Physics Wallah Case Study : How Alakh Pandey bootstrapped his EdTech startup worth $1.1 billion from a YouTube channel.

 

From a YouTube channel in 2014 with 4 subscribers including his family members to a Unicorn company valued at $1.1 billion as per an ET report. in 2022. Yes, we are talking about the fascinating and inspirational story of the leading and most loved EdTech startup of India Physics Wallah founded by Alakh Pandey who is currently the CEO of the company with co-founder Prateek Maheshwari.

Let's explore the electrifying, inspirational and passionate case study of this young entrepreneur and his successful EdTech startup Physics Wallah.

Beginning of the YouTube channel: Physics Wallah

Life was full of struggles and challenges for Alakh, from class 8th he started teaching for the 1st time with the chapter Gravitation of physics to financially support his family. His father Satish Pandey and mother Rajat Pandey had to sell the house for the education of their son Alakh and daughter Aditi Pandey. Despite, all the challenges Alakh was solely dedicated to his studies, he passed class 12th with a good percentage and also cleared the UPPCS Prelims exam with a good rank to fetch Harcourt Butler Technical Institute ( HBTI ), Kanpur for B . Tech in Mechanical engineering, he only chooses this branch because of his passion in physics. But, the only regret he faced at that time was his inability to join coaching to prepare for IIT due to his weak financial situation. College was not everything Alakh had hoped it would be. In his first year of college, he made the first video of his life for a college project, which he edited the whole night. In fact, he realized that what was taught in college was useless and irrelevant to his future goals, so he left his college in his 3rd year and moved to work as a Physics teacher in an offline JEE coaching Centre. He gave many interviews for the post of a physics teacher in many institutes, and many times he was fired from the coaching because he didn't have a college degree. 

 He started teaching Physics at a local JEE coaching class. And, for the first time, things were going great. Alakh was earning enough to support his family. He had a good job that he actually enjoyed doing. His boss was also impressed by his performance & he assured Alakh that if he kept going like this, he'll soon be able to teach over 7000 students.

In 2014, He started his YouTube channel and managed it with offline coaching where he used to post some physics facts videos and class 12 physics videos with dim lights, black gloves as a duster on his hands and a whiteboard worth Rs.4000, a mobile camera, and a super slow WIFI connection which takes a whole night to upload 1 video.

Take Home Msg:- Start with whatever you have, no matter what's your financial status to start your startup you don't need large no. of bags of money but only your passion and knowledge about your startup and improvise your every step with time as you start making a profit.
 

 In 2017,  He quit his job to focus on YouTube full time and he started teaching physics to ICSE students.

 ICSE students were a neglected bunch. So, getting a caring teacher who taught them Physics in a fun way for free was everything! They lifted the Physics Wallah channel to 10K subscribers in a year but there was more to come. Alakh also started to give his Paytm number and bank account details so that he can get some financial aid from students to meet his daily expenditures like money for mic, WIFI costs, etc. Then comes the revolution when Alakh went to Kota for buying the notes of the star faculty of Kota for Rs. 5000 which he borrowed from his friends and started teaching class 11th and 12th physics and chemistry from that notes with an average lecture duration being 1 hr. 30 min and 6hrs of hard work behind every lecture he posts on YouTube.

Soon, the YouTube channel grew to 50K, and with the pandemic boost, more than 8M subscribers!.

His income from YouTube AdSense increased from Rs. 10,000/ year to a figure of 7 digits/month which he invested to grow his platform

A lesser-known fact about Alakh is that his first love was not Physics or teaching but acting. To entertain his students he also started singing songs in between lectures, giving motivation to his students and cracking jokes, etc. This was the reason that he build such a loving, loyal and trustworthy audience.

Beginning of the EdTech revolution: Launching of the Physics Wallah App

In 2020, when the COVID 19 pandemic hit, this community pushed Alakh and Prateek Maheshwari (cofounder - Physics Wallah) to launch his EdTech app called PW - short for Physics Wallah. Alakh invested about Rs. 15 lakh, earned as AdSense revenue from his YouTube channel, for app development according to a previous interaction. On the day of its launch, the app literally crashed with a massive number of downloads. Within just 7 days, it reached 300K downloads. Today the application has over 5M+ downloads, 3 lakh daily active users, & over 90 minutes of consumption time.

