, pleasure to be here.
1:27
SPEAKER_01: Thanks for inviting me.
1:28
SPEAKER_01: Uh going back to the Upgrad story, uh, I was a consultant at Parthenon before starting Upgrad, which is this boutique education consulting firm.
1:37
SPEAKER_01: So we did a lot of work in global education.
1:40
SPEAKER_01: And two of the other co-founders of Upgrad, Mayanc and Ravi, were also from Parthenon.
1:45
SPEAKER_01: So Mayank was actually my boss at Parthenon.
1:47
SPEAKER_01: So we were all very passionate about education and the potential there.
1:51
SPEAKER_01: And because we were doing global consulting work, one of the clear things we saw was that global education is broken.
1:58
SPEAKER_01: Uh, and there is an opportunity to really use technology to fix that in terms of better access, better affordability, better quality.
2:05
SPEAKER_01: Now, to the story of how we met Ronnie, uh, we were initially looking at some investors.
2:11
SPEAKER_01: So we went, met a bunch of investors uh to raise some seed capital.
2:15
SPEAKER_01: And as part of that, we met Ronnie, who was back then running a venture capital fund.
2:18
SPEAKER_01: I think it was called Unilaser.
2:20
SPEAKER_01: Unilaser.
2:21
SPEAKER_01: Yeah, Unilaser, correct.
2:22
SPEAKER_01: Uh, and he's told us that look, I am not actively investing, uh, but I really like the idea.
2:30
SPEAKER_01: I'm really passionate about education and the impact that it can create.
2:34
SPEAKER_01: And I like the team.
2:35
SPEAKER_01: So I want to come in as a co-founder and help really grow this business.
2:39
SPEAKER_01: Uh, so we thought about it for a little bit.
2:41
SPEAKER_01: Um, and then yeah, we decided that uh he will be a real value ad.
2:44
SPEAKER_01: So that's how the four of us got together and started upgrad in early 2015.
2:49
SPEAKER_00: And now you're starting in something very different that is from education.
2:53
SPEAKER_00: Tell us more about that.
2:54
SPEAKER_01: Yeah, I think uh one of the companies that I have started right now is called Bliss Labs.
3:00
SPEAKER_01: And the basic thing that is super exciting for me is that I think we are in the midst of a massive platform shift.
3:06
SPEAKER_01: It is almost like when people went from shopping and discovering products offline in supermarkets and stores to online where they were discovering products on Google or social.
3:16
SPEAKER_01: I think there is a platform shift coming again where now people are moving to LLMs to discover stuff, right?
3:21
SPEAKER_01: So today already there are various reports, including Gartner, that says that 50% of consumers have moved to LLMs to make buying decisions.
3:28
SPEAKER_01: 90% of enterprises have moved to LLMs, especially in high research categories like education, travel, healthcare, software buying.
3:37
SPEAKER_01: A lot of the discovery, the decision making, the influence, and the transactions are going to move to LLMs.
3:44
SPEAKER_01: And I think that brands have spent so much money, so much energy, trillions of dollars on optimizing for their presence on the existing platform to Google and social.
3:53
SPEAKER_01: And the shift is happening, and it's still very early, and it's like very clouded in that sense, and it'll unbox itself.
4:01
SPEAKER_01: And we believe there's a massive opportunity to help brands, customers use this very effectively.
4:06
SPEAKER_01: So that's the space that we're super interested in.
4:09
SPEAKER_01: Uh, we're also taking, we know it's a very, very tough problem also to understand how LLMs are reading content on the internet, how they're interpreting your brand, your products, how they're effectively communicating that to consumers.
4:24
SPEAKER_01: So it's all behind a little bit of a black box.
4:26
SPEAKER_01: So it's a really tough problem to think about and solve for.
4:29
SPEAKER_01: And that's where I think the founding team that came together, I think has a great mix of eclectic people.
4:35
SPEAKER_01: Uh, obviously, I you know my background, and I've already spoken about it.
4:38
SPEAKER_01: My other two co-founders, one is Professor Karte Kosanagar, who is a professor at Wharton for the last 22 years, one of the top academics in the world of AI and marketing and tech.
4:48
SPEAKER_01: He leads their AI school.
4:49
SPEAKER_01: Uh CL Entrepreneur, the other co-founder Krishna, who comes with a strong search and user intent background from DeepMind and Google Search and Yahoo! search before.
4:58
SPEAKER_01: So I think we have that research, engineering, tech, product, market.
5:03
SPEAKER_01: I think it's a good mix.
5:04
SPEAKER_01: And that's what is super exciting for me to be able to look at this platform shift and say that uh if we can build something meaningful here, I think it'll be very, very interesting.
5:13
SPEAKER_00: Also, how did you make a choice of starting a company again?
5:16
SPEAKER_00: Uh, you're at a point where you know the IPO was like or is around the corner for upgrades, whereas starting a company today, the 0-to-1 journey is again tough.
5:27
SPEAKER_01: So the upgrade IPO journey, whether it's around the corner or not, we'll see.
5:30
SPEAKER_01: Uh, that's uh yeah, that's a that's a different topic.
5:33
SPEAKER_01: Uh but coming to why I started again, I think for me personally, I moved to the US five years back, as I said.
5:41
SPEAKER_01: And one of the things that is super exciting is the current wave of AI, right?
5:49
SPEAKER_01: And I think there are so many things that can be done very differently.
5:52
SPEAKER_01: And uh just the excitement and the craziness of AI and where it is at today.
5:57
SPEAKER_01: I I kind of started feeling that it will be a missed opportunity if I don't build something now from zero to one and try and design.
6:05
SPEAKER_02: Yeah.
6:06
SPEAKER_01: That was my that was my primary motivation to go out and try and start again.
6:11
SPEAKER_01: Uh, because I think we are in a really exciting time uh with what is possible.
6:15
SPEAKER_01: Things are evolving super fast.
6:18
SPEAKER_01: This experience of starting up is very different from my first time experience of starting up in terms of the pace of things, in terms of the stress and anxiety around like things changing every day, but also the opportunity of building something truly amazing and uh at scale.
6:31
SPEAKER_01: So that's the excitement, and that's the reason I went back to starting a company.
6:35
SPEAKER_00: But the space that you are in in GEO, right?
6:37
SPEAKER_00: Yeah, it has a lot of companies, like around 50 to 100 companies.
6:41
SPEAKER_00: How do you build a differentiator moat?
6:44
SPEAKER_01: Yeah.
6:44
SPEAKER_01: So first, GEO is just our first product.
6:47
SPEAKER_01: Uh, and that in itself, I think, is very, very early days.
6:52
SPEAKER_01: Sure, there are 15, 20, maybe 100 companies, starting from the largest, maybe the profounds of the world, to the smallest bypecoders who are also offering a similar solution.
7:01
SPEAKER_01: But I think the market is so large.
7:03
SPEAKER_01: Just think about every single brand, every single company, every single SMA is spending a combined trillions of dollars on advertising every year, right?
7:15
SPEAKER_01: A lot of that is going to move to LLMs, is our thesis.
7:18
SPEAKER_01: Sure, a lot of those are going to be in the form of ads and are going to be taken away by the big labs, all of that stuff.
7:25
SPEAKER_01: But that being said, I think there is still space for a lot of people to succeed.
7:30
SPEAKER_01: Right.
7:30
SPEAKER_01: So that's why I am not as concerned about competition and how many they are, etc.
