The Test Prep industry in India is largely dominated by offline coaching institutes, with a large section of the Tier-2 and Tier-3 population, migrating to Metro cities to study in Coaching Centres. while it is clear that this problem of lack of uniform accessibility needs to be solved through the scale of technology, it is imperative that the learning quality is not compromised upon.
In an interview with Mr Kush Beejal, Founder and CEO at NeoStencil, we understand how despite the large contribution of Technology, Education is still a Content game and how NeoStencil provides high quality test prep learning through its model, accommodating top-tier coaching institutes as well as students located in the remotest of areas
Q. How has the journey been in coming up with NeoStencil and scaling it to where it is now?
In 2013-14, UPSC introduced a format similar to CAT for its preliminary stage. While working, I decided to give the Prelims exam, cleared it easily, thanks to the aptitude test. In the next stage, to cover the vast syllabus and prepare for the subjective nature of the Mains exam, there was a need to join a top Coaching Institutes, located in Old Rajinder or Mukherjee Nagar, Delhi. These areas are the coaching hubs housing around 1000 coaching institutes for various exams and around half a million students, who managed to shift their base from their hometown. That one year of experience made me realize the ground problem faced by millions of students and it was written on the wall. I decided to solve the same. The problem was simple and the solution had to be simpler.
On one hand, there are students who are looking for quality coaching and on the other hand, there are 25-30k coaching institutes who want to get explored and want a partner to digitize their content. Therefore, the business model that we settled down upon was a B2B2C model, a marketplace. We started partnering and enabling coaching institutes through our live learning platform and on the other hand, we started to acquire customers through our online marketing activities. That’s how the model evolved. In terms of content delivery, what we chose was a Live Learning platform, because a student sitting remotely can access the same content that their offline counterpart is learning. Then only will both the student types get to compete on a level playing field. We started with Government Jobs segment given the high demand for a Government Job and the respectability that people associate a government job with, especially parents. Then we introduced Engineering and NEET exams as again parents want their children to get into the top colleges after school as well.
Q. How has NeoStencil achieved scalability operating in the industry?
First financial year for us was FY 16. We went live in June 2015. FY 16 we did around 80 lakh business and now we are at around 9 crore, which is probably around 11-12x in 4 years. In the seed round that we closed, we raised around $750K in cash from investors and around $250K in advertisement credits from Times Group. Barring one adventurous year, we have been running a sustainable business year on year. For us it was always about managing the Top Line and Bottom Line both.
We are now partners with close to 100 institutes and aim to build an online coaching hub of 1,000 premiere institutes of India for various test prep exams.
Q. How has NeoStencil managed to monetize so effectively, in a market where companies are struggling to convert free users to paid users?
We have courses ranging up-to 1 lakh rupees. Students are willing to pay such amounts as they know that these courses are of those institutes, which have produced toppers. Here, students focus more on the quality of the institute and NeoStencil gives them that confidence, that the opportunity cost of staying in the course for that amount of time, would be a wise decision. If we talk about the overall funnel, we have around a million users who have taken a free course, paid course, articles and viewed videos, Out of this, 150,000 would be the ones who would have taken a free video course. Out of this, around 15,000 converted to paid subscription.
Q. The online test prep ecosystem itself would be segmented in 2 halves. One would be companies catering to school students such as Toppr, Vedantu, Extramarks and Byjus, while others would be catering to college students and professionals such as Testbook, Gradeup, Oliveboard. Unacademy, NeoStencil compete in both the segments. What differences do you feel are there in both the segments?
Test Preparation is a business in which results are very important. Also, test preparation revolves more around the Star element of Institute/teacher. More than in K-12, results and ranks matter much more in Test Prep exams such as JEE, Government exams etc. Also, there is a shelf life to a star institute/faculty, as the learning content in exams such as Government exams is very dynamic and is ever evolving. Whereas, content is mostly static in K-12.
Q. How does NeoStencil’s business model function?
Test preparation centres are looking for partners that can put in IoT devices, can enable live-streaming, ensure cloud server optimization, handle customer acquisition, handle post sales, take care of troubleshooting and do customer servicing. Here is where NeoStencil fits in, as it is a one-stop solution for all this to institutes.
Q. One of the major attraction points for a Test Prep platform is a Customer-Centric and Customer-focused approach. How does NeoStencil map Customer Satisfaction and Engagement for its learners?
In terms of customer acquisition, we focus on affiliates, social media campaigns and SEO activities. In terms of customer servicing, we have a 3-day no questions asked refund policy for the courses. Students can access these classes 24/7. We give flexible validity of the course duration for students as well. Ranks and student outcomes from our platform speak for our user’s engagement and learning. Among around 100 of our students who got selected this year, one of our online students secured AIR 1 in UPSC, his name is Pradeep Singh.
Q. How has the demand for Test Prep been impacted due to the COVID situation? What are the strategies that NeoStencil is leveraging to make the most out of the increasing familiarity of people with online learning?
There is an uncertainty around exam dates which is delaying enrolment of students. There is confusion among students as they are unable to decide whether to prepare for graduation exams first or competitive exams first. But the way the funnel is developing, how the queries are coming in and how the supplier base is increasing for us, things are in good shape for us this year.
Q. How will the New Education Policy change the Test Prep industry going forward?
It is going to be a game changer for sure. Earlier, out of 37 mn students in graduate courses, only 3-4 million students used to go for competitive exams like JEE, NEET and CLAT. Now the government will put all of these students under one common entrance exam. That way the horizons for test prep will widen.
Q. What is the future growth scenario that the industry would witness? What would be emerging trends or new technologies that would impact competition and business growth in the future?
Now that everybody is going online, content curation will be a key factor. There is going to be increased competition with the growth of the online landscape. Focus on content and engaging students on a regular basis will be the key.
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