USP(Unique selling proposition) of PW is to provide quality education from top educators of the country at the lowest possible cost. 

PW provides the courses for IIT JEE and NEET at a cost of less than Rs.5000 / year which is nearly 1/10th of the fees as compared to the online courses of its rivals like Allen, Aakash/Byju's, Vedantu, and Unacademy. 

Today, their various courses generate.

INR 350 Cr in revenue in FY22, set to increase to INR 650 Cr in FY23

INR 7 Cr in profit in FY21, making it the only profitable EdTech unicorn in India!

Compare this with Unacademy's INR 380 Cr revenue in FY21 (latest numbers), the 2-year-old startup is now playing in the big leagues! But, thanks to its loyal community of students it doesn't have to spend Unacademy's INR 414 CR on marketing. Because he built a unique trustworthy ecosystem with his students, they automatically get attracted to buy the best quality courses from PW at the lowest possible prizes. This is the reason why Alakh was able to reduce COCA(Cost of customer acquisition) and invest his YouTube earnings to grow his team and tech, and also expand PW by opening offline centers.

Take Home Msg:- To increase the sales of your startup 1st focus on your USP, make it as unique and simple as possible like it was the low cost of the product in PW's case and 2nd is to focus on selling the product to a large number of audience and it will be only possible if you will reduce COCA for your product. For instance-- Product with a price of Rs.1000 sold to 50,000 will generate a revenue of 5cr and similarly, a product of Rs.1,00,000 sold to 500 people will generate the same revenue but it's easy to sell a low-cost product to many people by reducing COCA. 

Their growth has been too rapid in recent years. Statistics reveal that between 2014 and 2019, around 4,450 EdTech startups have sprouted in the country. The startup went through Series A funding on 7th June 2022 and received $100 million from Westbridge Capital and GSV Ventures. This maiden funding round made Physics Wallah a Unicorn and its valuation reached $1.1 billion post-funding. Today, more than 60 lakhs of students have learned from Physics Wallah. This startup has 16 PW Pathshala centers and 1,500 staff out of which 300 are teachers. It aims at providing the best learning experience for students.

The next challenge arose in 2021 when the rivals started playing dirty games. Unacademy offered Rs 75 crore to Alakh Pandey which he immediately refused. Then the competitors started poaching the PW staff and a lot of them left the company by getting attracted to the handsome salary packages given by the massive tech giants. Then with the support of students and his never-give-up attitude, Alakh came back strong, he hired more expert teachers and Kota HODs, produced 1000s of selections, and good rankers students in JEE and NEET exams, and took the company to Unicorn status.

Take Home Msg:- Always hire those people in your startup who have the same vision as yours and can work day and night to achieve it. 

As the saying goes, ' Teamwork divides the task and multiplies the success. 

They launched more courses and integrated regional languages like Bengali, Kannada, Odia, Gujarati, etc. to make studies easier for the regional students. They have some offline coaching branches called PW Path Shala, which they will expand even more.  They also recently started their new offline center in Kota, PW Vidyapeeth. Moreover, now they will also venture into the commerce stream and PG examinations.

It has established more than 20 offline coaching classrooms, ‘Pathshalas’,  across India, with more than 10,000 students enrolled for the 2022-2023 session.

Moreover, Alakh had also launched many other YouTube channels like competition Wallah, NDA Wallah, NCERT Wallah, PW foundation for class 9th and 10th students, and his personal vlogging channel Alakh Pandey with millions of subscribers.

Take Home Msg:- As your business had achieved a stable position, do not stop there keep trying new things and expanding your business with new innovations and ideas else your rivals will do it and it will take seconds for your downfall. 

The EdTech startup currently has 1,900 employees, including 500 teachers and 90-100 tech experts. It also has 200 associate professors available to answer student queries and another 200 professionals to create exam questions and term papers, as per the ET report.

Conclusion:

Neither money nor your educational status determines that you will be successful in your startup. From Alakh sir we all can learn that if you have passion, dedication, consistency, and a clear vision towards your goal, you will get the path somehow just start with what you have and focus more on how to reduce COCA and the USP of your business model and be loyal to your customers. That's all you need to make your next Unicorn.