7:34
SPEAKER_01: I think it's still very, very, very early days.
7:37
SPEAKER_01: And, you know, if you can stay the course and build something for the next decade, I think this is a super exciting space to be in.
7:43
SPEAKER_01: And in that thought process, I said AI visibility is just one of our early products, right?
7:50
SPEAKER_01: And even there, we think of differentiation of like, okay, what are we doing differently there?
7:54
SPEAKER_01: So if you think of the product, there are three key parts to it, right?
7:58
SPEAKER_01: First is what are people asking about your company?
8:00
SPEAKER_01: Right?
8:01
SPEAKER_01: Nobody knows this.
8:02
SPEAKER_01: Tangibility or anthropic, nobody is releasing this data.
8:05
SPEAKER_01: Everybody's taking a guess.
8:07
SPEAKER_01: Now we have proprietary models where we believe we can give you the closest approximation of what people are realistically asking in long-form contextual multi-turn questions.
8:17
SPEAKER_01: And so that's the first differentiation.
8:19
SPEAKER_01: Second is okay, for those questions, then how do you show up?
8:22
SPEAKER_01: And giving you the analytics and the dashboarding around that.
8:27
SPEAKER_01: That is table sticks, but even there, I think we have a state-of-the-art platform in terms of figuring out exactly where you're showing up well, where you're not showing up well, what are the citations that are influencing it, what are your agent analytics, all of that stuff.
8:39
SPEAKER_01: And the last bit is now how do you actually influence uh these LLMs to portray your brand in the right way?
8:46
SPEAKER_01: And that's where a lot of it today is just old school throwing spaghetti at the world type approach that create a lot of content now with AI, we can write thousand articles in five minutes and just publish it and hope for the best.
8:59
SPEAKER_01: I don't think that will succeed.
9:00
SPEAKER_01: It's a bad approach from a technical standpoint because I think these labs and LLMs will figure it out pretty soon.
9:06
SPEAKER_01: Second, even from your own brand standpoint, you're kind of, as a marketer, you're killing the soul of your brand if you're saying I'm just putting a thousand articles out there and hoping for the best, right?
9:14
SPEAKER_01: So, what we are doing is that's where the research part comes in with my other co-founders and team, where we're a small team, but more than 50% of my team is researchers.
9:24
SPEAKER_01: How big is our team today?
9:25
SPEAKER_01: Uh, we're 10 people, uh, but all of them are engineers and researchers, and there are very few like actual DTM folks.
9:31
SPEAKER_01: Uh, so the core problem that we are trying to solve is how do you then predictably understand how LLMs are answering a question in terms of their fan-out queries, in terms of what articles they're reading, what snippets they're reading, and how can you then have a more scientific approach around influencing the LG?
9:50
SPEAKER_01: And I think those three parts, when you think about it, I think there is differentiation in itself.
9:54
SPEAKER_01: And I think most of our clients today see it, and that's why they're excited and we see a lot of success there.
10:00
SPEAKER_01: Yeah.
10:00
SPEAKER_01: Uh, but as I said, it's still very early days, a lot to be figured out uh for everybody.
10:06
SPEAKER_01: So I'm not as worried about competition and how many people are there today.
10:09
SPEAKER_00: Because you think it's a very large market.
10:11
SPEAKER_01: It's a very large market, it's very early, uh, and there's a lot uh to be built.
10:16
SPEAKER_00: So the rules of sales and marketing are changing very fast right now, right?
10:21
SPEAKER_00: Uh what keeps you awake at night?
10:24
SPEAKER_00: Like most entrepreneurs fear that cloud would itself replace them.
10:29
SPEAKER_00: Do you also have some of these kind of fears?
10:32
SPEAKER_01: Specifically for what we are doing, we don't have that fear, right?
10:36
SPEAKER_01: Because we are right now creating products to say our customers are brands.
10:43
SPEAKER_01: Right?
10:43
SPEAKER_01: So our customer is a Nike.
10:45
SPEAKER_01: And Nike is trying to say if somebody is searching on a Chat GPT or on a Claude or on a Croc, saying, I am six foot one with 84 kgs, I have a left ankle issue which is slightly dodgy in the past.
11:01
SPEAKER_01: What are the best running shoes if I want to run a marathon in September?
11:04
SPEAKER_01: And these are the long-form questions that somebody are asking.
11:07
SPEAKER_01: Now, ChatGPT can say, Chat GPT is not giving you 10 links that you click and read.
11:12
SPEAKER_01: ChatGPT is going and reading those links, it is picking what to read, and it is giving you an answer.
11:18
SPEAKER_01: Sometimes it's one, sometimes it's two, maybe it's three, but that's it.
11:21
SPEAKER_01: It can give you three brands.
11:22
SPEAKER_01: That can be Hoka, Brooks, Nike, it can be whatever else.
11:26
SPEAKER_02: Yeah.
11:26
SPEAKER_01: Now Nike has to figure out how to one understand how their brand is being portrayed and why, and then what they do about it so that they can be portrayed the right way.
11:35
SPEAKER_01: Uh so I don't think an open AI or an anthropic will ever go to Nike and say, I will help you win.
11:42
SPEAKER_01: Because that's unfair.
11:43
SPEAKER_01: Yeah.
11:43
SPEAKER_01: Right?
11:44
SPEAKER_01: What we are doing is that.
11:45
SPEAKER_01: So I think that's where there is a difference in terms of uh some of the other entrepreneurs, my friends, I know, sometimes have this fear of like, you know, with these model releases and their capabilities increasing every passing day, uh, they might become irrelevant.
12:01
SPEAKER_01: So in our case, I think that's less of an issue, at least for now.
12:06
SPEAKER_00: And in in your case specifically, because the market is changing so fast, when you're positioning yourself, like how much of it is service component versus product?
12:17
SPEAKER_01: So given how early we are, we deliberately kept it pretty service heavy, right?
12:23
SPEAKER_01: Because we want to be very, very integrated into understanding how our customers are using this and what else they are struggling with.
12:31
SPEAKER_01: Because this is only one of the small problems we are solving.
12:33
SPEAKER_01: So think of any team today sitting and like trying to deal with all the changes that are happening in the world of AI, right?
12:39
SPEAKER_01: We are just offering one small solution to solve for a specific problem, which is a good start.
12:44
SPEAKER_01: We need that wedge.
12:45
SPEAKER_01: And as I said, it's a good wedge, it's a massively growing wedge, and there are results to see for that.
12:50
SPEAKER_01: But we want to be very close and integrated with the service component because we want to understand what else are the massive challenges that they're struggling with and how can we expand our product suite.
13:01
SPEAKER_01: So, for that reason, deliberately, we spend a lot of time servicing our clients today.
13:07
SPEAKER_01: Now, how that model changes as we scale, we'll figure out what the best way to do that is.
13:12
SPEAKER_01: But right now, we are very, very heavily involved.
13:15
SPEAKER_01: We spend a lot of hours with our clients to make sure one, we get sharp feedback on our product, what it is doing, what it is not doing, where our computer is doing better, but also understand what are the other challenges that our clients are facing and what are the big problems that they're struggling with so that uh we can build something meaningful.
13:34
SPEAKER_00: And among the different problems that you could have chosen to build, you know, as second-time entrepreneur, you have more options.
13:39
SPEAKER_00: How did you choose only this option?
