What startups can learn from India's fastest growing edtech startup, Classplus

Classplus, India's fastest growing edtech startup recently raised a monster round, toting up to $65m across Tiger Global, renowned US edtech fund GSV Ventures and existing investors Falcon Edge / AWI and Blume Ventures.

In this article, I elaborate on its unique customer-focused DNA and culture, and what ambitious startups can learn from it.

Huge COVID tailwinds on top of a strong business model

It is been a crazy 15 months for the company since the 1st lockdown was announced. During this period, it has seen 3 fundraising rounds during this period - all of which were preemptive, i.e., the investors reached out.

From Feb20 to May21 it has seen a 6x growth in paid customers, 12x DAU (almost 7 figures now at zero CAC!), and 7x MRR. Phew! 

Let us understand Classplus better. It has 2 revenue streams presently.

1) SAAS - annual fees paid by tutors for the white label app

2) Marketplace - tutors sell content to their students on the marketplace. Classplus gets a share. Last month tutors sold 300k+ courses on the app. 

Here is a really funny marketing message for a IAS course sold on Classplus. "Let us remove the fear of GK (Gen Knowledge). Let us make it do Nagin Dance."????

It is not just test prep. Music classes are also sold, and some, err, unusual ones too:)

COVID tailwinds of course help. After all, tutors need Classplus to run live classes, push value added content to students, and keep the home fires burning. Students need Classplus to ensure they can access content + classes that will help them achieve their dreams. 

But COVID alone can’t explain the sustained success it has had since their pivot into a B2B app for tutors 2.5 yrs ago. It is the intense culture and processes at Classplus that underpins their success. Before we get into that, a quick look back. 

Why Blume invested in Classplus

Blume invested in Classplus early ’19 when they were at <1k paid centres (they are over 10x that now). The content marketplace had not even kicked off then. Still, they were running content sales pilots with a few dozen centres and those looked good. That tipped us over.

We liked Classplus given their unique B2B2C model (one we felt would be the EdTech Shopify to the Amazons in Byju’s, Unacademy, Vedantu); now there are a dozen copycats but at that time it was an outlier. It was extremely unusual for that time given B2C was the dominant model.

Apart from the B2B2C nature, there were two key reasons. One was the intense founder bonding between founders Mukul and Bhaswat They had known each other from Class 11-12 Test Prep and stayed close.

Finally there was the huge downstream revenue potential in assessment, financing, college discovery etc. 

What explains Classplus’s success? What can other startups learn from it?

I share 5 learnings, basis my interaction with Mukul & Bhas the founders, and observation of the team and culture. 

1) A key reason for Classplus’ success is customer obsession. This is inbuilt into their culture. You rise or fail in Classplus by staying v close to the customer (tutors / ‘coachings’), or by straying away from them. Every person including finance, tech is expected to talk to 1-2 tutors every day.

e.g., Ayush, one of the business heads, in his first few days had to talk to 20 teachers and share their feedback - +ve/-ve on Classplus - in a presentation to his peers and founders. 

Everyone in the co is expected to share certain actions / output basis their conversation with tutors in whatsapp groups. The entire co runs on a few 100 whatsapp groups:) (Meesho is another co that has a similar culture of talking to their resellers.) 

The more you speak to customers you more you are able to drive relevant output and rise in founder and peer esteem. The less you speak to customers the more you get shut out of convos, and fall out of the mainstream.

Very Darwinian:) Classplus is clearly not for everyone:) 

Incidentally, no fancy tech is used for the above. Whatsapp + their own Classplus app are used for any customer interaction. Use what the user is using. Nothing fancy. 

2) Another distinct feature of the Classplus OS is quick decision-making. They listen to feedback, take a decision and validate it via calls, surveys (in app surveys). 

A product feature - where they pass on the leads of those customers who reach the payment screen but don't pay, to the tutor to follow up - was rolled out in 6hrs after they listened to a customer complain about it. ('???', not Kano model!) 

3) As with customer-obsessed startups, there is an immense founder obsession with usage data. Various cuts &slices are always being studied. Data-led insights are quickly validated by 10-15 folks calling teachers; & user-led insights are quickly validated by crunching numbers. 

4) Typically startup founders learn from customers, hiring and investors. One other group that Mukul and Bhaswat learn from is peers & senior founders; always operators than consultants or advisors:) 

5) Finally, there is a distinct insurgent culture within the co. Mukul + Bhas have created a company of Davids, out to defeat the Goliaths i.e., the unicorns who are hitting the business of the tutors & the ‘coachings’. 

All great insurgent brands create the same thing - create a common enemy and rally the team. This is thus a company of Davids or Robinhoods all fighting for tutors. No amount of vision / mission can create such a sense of alignment as attacking a common enemy. 

Teachers / Tutors too feel the entire company as their support mechanism. See feedback.

A call to arms

Come join the most customer-obsessed team in India - message me (my DMs are open) or write to [email protected] to join one of the ‘cultiest’ startups in India; certainly one of the most intense cultures in Indian startupland (yes, I am biased:) ) 

And finally congrats, Mukul, Bhas and the Classplus team. This is just the beginning. The revolution has just begun!

?? Onwards!