India and edtech: A love story

Edtech is one of the most promising tech-based industries in India. It is not surprising, given the country’s deep love for education and the vast numbers of young people eager to acquire professional skills. Combine this with the leap in access to digital infrastructure in recent years (cheap data, smartphones, etc.) and you have a recipe for edtech success. Six Indian edtech companies -Byjus, Physics Wallah, Vedantu, Unacademy, Eruditus and UpGrad- have achieved unicorn status in recent years, with many others surely to follow. Overall, the Indian edtech market is expected to grow at a breakneck pace of over 20% CAGR in the coming five years.

A first observation is that, despite being new and digital, Indian edtech seems to be very much operating under the philosophy of the most traditional Indian education, especially in its emphasis on test preparation. India’s education system is obsessed with testing. To a point where in many situations, the student’s only goal is to score the highest possible in some standardized test, everything else be damned. This obviously leads to a certain corruption of learning. It kills intellectual curiosity (useless in a test-driven system), it makes students see lectures and courses as administrative requirements (to qualify for the test) and it favors memorization over any other skill. To its credit, test-driven education has built a powerful pipeline of “raw talent”. But it also has left many learning casualties along the way (and sometimes, tragically, literal casualties, due to the enormous pressure that the system creates on students) and, moreover, rote learning and test-focused education look like the wrong principles to maintain in the era of critical thinking, creativity and soft skills. And edtech has done nothing to change this. In fact, the companies leading the edtech field are precisely companies that offer tuitions and test preparation. Most of them have done it by offering test preparation and tuition in a digital format. Only Eruditus and UpGrad have done it by re-bundling and marketing already existing higher education programs from well-established prestigious institutions.

A second observation is that edtech so far has pretty much only brought convenience and low cost to the education world. From a strategy perspective, it has been yet another instance of Clayton Christensen’s familiar “disruption from the bottom”, much like it happened in air travel, software, financial services, etc.. Disruption from the bottom happens when a disruptor uses a technological enabler (in the case of education, the digital ecosystem) to modify the traditional product in a way that makes it simpler, more flexible and more affordable. Byjus, Vedantu and Physics Wallah have allowed students anywhere to access great tutors at a reasonable cost, Eruditus and UpGrad have done the same for higher education. I do not mean to diminish the value of this disruption. A society with more people with access to great educators should likely end up with better outcomes. But this “low cost” model also comes with its problems, the biggest one of all being the fact that simplifying education is not the same as simplifying air travel. Learning (and teaching) is a complex endeavour, the effectiveness of which can be significantly impaired by optimizing convenience and thinking that it can always be broken into short and easy bites to be consumed at the learner’s leisure. This might be the thing that keeps edtech away from core education and more in that periphery of complementary skills and offerings.

The story of a disruption from the bottom usually has a second part, one in which the disruptor not only occupies the low-end segment but starts moving upwards to compete more directly with the incumbents. Is this about to happen also in the education sector? On one hand, it seems that edtech companies are trying to do so. This year, for example, Physics Wallah -the only profitable edtech unicorn- opened its “university”, with a three-year program that is more of a direct substitute for a traditional undergraduate program. Other Indian edtechs have been making moves towards longer degree-giving educational programs. On the other hand, their success in this area seems more difficult than in the other stories about industry disruption. How is Physics Wallah going to differentiate itself when directly challenging institutions with well-established brands, academic curricula, faculty, etc? Offering placement (again playing with traditional rules!) and industry connects (projects, corporate speakers, etc) will not be enough because that is what every single traditional institution is doing.

As Sangeet Choudary astutely notes, the real value creation and capture happens when a company figures out how to re-bundle (in a better way) what the disruption has unbundled. The first wave of edtech unbundled an industry that had become too rigid for the needs of its customers. It created the possibility to get pieces of the traditional product (a course, a skill, a coaching session, …) without having to buy the whole thing (e.g., the in-presence degree program). The second wave should be about re-bundling all that content in a unique manner that enhances the learning for the student. Things like using technology to diagnose each individual student’s best mode and methodology of learning or offering a new and much more precise way to assess whether the student has indeed learned should be part of that new bundle. Instead, if Indian edtech companies simply take a traditional curriculum, they give it a patina of modernity and sell it with a placement, they will not get very far, nor will the edtech sector as a whole.