13:40
SPEAKER_00: You could have built it because your two co-founders are uh some of the best AI researchers, right?
13:45
SPEAKER_00: You could have chosen to build an AI research lab.
13:48
SPEAKER_01: We think of ourselves as an AI research lab, right?
13:50
SPEAKER_01: Uh, and our first product is uh AI visibility product.
13:53
SPEAKER_00: Yeah.
13:54
SPEAKER_01: So we are an AI research lab where we are thinking of problems starting from the immediate problem that brands are thinking about, which is AI visibility, then thinking of agenti commerce of tomorrow, whether or not you're visible is the first point of failure, right?
14:08
SPEAKER_01: If you don't even show up, then you have a problem.
14:10
SPEAKER_01: But after you show up, how do you fit into the scheme of AI commerce?
14:14
SPEAKER_01: Of is there a checkout window there?
14:17
SPEAKER_01: Are you being shown in the carousel?
14:19
SPEAKER_01: Are you showing up in the ads?
14:20
SPEAKER_01: There's so many like points of failure.
14:22
SPEAKER_01: Uh, then if somebody is clicking and going to your website, you show up, but they're going to a website to buy the product.
14:29
SPEAKER_01: Uh, how the how is that experience?
14:31
SPEAKER_01: Uh, all of these things need to be figured out.
14:34
SPEAKER_01: And we are doing a lot of research on agent e-commerce overall to figure out where we can have a strong play there.
14:40
SPEAKER_01: Then there is ads that ChatGPT will launch, and we don't know if there is some play there.
14:45
SPEAKER_01: Then there will be uh other stuff like data.
14:48
SPEAKER_01: Like we have so much data on the questions, how brands are showing up, etc., uh, and various points of failure when people are doing agentic uh commerce workflows.
14:59
SPEAKER_01: So, is this data valuable?
15:01
SPEAKER_01: Right?
15:01
SPEAKER_01: So there are multiple threads of research that we are pulling on here, and that's the exciting bit.
15:07
SPEAKER_01: Uh, so we do think of ourselves as an AI research lab to answer your question.
15:10
SPEAKER_01: And one of the first products is RAI visibility and GEO product.
15:16
SPEAKER_00: And why do you choose to not to be the first product?
15:20
SPEAKER_01: Because I think it's an easy one to build, uh, and we have some research on what is the best way to optimize for it.
15:27
SPEAKER_01: Because easy one to build in the sense that we felt that there is a clear differentiation, right?
15:33
SPEAKER_01: Most people, when they solve for the AEO problem, are either doing just visibility that this is how you shop, right?
15:41
SPEAKER_01: And a lot of marketers I talk to, CMOs and growth teams, are saying, interesting, but now what do I do?
15:48
SPEAKER_01: Where is the actionability of this insight?
15:51
SPEAKER_01: And if you push on actionability, the response that you get today is, oh, let's get AI to write thousand articles, like old school keyword gap analysis type, and Red Hat publish thousand articles, and you publish it, something will happen.
16:06
SPEAKER_01: It's a very lazy and poor approach to take.
16:08
SPEAKER_01: So that's where I think we said beyond showing up, the actionability needs to be very scientific in nature.
16:15
SPEAKER_01: And that's where we had the research to say that we can give you strategic content ideas in terms of how to change your existing pages.
16:23
SPEAKER_01: Forget 500, we don't even ask, we say five articles, new articles, and very specific reasons as to why you need to do it and the specific impact it'll have.
16:32
SPEAKER_01: So, given that we have that uh research, we felt that it's a top-of-the-mind problem that a lot of people are thinking of, and we have a very differentiated solution uh based on the research, and that's why uh we need to push it out.
16:47
SPEAKER_00: So, so there is there an inherent fear because usually in the last like since the service versus product differentiation came in, services has always got a lower multiple, is is not considered in the same packet as product.
17:02
SPEAKER_00: Do you think that changes in the AI era?
17:06
SPEAKER_01: I think it will.
17:08
SPEAKER_01: Now again, we are right now too young to think of multiples, right?
17:13
SPEAKER_01: Right now, our problems are how valuable is what we're building, right?
17:17
SPEAKER_01: And what are the other problem spaces where we can build more valuable products, right?
17:21
SPEAKER_01: So we are not even thinking of multiples right now.
17:24
SPEAKER_01: And sure, in the past, obviously, product uh and SaaS have gotten much larger multiples.
17:30
SPEAKER_01: Now SaaS is taking a hit.
17:32
SPEAKER_01: Now what it'll do.
17:33
SPEAKER_01: I'm not an expert on any of these things, but intuitively it does feel like services are more defensible right now.
17:42
SPEAKER_01: Uh ops businesses are more defensible.
17:44
SPEAKER_01: They might not be as crazily valued, but sure, there is a certain defensibility aspect to it which is tougher to replicate.
17:52
SPEAKER_01: Uh so where this will go, I feel like a strong combination of product and service is always what I have felt will succeed.
18:00
SPEAKER_01: And that's what we did with Upgrad, right?
18:02
SPEAKER_01: Like it's not just a content library where we said, okay, there's a product, now we can log in and serve.
18:06
SPEAKER_01: We had a fairly large customer success team that was making sure that you were getting the learning outcomes and career outcomes.
18:13
SPEAKER_01: Obviously, we don't want to build a million people organization.
18:16
SPEAKER_01: So, how do you then use technology to effectively make your consumer or client feel like they're getting the best possible service while you back and figure out what is the best way to do that?
18:26
SPEAKER_01: Uh, I think it's a good model.
18:28
SPEAKER_01: And as I said, I'm I feel like that's the intuitive way.
18:32
SPEAKER_01: You're the expert on SaaS, so maybe I'll ask you after the podcast.
18:35
SPEAKER_01: But from where we are, we are definitely very, very uh services heavy today because we are so early and we want to be as close to the client as possible.
18:43
SPEAKER_00: And what was different, let's say, while operating in India in the last five years you have operated in the US and sold in the US market, yeah.
18:50
SPEAKER_00: Right.
18:51
SPEAKER_00: Uh, how has your perspective changed of selling here?
18:55
SPEAKER_01: So here, I think uh it is a lot more enterprise heavy.
19:00
SPEAKER_01: Uh in India, for example, Upgrad was a predominantly direct-to-consumer company.
19:06
SPEAKER_01: We eventually did build a strong enterprise business, but it remains a fairly strong uh direct-to-consumer company, right?
19:12
SPEAKER_01: Here, we obviously also do direct-to-consumer, but we also realize that here enterprise is such a huge part.
19:18
SPEAKER_01: Uh, even in a category like education, employers spend a lot to uh educate and upskill their employees.
19:24
SPEAKER_01: So I think that we had to figure out in terms of how to set up a totally different enterprise uh sales motion.
19:30
SPEAKER_01: The second thing that was different was for me the working culture.
19:34
SPEAKER_01: I think in India it's very different from the US, where in India I think all of us are trained or brainwashed a certain way into like believing that uh micromanaging is important, uh, otherwise work doesn't get done.
19:52
SPEAKER_01: Here, I think that is absolutely not required or appreciated for that matter.
19:57
SPEAKER_01: Right.
19:58
SPEAKER_01: So I came here, I started working in my India style a little bit, and I think I got the feedback that uh look, we get it and uh we'll do it a certain way, and but it things will happen.
20:08
SPEAKER_01: And I must say that, yeah, people are like, I feel very disciplined and professional, and uh they get it done.
