In 2011, a company that began as an ordinary coaching center with just 25 students on board achieved almost a miracle in a decade’s time. Not just 100 or 1000, but 100 million users started using Byju’s resources. The question is was company truly doing such a wonderful job, or was something fishy going on in the background?
Byjus’s used what strategies to attract such a massive crowd?
- Marketing Strategies
Byju’s almost neglected the Revenue Marketing Ratio and spent a significant amount on marketing. The company left no stone unturned in promotion of the brand. The brand name appeared everywhere, from massive platforms like FIFA and IPL to hoardings on street.. Even the huge public figures such as Shah Rukh Khan and lionel Messi were appointed as brand ambassadors. The advertising cost was even higher than the costs of employees and operations. The strategy was to make people friendly with the brand name.
- Creating fear amongst parents about their children’s future
The company played a dirty game by not restricting itself to targeting the right people but also instilling the fear in minds of the uneducated parents about their children’s future in highly competitive world. The sales people were instructed to expand their horizons beyond just making calls, instead, they were told to visit places such as temples, streets, malls and educational institutions to persuade people to sign up for the course. Even people with very low incomes, such as rickshaw and auto drivers who could barely afford their day-to-day meals, were brainwashed and enticed with promises of laptops and tablets to sign up for a course costing as high as around 1 lakh, so that their children could supposedly have a better life.
- How did poor people afford such expensive courses?
The company resorted to unethical means, such as convincing parents to take out loans for the bright future of their children. The uneducated individuals who were given a ray of hope were not even aware that they were being burdened with loans carrying hefty interest rates. Later on, when compelled parents requested refunds due to not seeing any results from the course or being unable to afford the high loan interests, they discovered that their numbers had been blocked by the companies.
Ironically, the company who promised to build the future of the youth of our country actually ruined the future of those innocent children.
- Unbearable work environment for the employees of the company
The sales associates were given extremely high sales targets every month. They were asked to do whatever it takes, visit anywhere to meet these targets. Under the pressure of facing termination if targets were not met, the employees of the company resorted to unethical means, making false promises, and even misleading customers because, at the end of the day, the company was only concerned about sales revenues.
One former employee who had to quit the company gave the following statement:
“You have to let go of your conscience and be absolutely shameless to do this job”
- Switching to offline classes, Loss of reputation and trust
In late 2022, after COVID ended, many students started shifting from online to offline mode. Additionally, news of the company’s malpractices emerged, leading to negative publicity. As a result, the company incurred losses.
- Loss from the acquired companies
After facing a lot of negative publicity, the company chose the strategy of acquiring some popular companies such as White Hat Jr, Akash institutes and 17 others to gain hold of their target audience. Firstly, it acquired these companies at overvaluations, and secondly, along with taking over, it had to bear the existing losses of the acquired companies, which in turn created a difficult situation for Byju’s.
- Loans were taken to handle the losses
The company, which had a valuation of 22 billion dollars in year 2022 experienced a downfall and fell to a $3 billion valuation. It had to take term loans from different countries, including the UK. It kept shifting the deadline to pay the loan amount, which actually led to economic strain.
The company’s reputation suffered, leading to resignations from board members and a precarious future.
At present, Founder CEO Raveendran Byju, his wife and brother are the only three members on company board. More than 50 percent of Byju’s shareholders on Friday voted unanimously for removing founder CEO Byju Raveendran and his family from the board.
In conclusion, I would like to summarize with a quote by Warren Buffet: ‘It takes 20 years to build a reputation and five minutes to ruin it.”
One should have the courage to think of an idea, start a startup, but it is equally important to work on the core and run it with fair means and practices. Be an inspiration, be a change.