Every parent wants the best future for their children. Most parents do not think twice before investing heavily in education to ensure their children get the best possible chance at success. From admissions in modern schools to sending children to foreign universities for higher studies, the money involved in the education sector is beyond anyone can comprehend. Notably, when there are billions of Rupees flowing in the education sector, people see education as a huge moneymaking machine.
Byju’s is a titan of the Indian ed-tech market, and its flagship program, The Learning App, has 40m users and 2.8m paid subscribers; its valuation is about to climb to $21b; it’s been on a spending spree, buying up competitors in Asia and the USA.— Cory Doctorow (@doctorow) August 30, 2021
A lot of companies have come up with solutions for schools, teachers and students to provide them support according to their needs. One such “sparkling golden star” in the industry is Byju’s. Launched in 2015, Byju’s is a “flagship program”, the “most asked-for learning app” that promises the students and their parents unimaginable success through its platforms. Reportedly, there are around 40 million users on the app, with 2.8 million paid subscribers. And these numbers are from before the schools were shut due to the Covid pandemic.
As on August 28, it was reported that Byju’s is eyeing 10,000 crores in revenues this year.
Cory Doctorow, author, journalist and activist, recently published a thread on Twitter in which he pointed out problems associated with Byju’s and other such ed-tech aggregators in India and abroad. He mentioned that currently, the company’s valuation stands at $21 billion, and it is on a spending spree taking over competitors in Asia and the USA.
Cory quoted a report that was published in Rest of World on August 30, authored by Akanksha Singh. In the report, it was described how the sales culture in the company is rotten from top to bottom. The report has stated that the sales staff of Byju’s hustle poor parents and lure them into taking predatory loans so that the salespersons can hit their target.
Byju’s and its spending spree
Singh’s report had stated that in 2021 itself, Byju’s bought six competitors, including Aakash Educational Services, one of the largest coaching institutes in India, for $950 million. It also bought American company Epic, Singaporean company Great Learning and others. The company offers a series of e-learning programs for students from age four and above. It also provides training for competitive exams, which is itself a huge business in India.
Singh’s sources include “7 current and former employees at Byju’s,” who describe the company’s pivot from emphasizing private tutors for wealthy families to subscriptions for poor parents who can’t afford them, coupled with predatory loans.— Cory Doctorow (@doctorow) August 30, 2021
But how an education platform rose to such success in a few years? The catch is the alleged toxic and hostile work culture at Byju’s. In her report, Singh quoted one of the former sales representatives of the company who said that he left the company on the day he had to sell the package to a poor driver who merely had Rs.700 or $9 in his bank account. The driver took a loan from his boss and told the sales representative that “he would work 24×7 to repay the loan.” The sales guy said, “That was the day I resigned.”
Sales executives trap vulnerable parents in guilt
Reports suggest that sales representatives or business development executives (BDE) use guilt-trap techniques to trap poor and illiterate parents in buying the packages. According to an article published in The Morning Context by the title “How Byju’s catches parents”, the author narrated the whole process by which the sales representatives allegedly trap the parents.
The sales executives reportedly often use hard-sell tactics. Approaching anyone and everyone they come in contact with to register for the app and keep using it beyond the 15-days free trial period. The overworked, and over-pushed sales team has to spend long working hours to meet unrealistic targets. Often, it is the lower middle class and uneducated parents who end up taking loans after listening to a sales exec narrate how their child will face a dark future if they do not sign up for the learning app.
Cory quoted one of the reports on Byju’s in which it was mentioned how BDEs trap the parents in guilt. He wrote in a tweet, “One former sales associate summarized the pitch: “Your son can be nothing in life if he doesn’t go with Byju’s — and if you, as a parent, can’t [secure] your kid’s happiness and future … you might as well have not had kids.” Any parent who is even slightly vulnerable to such tactics would fall into their trap almost immediately.