20:14
SPEAKER_01: Uh so I think that was the difference in terms of adjustment for me.
20:17
SPEAKER_01: Same with even our learners, right?
20:19
SPEAKER_01: So for the upgrad student in India, they would appreciate if we called them and said, Hey, look, you've not logged in for five days.
20:26
SPEAKER_01: Are you missing something?
20:27
SPEAKER_01: Can we help you with something?
20:28
SPEAKER_01: And they appreciated the follow-up.
20:31
SPEAKER_01: Here, if we called somebody, they would get really annoyed.
20:33
SPEAKER_01: They'd be like, Why are you calling me?
20:35
SPEAKER_01: Uh, I know I didn't log in for five days.
20:36
SPEAKER_01: Yeah, sure, you want to like push me, but just drop me an email, drop me a text.
20:40
SPEAKER_01: So I think uh here people are more responsive to like emails, texts, uh, and they actually take action based on that and they have a certain amount of like self-discipline.
20:48
SPEAKER_00: I think US, because of the culture that's the country has grown up in, they do their own dishes, our own homes, uh, drop the kids to school.
20:58
SPEAKER_00: The the market is largely self-served.
21:01
SPEAKER_00: They and when they want support, they'll ask for it.
21:05
SPEAKER_00: Yeah.
21:05
unknown: Yeah.
21:06
SPEAKER_01: And if you do it uh without their asking, they get annoyed.
21:08
SPEAKER_01: So that's a learning for me, uh, both from a consumer standpoint and from a team standpoint.
21:13
SPEAKER_00: Yeah, specifically now you are building in the in the B2B space and primarily selling in the in the US market, right?
21:21
SPEAKER_00: Building a great self-surf product in the US market goes a long way.
21:25
unknown: Yeah.
21:26
SPEAKER_00: Whereas India is completely opposite, right?
21:28
SPEAKER_00: An enterprise B2B SaaS product or an AI product.
21:31
SPEAKER_01: You need like power deployed engineers or like whatever you want to call them, uh CX uh to ensure that it is successful.
21:38
unknown: Yeah.
21:38
SPEAKER_00: But um uh, you know, in in US also, like uh the concept of FDs was pioneered by Palantir.
21:46
SPEAKER_01: So I think the more complex your product is, which in the case of Palantir, it is extremely complex.
21:51
SPEAKER_01: So you will need somebody like that to understand specific software integrations and workflows, etc.
21:56
SPEAKER_01: But you're right.
21:57
SPEAKER_01: I think that's also the beauty of self serve, right?
21:59
SPEAKER_01: Because it Can scale so fast.
22:02
SPEAKER_01: It doesn't have like the dependencies in scaling.
22:04
SPEAKER_01: So yeah, it's a good thing.
22:06
SPEAKER_01: It's a great opportunity.
22:08
SPEAKER_00: In your first time journey as an entrepreneur, right?
22:10
SPEAKER_00: What are the sum of tough things that you had to do?
22:13
SPEAKER_00: What are some things that you had to unlearn?
22:17
SPEAKER_01: I would say personally for me, I was a consultant.
22:22
SPEAKER_02: Yeah.
22:23
SPEAKER_01: So in consulting, there is this, I think, slight obsession with perfection, that every single slide, you can take five hours to create a slide, but it has to be perfect.
22:31
SPEAKER_01: Like not one spelling can be wrong, not one color tone can be different, and all of that stuff.
22:35
SPEAKER_01: Same, right?
22:36
SPEAKER_01: When you write an email, you're not writing as many emails as an early stage consultant in your life.
22:42
SPEAKER_01: But whenever you write it, it needs to be like well thought through, well structured, all of that stuff.
22:48
SPEAKER_01: So I came up from like that school of like being a consultant for four years.
22:52
SPEAKER_01: And when I came to becoming an entrepreneur, I think it was a whole different world.
22:56
SPEAKER_01: Where I'm like, here it's about keeping a certain threshold and then just moving fast, right?
23:02
SPEAKER_01: Uh even if you make some mistakes.
23:04
SPEAKER_01: I think that was the first big learning for me that if I keep getting obsessed about I'm not doing something or I'm not pushing a button unless I'm 100% sure, that is a sure, short way to fail.
23:18
SPEAKER_01: Right.
23:18
SPEAKER_01: Uh so that was my first big unlearning of like, I need to be comfortable with even if I'm only 80% sure, even if I know that these things are unknown or might go wrong or are mistakes.
23:28
SPEAKER_01: You know, it's just the natural course of things.
23:30
SPEAKER_01: And in the long run, that's the right way to learn.
23:32
SPEAKER_01: So I think that was the first big unlearning from where uh I came from.
23:37
SPEAKER_01: Uh the second thing, maybe the tough thing to do was, you know, team hiring and scale.
23:45
SPEAKER_01: Uh again, I worked at in consulting firms, it's pretty structured.
23:50
SPEAKER_01: Uh every two years you get promoted, if you're doing well, uh, hiring is not crazy, it's at a certain pace.
23:58
SPEAKER_01: I was working in a small 30, 40 people team overall.
24:02
SPEAKER_01: But when we moved and we started upgraded, and I think pretty fast we got our PMF.
24:07
SPEAKER_01: Uh we scaled from zero to 100 in probably two years, and we went from 100 to 1000 in like the next year, right?
24:14
SPEAKER_01: Because the product was working now, it's all about scaling.
24:17
SPEAKER_01: And I think in that process, we made a lot of mistakes around hiring and sometimes frankly overhiring.
24:24
SPEAKER_01: Yeah.
24:24
SPEAKER_01: Uh, because we expected demand to grow at a certain pace, it did not.
24:27
SPEAKER_01: And then, you know, that drags the organization down from definitely a culture standpoint when you scale that fast, and you need to be very rigorous around how you more than rigorous, you need to be very thoughtful around how you do that.
24:40
SPEAKER_01: And we were not in the early days.
24:42
SPEAKER_01: That was something that we had to learn the hard way.
24:44
SPEAKER_01: Uh, and the second thing would be when you overhire or when you hire wrong, having this conversation of we have to let somebody go is always extremely painful and tough.
24:54
SPEAKER_01: And the first time I had to do it, I still remember.
24:56
SPEAKER_01: I think it was like, yeah, it was it was a really tough thing to do.
25:00
SPEAKER_00: And what are you doing different in your second innings as an entrepreneur than the first time you did it upgrad?
25:06
SPEAKER_01: Yeah, so I think a few things I want to do differently is one, today, I think I want to be much more thoughtful, as I said, around hiring.
25:14
SPEAKER_01: Right.
25:15
SPEAKER_01: In the past, we made the mistake of just saying, okay, let's hire people and then scale.
25:19
SPEAKER_01: Right.
25:19
SPEAKER_01: It's almost in a certain sense of like throwing people at the problem and hoping it resolves at scale, right?
25:25
SPEAKER_01: I think one given where we are with technology and what's available today, but also second, in terms of my own maturity of like how to handle that.
25:32
SPEAKER_01: I think that's one big uh thing.
25:35
SPEAKER_01: The second thing I think is a big learning for me over time is just relationship management with your founders, with the team, how do you set the right culture, what you are responsible for, and being very clear about that and making sure that uh you show up for those things, I think uh is very important.
25:54
SPEAKER_01: And that's the second thing I'm trying to be better at.
