WhiteHat Jr’s Karan Bajaj On How To Build And Scale An Edtech Product

This article is part of The Product Summit 2020, India’s largest virtual product conference which took place on October 10 & October 11. 

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“I have been involved in three creation industries. I have written novels, led a television channel and now an edtech product… All of them have the same cycle of entertainment and meaning,” said Karan Bajaj, founder and CEO of WhiteHat Jr.

While most of us struggle to succeed in one field, Bajaj has repeatedly changed tracks and delivered the goods while also straddling the world of yoga.

He started out as a marketing professional, went on to become a management consultant at Boston Consulting Group and then led Discovery’s India operations while also dabbling in fiction writing with three novels.

Then in 2018, Bajaj founded WhiteHat Jr, an edtech startup that enabled kids aged 6-14 to learn programming and coding through one-on-one video classes. In a market that was warming up to the idea of online learning with BYJU’S, Vedantu, Toppr, Cuemath, Unacademy and others gaining traction and funding, WhiteHat Jr’s idea took off and the startup managed to carve a niche in this space.

By the time the pandemic hit, the company saw its annual revenue rate rise from $12 Mn to $150 Mn in five months. While Bajaj was looking to raise more funds, BYJU’S came calling with a $300 Mn acquisition offer that was too good to refuse.

As reported by Inc42 earlier, more surprising than the revenue jump was the fact that much of WhiteHat’s initial growth was driven by its MVP (minimum viable product), which was launched in April 2019 and which remained its only product till December 2019.

“If you look at the original version of the product it was very basic…like a crowdsourced video platform in which students and teachers were connected and it did very well,” Bajaj, who will be speaking at Inc42 and TPF’s The Product Summit in October, recalled.

While this product description might sound easy to build, it’s equally difficult to stand out in a crowded market — according to an Inc42 Plus report more than 4,450 edtech startups have been launched in India to date.

So what separates the successful products from those that whither and fail?

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Creating Delight For Kids, Teachers And Parents

Broadly speaking, most consumer tech products either serve the end-user or connect providers with consumers to act as a platform. However, edtech for kids has a special challenge — apart from the students and teachers who are the end-users and service providers, respectively, the product also has to also satisfy the parents who are actually paying for the product.

Bajaj believes that being able to combine a child’s delight and learning outcomes in an edtech product is very critical because “Kids really value a product with delight, parents value a product with outcomes”.

While solving for teachers and parents is largely related to outcomes — income and learning progress respectively — and can be measured empirically, the difficult part is delivering that delight, which is often intangible or not in line with the outcomes for parents.

“Kids love the entire gamification framework where they get points for doing classes and projects… But parents couldn’t care less about it, right?” Bajaj asked rhetorically.

Gamification, of course, is something that most edtech companies take very seriously — tools such as leaderboards, difficulty levels and rewards are believed to increase a kid’s engagement with a platform. In January last year, BYJU’S acquired US-based learning platform Osmo — which produces AR-based educational games — for $120 Mn.

Interestingly, Bajaj refers to edtech as a creation industry — with the teachers being at the centre of it as creators who make the difference at the end of the day.

This is a major departure from the way Indians have always viewed education where the teacher basically regurgitates the same material year after year and absent-minded students hardly have any takeaways from a learning session.

Drawing a comparison with his experience of leading edutainment channel Discovery, Bajaj said, “In a way, they are similar — while the letter inside the envelope has to have substance and be strong, the envelope itself has to be colourful and bright that should make you feel like opening it.”

The Road To Achieving Product-Market Fit

The strength of the substance or the learning content is what drives the product-market fit in an edtech product as it determines the renewal rate of subscriptions, the net promoter score i.e the how likely are users to recommend the product to their peers and the conversion rate from free trials to paying customers.

Bajaj said, “We hit a NPS of 50, a renewal rate of 50% and a predictable funnel of 12-15% about around June 2019, about 7 months after starting the company…when you have that then you have product-market fit and should scale like crazy.”

The renewal rate is all the more important for WhiteHat Jr since the customer lifecycle is shorter for its courses than other edtech startups such as BYJU’S and Vedantu, which offer classes for kindergarten to grade 12th for multiple subjects. In comparison, WhiteHat Jr three courses include 8 sessions, 48 sessions and 144 sessions respectively, which is a much smaller window to connect with customers and upsell.

This also means that each student that doesn’t sign up for the next course in the progression pinches WhiteHat Jr more than similar drop-offs for BYJU’S or others in the K-12 space with the longer customer lifecycle and more re-entry points for students.

Bajaj said that every business model has a certain renewal number built into it, which helps map the stickiness of the product. “My target was a 50% plus renewal rate and we achieved 70%,” he added.

The second critical factor for WhiteHat Jr is the conversion rate of trials, which helps lower the overall acquisition cost. A stable conversion rate, regardless of the number of trials — “be it 100, 1,000 or 10,000” — is important so that a company has a ‘predictable funnel’ of customers while scaling up operations.

The most crucial metric however is the net promoter score (NPS) — in a country where office colleagues discuss their kids’ school grades and the best coaching classes in town, it is all the more important that referrals for edtech products happen organically.

NPS is calculated as the difference between the percentage of users who will refer the product to others favourably and those who would not. In the case of tech startups, an NPS of 50 is considered world-class and this is a key factor in the early success of products.

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Product Pivots While Scaling Up

Although Bajaj said that the next step after hitting the NPS, renewal and conversion targets should be scaling up fast, WhiteHat took seven months to enter its first international market.

This was because the product had to be iterated before launching in the US. The course had to be customised to lean more towards ensuring that a kid thoroughly enjoyed it and chose to adopt it themselves as opposed to India, where parents decided if the course was good for their children, as Bajaj indicated earlier.

Further, the product had to be tweaked for the US market since younger kids there are more comfortable with using a laptop and so the curriculum was accelerated a little bit. “From an operations perspective we obviously had to set up the architecture for launching in a new market — calling solutions, ticketing solutions all that change with the market a little bit,” Bajaj told us.

While the marketing insights and operational circumstances might change from one market to another, the main focus needs to be on delivering the core product well. The key is to cut all the noise and ask the question as to what makes the heart of the product. “Right off the gate I knew the heart of the product was the live class,” said the founder.

“Woh Bruce Lee ka ek quote hai — ‘One does not accumulate but eliminate, it’s not daily increase but daily decrease’,” Bajaj paraphrased and added, “A product is like that.”

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This article is part of The Product Summit 2020, India’s largest virtual product conference which took place on October 10 & October 11, supported by Amplitude, AWS, Dell Technologies, and DigitalOcean.

Missed TPS 2020? To access the exclusive TPS Session recordings, PPTs and upcoming sessions on products, click here!