One former sales associate summarized the pitch: “Your son can be nothing in life if he doesn’t go with Byju’s — and if you, as a parent, can’t [secure] your kid’s happiness and future … you might as well have not had kids.”— Cory Doctorow (@doctorow) August 30, 2021
One of the BDEs told The Morning Context that he once pitched the package to a lady who wanted to buy it for her grandson, but the grandson was more interested in learning the Pakoda selling business she owned. The BDE decided not to sell her the package and left the company after few days. The stories several portals covered are the same. BDEs leave the job at Byju’s because of the toxic sales culture. After a point, they started to feel under extreme pressure and guilty for what they were doing to the parents.
And it quotes ed-tech activist Pradeep Poonia – a former ed-tech worker – who describes a host of deceptive tactics rooted in the fact that “Edtech is trying to solve problems that don’t exist.”— Cory Doctorow (@doctorow) August 30, 2021
Pradeep Poonia, the activist who exposed Byju’s and other such apps, had uploaded a video in January 2021 that was allegedly a phone conversation between a manager and a new BDE in the company. It looks like new recruits were supposed to call the managers at a fixed time or after every demo they give to the parents. However, this particular BDE failed to do so and faced abuses by the manager.
“The problems” that do not exist
Poonia had once said that the “Edtech is trying to solve problems that don’t exist,” and it is not farfetched. It is true that we are living in a competitive world and want the best for our children, but that does not mean we should push them to something that is not even close to what they need. Notably, a defamation case was filed against Poonia by WhiteHatJr (Now owned by Byju’s) in November 2020 for exposing the alleged toxic work culture and problems faced by the parents. However, it was later withdrawn in May 2021.
There are several problems with the courses. The first being the language barrier. The courses Byju’s offers are in English. Their target families who may buy packages for their children are from the not-so-well-educated background, and the children are from Hindi or another language-medium school. In such cases, the courses are of no use.
The other problem with these courses is the lack of interest that students develop after a certain period. The morning context quoted a parent who said that his daughter loses interest in the course after two years. The app was useless for the next year as he had already paid for three years. The reason? Reports suggest students often do not find “enough practice questions, and the questions aren’t dynamic. After a point, questions get repeated.” When parents try to raise the concerns to the mentors or company officials assigned to their account, they had no answers.
The loan trap
Another problem with Byju’s highlighted in the articles is that it offers loan options via two partners. In some cases, they allegedly did not reveal to the parents that the EMI option they are taking would be via a loan that would be taken in the name of the parents. If a parent fails to pay EMI, the loan company starts to threaten them to repay the loan. It also adversely affects the CIBIL score of the parents. In case someone wants to cancel the subscription to the course, it can only be done in the first 15 days. If a student stops using the app after few months, the parents have to pay the remaining EMIs as Byju’s has already got its money and the liability of repaying the loan is on the parents.
In India, with a 1.3 billion-plus population scrambling for resources, competition is always severe. In the hustle to ensure a better job, a better life for their children, parents spend a lot of their hard-earned money on coaching classes, private tuition. An entire industry in India flourishes in the name of private coaching, which is beyond the regular academic hours, just to prepare students for the competitive and entrance exams. With the advent of technology and internet connectivity, the private tuition industry has now evolved into the vast ed-tech industry where millions of children and parents are joining a mad rush to get ahead of each other.
China’s crackdown on ed-tech companies
A similar boom in the ed-tech sector and the mad rush of parents to enrol their children in private coaching had been slowly stirring public grievances in China. With a goal to regulate private capital in the private tuition sector and to prevent the growing concerns about unhealthy competition, the Chinese government had recently announced major curbs on the ed-tech industry.
In one sweeping move, the Chinese government banned after-school tuition/coaching companies from earning profits, raising capital or going public. The directive mandated that all ed-tech companies will re-register as ‘non-profit’ organisations, local authorities will not allow any new ed-tech company, and existing companies will be subject to examination. Any online courses for 3 to 6-year-old children have been banned. No ed-tech company can teach school subjects on holidays or weekends.
China’s severe crackdown on the ed-tech business has stirred up a lot of discussion in India too. There are already voices that were cautioning against the unhealthy rush of pushing children into a barrage of courses and tuitions beyond school hours. With the advent of the ed-tech boom, the concerns regarding mental health, financial impacts and long-term effects on the education sector are being discussed too.