25:56
SPEAKER_01: Uh, the third is, as you said, it's a whole different industry.
25:59
SPEAKER_01: Uh, there's a lot to learn.
26:01
SPEAKER_01: Uh, so I think the difference is that when I came into Upgrad from four years of Parsons on, I kind of knew a lot about online education and education in general, and I had a lot of like network.
26:13
SPEAKER_01: Uh, but this is a whole different space.
26:15
SPEAKER_01: Obviously, I've been on the other side as a brand which spends a lot of money uh for acquisition.
26:20
SPEAKER_01: Uh, so this is a very interesting uh exercise for me to go into something that I uh I'm totally new to, but I think that gives me a fresh perspective on things and how to solve it.
26:31
SPEAKER_00: And what are some of the mistakes apart from you know fast hiring that you did in your first time journey?
26:38
SPEAKER_01: I mean, there are a lot.
26:40
SPEAKER_01: Uh I don't know, like we can keep listing it, but as I said, I think yeah, fast hiring, team and hiring is definitely uh a big one.
26:52
SPEAKER_01: Uh second, I would say we did some mistakes around, especially because we spoke about international expansion.
27:00
SPEAKER_01: Yeah.
27:00
SPEAKER_01: Uh we were too ambitious in terms of trying to say, let's scale this across 20 markets, right?
27:07
SPEAKER_01: While the product was there, while the partnerships were there.
27:09
SPEAKER_01: I think the local nuance of regulation, of GTM, of all of those things that are important to succeed, we we were not very thoughtful on that in the first year of our international expansion.
27:21
SPEAKER_01: So there were cases where we opened a few countries and then we said, look, eventually we came to the conclusion that we can't do this.
27:27
SPEAKER_01: Well, we have to pick three or four and win the battle there.
27:30
SPEAKER_01: And this is not like, oh, we have the product, we have the partnership, so let's just open the Google Tap or MetaTap everywhere.
27:35
SPEAKER_01: Uh, and we're not going to get there.
27:37
SPEAKER_01: So I think that was another learning uh that I can think of.
27:41
SPEAKER_01: Yeah, I think those would be a couple of learnings.
27:44
SPEAKER_00: And uh education in India, right?
27:47
SPEAKER_00: Especially the education tech part, has seen ups and downs, uh, you know.
27:52
SPEAKER_00: Uh so what's your perspective of you know uh how the how does the sign curve evolve?
27:58
SPEAKER_00: Like first there was no interest, suddenly there was a lot of interest during COVID time, and then the interest waned out.
28:03
SPEAKER_01: Yeah.
28:04
SPEAKER_01: So I think, look, I think it's a natural cycle.
28:07
SPEAKER_01: Everything goes through ups and downs, like the stock market, right?
28:11
SPEAKER_01: It's a curve, it has like its own uh way of uh playing out.
28:15
SPEAKER_01: I think specifically with ed tech, initially the response as expected was a little muted, but that was because you need to build trust, right?
28:25
SPEAKER_01: Trust is the biggest thing in education, like in healthcare and some of the other sectors.
28:29
SPEAKER_01: Trust is a big thing everywhere, but in especially these sectors, it is massive.
28:32
SPEAKER_01: So it took time to build that trust and establish that credibility that you can deliver outcomes.
28:38
SPEAKER_01: Yeah.
28:38
SPEAKER_01: Uh, so I think that was the first wave.
28:41
SPEAKER_01: The second wave was when people saw that look, these people are actually able to deliver engagement and outcomes and retention and credibility and all of those things.
28:50
SPEAKER_01: Then suddenly we were hit by the pandemic.
28:52
SPEAKER_00: Yeah.
28:52
SPEAKER_01: Right.
28:53
SPEAKER_01: And then people got forced into saying, now we have to do online.
28:58
SPEAKER_01: We don't even have an option.
28:59
SPEAKER_01: Right.
29:00
SPEAKER_01: So similar to when people said, Oh, I don't think people can work from home, right?
29:03
SPEAKER_01: Suddenly COVID changed it, where everybody had to work from home and then there was a paradigm shift, right?
29:07
SPEAKER_01: Similarly, with online, when all students were stuck, all employees were stuck at home.
29:12
SPEAKER_01: Now everybody was like, now we have no option but to teach online.
29:15
SPEAKER_01: So it forced a lot of people into starting to use online education.
29:19
SPEAKER_01: And once they started using, I think there was a penny-dropping moment where they said, oh damn, this actually does work.
29:25
SPEAKER_01: Obviously, there are use cases where physical is still better, but there are many use cases where online education works.
29:30
SPEAKER_01: So I think what happened during that two years of pandemic phase was that what we thought would take 10 years to happen in terms of the adoption curve to evolve, it accelerated it over those two years with all stakeholders, with learners, with companies, with universities, with faculty.
29:46
SPEAKER_01: So it accelerated that credibility and adoption curve, which then obviously attracted a lot of investment.
29:53
SPEAKER_01: And as things happen, you know, these things have a way of becoming irrational pretty soon.
29:59
SPEAKER_01: So then irrational in investment and irrational uh investor interest started coming in at crazy valuations, and you know, it had to correct.
30:09
SPEAKER_01: I think it's good's good uh that it is corrected in my view, because it brings us back to some amount of rationality and building for the right reasons, focusing on the problem at hand and trying to deliver outcomes.
30:19
SPEAKER_01: So I think this is an expected thing.
30:21
SPEAKER_01: As I said, it went through that up because of all the reasons, and then there was an expected correction which happened.
30:26
SPEAKER_01: So it's good.
30:28
SPEAKER_00: And you led international uh you know growth for upgrades, right?
30:33
SPEAKER_00: Tell us about that.
30:34
SPEAKER_00: Like, why did you, first of all, when India had such a large market opportunity, went out and uh look for international growth?
30:42
SPEAKER_01: Yeah, so I think uh when we look at the context of international at upgrades, I think the first is for the longest time, Indian regulations didn't allow Indian universities to offer online degrees.
30:54
SPEAKER_00: Okay.
30:55
SPEAKER_01: Right.
30:55
SPEAKER_01: I think I might be getting the exact date wrong, but I think this was as late as 2021, 2022.
31:00
SPEAKER_00: Even during the COVID time?
31:01
SPEAKER_01: Even during the COVID time.
31:02
SPEAKER_01: I think that's the first time they started putting regulation in place for online degrees.
31:06
SPEAKER_01: I'm yeah, I mean as I'm getting the date wrong, but roughly in that range, right?
31:09
SPEAKER_01: So one of the things interesting for us at Upgrad was in the early days, people said long-form education and online won't work.
31:15
SPEAKER_01: This was in 2015.
31:17
SPEAKER_01: They said, yeah, sure, if you're doing one week, two weeks, three weeks, five thousand rupees, ten thousand rupees, it's okay, you can do it.
31:24
SPEAKER_01: But our first product at Upgrad was a PG diploma from Triple IT Bangalore, which was a 12-month intense 400-hour course.
31:32
SPEAKER_01: And we were charging two lakhs for it, which is roughly as per current exchange rate, I guess, close to$2,000.
31:37
SPEAKER_01: Yeah, right.
31:38
SPEAKER_01: Uh, which was a big sum of money.
31:39
SPEAKER_01: And when we were launching this product, everybody told us we were mad that it'll never work, nobody will pay, even if they pay and come, they will drop off, nothing will happen.
31:47
SPEAKER_01: Right.
31:48
SPEAKER_01: That program was a runaway success.
31:50
SPEAKER_00: And it was all online, 100% online.
31:53
SPEAKER_01: So we got instead of we got 316 students, if I'm not wrong, paying us 2 lakhs for the first batch.
32:00
SPEAKER_01: And uh our completion rates were close to 85% for a 12-month, 400-hour intense program.
32:06
SPEAKER_01: And people were seeing career outcomes, very strong learning outcomes.
32:09
SPEAKER_01: And I think that's when we said, to answer your question on international growth, we said, all of these students who finished their PG diploma said, I want to do a master's in data science.
32:19
SPEAKER_01: I want to do a PhD in machine learning.
32:21
SPEAKER_01: And for the for a few months, we gave a response saying we can't because Indian universities can't offer these degrees online as per existing regulation.
32:29
SPEAKER_01: But then one day I was traveling for some conference uh and we realized that look, international universities can offer these things.
32:35
SPEAKER_01: Uh, so let's go partner with international schools.
32:38
SPEAKER_01: So back in 2018, if I'm not wrong, I literally moved to Liverpool for like four weeks and I said, I will sign this university and come back.
32:47
SPEAKER_01: So I went, did multiple trips eventually universities are slow.
32:50
SPEAKER_01: So we signed University of Liverpool, and that was the first online master's in data science in India.
32:54
SPEAKER_01: And it was again a runaway success.
32:56
SPEAKER_01: So that's when we realized that there are two parts to this: one is supply and the other is demand.
33:02
SPEAKER_01: So upgraded supply from university partners, faculty, content creators always had an international element of it.
33:09
SPEAKER_01: Uh, because one regulatory reasons.
33:11
SPEAKER_01: And second, if you think about it, in some ways, global universities is still thought of as having a higher reputation and halo.
33:20
SPEAKER_01: Uh, so we said, okay, we can use that as well and bring international universities uh to India.
33:26
SPEAKER_01: As we did that, and we had supply locked in with international schools.
33:31
SPEAKER_01: The next wave of that evolution was uh we said, oh, look, we already have a Liverpool, a Deacon, a Golden Gate, a Watton, an NCR, all these guys.
33:40
SPEAKER_01: And now that we have these partners, the international market is opened.
33:44
SPEAKER_01: We not do anything.
33:44
SPEAKER_01: The course is ready, the partners are there, uh, and we just need to figure out GTM in these markets.
33:50
SPEAKER_01: So that was the third wave of saying, okay, now let's unlock demand uh in specific markets where it makes a lot of sense.
33:55
SPEAKER_00: Now you started advertising in those markets.
33:58
SPEAKER_00: And looking for students in outside India market.
34:00
SPEAKER_01: Correct.
34:01
SPEAKER_01: Yeah.
34:02
SPEAKER_01: So that was the evolution of how we eventually became international.
34:05
SPEAKER_01: First was international supply for Indian learners.
34:07
SPEAKER_01: Now that we had the supply and the course is ready, we said, let's just open up some of the markets that look really interesting.
34:13
SPEAKER_01: Because the problem we thought was global.
34:16
SPEAKER_01: It was not an India problem, where we said, one, professionals need to continuously upskill to remain relevant.
34:23
SPEAKER_01: Second, they will need rigorous online learning, which is a combination of world-class engaging content, a world-class LMS and community, and third support services.
34:33
SPEAKER_01: And we were saying that nobody in the world is doing this and solving for this problem really well.
34:38
SPEAKER_01: So there is definitely that opportunity.
34:41
SPEAKER_01: And uh yeah, and we also at that point raised close to 300 million from like the Tum SX and uh IFCs of the world.
34:48
SPEAKER_01: So we had uh the intent, the mandate, uh, and the uh yeah, the energy to like go out and do it.
34:54
SPEAKER_00: And you know, EdTech when you entered in market suddenly became very crowded, right?
35:00
SPEAKER_00: In a very short span of time.
35:02
SPEAKER_00: So how you did you manage to differentiate and rise above the noise?
35:07
SPEAKER_01: Yeah, so I think when we started, the biggest challenge was not competition.
35:15
SPEAKER_01: I would say even right now, the biggest challenge is not competition.
35:19
SPEAKER_01: So let me give you an example, right?
35:21
SPEAKER_01: So let's say we had we got 100 leads.
35:23
SPEAKER_01: Yeah, let's say one person joined, we had one person conversion.
35:29
SPEAKER_01: What did the other 99 people do?
35:32
SPEAKER_01: 98 of them dropped off and did nothing, right?
35:36
SPEAKER_01: There was only one other person who might have taken a competitor program.
35:39
SPEAKER_01: So it is not like we're losing to competition.
35:42
SPEAKER_01: It's like somebody says we're losing to Netflix, right?
35:45
SPEAKER_01: Our competition is Netflix, our competition is Zomato, uh, our competition is people wanting to do something else.
35:52
SPEAKER_01: So for us, that's where it was never an obsession about competition, it was an obsession about how can you create credible products that can drive engagement and outcomes for learners, and then you can drive adoption.
36:08
SPEAKER_01: So as long because it was, as I said, 98 of them are not doing anything, it's not like they're picking a competitor product.
36:14
SPEAKER_01: So our focus was always for that reason on very strong product and credibility building.
36:22
SPEAKER_01: Uh, and that's the work that we did.
36:25
SPEAKER_01: So, for example, a lot of uh credit needs to be given to our university partners.
36:29
SPEAKER_01: We had some world-class university partners in terms of triple ID Bangalore, Micah, IMT Garceba, then India.
36:35
SPEAKER_01: Uh, internationally, we had uh Liverpool, Deacon, uh, Golden Gate.
36:42
SPEAKER_01: Uh, and I think we were able to use the university and their faculty to drive a lot of credibility.
36:48
SPEAKER_01: Earlier, I told you Upgrad was one of the first platforms to bring uh online degrees, uh, which was a non-existent concept before.
36:56
SPEAKER_01: I think we were also one of the first to like sign an IIT uh to come online.
37:00
SPEAKER_01: IIT Madras was our first partner.
37:02
SPEAKER_01: We launched a data science course with them.
37:04
SPEAKER_01: So I think we did a lot of like credibility building with stakeholders, and one was universities.
37:10
SPEAKER_01: Second was again corporates.
37:12
SPEAKER_01: We had a lot of corporate partners where we used to go and talk to them about why this works in terms of upscaling their employees.
37:17
SPEAKER_01: So, like Graminer, Cognizant, all these guys in the early days, we did a lot of work there.
37:22
SPEAKER_01: Uh, so a lot of work on that product uh to ensure that people feel like this is something that is going to be super valuable for me.
37:31
SPEAKER_01: And uh I can see how I'm getting the learning outcomes and the career outcomes.
37:35
SPEAKER_01: And obviously, in education, it's as I said, the fundamental pillar is trust.
37:41
SPEAKER_01: So even if you start small, if your initial 20 learners go out and say, I'm super happy with this, I think that's the only thing that can last in the long run.
37:49
SPEAKER_01: Uh so that's where we build a lot of trust and relationship with our uh customers, uh, which was very important.
37:56
SPEAKER_01: The last thing I think we did to again stay a little bit different was we always said offline is important, right?
38:05
SPEAKER_01: We are an online learning company.
38:06
SPEAKER_01: So we had programs where you can do 100% of the program online.
38:10
SPEAKER_01: There's no reason for you to come offline.
38:12
SPEAKER_01: But we did what we used to call offline engagement sessions, right?
38:16
SPEAKER_01: So we upgraded has a lot of offline uh call them centers, right?
38:22
SPEAKER_01: Where our students can come hang out with each other, or say, I don't, I'm not feeling like studying at home.
38:28
SPEAKER_01: So I'm coming here with my laptop and studying.
38:30
SPEAKER_01: We used to organize events, faculty used to come and like talk about a random topic.
38:35
SPEAKER_01: Industry experts used to come and talk about what's new.
38:37
SPEAKER_01: So we used to build that community, uh, and I think that was very important also in building that credibility.
38:42
SPEAKER_01: When people think of Up Grant, they're like, it's not some distant brand where I log in somewhere and then get a sense of what it is.
38:50
SPEAKER_01: There is a real touch-and-feel element of it because I can see UpGrad when I'm driving home every day.
38:55
unknown: Right.
38:55
SPEAKER_01: So I think that was a very different feel that we tried to create uh for the brand in terms of how we build credibility.
39:01
SPEAKER_00: And during those 10 years as a co-founder of uh Upgrad, what are the skills as an entrepreneur you built which you didn't build in your consulting career?
39:11
SPEAKER_01: Oh, many.
39:14
SPEAKER_01: So the first I think was uh I told you about like how do you balance like your tendency to be a perfectionist?
39:22
SPEAKER_01: Uh second, how do you scale teams uh effectively?
39:27
SPEAKER_01: Uh I can go through many, but if I were to give you one more, which I think I'll try and give you the most important one in my view, is just I don't know if resilience is the right word, uh but it is just you know, more days it's very glamorous from the outside, the journey, but like I would say 80% of the days are tough, right?
39:52
SPEAKER_01: Where there's something always going wrong, there's some problem, there's some crisis, some this, some that.
39:57
SPEAKER_01: Uh and it's easy to be pessimistic, it's easy to not feel like this is going somewhere.
40:06
SPEAKER_01: Yeah.
40:07
SPEAKER_01: Uh so I feel the ability to have that resilience to say, despite all the noise, I'm super excited about what we're doing, despite all the problems, I see the opportunity here, and I'm going to keep going and build this for the long run.
40:21
SPEAKER_01: I think is uh something that I build.
40:25
SPEAKER_01: And it's not like you reached and you've achieved it, right?
40:28
SPEAKER_01: Like you can keep going.
40:30
SPEAKER_01: It is uh, yeah, even today I'm like, I can be more resilient.
40:33
SPEAKER_01: There are always moments where you doubt yourself whether I'm doing the right thing or not.
40:38
SPEAKER_01: You question why the hell am I doing this?
40:41
SPEAKER_01: Uh but how your ability to keep that to a minimum, that noise to a minimum, and then focus on the larger opportunity and the excitement of it, I think is a skill to build.
40:51
SPEAKER_00: And what are some of the unexpected insights uh that you got in the journey?
40:56
SPEAKER_01: Unexpected insights.
41:01
SPEAKER_01: Uh so I told you we started with Indian partners, university partners.
41:04
SPEAKER_01: So Mica was our partner.
41:05
SPEAKER_00: I don't know if you were of Micah, it's a good design and mass communication school.
41:09
SPEAKER_01: It's India's best mass communication and design school, right?
41:11
SPEAKER_01: Exactly.
41:12
SPEAKER_01: It's an Amdiva.
41:13
SPEAKER_01: So we launched a digital marketing program with them, which was very successful.
41:16
SPEAKER_01: And then we, as we were bringing international partners, we launched a digital marketing program with Cambridge University.
41:21
SPEAKER_01: Right?
41:22
SPEAKER_01: And we were like, in our head, we were like, okay, Micah is doing, I'm making up these numbers, but let's say 100 students at one lakh price point.
41:30
SPEAKER_01: So Cambridge should easily be able to do 400 students at one and a half lakh price point.
41:35
SPEAKER_01: It's Cambridge, right?
41:37
SPEAKER_01: Uh we launched the program, totally failed.
41:40
SPEAKER_01: We got 10 students or 20 students at like one and a half lakh.
41:43
SPEAKER_01: We changed the price, we tried to match it, nothing happened.
41:47
SPEAKER_01: And then by then we were fairly large.
41:49
SPEAKER_01: So then I asked the sales folks and the marketing folks, like, what's happening?
41:52
SPEAKER_01: What's happening?
41:53
SPEAKER_01: And eventually I didn't feel like I got an insight.
41:56
SPEAKER_01: So then I said, okay, give me 100 leads, right?
42:00
SPEAKER_01: So these are the people who came to the upgrad website.
42:02
SPEAKER_01: We know, saw the mica page, saw the Cambridge page, and decided to do Micah.
42:06
SPEAKER_01: So I said, give me 100 people's list.
42:09
SPEAKER_01: So I called them.
42:10
SPEAKER_01: I was like, what did you see?
42:12
SPEAKER_01: What did you like?
42:13
SPEAKER_01: Program features, etc.
42:14
SPEAKER_01: And eventually I was like, why did you pick something?
42:16
SPEAKER_01: I still remember one person uh telling me in these words, sir, uh Cambridge employer.
42:30
SPEAKER_01: So I think uh that was a penny-dropping moment for me.
42:35
SPEAKER_01: That I think people think of credibility in very different ways, right?
42:39
SPEAKER_01: It is also what they're trying to communicate and make it feel like real.
42:42
SPEAKER_01: They're like, sir, I'm not bad.
42:47
SPEAKER_01: I want to like do something.
42:56
SPEAKER_00: One of the students, one of the gaulieries.
42:59
SPEAKER_01: Yeah, so 99% cases, Cambridge.
43:05
SPEAKER_01: Micah is like a realistic brand uh that communicates signals.
43:08
SPEAKER_01: So I think that was a penny-dropping moment for me, also, like in terms of the insight of you know, there are certain brands that uh reach certain audience very well.
43:18
SPEAKER_01: For that matter, I think when we look at India, we brought international, but I think Indian brands did a much stronger job at like penetrating the India.
43:26
SPEAKER_00: Like for example, IIT Madras would have been a phenomenal.
43:28
SPEAKER_01: IIT Madras.
43:29
SPEAKER_01: But again, this is a certificate, so it didn't do so well, but Triple IT Bangalore, Maica in India, uh IMT Ghazia Bad, like so many amazing OP Jundal, uh Professor Raj, there has done such an amazing job with the LLM program.
43:42
SPEAKER_01: I think all of these uh strong Indian universities do so much better uh because of like local uh demand and acceptance.
43:51
SPEAKER_01: So that was a very surprising insight.
43:53
SPEAKER_01: So there are a lot of them, but yeah, that I thought was a funny one.
43:55
SPEAKER_01: I still remember that conversation.
43:57
SPEAKER_00: Yeah, unless you talk to users.
44:00
SPEAKER_00: Uh you know, you never know.
44:01
SPEAKER_01: Yeah.
44:02
SPEAKER_00: How what they're thinking.
44:03
SPEAKER_00: What they're thinking and and why they're buying something for what they are buying.
44:08
SPEAKER_00: And I assume during your upgrad days, since you know Ronnie was a co-founder and you had Ronnie's backing, there was never a moment that you could think that you would run out of money.
44:21
SPEAKER_01: Uh true to some extent, to be very honest.
44:24
SPEAKER_01: Uh I think there was some amount of security, but I think there was also the pressure that look, if it didn't work, if the business was not making sense, it's not like an infinite check on a flowing pool, right?
44:38
SPEAKER_01: Uh so yeah, there were like targets, there was like metrics that we had to meet, and the business had to make sense.
44:45
SPEAKER_01: Uh sure, like if it was like, you know, a few months here or there, and there's a temporary cash flow issue, maybe those were easier to handle uh as compared to some other startups where that might have been a real struggle and a crisis.
45:00
SPEAKER_01: Uh, but yeah, the fundamental problem of like, yeah, whether this business makes sense or no, or whether it makes sense to put more money and grow, it was always a question, right?
45:09
SPEAKER_01: Especially in those days where EdTech was burning money, uh, and there were so many brands raising like billions of dollars, investing in getting like Bollywood stars and all of that stuff.
45:19
SPEAKER_01: Uh so we had to like figure out what our position is and how we responsibly build this and make sure that it's a real business.
45:26
SPEAKER_01: So that pressure was always on.
45:28
SPEAKER_00: And what was the first external fundraise that you guys did outside uh Unilaser?
45:36
SPEAKER_01: So uh this is not a Unilaser investment.
45:39
SPEAKER_01: I think it's a different vehicle.
45:41
SPEAKER_01: But anyway, uh the first external big round we did was during COVID.
45:44
SPEAKER_01: As I said, there was massive demand for online education in general, so we got very strong inbound interest.
45:50
SPEAKER_01: Uh so we did our first round in I would say late 2020.
45:55
SPEAKER_01: Yeah, probably late 2020, early 2021, uh, that timeline.
46:00
SPEAKER_01: And uh we raised close to 120 odd million from Tamasek and IFC World Bank and uh a few other investors.
46:08
SPEAKER_00: And how did that happen?
46:10
SPEAKER_01: Um as I said, I think we got inbound interest, and uh six years into the journey, so we were a fairly evolved uh company in terms of our product portfolio, in terms of our user base, etc.
46:22
SPEAKER_01: And uh we said, yeah, it's a good time because we want to grow aggressively also, and uh, there's a lot of inbound interest, the valuations are very attractive.
46:30
SPEAKER_01: Uh, so why not?
46:31
SPEAKER_01: So we went out and raised.
46:33
SPEAKER_01: Uh we had conversations with multiple people, but eventually we closed with Tamisek and World Bank.
46:37
SPEAKER_00: Yeah.
46:38
SPEAKER_00: So in your journey as a second time as an entrepreneur now, uh, I believe raising money has would have become much easier, building a team would have become much easier.
46:45
SPEAKER_00: So, what remains tough?
46:48
SPEAKER_01: Uh see, it's it is never very easy, right?
46:52
SPEAKER_01: It's almost like sure, there are some skills that you can transfer, there is some credibility that you can transfer, which helps with investors and team.
47:00
SPEAKER_01: But it is kind of like back to square one.
47:01
SPEAKER_01: So you have to like redo the whole thing.
47:04
SPEAKER_01: People are smart, investors are smart.
47:05
SPEAKER_01: If your idea doesn't make sense, what you're doing doesn't make sense, stop.
47:08
SPEAKER_01: But yeah, sure, it's better and I'm more prepared for it.
47:12
SPEAKER_01: What remains a challenge is still daily execution.
47:15
SPEAKER_01: Like I think raising money is one when you raise it, it hits your bank account, and then that's that.
47:20
SPEAKER_01: And you hiring is a continuous process.
47:23
SPEAKER_01: But how do you bring all of this together to create products that solve for real consumer pain and then grow the organization, the daily hustle, uh, the daily challenges, the daily problems?
47:35
SPEAKER_01: Everything, some every day something is breaking, every alternate week there is an existential crisis, especially in the early days.
47:42
SPEAKER_01: Uh so yeah, that that remains as tough as ever.
47:45
SPEAKER_00: Uh so and how many investors you had to pitch this time to close around?
47:50
SPEAKER_01: This time, I think where we are at uh in the world of AI, and uh it was not as hard as the first time.
47:57
SPEAKER_01: Yeah.
47:58
SPEAKER_00: Maybe I guess 10.
48:00
SPEAKER_01: Yeah, maybe 10.
48:02
SPEAKER_01: Uh and yeah, it was a good conversion this time.
48:04
unknown: Yeah.
48:05
SPEAKER_01: And this time it's not like we went out and raised a hundred and twenty million dollar check the first time, right?
48:09
SPEAKER_01: It's a small Oli check.
48:11
unknown: So yeah.
48:12
SPEAKER_00: Thank you so much, Falcon.
48:13
SPEAKER_00: It's been amazing.
48:14
SPEAKER_00: Thank you.
48:15
SPEAKER_01: Pleasure to be here with you.
48:17
SPEAKER_00: Thank you for sharing on what you're building next and really glad to what you accomplished with Upgrad.
48:23
SPEAKER_01: No, uh thank you very much for having me.
48:25
SPEAKER_01: And I think one of the proudest moments for me at UpGrad uh always is when uh any of our learners reach us out.
48:34
SPEAKER_01: So we get a lot of emails around, oh, we did this program and something else happened.
48:38
SPEAKER_01: So I think just the kind of impact uh that it has and just continues to have, I think is yeah, super exciting uh and inspiring.
48:46
SPEAKER_00: Yeah, today is one of the most powerful brands in the Indian education system.
48:49
SPEAKER_01: Yeah.
48:50
SPEAKER_01: Uh no, and I think there is uh room for so much more, especially with AI.
48:54
SPEAKER_01: And I think a lot of people think of education as a content play, uh, but it is definitely not.
48:59
SPEAKER_01: Content is the easiest challenge to solve for.
49:02
SPEAKER_01: The biggest challenge to solve for is engagement and motivation.
49:05
SPEAKER_01: And I see a lot of young companies making the same mistake with AI, where they think, oh, we can create a lot of content, we can create a tutor, we can create this.
49:13
SPEAKER_01: All of those are great ideas, but you need to use the frame of you're not solving for content, you're solving for attention, engagement, and motivation.
49:21
SPEAKER_01: And how do you use a combination of like AI and uh teachers and tutors in real life to be able to solve for those problems and fundamentally rethink what kids even need to learn, right?
49:34
SPEAKER_01: Like if you go to school, you and me went to school and we were taught a certain way.
49:36
SPEAKER_01: Like today, maybe a very different skill set is required in terms of resilience, in terms of creativity, in terms of critical thinking.
49:42
SPEAKER_01: Children kids are bombarded with like all kinds of things.
49:44
SPEAKER_01: What do they question below?
49:46
SPEAKER_00: They're born with reasoning.
49:47
SPEAKER_01: They're born with reasoning.
49:48
SPEAKER_01: So yeah, they need to be able to like be critical thinkers and be skeptical about what they see and what they hear on the internet.
49:54
SPEAKER_01: So there are very different skill sets that need to be built.
49:57
SPEAKER_01: So I think it's overall a super exciting time.
49:59
SPEAKER_01: Uh and uh yeah, thank you for having me.
50:02
SPEAKER_00: Yeah, pleasure.
50:03
SPEAKER_00: Thank you.
50:03
SPEAKER_02: Thank you.